Richard Rumelt’s Good Strategy Bad Strategy: What Marketers Miss

Richard Rumelt’s framework for strategy is built on one uncomfortable observation: most organisations mistake goals for strategy. Good strategy, in Rumelt’s terms, has a diagnosis, a guiding policy, and coherent actions. Bad strategy is a list of ambitions dressed up in strategic language. For marketers, the distinction matters more than almost any framework you will find in a business school curriculum.

Rumelt spent decades studying why some organisations win and others stall, and his conclusion was not that winners had better tactics. They had better thinking. They identified the critical obstacle, made a clear choice about how to address it, and then aligned their resources accordingly. Everything else followed from that.

Why Most Marketing Strategy Is Actually Bad Strategy

I have sat in a lot of strategy sessions. Across 20 years and more than 30 industries, I have watched smart people produce documents that use the word “strategy” throughout but contain almost none of the thinking the word implies. What they contain instead are targets, aspirations, and a list of things the team plans to do. Rumelt has a name for this. He calls it the “fluff” hallmark of bad strategy: the use of high-sounding words that create the appearance of strategic thinking without the substance.

The problem is not that marketers are lazy or incompetent. The problem is structural. Most organisations reward the production of strategy documents rather than the quality of strategic thinking. A 40-slide deck with a bold vision statement and a roadmap of initiatives looks like strategy. It gets approved. It gets presented to the board. And then it gets executed with enormous energy in directions that do not compound on each other, because no one ever identified the actual obstacle or made a real choice about how to address it.

Rumelt’s framework cuts through this. His “kernel of good strategy” is deceptively simple. First, a diagnosis that defines the nature of the challenge. Second, a guiding policy that addresses the challenge. Third, coherent actions that carry out the guiding policy. Three elements. Most marketing strategies contain none of them in any meaningful form.

What the Diagnosis Step Actually Requires

The diagnosis is where most marketing strategies fail before they start. A diagnosis, in Rumelt’s sense, is not a description of the market. It is a simplification of reality that identifies which aspects of the situation are critical. It answers the question: what is the obstacle that is actually preventing us from growing?

That question sounds simple. In practice it requires a level of intellectual honesty that organisations find genuinely uncomfortable. Because the honest diagnosis is often something the organisation does not want to hear. The product is not differentiated enough. The sales team is selling to the wrong customers. The brand is associated with a category that is shrinking. The go-to-market model made sense five years ago and does not make sense now.

I ran an agency that had been loss-making for two years when I took over. The previous diagnosis, as far as I could tell from the documentation, was that the agency needed more revenue. That is not a diagnosis. That is a symptom. The actual diagnosis, once I spent time in the business, was that the agency was doing high-effort, low-margin work for clients who did not value the strategic capability the team had spent years building. The obstacle was not revenue. It was a client portfolio misaligned with the agency’s actual strengths. Everything that followed, which clients to keep, which to exit, where to pitch, how to price, flowed from that single honest diagnosis. Within 18 months the business was profitable.

The diagnosis step is also where Rumelt’s thinking connects most directly to go-to-market strategy. If you are building or rebuilding a GTM motion, the diagnosis question is: what is the specific friction preventing the right customers from finding, choosing, and staying with us? That is a different question from “how do we grow?” and it produces a different quality of answer. For more on how this connects to broader growth thinking, the Go-To-Market and Growth Strategy hub covers the structural decisions that sit underneath effective GTM execution.

The Guiding Policy: Making a Real Choice

Once you have a diagnosis, the guiding policy is the approach you choose to address it. Rumelt is precise about what makes a guiding policy good: it channels action in certain directions without defining exactly what will be done. It is a constraint and a direction simultaneously. It rules things out. And that is what makes it uncomfortable for most organisations to produce.

A guiding policy that rules nothing out is not a policy. It is a statement of intent. “We will compete on quality, service, and price” is not a guiding policy. It is three different strategies in one sentence, which means it is none of them. Real strategic choices involve trade-offs. If you are competing on the speed of your service, you are probably not competing on the depth of your customisation. If you are going upmarket, you are probably not going after volume. The guiding policy makes the trade-off explicit.

This is where Rumelt’s thinking overlaps with Michael Porter’s work on competitive advantage, but Rumelt is more operationally focused. He is less interested in the taxonomy of competitive positions and more interested in whether the organisation has actually made a choice and whether that choice is coherent with the diagnosis. A guiding policy that does not address the diagnosed obstacle is bad strategy, regardless of how well-articulated it is.

