Richard Rumelt is a legend in the world of strategy. He’s the author of Good Strategy/Bad Strategy and The Crux: How Leaders Become Strategists, both of which are often recommended by guests on this podcast. From his early days teaching in Iran at a Harvard-sponsored business school to teaching at Harvard Business School itself to over four decades teaching at UCLA’s Anderson School of Management, Richard’s impact resonates globally. His strategic insights are sought after by major corporations including Microsoft, Shell, Apple, AT&T, Intel, and Commonwealth Bank and by governmental organizations such as the U.S. Army Special Operations Command. In this episode, we discuss: • The essential components of a good strategy • The importance of coherence in strategy • Common pitfalls that create a bad strategy • How “power” plays into strategy, and common sources of power • The value of knowing history when developing effective strategies • Why a strategy should simply be called an “action agenda” • The need for one decider in an organization — Brought to you by: • CommandBar—AI-powered user assistance for modern products and impatient users: https://www.commandbar.com/lenny • Miro—A collaborative visual platform where your best work comes to life: https://miro.com/lenny • Vanta—Automate compliance. Simplify security: https://vanta.com/lenny Find the transcript and references at: https://www.lennysnewsletter.com/p/good-strategy-bad-strategy-richard Where to find Richard Rumelt: • Email: richard@generalimagination.com • LinkedIn: https://www.linkedin.com/in/richard-rumelt-18520828/ • Website: https://thecruxbook.com/ Where to find Lenny: • Newsletter: https://www.lennysnewsletter.com • X: https://twitter.com/lennysan • LinkedIn: https://www.linkedin.com/in/lennyrachitsky/ In this episode, we cover: (00:00) Richard’s background (04:29) What is a strategy? (06:23) The essential components of a good strategy (the “kernel”) (15:04) An example of good strategy (16:55) Bad strategy (25:17) The importance of focus and power (28:19) Identifying and utilizing power (34:38) Types of power (41:13) Implementing power (48:15) The importance of historical knowledge (55:23) How to write an action agenda (01:02:47) The crux (01:10:40) Challenges to executing a strategy (01:15:44) The need for a decider (01:20:39) Strategy for startups (01:26:04) Richard’s “value denials” exercise (01:31:01) Closing thoughts (01:33:57) Lightning round Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com. Lenny may be an investor in the companies discussed.