I have known Prof. Richard Rumelt of UCLA primarily
through his interviews and carry a lot respect for his perspectives on strategy.
I have found his metaphors like predatory leap and strategy as surfing a wave
useful. It is no surprise that I enjoyed reading Rumelt’s “Good
strategy, bad strategy (GSBS)”. In this book, Rumelt has condensed his wisdom of five
decades and made it accessible to people like us.
In an earlier article I have written about the 3
challenges in implementing strategy that was based on the “bad strategy”
part of GSBS. Here I want to focus more on the “good strategy” part and present
what I liked about it, a few things I thought are missing and finally a few
places where GSBS intersects with our book “8 steps to innovation”.
These are the 3 things I liked about GSBS in my first reading. I hope to visit the book again to discover more nuggets of wisdom.
emphasis: I like the way Rumelt emphasizes the importance of “challenge”.
He says – A good strategy honestly acknowledges the challenge being faced
and provides an approach in overcoming them. This may look like an obvious
statement. But ask yourself the question to state the topmost challenge you or
your team is facing today and you will realize the difficulty. It involves a
choice – a focus among tens or hundreds of problems you are facing and that is
not easy. I liked the emphasis on stating the challenge because it can become a
first checklist item to see if there is indeed a strategy. Is there a clearly
objectives: Strategic goals can easily become blue-sky
objectives (“We want to become number one player in our chosen market”) or Dog’s
dinner list (“Our strategic plan has 7 strategies, 20 tactics and 234 action
items”). None of them is helpful. To avoid this trap Rumelt suggests that the
strategic goal should have a proximate objective – a feasible goal you are
going after right now. If your objective is to send a spacecraft on the moon
which can do soft-landing, your proximate goals could be to design something
that will do soft-landing on the earth first. Similarly, for Indian Railways,
to turn profitable was a distant goal in 2004. Instead, the slogan “heavier,
faster and longer” provided more feasible goals in each of the three
categories. Rumelt calls these categories – domains of action. This idea is so important according to Rumelt that he contemplated titling this book "The Proximate Objective"
as a hypothesis: I was glad to see Rumelt acknowledge the
role of experimentation in strategy – even if it meant waiting till “chapter 16”.
He says – A new strategy , in the language of science, a hypothesis and its
implementation is an experiment. This creates a new set of questions
typically not found in the strategy textbooks – how do you design a good
experiment? How to sequence experiments? How to build experimentation capacity?
I believe that the language of experiment can add a rich set of vocabulary to
strategy lingo dominated by “rollout” and “balanced score card”.
There are two things conspicuously missing in the book:
(1) role of communication and (2) role of bright spots.
Role of communication: Rumelt
rightly emphasizes the role of “coherent action” in a good strategy. However,
he doesn’t mention the role metaphors and stories can play in generating
coherent action. I feel that there is a lot of good work done in this area by
people like Chip & Dan Heath in designing a good communication (e.g. Make
to stick) that strategy world can use.
of bright spots: What is already working well perhaps in pockets
may provide a good starting point. It is not so much about finding your strength
as finding the situation that is working to your advantage. For example, when
Intel was at crossroads and getting beaten in the memory business,
microprocessors was a bright spot waiting to be spotlighted. We don’t know if
in tough situations, every organization can find its bright-spot. However, I
feel it is one of the most important techniques for designing culture-friendly
“8 steps to innovation” is not about strategy. However,
it complements GSBS in many places like step-2 (challenge book), step-4, 6 and
7 (design of experiment and sandbox) and step-8 (create a margin of safety).
I feel “Good
strategy, bad strategy” spanning close to fifty years of work in strategy is a
must read for anyone interested in developing strategic thinking and
Prof. Rishikesha Krishnan and I co-facilitated a session
on innovation at IIMB week before last based on our “8 steps to innovation” book.
