Good Strategy / Bad Strategy

Reviewed by Diario de un Inversor · UpdatedJuly 17, 2026

Our review

Richard Rumelt opens with a provocation anyone who has set foot in a company will recognize: most documents called «strategy» contain none. Inspiring visions, ambitious goals, lists of initiatives — what Rumelt baptizes «bad strategy» — are substitutes for the only hard thing: choosing. Good strategy, he argues, has a three-part kernel: a diagnosis identifying the essential challenge (what is really going on), a guiding policy deciding the approach to overcome it, and a set of coherent actions executing it in coordination. The rest of the book deploys the sources of strategic power — leverage, advantage, industry dynamics, design — with the best case collection in the genre: from Trafalgar to the iPhone, from Walmart versus Kmart to the decline of the American TV industry. Rumelt writes with cutting clarity and explicit contempt for motivational verbiage, which makes the reading extraordinarily refreshing. If you could read only one business strategy book, most serious specialists would choose this one.

Key takeaways

• The kernel of every good strategy: diagnosis + guiding policy + coherent actions. If one piece is missing, there is no strategy.
• Goals are not strategy: saying «grow 20%» without explaining how to overcome the challenge preventing it is canonical bad strategy.
• Strategy is as much deciding what not to do as what to do; coherence between actions is a source of power in itself.
• Accurate diagnosis is the most neglected part: most organizations jump to solutions without naming the real problem.

Fact

Rumelt is professor emeritus at UCLA Anderson and was described by The Economist as one of the twenty-five most influential living management thinkers; the Spanish edition was published by Arpa in 2024.