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Richard Rumelt

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2024-01-21

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2024-01-21

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1. “On a cruise ship, then you follow. And you're now in the ocean. It's terrible and it's confusing. And there's waves and there's water. Want to drink? And you look around and you see up here's a floating piece of wood. Let me grab it. That feels a lot better. That's how it feels when you look at a confusing situation. And the first idea of how to understand it comes to mind. I've got this piece of wood. Now I'm not The most important intellectual tool we have. To think again To say, okay, I came up with this diagnosis because I thought this and I thought this is there another way to look at the situation Is there a bigger piece of wood over there than I can dram onto? That's the hard thing. When I looked at the Great Depression, what I saw. Is the If you look at capital goods,”

   2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

2. “The last 150 years, you don't know why I hang it. Back and you can go online and look at the Wall Street Journal, the New York Times from that era and start in September of 1928. Just look at the front page every day. You can see it unfold. It's a surprise Forger's laid off some people, but except where they'll hire them back. This economist says, well, it's a temporary thing to this. It'll come back. And it gradually gets worse and worse and worse and there's no understanding of it. There's not a lot And so you've got maltreatment saying, Oh, it's monetary. They didn't loosen up the money supply. You got other people saying things. But put yourself back at that moment in time and see what people saw and realize that no one understood what was happening. To form their own opinions. That's the diagnosis skill. That's the Now, let's”

   2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

3. “The further back we go in history, the leaner is less rich. The best histories are written by the people at the moment. It's happening. Very soon after. History books and things like that Someone's opin But our early history here in the United States, we have pretty good documentation about what went on in the Indian War, what went on, why we had these big cycles of economic growth and then depression. We had depressions in 1940 and LNG after the Civil War. And there was another huge panic, depression in 1890s. I don't know. A lot of people don't even know that these things happen. How do they happen? And of course, everybody knows about the great depression of 1929, 30s. Go back, and how did that happen? You'll hear professors opine about why it There's no agreement. The biggest economic fact.”

   2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

4. “You're going to ask me more questions about what it is people should know and how do you get these sorts of power? How do you get these insights I'm a big fan of history. I'm a big fan of knowing things about what happened. History biographies, warrant history. If you don't have access to other times and other places and other things that have happened, Very hard to think strategically about the situation you're in because there isn't a science of strategy. It's not like physics. It's not like engineering where we can write down the equations of stress on beam and say how thick does the beam have to be. It's not like that. It's a lot of it is based on analogy to previous human exteri”

   2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

5. “Nation building is hard stuff takes a century. You know, Afghanistan, I'm often a tinge here with Afghanistan, but it's a really interesting subject. Afghanistan was a warlord society. Bunch of different warlords running the place Well, what the word society, where else do we look for analogy? Well, I'm a good scalpel. In 1650. Look at France in 1300. You can look at Japan. before the modern era. These are warlord societies. Well, how did they go from that to being of coherent? Maybe he wasn't Democratic, but still, there was a government set of just war. It took some to conquer all the rest. And then it took a long time for them to put in the structure of government and then maybe became a democracy, maybe not. But that's the process. It's not like you just go in there and say. Now no longer war was slight because we decreed it”

   2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

6. “Wanted to catch Osama bin Laden, but at the same time they didn't want to put an army in the shield of actually catching because it would be embarrassing to have that many Americans in the field. That's what happened in Torabura. The Secretary of Defense said no. We don't want to make it look like we're taking over the country. They didn't try to catch you as hard as they could. And we want to have the education of women and we want to have the democracy and we want to have. A long list that would have no opium production. But at the same time, our allies are the opium producers. It was a Taliban. Americans didn't do it. So we had all these different objectives. Don't work. You need to have a focus on something What's achiev”

   2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

7. “And some of that is sort of part of the situation, and some of it's how you shape and focus your action. Strategy tends to be surprising when we see it, when we see it work. Surprising because we all expect, we expect people to bumble around. Expect armies to bone more at. We expect nation states to bone Lorat. We don't expect them to execute coherent strategies. United States went to Afghanistan”

   2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

8. “Statistically, if you come to me and you say, I'm going to open a new restaurant, which is my strategy. My answer would be don't open the restaurant. Invest in the SP 500 because the statistics are that new restaurants fail. So, what makes you think that you can succeed? Oh, I really want to succeed. Not good enough. I trained under a shut, whom it's been very successful. Oh, that's interesting. Tell you more. So there, where's the asymmetry here? Where's the source of power where you go from the ah? It's the standard odds in this game or against people where you think the odds are in your That's a source of power looking for. We're looking for this information, this skill, this. Thing in the field, the way the resources are arranged that's going to get you is edged.”

