The Four Hallmarks of Bad Strategy
Detect bad strategy by spotting fluff, missing challenges, goal-as-strategy, and bad objectives
Bad strategy is not simply the absence of good strategy. It grows out of specific misconceptions and leadership dysfunctions. Rumelt identifies four hallmarks that reliably signal bad strategy, turning the detection of strategic nonsense into a learnable skill.
The four hallmarks are: (1) Fluff, which is gibberish masquerading as strategic concepts, using inflated 'Sunday words' and esoteric jargon to create the illusion of high-level thinking; (2) Failure to face the challenge, where the strategy does not recognize or define the actual challenge being addressed; (3) Mistaking goals for strategy, where statements of desire replace plans for overcoming obstacles; and (4) Bad strategic objectives, which are either impracticable or fail to address critical issues.
Rumelt argues that bad strategy is the active avoidance of the hard work of crafting good strategy, not merely miscalculation. It flourishes because it floats above analysis, logic, and choice. Three common pathways produce bad strategy: the unwillingness to make hard choices among competing priorities, the seduction of template-style strategy (vision/mission/values fill-in-the-blanks), and New Thought positive-thinking ideology that treats desire and belief as sufficient for success.
- Bad strategy is the active avoidance of the hard work of crafting good strategy, not merely a failed attempt at good strategy
- If you cannot define the challenge your strategy addresses, you cannot evaluate or improve it
- A strategy that is a list of desired outcomes with no plan for overcoming obstacles is not a strategy at all
- Fluff and jargon are not harmless padding; they actively prevent clear thinking about real challenges
- The inability or unwillingness to choose among competing priorities is one of the most common sources of bad strategy
- Test for FluffRead through the strategy document and identify any passages that use inflated language, buzzwords, or apparently esoteric concepts that do not add meaning. Strip away the jargon and see if anything substantive remains. If a statement says nothing beyond what a thoughtful person would already know, it is fluff.Pro tipA hallmark of fluff is that restating it in everyday language reveals its emptiness. A bank's strategy stating it would pursue 'a customer-centric intermediation strategy' was simply saying it would be a bank. The fancy language disguised the absence of actual strategy.
- Test for Failure to Face the ChallengeAsk what specific challenge or obstacle the strategy is designed to overcome. If the strategy document does not identify the challenge, or if the challenge is stated so vaguely that it could apply to any organization, the strategy fails this test.Pro tipInternational Harvester's 1979 strategy set financial targets and goals but never diagnosed or addressed the company's actual challenge: a labor force in near-revolt and a deeply dysfunctional relationship with its unions. Without naming this challenge, no set of financial targets could save the company.
- Test for Goals Masquerading as StrategyCheck whether the strategy is actually a statement of desired outcomes rather than a plan for achieving them. Phrases like 'Our strategy is to grow revenue by 20%' or 'Our strategy is to be the market leader' are goals, not strategies. A real strategy explains how obstacles will be overcome.Pro tipCEO Chad Logan's 'strategy' was to reach $100 million revenue via 20% annual growth. When pressed on how, he said 'It starts with a commitment to a goal.' This reveals the confusion: ambition is the starting point of strategy, not strategy itself.
- Test for Bad Strategic ObjectivesEvaluate whether strategic objectives are feasible and address critical issues. Watch for 'dog's dinner' objectives (long lists of things to do that are really just a restatement of the problem), 'blue-sky' objectives (unachievable aspirations disconnected from reality), and objectives that fail to address the most critical issues facing the organization.Pro tipThe Los Angeles Unified School District set a strategic objective of raising proficiency rates to 100% while 33% of its students dropped out before graduating. Setting unachievable goals while ignoring the most critical problems is the hallmark of a bad strategic objective.WarningBe especially wary of long lists of objectives that try to give something to every constituency. The inability to prioritize is a sign that the leader has not done the hard work of making strategic choices.
Enron's stated strategy was built around buzzwords like 'laser-focused,' 'world's leading company,' and pursuing the 'best of the best.' It described itself as a company that 'creates innovative and efficient energy solutions' and was committed to providing 'sustainable solutions.' This language said nothing about how Enron actually competed or what challenges it faced, masking what turned out to be massive fraud.
In 1979, International Harvester's new CEO Archie McCardell developed a strategy focused on financial targets and market share goals. The strategy completely ignored the company's most critical challenge: a deeply adversarial relationship with its labor unions that was destroying productivity. The strategy set goals without diagnosing or addressing this core obstacle.
CEO Chad Logan presented his strategy as reaching $100 million in revenue through 20% annual growth. When asked how he would achieve this, he responded that 'it starts with a commitment to a goal' and that people would 'ichiban' (be number one). There was no analysis of the competitive landscape, no identification of challenges, and no plan for overcoming obstacles.
Rumelt coined the term 'bad strategy' at a 2007 Washington D.C. seminar on national security strategy organized by the Center for Strategic and Budgetary Assessments. Examining the U.S. National Security Strategy document, he found it was filled with slogans and goals but contained no actual strategy. When he presented this analysis to attendees including former Secretary of Defense James Schlesinger, the room's reaction confirmed that this was a recognized but unnamed problem. Rumelt realized the same patterns appeared everywhere, from corporate boardrooms to government agencies to nonprofit organizations.