Participants in this session were entrepreneurs or second-third generation
business owners. Businesses varied from Agarbatti (supplying to 80 countries)
to clutch gears to Agro-products to Medical equipment to jewellers to payment
gateway – in short quite diverse. One of the exercises we did was to generate a
One thing that struck me is that each of these participants
had a lot of clarity about the key business challenges. For example, the power problem
in Tamilnadu and union problem in West Bengal is reflected in the challenge
book. When we do a similar exercise with mid-level managers in large companies group,
they don’t necessarily exhibit similar clarity. This may be so because they are
far removed from the business decisions. We had explained to the participants
about the 3 characteristics of a good challenge statement (1) emotional appeal
(2) concrete goal and (3) hooks for imagination. The first draft of the
challenge book we generated is shown in the picture above.
My analysis of how some of the challenges (selected
randomly) fulfil the three characteristics is given below.
A few observations about the challenge book:
A challenge meeting all three characteristics: “Prototyping
in a non-IT startup takes a few weeks. Can the time be brought down to 3 hrs?” This
challenge appears to meet all three characteristics. The challenge author also had
know-how about how much a 3-D printer costs and how much it can bring down
prototyping time etc.
Blue-sky challenge: Enhancing
customer satisfaction is an important challenge for many businesses. In fact, “customer
delight” is part of core values for most of my customers. However, it hardly
reflects in the actions demonstrated on a day-to-day basis. This is the reason
a challenge to “enhance customer satisfaction” may be looked upon as an empty rhetoric.
“How do we connect with international customers?” is a challenge meant to reach
out and satisfy international customers better. It looks more focused.
More solution, less challenge: “ERP”
gives an impression that there is a need to implement ERP solution. This could
very well be the case. However, why that is required is not clear. Perhaps information
about which parts are coming / when is not available easily. Perhaps products
delivered are not reaching on time. It might be a better idea to focus on the
challenge than on the solution.
The analysis is not meant to judge the challenges as
good or bad. It is only meant to give an indication of further improvement –
perhaps by framing the challenge better.
I asked the author of
the challenge “General rural employment through sustainable business” if this
was related to his business. He said it is not. However, he said he is
passionate about this challenge and would like to pursue it along with his
My reading has been poor in the last few months. So I did
a bright spot analysis. i.e. went hunting for situations when I did good
reading in the past. That is when I recollected that last January (2012) I did
systematic reading of “Thinking, fast and slow” – one chapter per day and drew a
one-pager chapter-map after each reading. I still refer to the map-book.
Now, I have decided to focus on a chapter at a time – not
the entire book. And I have already made progress. I have a tendency to reflect
a lot when I read. Hence, the reading speed is slow. I have come to live with
it. Here is what I have planned to read in the rest of the 2013. Let’s see how
strategy, bad strategy: Among the strategy gurus my favourite is
Richard Rumelt – I don’t know why. The first time I wrote a blog referring to
Rumelt’s work was 5 years ago (titled “Predatory
leap metaphor of Prof. Rumelt”). My
friend and collaborator Prof. Rishikesha Krishnan also an authority on strategy
has recommended this book to me. I am currently on chapter
3 and enjoying it. I am also finding very interesting intersections of this
book with our book “8 steps to innovation”. I hope to finish this book in
the Gods: The remarkable story of riskby Peter Bernstein: Today
I met Rajiv Mody, CEO of Sasken, my ex-employer and a man I carry a lot of
respect for. He strongly recommended me this book. He felt that one reason why
we Indians are not very innovative is because we haven’t paid attention to systematically
assessing the risk. It also meant collecting data systematically, validating it
etc. One of the three myths about innovation we emphasize in our book is the
saying “innovation is about risk taking”. We argue that it is not just about
risk-taking, it is also about risk assessment and risk mitigation. I want to
see if this book can shed some more light (one way or the other) on our
The surprising payoff of trial-and-error for business, politics and society by
Jim Manzi: I have been sharing my blogs and getting useful feedback from Prof.
