Much has been written about the increasing volatility and complexity of the business environment — and for good reason. They make strategic work more demanding.
Whether the challenge stems from volatility, uncertainty or deeper structural complexity, the implication is the same: good strategy depends on clear, disciplined thinking.
It requires judgement, focus and the ability to make real choices under imperfect information — precisely the capabilities organisations struggle with when pressure mounts.
Richard Rumelt captured this uncomfortably well in Good Strategy / Bad Strategy. His argument was never about frameworks or best practices. It was about intellectual honesty. Good strategy, he argued, is not a vision statement, a list of ambitions or a detailed plan. It is a coherent way of dealing with a challenge.
Richard Rumelt captured this uncomfortably well in Good Strategy / Bad Strategy. His argument was never about frameworks or best practices. It was about intellectual honesty. Good strategy, he argued, is not a vision statement, a list of ambitions or a detailed plan. It is a coherent way of dealing with a challenge.
More than a decade later, that insight feels even more relevant — and even more demanding.
Diagnosis is harder than it looks
Rumelt places diagnosis at the heart of strategy for a reason. Without a shared understanding of what really matters, everything that follows becomes noise.
Diagnosis is not about describing everything that is happening. It is about simplifying reality without oversimplifying it. About distinguishing signal from
background, structure from surface-level turbulence.
This is where many strategies fail today.
In a world saturated with data, trends and expert commentary, organisations often mistake awareness for understanding. Strategy documents list dozens of forces — geopolitics, technology, regulation, sustainability, talent, AI — without ever making clear which ones actually define the challenge at hand.
The result is not nuance, but paralysis.
A good diagnosis is uncomfortable because it excludes. It says: this is the problem we are solving, and by implication, these other things are not central right now. That requires judgement, and judgement requires leaders to expose their thinking to scrutiny.
Guiding policy is about focus, not slogans
Rumelt’s second element — the guiding policy — is often misunderstood or watered down.
In practice, many organisations replace it with abstract aspirations: “be customer-centric”, “lead in innovation”, “grow sustainably”. These statements may be well intentioned, but they do not guide choice. They allow everyone to agree while continuing to pull in different directions.
A real guiding policy does something much more demanding: it channels attention and effort. It clarifies how the organisation intends to deal with its key challenge and what kinds of decisions should follow from that logic.
In today’s environment, this is particularly difficult because leaders are asked to hold multiple tensions at once: efficiency and resilience, global scale and regional fragmentation, speed and control, innovation and regulation. The temptation is to avoid committing and to keep options open everywhere.
But strategy without focus is not flexibility — it is drift.
A guiding policy does not eliminate uncertainty. It provides a way to act despite it
Coherence is a choice, not a checklist
The third element — coherent action — is where strategy either becomes real or quietly dissolves.
Coherence is not about having many initiatives. It is about having actions that reinforce each other. About ensuring that investments, capabilities, structures and incentives point in the same direction.
This is increasingly challenging in large organisations, where different parts face different pressures and time horizons. Technology roadmaps, regulatory demands, market opportunities and operational realities do not naturally align.
Coherence therefore requires active trade-offs. Saying no. Accepting that some local optimisations will be sacrificed for system-level direction.
This is why good strategy often feels unexpectedly narrow. Not because leaders lack ambition, but because they understand that concentrated effort beats dispersed activity.
Beyond Rumelt: judgement in a geo-economic world
What Rumelt perhaps underplayed — understandably in his context — is how much external systems now constrain strategic choice.
Today, strategy is shaped not only by markets and competitors, but by regulation, industrial policy, security considerations and technological architectures that lock in paths over long periods. As discussed in our earlier viewpoints, companies increasingly operate within geo-economic and institutional realities they do not control.
This does not make strategy obsolete. It makes interpretation and judgement more central than ever.
Good strategy today is less about outsmarting competitors and more about understanding where degrees of freedom actually exist — and where they don’t. It is about choosing where to commit, where to comply, and where to build optionality.
That judgement cannot be delegated to frameworks.
