Ever been in a meeting and been asked, “What’s your strategy?”

Usually, you can speak to the steps you will take to reach “x” goal or a certain revenue target or something along those lines, but is that a strategy? And is the subset of a strategy really just more of an action plan? And, heck, do most people even know the difference between a good strategy and a bad one?

I wasn't sure myself, so I read a book called ‘Good Strategy / Bad Strategy'‘ by Richard Rumelt’. Here's what I learned.

Most Companies Will Fail Because of a Bad Strategy

There are countless examples of companies that had bad strategies that seem so obvious now—like Blockbuster, BlackBerry, and Enron—but I'm curious: Did they know they had a bad strategy at the time? When does a bad strategy become obvious? Let’s explore.

First things first, you need to understand what good strategy is and what it isn't.

In Good Strategy/Bad Strategy, Richard Rumelt distinguishes effective strategies from ineffective ones, emphasizing that good strategy identifies and addresses a core challenge with a clear, focused approach.

In contrast, bad strategy is vague, overly ambitious, and filled with buzzwords, lacking real direction. Rumelt stresses that a good strategy makes tough choices, leverages strengths, and has clear, achievable objectives, ultimately requiring disciplined execution to produce meaningful results.

In a nutshell, good strategy involves three key elements:

• Element #1 - A company diagnoses and identifies its main challenges and problems

• Element #2 - It develops a guiding policy (i.e. a coherent approach or overarching plan to address these challenges)

• Element #3 - It implements coherent actions—specific, coordinated steps that put the guiding policy into practice

We'll explore an example to illustrate this concept in a moment, but first, we have to discuss bad strategy.

Bad Strategy 101

Most companies fail because they have a bad strategy masquerading as a good one.

This means that while challenges and problems may have been identified, the goals are often wishful thinking. The specific problems aren't clearly defined, there's no guiding policy, and there aren't specific, actionable steps to solve these challenges. Let’s use Blockbuster as an example.

Blockbuster's strategy failed because it clung to its traditional brick-and-mortar rental model, even as digital streaming and online services gained popularity. The company was slow to adapt to emerging technologies and consumer preferences, allowing competitors like Netflix to capture the market with more convenient, subscription-based models.

Blockbuster's reliance on late fees and physical stores alienated customers who sought more flexibility and convenience. Leadership missed critical opportunities to innovate, including passing on an offer to buy Netflix. The list goes on and on.

By the time Blockbuster entered the digital space, it was too late, and their brand was associated with outdated practices, ultimately leading to their downfall.

What Does Good Strategy Look Like?

Now that we know what bad strategy looks like, we can shift our focus to examples of good strategy. Take Apple for example.

When Steve Jobs came back to Apple in 1997, he made big changes to save the company. He cut down the number of products Apple was making and chose to focus on only a few high-quality ones, like the iMac. As a result, this helped Apple put more effort into creating great products that people loved.

Jobs made sure Apple's hardware and software worked perfectly together, and he made design and simplicity very important. He also made a deal with Microsoft to help keep Apple financially stable. Jobs had a long-term plan to create a connected group of products and services that changed the way we use technology.

Most Organizations Don’t Have a Good Strategy (And Never Will)

Do most successful companies start out with a good strategy? Of course. But you know what they say, the road to hell is paved with good intentions, or in this case strategy.

Everyone starts out well and good with the right product-market fit and the good media, but, once companies reach a certain level of success they lose vision and purpose. Politics, incentives, and other things that determine which initiatives are being made a priority get in the way. And to top it all off, every department has a different challenge and sometimes it’s not clear what the overarching goal actually is.

Thankfully, as seen through the elements and examples above, you now understand what good strategy is and isn’t. Which means you can slowly start to do your part, in your section of the company to craft out a good strategy.

So, what are you waiting for?

Look for your company’s or department’s main challenges, create a plan to address those challenges, and start taking the actionable steps to put that plan into practice.

Good strategies don’t create themselves. Hop to it.

What’s Next?

Do you want more help and guidance in developing, implementing, and maintaining a good strategy? Are you in need of a community of tech sales professionals who are building a better world through empathetic selling and problem-solving?

You can have both by joining my Patreon.

And, listen, I know that everyone doesn’t have the budget for another monthly membership —so y’all know I won’t leave you out to dry.

Join the email list for weekly reminders, exclusive access to free downloads, and more special offers.