Richard P. Rumelt

You know, seminal textbook there.

And the other one is Good Strategy, Bad Strategy by Richard Rumelt, which I think is, it's the first time anyone's ever really succinctly defined to me or for me what a strategy actually is.

And the idea of it being a means of overcoming an obstacle, which is still how I think about it.

And I love it.

And therefore, most of the times, you will find a solution which will become tomorrow's problem.

In good strategy, bad strategy, Richard Rumelt says that every good strategy has a kernel.

A diagnosis, you will see me on video, right? So step one is a diagnosis.

Step two is a guiding policy.

So for the next twenty minutes, I'm gonna give you a quick primer on a book that I love.

It's called Good Strategy Bad Strategy by a guy named Richard Rumelt.

Uh, I think that's how you say his name.

Um, everything sort of builds on that.

Again, like one of my favorite books, um, and I think it applies up and down sort of the, the, the layers of a company.

It, it, it can apply at the company level, and then it can apply all the way down at your team level or even an initial... an individual initiative that you may be working on.

So, uh, Richard Rumelt is a strategy professor at UCLA's Anderson School of Management.

In twenty eleven, he published a book called Good Strategy Bad Strategy, and if you lead anything, a company or a team or a project, um, I would recommend it's worth your time to sort of check this book out.

I love that.

So, um, you and I share an admiration for Dick Rumelt's, uh, ideas about strategy.

Mm-hmm.

And, um, and he has a, a, a very nice definition of strategy, which is quite different than a lot of traditional strategy work.

A passenger? Well, that's a completely different story.

Well, I was reading this article by strategist Richard Rumelt, who I've been going down a rabbit hole of sorts reading more and more about.

And in this article, he asked what Fred Smith, hypothetically, would make of artificial intelligence.

And the speculation about Fred Smith was necessary because he passed away in June of 2025.

If other people warrant it in the future right now, it is my man, Charlie Munger, Dr. Peter Drucker, this guy, Edward Debono, that I'm going to be talking a lot about here in the future because I don't know how I survived this long trying to think intelligently and haven't come across this guy before.

Billy Bean, understanding value, money ball, bringing a little sports.

general management mindset in here I thought was good, change management expert, John Cotter, my friend and strategy guru, Rich Horwath, and this guy, Richard Rumelt.

So that's seven, and I've gone through a couple rounds of having these individuals challenge me in different ways based on what they have already published to help me think better.

And there's a lot of systems that need to be put in place, and I think we did a lot of really, really good work.

And part of the reason that we did good work that I think will really affect the organization over the next few years is because the chair of the board shared an article with us before we all came to the retreat to work together called The Perils of Bad Strategy by Richard Rumelt.

And I am going to see if I can put a link to that article in the show notes.

It may be a situation where you have to give an email on the website to get the article, but it is well worth it if you give them your email.

So Richard Rumelt is an author who wrote a book called Good Strategy Bad Strategy, and he has worked for decades with very large organizations, helping them with strategic planning.

So I'm kind of amazed that I had never heard of him before, but this article that Aberami sent me, she's the chair of the board, blew my mind because it made me realize I was missing a very important ingredient in my strategic planning guide.

So you got a template, kind of an outline, bare bones template version of my strategic planning guide in the last several episodes.

Right.

We use Rumelt's criteria.

There are four criteria, and they are absolutely essential for the exam.

Walk us through them.

Does this theme create an advantage that is rare? Is it genuinely hard for competitors to copy? If your entire strategic theme is just lower our prices by two percent, a well-funded competitor can copy that strategy in five minutes.

It offers no sustained competitive advantage.

Let's run some drills to cement Rumelt's criteria.

Question five point one three.

One of my favorite books of all time on strategy, I think there's, like, one really excellent book.

It's Good Strategy/Bad Strategy by Richard Rumelt.

It's the best book.

Any founder listening to this, listen to that book.