   2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

9. “Undertake a strategy that You think Got to have a reason. It makes sense And that Is derived from some source of power, some source for debate. Ultimately, your power or your advantage is something based in history. That has the feel of reputation or institution Or It's some kind of Symmetry or knowledge that you have that others don't have. So it's a resource that you can use. That your competitors or others don't have equal access to. Because she neither mastered it or you own it. Herded from the past? All those things are sources of the power that you used to make it not an even bet. So when you walk into Well, maybe if you play poker with skill, you can expect to make some money. But the general casino games, you're going to expect to do. In bus”

   2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

10. “Twitter's fascinating. I mean, I tune into it every couple days and see what's going on. It is just an amazing rumble of opinions and statements. It's much more interesting than a watch five years ago.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

11. “The way you get around all that is by the specialized, by owning a particular approach that isn't the market leader's approach. And it's always been that way in business. But, you know, our tension is often attracted by these giants. So yeah, sources of power today when we look at new business models that are part of the fabric are these network effects. Things like that that are very, very strong. And people are trying to get those in startups and in small firms within a certain market space and build it as best as possible to get ahead of others. There's a venture capital available to try those experiments. And some of them work and some of them don't. But that's this new age we're in now. Where the speed of building a market position with network effects is a dominant game in the tech space.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

12. “Size is going to matter, that the size of the data that you could put into the learning algorithm. Going to make your AI better. And so again, big, it's going to matter. Just think of Google. their ability to improve search based upon all the searches that go on on their base every day. It's very hard for being to catch up because Bing doesn't have as much data to trade on. And so, unless there's some new innovation there that isn't just the amount of data. The leader again has this asymmetry”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

13. “They're the eaves of shopping on Amazon. It keeps people from leaving it and going to another website. Now, other websites got better and better, and some of that is less strong than it used to be. And this is constant struggle. But nevertheless, the size of the user bends An important source of the symmetry and power for the people who come out ahead and won that battle for this round, this five year or ten years, how long does it last before some other thing begins to take precedence? And now we have two sided markets, whether it's credit cards or places where both buyers and sellers. And so here are these big forces that companies are playing with right now are these network effects. When the new generative ALI We have the possibility of stronger effects than we've ever seen before. We don't know yet. But the suspicion is”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

14. “Basic, but they network effect was huge. He got angry about the network effect because people weren't painting, they kept stealing it and using it to consume everybody. And the microcomputer industry had MBASIC. Then we get the network effects. User bases now with And so you get network effects, big social media. Owen wants to be on a social medium, only three other people are on social media. So he's got having a large network. Amazon and get big fast because The economics are amazing. So we used to say, well, the department store. Economics are that you're saving people the cost of going out of the store, walking down the street to another store. From now it's all in one place. Supermarkets, the same thing. But look at a thing like Amazon where”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

15. “I started to make a list there in the book, and I wrote a bit about ChainLeak systems. Today, I mean, the power that new business models are exploiting is the power of the user base. We called years ago network effect, where the more users you have, the more useful a product is. So the idea of network effects first erodes with the telephone system. Which the idea was. that you don't want to be connected to a telephone system that only connects it to a whole and useful connect to the work useful. And my colleague Morvin Lieberman was taking the economics course at Harvard University at the same time that Bill Gates was a student in that classroom, professor's going on at network effects. And of course, that's what catapulted M and his software MS Dawson at the time, not MS Daws. He had something called.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

16. “Because everybody wants all the smart AI people want to work at the cutting edge with the current winner. Then they'll start arguing with each other and infight, and there'll be all sorts of embarrassing personnel things going on, and so what else can grab that position if it's not well managed? Business is excite in that sense that it's not stable. It's not just as it was what I was first studying. It's not just IBM and Sears and ATH forever. A consonant garland, Chiji of the Guard.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

17. “And so that's a good question, Lenny. So, how do you figure it out? So I start, as I said earlier with asymmetries. In what way? Is my company different than other companies? In what way is my team different? What do we know that other people don't know? What do we possess that other people don't possess? So there has to be some asymmetry to create competitive power. There has to be something different. I'll come here after redefine your space down small enough that you can actually see it because particularly a smaller company that doesn't have worldwide power has power in a certain marketplace or certain set of customers or sometimes it's not customers sometimes the power isn't who you can bring in hire So, if you invented chat GBT, you can bring in the smartest AI people for a year or two.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

