Some business books become famous because they are useful in the moment. Richard Rumelt’s Good Strategy/Bad Strategy feels more impressive than that. It was published years ago, but it still feels uncomfortably current because the same mistakes it criticizes are still everywhere: leaders setting ambitious goals, calling them strategy, and then acting surprised when nothing really changes (Rumelt 2011).
What struck me most about the book is that it actually changed how I think about strategy in two ways.
First, it made me appreciate that good strategy takes time. Not because slow thinking is automatically better, but because real strategy depends on careful analysis of the situation. You have to understand the nature of the challenge, what is actually causing underperformance or friction, what constraints matter, and where leverage might exist. That kind of work cannot be replaced by vision statements, planning rituals, or generic ambition. Although AI can certainly help these days. Rumelt makes strategy feel less like a declaration and more like disciplined diagnosis.
Second, the book sharpened my sense that setting goals are the easy part. The harder and more important work is diagnosing the situation, setting a clear guiding policy, and translating that policy into a coherent set of actions. That is what makes strategy useful under uncertainty. The “what” of strategy is often easy to say out loud.Enter a new market. Develop these use-cases. Improve retention. Increase margins. But a strategy only becomes real when it connects a diagnosis of the problem to a policy for dealing with it and to coordinated actions that actually follow from that policy.
That is one of the core lessons I took from the book: uncertainty is not a temporary inconvenience that good management eventually eliminates. It is the normal condition. Because of that, strategy is not just about naming a destination. It is about understanding the situation well enough to choose a coherent approach and then act on it consistently.
Why the book still feels relevant
What is surprising is not just that Rumelt describes these problems clearly. It is that the book is old enough that you might expect management thinking to have improved by now, and yet the same bad habits seem to keep repeating.
Organizations still confuse goals with strategy. They still produce long lists of priorities that are really attempts to avoid making hard choices, diffusing resources across multiple initiatives to please everyone. They still hide weak thinking behind motivational language. They still act as though the job of leadership is to announce targets rather than to define a coherent approach.
That is why the book feels so durable. Rumelt is not attacking a fad. He is voicing out a recurring pattern of institutional wishful thinking. The details change, the vocabulary evolves, the slide decks get prettier, but the core mistake remains the same: treating strategy as a statement of intent instead of a serious theory of action.
Strategy as disciplined hypothesis
The biggest conceptual shift the book gave me is that strategy should be understood less like prophecy and more like disciplined hypothesis.
That does not mean strategy is random, improvised, or purely reactive. It means a good strategy begins with an educated judgment about what will work, why it will work, and under what conditions it might fail. From there, the task is not to defend the plan at all costs. The task is to act on that judgment coherently and then test it against reality.
Strategy is not a one-time slogan produced during an offsite, but neither is it loose experimentation. It is a structured effort to diagnose a challenge, commit to a policy, coordinate action, and then evaluate whether the original judgment is holding up.
This is one reason I found the book so clarifying. Rumelt pushes strategy away from performative certainty and toward disciplined judgment. He treats strategy nearly as a scientific endeavour, one that depends on evidence, interpretation, and the willingness to confront inconvenient facts.
What the book gets right that many leaders still miss
The book’s enduring strength is that it insists strategy is not the same as aspiration.
Aspirations matter. Goals matter. Ambition matters. But none of them, on their own, tell you what to do when tradeoffs appear, when the environment shifts, or when your assumptions turn out to be wrong. That is why diagnosis, guiding policy, and coherent action matter so much together. A strategy becomes usable only when those three pieces reinforce one another.
This also explains why genuinely good strategy is rare. It demands more than confidence. It demands analysis, patience, and the courage to choose a path that excludes other possibilities. It requires leaders to do the harder work of understanding reality before trying to control it.
Final take
It takes time. It requires careful analysis. It depends on more than defining objectives. It requires diagnosing the situation, setting a clear guiding policy, and turning that policy into coherent action. And it has to be approached as a disciplined hypothesis: make the best judgment you can, act on it coherently, gather evidence, and keep testing whether that judgment still holds.
That may be why the book still feels fresh. It is describing a discipline that many organizations still have not learned. We still see management teams mistake goals for strategy. We still see planning processes produce slogans instead of diagnosis.
Rumelt’s book matters because it forces a more demanding standard. It reminds us that strategy is not about sounding decisive. It is about understanding the situation well enough to choose a coherent policy, back it with coordinated action, and learn from reality without pretending uncertainty has disappeared.
Note: Interestingly I have seen serval agent skills implementing the same principles that Rumelt describes, which suggests that these ideas are not just theoretical but also practical in the age of AI (see here for an example).