Good Strategy vs. Bad Strategy

[#1]

(based on Richard Rumelt’s framework)

Good strategy always has 3 elements:

1. Diagnosis — clear definition of the problem or challenge.
2. Guiding policy — an approach that sets direction and limits options.
3. Coherent actions — concrete steps aligned with the policy.

Bad strategy looks different:

• A list of abstract goals (“be #1”, “be innovative”).
• No sharp analysis, just slogans.
• No connection between words and actions.
• A “top-down illusion”: pretty documents pushed from the top, disconnected from reality.

---

The myth: “Strategy comes from the top”

One of the most common mistakes is believing strategy gets written in the CEO’s office and then “rolled down.”

In reality, this almost always creates a vacuum: people wait for instructions while reality shifts faster than the PowerPoint slides.

---

How real strategy emerges: bottom-up

• Andy Grove (Intel): engineers and marketers noticed the CPU market outgrowing DRAM. That “signal from the field” drove Intel’s legendary pivot.
• Henry Mintzberg: strategy often emerges from practices and experiments, not from a one-time plan.
• Peter Drucker: strategy is where an organization puts its effort — and those efforts are visible at the operational level.
• Hamel & Prahalad: future winners build strategy from knowledge at the “edges” of the organization.
• Even Michael Porter admitted advantage forms through concrete value-chain decisions, driven bottom-up.

---

Why it works this way

• Operational knowledge: real problems and opportunities are seen by those closest to clients and products.
• Flexibility: markets move faster than any “grand line.”
• Engagement: people act with energy only if they feel part of the path.

---

Conclusion

Good strategy is never “divine revelation from above.”
It’s built in dialogue: reality → teams → organizational framing.

• Top = sets the frame and alignment.
• Bottom = provides the content.

Leaders who wait for strategy “from above” end up with a vacuum.
Leaders who know how to collect strategy from below build real competitive advantage.