18. “Safeguard the big IT departments that don't warm them too close. So, small companies The big companies are insecure in the clinical. We'd have to lay off people and we have these big machines we'd like to run. And so IVM then becomes disadvantaged in the new world because Inherits this big company orientation and that lagging behind. So power, the opposite side of power is this. To inherit from pens can be the wrong thing. And so the source of power is that source of power can be an invention, a source of power can be a particular customer base that you have identified. It doesn't last forever power. But all the different sources of advantage that are sometimes transitory and sometimes permanent. Our sources of power that a company has to use. Compete and survive.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

19. “Can be the opposite of power because people don't expect you to be able to do something new. They expect you to be able to do this, but not that. Having relationships can be a source of power. When Gertchner took over IBM as it was failing in the face of the microprocessing revolution. He recognized that their primary asset, their source of power, was that they were respected and they had Hit umptra into every large corporational planet. No way. As an actual producing company And so he said we're going to embrace our customers, bear hungout customers. Serve our customers. Because that's our source of our power. Our lever, that's the asymmetry now. The world begins to change. Com Begins to move to the And IBM's customers, the largest companies in the world, are the most hesitant to do that.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

20. “In a competitive situation. Fundamental Aspect of power. Is something that's going to give you some sort of advantage. Usually, it's an asymmetry of some kind. Two fighters are equally balanced, or two horses are equally fast, or two armies are equally. And they meet in competition, it's 50-50, who knows what will happen. A strategy, you need to exploit an asymmetry of some kind. You go a little faster over there Something has to be different between now and the two things. So that's the beginning of power is asymmetry. Can think of it as leverage. So, Kais A source of Be first to recognize something. Can be a source of Having a reputation of a certain kind gives you some power that someone doesn't have that reputation doesn't have. On the other hand, having a well-established reputation of a certain type.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

21. “One of the big issues in strategy is simply the organization, complex organizations, particularly you have a hard time focusing energy because of all the different interests.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

22. “Say a coward. I don't say advantage efficiency as they say power because there are different ways in which power is exhibited and you have to focus power. Want to target That can actually be affected or cheap. This is just real simple logic, but. It's a discipline to focus power. You can Take American power and say we're going to change China's trajectory and Russia's trajectory. Our own and the name all the 30 countries around the world that we're trying to. Diffusing our efforts because they're not the same. They're going in different direct When you say it, that's obvious as you live it because like any organization, like any big organization, US government has different interests for you. So they're pursuing different interests funded for different purposes with different clientele. And so there's gradually a diffusion.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

23. “Yes, focus is I Nine years old, I was at summer camp. I had my parents sent me a magnifying glass and I was out there using the sun to tread it. A piece I think I have a piece of. Claw that I was trying to burn. Wasn't having much And the magnifying glass focuses the sun rays, sun's rays on Counselor came over and he said, try this. He pulled out black thread from his t shirt, put it down, and I focused the subray's heart. So stupid little story. Burn that black thread. There has to be a source of power. Has to be a focus The magnifying block. The power. And it has to be a notori that can be effect. It has to be a black thread, not white. That sequence is part of it. Virginia source of power.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

24. “A few. Not too many. Not so much We work best when we concentrate. It's a fundamental source of power and strategy. Trying to do too many different things is defocusing.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

25. “That politicians right now sort of decided for a few years that the problem is hot seems too expensive. We're going to build housing. $700,000. Give it to the homes. You build it. They are there. But then, you know, the next problem is, well, can't seem to build a housing. So, again, you need a diagnosis. Why can't you build a house? You're a rich, powerful country. Why can't you build some housing? So diagnosis industry is critical to understanding it. And in public policy, we argue over the diagnosis. Organizations of the RTV. And unless you resolve it. So, lacking diagnosis is one of the key reasons for bad strategy. The other, the fluff and the incoherent actions are fun to describe, but they're less common. The second major source of his strategy is mistaken goals for strategy. These goals are her strategy.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

26. “A real diagnosis would say because. He jumped immediately to therefore we're going to have more people go to college than any other country. Having more people go to college doesn't solve the problem of 15 year olds not being able to do. Hopefully, it doesn't screw up colleges everywhere. So that kind of gap is there, all where you don't do the diagnosis. Why do we have this? We argue over diagnosis in parapolitics and part of organizational politics. That's what we do. And that's in coin. To do a strategy, you have to resolve the argument at some point. So, why do we have a homeless explosion in pork or Seattle or Los Angeles? People argue about something say, Oh, it's drug. So, oh no, housing is true defense. There are different diagnoses. But to deal with the issue, you have to decide on a diagram.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