For marketers, the guiding policy is the thing that should determine channel mix, messaging architecture, budget allocation, and team structure. If your guiding policy is to win in a specific vertical by becoming the most trusted technical resource in that space, then your content strategy, your sales approach, your event presence, and your hiring should all reflect that. If they do not, you do not have a guiding policy. You have a marketing plan with a decorative strategy slide at the front.

Coherent Actions: Where Strategy Either Holds Together or Falls Apart

The third element of Rumelt’s kernel is coherent actions. This is the test of whether the strategy is real. Coherent actions are not just a list of things the team will do. They are a set of coordinated moves that reinforce each other and that collectively carry out the guiding policy. The coherence is the point. Individual actions that are each defensible but point in different directions produce noise, not momentum.

I spent time early in my career overvaluing lower-funnel performance activity. We were running paid search, retargeting, and conversion optimisation programmes that looked excellent on a dashboard. The cost per acquisition numbers were strong. The attribution model said we were winning. But when I started looking more carefully at what was actually happening, a large proportion of the spend was capturing intent that already existed. People who were going to buy anyway. The actions were coherent with each other, but they were not coherent with a guiding policy of growing the customer base. They were coherent with a policy of efficiently harvesting existing demand, which is a very different thing, and a much smaller thing.

Rumelt’s coherence test asks whether each action amplifies the others. In a well-constructed strategy, the brand work makes the performance work more efficient. The content builds the audience that the sales team converts. The product decisions create the proof points that the marketing team needs. When actions are genuinely coherent, you get compounding returns. When they are not, you get a collection of activities that each justify themselves in isolation but do not build anything together.

This is one of the structural problems that makes GTM execution feel harder than it should. Teams are often running coherent programmes within their own function but incoherent programmes across functions. Marketing is building awareness in one segment. Sales is focused on a different segment. Product is optimising for a third. Each team has a plan. No one has a strategy.

The Four Hallmarks of Bad Strategy Rumelt Identifies

Rumelt identifies four specific hallmarks of bad strategy, and they are worth naming directly because they are so common in marketing organisations.

The first is fluff: the use of inflated language and buzzwords to create the impression of strategic thinking. If you have ever read a marketing strategy document that contained phrases like “customer-centric omnichannel ecosystem” without any explanation of what that means in practice, you have encountered fluff. It is not just aesthetically unpleasant. It is actively harmful because it prevents the organisation from identifying and addressing the real challenge.

The second hallmark is failure to face the challenge. This happens when the strategy document acknowledges a difficult situation but then proposes actions that do not actually address it. The challenge is named, and then quietly ignored. I have seen this in brand strategies where the diagnosis clearly pointed to a positioning problem but the recommended actions were all about media spend. The positioning problem was too hard to address in the planning cycle, so the team worked around it. The result was more spend on a broken message.

The third hallmark is mistaking goals for strategy. This is probably the most common failure mode in marketing. “Increase brand awareness by 15 points” is a goal. “Grow market share in the mid-market segment” is a goal. Neither of these is a strategy. A strategy explains how you will achieve the goal given the specific obstacles in your path. Without that explanation, you have a target, not a plan.

The fourth hallmark is bad strategic objectives: objectives that are either impossible to achieve or that miss the point of what the organisation actually needs to do. Rumelt describes these as “dog’s dinner” objectives, a list of things that sound important but have no logical connection to each other or to the underlying challenge. Marketing OKRs that span brand sentiment, pipeline volume, content output, and social engagement without any explanation of how these connect are a common example.

Rumelt’s Concept of Leverage and Why Marketers Underuse It

One of the most practically useful ideas in Rumelt’s work is the concept of leverage: identifying the point where focused effort produces disproportionate results. Good strategy does not spread resources evenly. It concentrates them at the point of highest leverage.

This runs directly counter to how most marketing budgets are allocated. Budget allocation in most organisations is a negotiation between functions and channels, not a strategic decision about where concentration will produce the most impact. The result is a portfolio of activities that each receive enough resource to exist but not enough to dominate. A little brand, a little performance, a little content, a little events. Each activity is defensible. None of them is winning.

Rumelt draws on military strategy to make this point, specifically the idea that concentration of force at a decisive point beats equal distribution across a front. The analogy holds in marketing. The organisations that grow fastest are usually the ones that have found a specific point of leverage and committed to it. A specific channel where they have an advantage. A specific segment where they have a right to win. A specific product capability that addresses a pain point the market has not solved. They put disproportionate resource behind that point and build from there.

