Good Strategy/Bad Strategy: The difference and why it matters

No one has an advantage at everything. Teams, organizations, and even nations have advantages in certain kinds of rivalry under particular conditions. The secret to using advantage is understanding this particularity. You must press where you have advantages and side-step situations in which you do not. You must exploit your rivals’ weaknesses and

Having conflicting goals, dedicating resources to unconnected targets, and accommodating incompatible interests are the luxuries of the rich and powerful, but they make for bad strategy. Despite this, most organizations will not create focused strategies. Instead, they will generate laundry lists of desirable outcomes and, at the same time, ignore

increasing value requires a strategy for progress on at least one of four different fronts: • deepening advantages, • broadening the extent of advantages, • creating higher demand for advantaged products or services, or • strengthening the isolating mechanisms that block easy replication and imitation by competitors.

key corporate advisers—investment bankers, consultants, mergers and acquisitions law firms, and anyone who can claim a “finder’s fee”—can earn a king’s ransom by being “helpful” in a major deal.

The fantastic rate of expansion of the “new network” carriers was taken as evidence of competitive superiority, unleashing a frenzy of investment and stock appreciation. When the telephone companies finally began to respond in 2000, the bubble popped.

A long list of “things to do,” often mislabeled as “strategies” or “objectives,” is not a strategy.

the kernel of strategy—a diagnosis, a guiding policy, and coherent action—applies to any complex setting. Here, as in so many situations, the required actions were not mysterious. The impediment was the hope that the pain of those actions could, somehow, be avoided.

In any organization there is always a managed tension between the need for decentralized autonomous action and the need for centralized direction and coordination. To produce a turnaround of a chain-link system, Marco Tinelli tipped the balance, at least for a while, strongly toward central direction and coordination.

This disaster—like the Johnstown Flood, the burning of the Hindenburg, the aftermath of Katrina* in New Orleans, the BP gulf oil spill, and many other man-made disasters—was the result of five intertwined errors in human judgment and behavior.