27. “Comment and told me there's a lot of word shallad writing. That people try to use to describe their situation, it sounds more abstract, perhaps more abstract, therefore it's more strategic, incoherent stuff. Where we're going to do A and we're going to need B and those two things. Obviously fight. All those things are hard, bad strategy. Bad strategy is a document or a set of intentions or a set of verbalizations where it's not a strategy. There's no diagnosis often. Started up saying where the United States is falling behind in education. And he's looking at the pizza, the PISA test score, so it's a 15-year-olds around the world. And it's true, the United States is down number 30. Countries in terms of the discourse of our 15-year-old in math and in general knowledge. Okay, correct statement. We're falling behind.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

28. “And oh, we'll have an office of corporate person in charge of court. But there's no sensible why is it hard to coordinate? What are the barriers to this? This has been going on for 34 years now. What's holding it back? What's the problem we have to solve? Not I was hired to do a foundry for a company. And they said, well, our diagnosis is that we're not growing faster. Let's get into that because that's not a diagnosis. A statement of values you would like to go faster than you are. I'd like to taller than I am. I'd like to have more hair. You want to grow faster. Okay. So, what's holding you back? and Saying, okay, we're going to grow, that's fast strategy. Bad strategy also is fluff. People will use fancy words to describe. Their situation, no since I wrote that, the term word salad has become”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

29. “Yeah, they have 17 different intelligence agencies. And the strategy basically that these people had written said the 17 agencies should work together more effectively. You don't have to be a Russian spy to see that what they're really saying is these guys aren't working together effectively and it's a problem. But they didn't check that. The strategy is they're going to work together more effectively, just like the RV always comes out with. Our strategy is joining us, meetings. We're having trouble coord There's nothing there about that other than this is what should happen. There should be more effective coordination.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

30. “Sure, what I wrote strategy, bad strategy. A lot of people resonated with a bad strategy These documents that the company produces are not actually strategy. They're Bed strategy, the standard bed strategy for a corporation is a set of profit goals or performance goals. Should have gold. The engineering of how companies work to some extent. An abstract high level goal. Down a stretch, there are something else, their ambitions, and ambitions are gone strategies. List of all the different things you wish would happen. His know I was asked to help. Of the U.S. Department of Defense, create a strategy for all its 17 different intelligence agencies.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

31. “Its strategic assembly without any synthesis. I mean, strategies that What's mysterious to me? What was mysterious to me and what remains mysterious to me is how so many organizational leaders don't do it. They create bad strategy. They do something that they say is strategy, and then it's not.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

32. “If you're Microsoft right now and you're trying to adapt to AI, you have a diagnosis. Well, let's see. You see the challenge of how do we adapt to it. You create a guiding policy that you're going to invest in. One of the major leaders, and then you're going to begin to incorporate that into your search engine. And then you have coherent actions. You actually do some of these things, and it's not. Rocket science. The difficulty is that companies don't. Companies that say Our future is, let's say, something that's not in a software business that's Industry 4.05.0, that we're going to have, we're investing in the future of. robotics and computer vision and all that. That's going to be our future. Then you see what they're doing. They've blocked this company, they've bought this company, they've bought this company. And that's it”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

33. “And that can be a long term sense of how we compete. You don't have to change a strategy every five minutes for every five years. If you're making almond joint candy bars or something, you don't really change your strategy constantly if you're in the tech business, of course, you have a shorter time horizon. And then the coherence in action. It's critical. And so these are the three what I call basic elements, the kernel. If 813 is missing It's not really a strategy, it's something else.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

34. “Most companies have strategic goals of increasing growth and increasing. Magically, that can happen in some cases, God. Growth and profit are baden each other. Say we define profit as return on If you're going to increase growth and increase return on equity, how do you do that? Because you're basically going to invest less to get your return on equity yet. Or you're going to grow and get your profit. You're not. Well, how are you going to do that? You get your profit margin up and grow faster. This is baby talk But CDO after CEO, Thano can say, Well, we're going to grow. And so having a coherent actions that don't on one another. An important card of strategies, those three elements have to be there. There has to be an understanding of the situation. There has to be a guiding policy. How are we going to deal with it?”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

35. “And so the guiding policy is sort of at that level. What do we really have to do? How do we? What are we doing and what are we not doing to deal with the diagnosis that we create? And then the most important part of a strategy, the part that it's so easy to leave out because people like to think of strategy as this. High level conceptual thing. The coherent action, you have to do something. And what you do Has to be coherent in several ways. The first way is it has to deal with the problem or the diagnosis and the guiding policy. It has to implement. It has to be coherent in that you shouldn't do things that fight each other. Shouldn't say, oh. We are going to Burn less oil, and at the same time, we're going to import more Doesn't make any sense to do things that are self-contradictory. people do.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