When I grew an agency from 20 to 100 people, the leverage point was not being good at everything. It was being genuinely excellent at a specific type of performance marketing at a moment when the market was shifting toward that capability. We concentrated on that. We built reputation in that area. We hired for it, pitched for it, and priced for it. The growth followed from the concentration, not from trying to compete across every service line simultaneously.

Finding your leverage point requires the kind of honest diagnosis Rumelt describes. You have to be willing to look at where you actually have an advantage, not where you would like to have one. That distinction is harder than it sounds. Most organisations have a complicated relationship with their own strengths, either overestimating them in areas where they are emotionally invested or underestimating them in areas that feel unglamorous.

Applying Rumelt’s Framework to a Real Go-To-Market Problem

The most useful test of any strategic framework is whether it produces better decisions in practice. Here is how Rumelt’s kernel applies to a common GTM challenge: a B2B software company with strong product-market fit in one segment trying to expand into adjacent segments.

The bad strategy version of this problem produces a document that says the company will expand into three new verticals over the next 18 months, with dedicated content, sales resource, and partnership programmes for each. The goals are clear. The budget is allocated. The activities are planned. What is missing is the diagnosis. Why has the company not already won in these verticals? What is the specific obstacle? Is it brand recognition? Is it a product gap? Is it a sales motion that does not fit how buyers in those verticals make decisions? Without the diagnosis, the actions are guesses dressed up as a plan.

The good strategy version starts with the diagnosis. It identifies which of the three verticals represents the most accessible opportunity given the company’s current strengths. It names the specific obstacle in that vertical and builds a guiding policy around addressing it. Maybe the obstacle is that buyers in that vertical have never heard of the company and default to established vendors. The guiding policy might be to build credibility through a specific community or publication that those buyers trust, rather than through broad awareness spend. The coherent actions that follow from that policy are very different from a standard launch plan, and they are much more likely to work because they are designed to address the actual obstacle.

The Forrester intelligent growth model makes a related point about the importance of understanding where growth actually comes from before committing to a growth strategy. The direction of causality matters. You do not allocate budget and then discover your strategy. You identify the strategic opportunity and then allocate accordingly.

For further reading on how these strategic principles connect to execution, the Go-To-Market and Growth Strategy hub covers the full range of decisions that sit between strategic intent and commercial outcome, from market selection to channel architecture to measurement.

The Honest Difficulty of Good Strategy

One thing Rumelt is clear about, and that I think gets underemphasised in how his work is discussed, is that good strategy is genuinely hard. Not because the framework is complicated. The framework is simple. It is hard because it requires making real choices, which means accepting real constraints. It requires naming the obstacle honestly, which means confronting things the organisation might prefer not to confront. And it requires concentrating resources, which means saying no to things that are perfectly reasonable but that do not serve the guiding policy.

Early in my career, I was handed a whiteboard marker in the middle of a brainstorm for a major drinks brand when the agency founder had to leave for a client meeting. The internal reaction was somewhere between exhilaration and panic. But the experience taught me something that took years to fully articulate: the quality of the thinking in the room is a function of the quality of the questions being asked, not the seniority of the person asking them. Rumelt’s framework is essentially a set of better questions. What is the real obstacle? What approach addresses it? Are our actions coherent with that approach?

Those questions are uncomfortable because honest answers to them often reveal that the current plan is not a strategy. They reveal that the organisation is busy rather than directed. They reveal that the activities being funded are not the activities most likely to produce the outcome being sought. That is useful information. It is also information that organisations have a strong incentive to avoid, because acting on it requires change, and change is difficult.

The organisations that use Rumelt’s thinking well are the ones that have built a culture where that kind of honest diagnosis is possible. Where the strategy review is genuinely a review of whether the diagnosis is still accurate and whether the guiding policy is still appropriate, not a performance of alignment and confidence. BCG’s work on scaling agile organisations points to a similar principle: the teams that adapt fastest are the ones that have built honest feedback loops into their operating model, not just their retrospectives.

Rumelt’s contribution to strategic thinking is not a new model or a proprietary tool. It is a set of standards for what counts as real strategic thinking versus the performance of it. For anyone who has spent time in marketing organisations, the gap between those two things is very familiar. The framework gives you a precise language for identifying and closing it.

About the Author

Keith Lacy is a marketing strategist and former agency CEO with 20+ years of experience across agency leadership, performance marketing, and commercial strategy. He writes The Marketing Juice to cut through the noise and share what works.

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