Enabling Operational Excellence
Enabling Operational Excellence
Enabling Operational Excellence
Enabling Operational Excellence

TURNING OPERATIONAL KNOWLEDGE & COMPLIANCE INTO A COMPETITIVE EDGE

We systemize tacit knowledge into explicit knowledge

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Posts Tagged ‘Rumelt’

Understanding Strategy as a Key Business Analysis Tool: It’s Not Business Process!

John Matthias recently wrote this about our new book, Building Business Solutions: Business Analysis with Business Rules[1]:

“I especially liked the discussion about the mission and goals. I still see business process analysis in organizations I visit where the goals are not articulated well, and the results are not useful. (I’ve done it myself.) It’s easy to get lost among the trees, unaware of the contours of the forest or what direction you’re going.”

Indeed! That’s why we came up with the Policy Charter, which is the deliverable in our approach that lays out the elements of strategy and their motivation.  A Policy Charter is all about business goals, business risks, and business policies. It’s not about business process! [2] How do you distinguish between good business strategy and bad business strategy? Noted strategy expert Richard Rumelt distinguishes the good and bad as follows.[3] Good Business Strategy Rumelt, p. 20: “good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests.  Strategy is at least as much about what an organization does not do as it is about what it does.” Rumelt, p. 243: “good strategy is, in the end, a hypothesis about what will work.  Not a wild theory, but an educated judgment.  And there isn’t anyone more educated about your [business] than the group in [the] room.”  Bad Business Strategy Rumelt, p. 32: Bad strategy “… is not simply the absence of good strategy.  It grows out of specific misconceptions and leadership dysfunctions.  To detect a bad strategy, look for …
  • Failure to face the challenge. When you cannot define the challenge, you cannot evaluate a strategy or improve it.
  • Mistaking goals for strategy.  Many bad strategies are just statements of desire rather than plans for overcoming obstacles.”
Rumelt, p. 32: Bad strategy “… is long on goals and short on policy or action. …  It uses high-sounding words and phrases to hide [its] failings.”  He means (and says) fluff. The Three Skills of Good Business Strategy What do you need to be successful with strategy? Rumelt (p. 268) says: “… you must cultivate three essential skills or habits.
  • First, you must have a variety of tools for fighting your own myopia and for guiding you own attention.
  • Second, you must develop the ability to question your own judgment.  If your reasoning cannot withstand a vigorous attack, your strategy cannot be expected to stand in the face of real competition.
  • Third, you must cultivate the habit of making and recording judgments so that you can improve.”
Good stuff!


[2] The standard for organizing business strategy is provided by the Business Motivation Model (BMM). See www.BusinessRulesGroup.org
[3] Rumelt, Richard [2011].  Good Strategy Bad Strategy:  The Difference and Why It Matters.  New York, NY:  Crown Publishing, a division of Random House Inc.

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A Rigorous Definition of Fluff … Good Thoughts on Strategy for Business Solutions (and Other Things)

I always thought my business partner, Gladys S.W. Lam, pioneered use of the word fluff for all things superficial, especially in written material. She uses it well and often (for example, she might very well use it for these very words). However, now there is evidence of other expert users of the word.  Just to be sure of the meaning of fluff:  [MWUD 2b]: something essentially trivial and lacking importance or solid worth.  In Good Strategy Bad Strategy The Difference and Why It Matters by Richard Rumelt (Crown Publishing, a division of Random House Inc., New York, NY, 2011) fluff is described (p. 32) as “… a form of gibberish masquerading as strategic concepts or arguments. It uses ‘Sunday’ words (words that are inflated and unnecessarily abstruse) and apparently esoteric concepts to create the illusion of high-level thinking.”  Rumelt makes some excellent points. About business risks he says (p. 42): “If you fail to identify and analyze the obstacles, you don’t have a strategy. Instead, you have either a stretch goal, a budget, or a list of things you wish would happen.” Good stuff!  What do you need to be successful with strategy? Rumelt (p. 268) says: “you must cultivate three essential skills or habits. First, you must have a variety of tools for fighting your own myopia and for guiding you own attention. Second, you must develop the ability to question your own judgment. If your reasoning cannot withstand a vigorous attack, your strategy cannot be expected to stand in the face of real competition. Third, you must cultivate the habit of making and recording judgments so that you can improve.”  A Policy Charter is the deliverable in our methodology Proteus used to lay-out the elements of strategy and their motivation (know-why). By the way, did you know that know-why is actually in the dictionary? I’m not sure I actually know why.  How do you distinguish between good business strategy and bad business strategy? (Rumelt doesn’t say anything about ugly strategy, as far as I know.) He says (p. 20)“good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests. [I like that!] Strategy is at least as much about what an organization does not do as it is about what it does.” He also explains (p. 243) that “good strategy is, in the end, a hypothesis about what will work. Not a wild theory, but an educated judgment. And there isn’t anyone more educated about your [business] than the group in [the] room.” Exactly right.  Rumelt says bad strategy (p. 32 ) “… is not simply the absence of good strategy. It grows out of specific misconceptions and leadership dysfunctions. To detect a bad strategy, look for … Failure to face the challenge. … When you cannot define the challenge, you cannot evaluate a strategy or improve it. Mistaking goals for strategy. Many bad strategies are just statements of desire rather than plans for overcoming obstacles.” Bad strategy “… is long on goals and short on policy or action. … It uses high-sounding words and phrases to hide [its] failings.”  He means (and says) fluff.

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