Notes from "Good Strategy, Bad Strategy."

March 1, 2018. Filed under management 129 book 14 review 13

Over the last month I've been reading Good Strategy, Bad Strategy during my commute, and it's been the most thought-provoking book I've read in some time. Given the number of times I've referred to it recently, I've written up some notes to share!

The premise is that there is very little good strategy, a great deal of bad strategy, and it's possible to distinguish the two. Not only distinguish the two, but to improve the quality of your strategy. It's felt like a superpower to have a vocabulary to describe some of the poor decision making I've seen in the past, and more excitingly it's also given me a tool to see a great deal of good strategy that I was missing as well.

Onwards to the summary.

Bad strategy shares one of four defining characteristics:

  • Fluff is gibberish that sounds like a coherent plan, but which doesn't say anything. Most frequently a great jumble of buzzwords structured into a grammatically coherent format that nonetheless conveys quite little substance, such as "Using technologically advanced solutions to drive synergy across our geographically distributed teams"
  • Failure to face challenge is a plan that doesn't define the challenge. This typically involves doubling down and working harder on something that doesn't work, perhaps setting more aggressive sales quotas for a product that folks won't buy
  • Mistaking goals for strategy are most frequently seen in extremely audacious goals that don't come combined with an approach. If Microsoft's strategy had been "A Windows computer in every home", they likely wouldn't have gotten very far, but fortunately they had a distribution strategy to go along with that goal
  • Bad strategic objective are goals which offer a diagnosis of the problem, but then fail to address inconvenient realities. For example, in the darker days of Digg there was once a proposal to create a viral loop using our highly engaged logged in users' social activity, which would have been more helpful if we'd had the initial highly engaged logged in users to begin with. The plan certainly didn't account for the biggest issue in the room: we were about to run out of money in a couple of months

Why is there so, so much bad strategy when there are so many smart folks in business?

  • Unwillingness or inability to choose is when you won't accept tradeoffs, and implicitly choose to fail at everything instead
  • Template-style strategy is when you get a heavily-structured document, fill in the boxes, and have a strategy! These are a good starting place for thinking about your approach, but it's easy to get caught up filling in boxes rather than ensuring your thinking makes sense
  • New thought is the school of thought, fully embodied in The Secret, that if you just work harder or want things more, you'll succeed. This line of thought is particularly pernicious because it directs you to burn yourself–and your team–out instead of reflecting, learning and improving

What is the core of a good strategy?

  • Diagnosis - a theory describing the nature of the challenge. This is trying to identify the root cause(s) at play, for example "high work-in-progress is preventing us from finishing any tasks, so we are increasingly behind each sprint" might be a good diagnosis
  • Guiding policy - a series of general policies which will be applied to grapple with the challenge. Guiding policies are typically going to be implicit or explicit tradeoffs. For example, a guiding policy might be "only hire for most urgent team, do not spread hires across all teams." If a guiding policy doesn't imply a tradeoff, you should be suspicious of it (e.g. "working harder to get it done" isn't really a guiding policy, the relevant guiding policy there might be "work folks hard and expect high attrition")
  • Coherent actions - a set of specific actions directed by guiding policy to address challenge. This is the most important part, and I think the most exciting part, because it clarifies that a strategy is only meaningful if it leads to aligned action

The second half of the book covers "sources of power", which are factors to incorporate into strategies to make them effect. I found this section pretty unhelpful, and the different kinds of power overlapped quite a bit. What is the difference between "using leverage", "using design" and "focus", anyway? I took a page of notes summarizing the differences, and I'm still not sure what they are, so I've deleted that section entirely!

Overall, a fascinating book that I highly recommended.