Good Strategy Bad Strategy 15: Putting It Together (Richard Rumelt)

The whole point of strategy is to give yourself an edge over your competitors. Remember, in the beginning, we said advantage is rooted in differences, not in similarities? Everything we've discussed so far is geared towards making you stand out and be better than your rivals.

Strategy is not just about ideas. You need policies and actions that will make it happen. Remember the kernel, problem/challenge, guiding policy and cohesive action? You don't win without action. And you don't win with unfocused and contradicting action. Your actions must be coherent and support each other. 

Next, you need to think about where things could go wrong, and how to prevent them from going wrong. If prevention is not possible, then how do you recover?

Remember what Tony Hsieh said about not outsourcing your core competencies? That's another important element of strategy. Control your core competencies you can make it difficult for your competitors to copy or replicate your advantages. Not forgetting the proprietary learnings from which you will benefit when you're actively involved in the process of delivering value to your customers. 

Rumelt reminds us that setting goals is not strategy. Growth is the outcome of a successful strategy. Chasing growth without the support of a good strategy is just wishful thinking. Even growth through acquisition requires buying companies aligned with your core strategy. Random acquisitions will cost you dearly in the long term. 

What I've observed lately, however, is that companies with the financial muscle will acquire certain companies not because they need to, but because they want to deprive their rivals of the skills and resources possessed by the acquired company.