Good Strategy, Bad Strategy — and Why Real Strategy Emerges from the Ground Up

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In strategic management, the biggest myths are not about what to write in a strategy document, but how strategy is actually born.

Many founders and managers believe strategy should come from the top. In practice, that belief often leads to stagnation and a vacuum — where people wait for direction while reality changes faster than any “official” document can keep up.

Good vs Bad Strategy (after Richard Rumelt)

A good strategy always includes three key elements:

1. Diagnosis — a clear definition of the core challenge.
2. Guiding policy — a set of principles that limit choices and shape direction.
3. Coherent actions — concrete steps that follow from those principles.

A bad strategy, on the other hand, looks like this:

• A list of abstract goals (“become #1 on the market”, “drive innovation”).
• A vague problem statement — slogans instead of clarity.
• No link between statements and actions (budgets and plans don’t follow).
• The illusion of control — a top-down “document drop” disconnected from reality.

The False Expectation: “Strategy Comes from the Top”

One of the most common mistakes is believing that strategy is born in the CEO’s office and must be cascaded down.
In reality, that approach almost always creates a vacuum — people wait for answers while the market moves on.

Most authors in strategic management agree: strategy emerges from recognizing real challenges, and those are usually visible to teams working closest to customers and products.

How Real Strategy Emerges — Bottom-Up

Andrew Grove at Intel offered a classic example: it was the engineers and marketers — not executives — who noticed that the processor market was growing faster than memory. That “signal from the ground” triggered Intel’s legendary pivot from DRAM to CPUs.

Henry Mintzberg, in The Strategy Process, described this as emergent strategy — one that surfaces through daily actions, experiments, and learning, not through a single top-down declaration.

Peter Drucker once said: “Strategy is not a decision made at the top — it’s a pattern in how an organization allocates its efforts.”
Those efforts always start at the operational level.

Gary Hamel and C.K. Prahalad (Competing for the Future) emphasized that companies which outpace others do so by building strategy from the edges of the organization, not its center.
Even Michael Porter, often criticized for being overly structural, acknowledged that real competitive advantage comes from specific choices along the value chain, driven bottom-up.

Why Strategy Should Be Built from the Bottom

• Operational insight — problems and opportunities are visible to those closest to the work.
• Adaptability — the market changes faster than any top-down “five-year plan.”
• Engagement — people act decisively when they feel ownership in shaping direction.

A good strategy is never a divine revelation from above.
It’s a dialogue — reality → teams → organizational alignment.

Top management provides the framework and coordination,
but the content and insight always emerge from the ground.

Leaders who wait for strategy to “descend from the top” get paralysis.
Those who can collect and shape strategy from below gain real competitive advantage.

Because in the end, the desire for “strategy from above” often signals a lack of managerial maturity — or simply the fear of doing the hard work: thinking deeply, diagnosing, and deciding.
When leaders replace that effort with slogans and borrowed formulas, they lose the chance to build something real.