36. “Is what we're doing. We have 17 priorities. That's the opposite of policy. That's a lottery list of all the things we wish would happen over the next year. Going to gain market share in China. We're going to cut our emissions. We're going to save energy. We're going to be safer. We're going to cut costs for all these different things we're going to do. Roll priorities. No, lots of people misuse the word priority when they're trying to do all that. You wouldn't want to be in. Commercial airplane and here the tower say to the pilot I'm giving priority to the following three planes long gone way far. Right, what do you know there's something wrong? Well, that's the word priority means the first. It doesn't mean the grab bag of everything that you can think of that might matter. It means what's first.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

37. “The world is more complicated than two by two, unfortunately I was educated as an electrical engineer, and my early years were spent designing spacecraft for NASA. And when I got into looking at business and business strategy stuff, I was always amazed at how. Unintellectual. Your head was struggling to master Z transforms. And yet these people were looking at two by two significant diagrams downwards and say, well, that's what the company's about. So a rich diagnosis of the situation, but then a guiding policy. The guiding policy is what are we going to do? It's a simple thing to say a guiding policy, and the guiding policy is awarded in strategy. It's the core of it. Here's how we're dealing with the situation. Yet, when I say that, it flies in the face of as I was writing that, I had a client who had 17 priorities.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

38. “That was a basic idea going ahead enough. So if that's the core of it. The basic activity what are you doing when you create a strategy while you're diagnosing the situation? You're trying to figure out what's going on here. What's the nature of reality that you deal with? Now, humans can't understand all of reality. No one can. Part of what a diagnosis is is a decision about what you're going to pay attention to. And the hypothesis or several hypotheses about what? What's going on? How do things connect together? And that's the beginning of the diagnosis. And so diagnosis is an understanding of the situation that you're in. That's And you can use any of those tools that are famous for that, and you can try for you any one of a number of things to try to comprehend the situation.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

39. “Surprised that David is able to beat this giant warrior. And that's a strategy story. Strategy story is about discovered strain. It's about, oh, look at how they did that. Look at how he got made in five moves. Look at how that's a strategy story. Look at how Steve Jobs changed the world when people couldn't expect it. That's emotion what a strategy story is. So I want to write. And my wife, Kate, asked me, well, do you defy strategy? I said, oh, it's really hard. And she said, well, you can't write a book about it if you can't define it. Because I have this other conceptual skein in my head that all teachers and writers had, which is that there's a bunch of analytical tools. This is back in 2005. 2004. And I gradually came to the realization of strategy is problem solving. It's a form of dealing with challenges.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

40. “Right, sure. So when I used to teach strategy. Many years at Harvard, and at UCLA and other places. Lots of ways of looking at strategy, and so years and years ago we still look at the learned curve and the matrix and the five forces and all of those kinds of analytical tools And began to dawn on me at some point. This isn't strategy. These are analytical tools for analyzing the problem, for thinking about things, for looking at competition. Think about strategy. Strategy is one. And I started to write a book. And the first chapter of the book was the first part I wrote was David and Goliath. Strategy story And my client in writing about David Coy was that.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

41. “Challenge, a problem. What are we going to do about global warming? What are we going to do about China once you read in a five word of Taiwan?”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

42. “Strategy is a design for overcoming a high stage challenge It's a mixture of policy and action designed to deal with a challenge. The challenge could have an upside. It could be, oh, geez, we were fooling around back 40 and we discovered, what do we do? Or it could be negative. It could be that new innovation is driving us out of the market. But a challenge is the hardest strategy. The work comes from strategos, which is Greek for the Greek selected ten stratigoi. To serve as strategic leaders at Atkins. And they were elected. And they dealt with issues of the day. The Persians are invading. There's a plague in Channel. We need money for a new temple. And that's where the word comes to us from. But it isn't just military, it wasn't it, So, strategy is always about dealing with.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source

43. “Don't call it a drag. Call it an action agenda. Huge numbers of people out there willing to sell you advice, mission and your vision and your values. All these things that have to be in place before you can have a strategy. That's not true. We begin to try to identify the one or two key challenges that can actually be addressed and what are we going to do about it? coherent actions we are going to do to take things on. Okay, we're going to go after this and here's the action steps we're going to take to do that. That's essence of what you're doing when you're thinking strategically.”

    2024-01-21 · Lenny's Podcast · Good Strategy, Bad Strategy | Richard Rumelt · IDENTIFIED FROM THE TRANSCRIPT · source