Sample frameDay 051·Strategy · Foundations

Good morning. Most strategy documents contain everything except a strategy. Today you learn the test.

Strategy.

The Strategy Kernel

5 min read·Apply by lunch

The question

If you deleted every goal, target and ambition from your strategy document, would anything remain that explains what stands in your way and how you intend to overcome it — and if you already suspect the answer is a blank page, why haven't you written the diagnosis first?

The idea

Richard Rumelt, professor of strategy at UCLA Anderson and one of the field's most respected thinkers, opened Good Strategy Bad Strategy (2011) with an uncomfortable observation: most strategy documents contain no strategy. They contain goals ('grow revenue thirty per cent'), vision ('be the leading provider') and a list of initiatives — but nothing that connects a diagnosis of the actual challenge to a way of overcoming it. Rumelt's answer is the kernel, the three parts every real strategy has: a diagnosis that names the critical challenge in the situation; a guiding policy — an overall approach for dealing with it; and a set of coherent actions that carry the policy out. The trap is mistaking ambition for strategy. A goal states where you want to be; a strategy explains why you aren't there already and how you will overcome what stands in the way. Most people write the goal, skip the diagnosis, and call the gap a plan.

The framework

01
Start with the diagnosis — name the challenge before you name the goal.
A diagnosis simplifies the mess of a situation down to its critical aspect: not everything that is wrong, but the one obstacle that, left unaddressed, makes every goal a fantasy. Write it as a paragraph that explains why the business isn't already where it wants to be — a competitor's structural cost advantage, a channel that has stopped working, a product built for a segment that has moved on. The test of a good diagnosis is that it is arguable: it takes a position on what is really going on, which means someone in the room could disagree with it. A diagnosis nobody could dispute is a description, and descriptions don't tell you what to do.
02
The guiding policy rules things out — that's how you know it's real.
The guiding policy is the overall approach you choose for overcoming the diagnosed challenge — not a vision, not a target, but a direction that channels action without prescribing every step. Its defining property is exclusion: a real policy makes some previously reasonable options wrong. 'Serve customers better' excludes nothing and is therefore fluff; 'compete only where our installed base gives us a distribution advantage' rules out whole markets, and the ruling out is the strategy. It should also lean on some genuine source of leverage — an asset, a position, an insight competitors would find hard to copy — because a policy anyone could adopt confers advantage on no one.
03
Actions must be coherent — coordinated, resourced, and pointing the same way.
The most common failure Rumelt documents is not bad analysis but incoherence: a list of initiatives, each individually sensible, that quietly fight each other — cutting cost while entering a premium segment, centralising for efficiency while promising local responsiveness. Take your current initiative list and test every item against the guiding policy: does this action carry the policy out, and does it reinforce the others? Actions that fail the test aren't neutral; they consume the money and attention the coherent ones need. Strategy is as much about what you stop as what you start, and the stopping is where most organisations flinch.
04
Run the bad-strategy test on your own document.
Rumelt named four hallmarks of bad strategy, and together they make a brutal audit. Fluff: language that sounds strategic but dissolves under one 'what does that actually mean?'. Failure to face the challenge: a document with no diagnosis cannot contain a strategy, because there is nothing for the strategy to overcome. Mistaking goals for strategy: targets and ambitious visions restated as if wanting were a method. And bad strategic objectives: a long list of things to do, none connected to the obstacle, or objectives exactly as impracticable as the challenge they dodge. Read your own strategy page against the four this morning. If it fails, that is not a writing problem — it is the diagnosis you skipped, announcing itself.

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