Stefan Thomke of Harvard, an authority on experimentation. He has been generous
in giving endorsement for our book. Thomke has suggested me this book last
October. He said that it has a thoughtful treatment of business
experimentation. Helping organizations (for-profit & not-for-profit) build
experimentation capacity is really at the heart of what I do. I hope this book
will give me a fresh perspective.
to ourselves: Discovering the adaptive unconscious by
Timothy Wilson: Daniel Kahneman referred to this book in “Thinking, fast and
slow”. I had made a mental note of this while reading TFS. And then I forgot
about it. Last week Sukumar Rajgopal, SVP, CIO and Head of Innovation at
Cognizant mentioned to me that he enjoyed this book very much. I am captivated
by Kahneman and hence sometimes I feel that a fresh perspective on the topic
will be useful to have.
How to live in a world we don’t understand by
Nassim Taleb: I have been deeply
influenced by NNT's The Black Swan. Black Swan was more philosophical than
practical (how-to). The only chapter in Black Swan which talks about what to do
is chapter 13. Anti-fragile is primarily about “how to”. Or so it seems. I
would like to find out.
Five books in nine
months is roughly a book in two months. I feel it is a reasonable target. Only
time will tell…
I facilitated a 2-day workshop on innovation for technical
experts at Hotel Grand Mercure, Bangalore last month. The participants were Senior
Engineers, Architects, Product Managers, Engineering Managers and entrepreneurs. I have
been facilitating such workshops for the past six years. However, this workshop
stood out for following 4 unique things.
Challenge book from technology-trend: Unlike
in the Design Thinking
workshop where we build a challenge book through “pain”, we began our challenge
definition journey from technology trends (“wave”).
Each participant identified
a technology trend (s)he is excited about and then mapped it on the Gartner’s hype
cycle (See the picture). Some of the trends that showed up were: brain-computer
interface, geriatrics (early phase), Big Data (peak of inflated expectations),
Video analytics (trough of disillusionment), cloud computing (slope of
Then each participant did a secondary research and made a
presentation on: (1) What makes the trend interesting today? (2) What were the
breakthroughs for the technology trend? (3) What are the key challenges? (4)
What adjacent skills do you possess?
Prototyping through storyboarding: During
this session, participants explored various forms of early stage prototyping. One
such form was storyboarding – perhaps one of the simplest form of prototyping.
Each participant presented his idea through a “Before” and “after” scenario
expressed in the form story. You don’t need fancy drawings. A lot can be done just using the stick figures.
Idea socialization through blogging: During
this session we explored blogging as a medium to socialize your idea. For most
of the participants, they were writing a blog for the first time. We followed 3
simple rules: (1) curiosity before content (e.g. Is the problem definition
clear?) (2) options before solution (e.g. have you discussed options and
trade-offs before proposing a solution?) (3) Prototype is the best presentation
(e.g. have you given a glimpse for the reader to experience the idea?) Each
participant also commented on at least one blog. Here we followed a simple rule
– bright spot before grey spot – i.e. do you have anything good to say about
the article before you talk about improvements? Please check out the blogs we wrote.
Chat with industry experts: We
were fortunate to have two informal discussion sessions with two industry
experts: Dr. Milind Bhandarkar, Chief Scientist at Greenplum (EMC) and Hadoop
evangelist and Dr. Dinesh Nair, Chief Architect at National Instruments. Milind
graciously agreed to skype from Bay area and gave us an overview of his career
from CDAC’s Param to SUNY Buffalo to UIUC to Yahoo to Greenplum etc. He told us what it meant to be part of the founding team of Hadoop at Yahoo and how it helps to have a competitor like Google to get internal buy-in for a new technology like Hadoop. As a leader of the Big Data consortium Milind also shared some of the key challenges and opportunities associated with the technology.
Dinesh heads the
Center of excellence on vision and machine learning at NI Bangalore. He belongs
to the rare species which has stuck with a single company in his career. A
prolific inventor (holding over 30 patents) Dinesh shared his experiences on
variety of topics such as role of patenting and prototyping, role of blogging
in socializing ideas, how he tracks technology trends, how one needs to let go
of an idea when the time is not right and a bunch of other things.