Strategy (II): ten more thoughts from Rumelt

This Rumelt guy that Krepinevich and Watts cite repeatedly in their new essay on strategy so intrigued me that I poked around for more on him. Here is another good list of 10 strategic thoughts from him:

1. Most strategic plans have little to do with strategy. They’re three-year or five-year rolling resource budgets, and they coordinate deployment of resources — but that’s not strategy.

2. Strategic planning is “a pathway to substantially higher performance.” The best path to that “is to exploit some change in your environment–in technology, consumer tastes, [etc.] — and ride that change with quickness and skill.”

3. The annual resource budget should be separate from the strategy. Call “those budgets ‘long-term resource plans’ — and start a separate, nonannual, opportunity-driven process for strategy work.”

4. Strategy starts with identifying changes. “Strategic thinking helps us take positions in a world that is confusing and uncertain.”

5. What’s needed is a “predatory approach. Leap through the window of opportunity and stay focused on big wins — not on maintenance activities. (Think Steve Jobs and the iPod.)

6. Most “innovation flows from the unexpected combination of two or more things.” (The iPod “came from knowledge and resources being adroitly combined.”)

7. “Most of the strategy concepts in use today are static.” If the terrain never changed, that would work, but in today’s world, change is constant.

8. “‘Value denials’…are products or services that are both desired and feasible but are not being supplied.”” Value denials are business (or service) opportunities. One way to think about change is to ask yourself “what value denials it will uncover.”

9. Strategic analysis is really about solving a puzzle. Small groups of smart people are needed to solve these puzzles.

10. A manager’s most important job “is to break down a situation into challenges that subordinates can handle.” The manager “absorbs a good chunk of the ambiguity in the situation and gives much less ambiguous problems to others.

I like most of these, with a couple of exceptions. No. 1 is a biggie. No. 4 is a smart operational observation: what is new, what is different, what is significant? These are concrete things to identify. 

I don’t understand No. 8. I disagree with No. 10. I think a manager’s job is to hire the right people and maintain a culture in which they can work creatively, ethically and collaboratively. I wouldn’t try to manage away genuine ambiguity, which tends to be part of the task or problem that the subordinates address.

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