Love the examples. One thing that stands out: in each case, the leaders made an early bet, in a complex situation, with much ambiguity and uncertainty... AND bet correctly! Are you aware of any examples where the initial bet was incorrect - yet, by clarifying the key assumptions and proactively testing them (and invalidating them), they corrected course and had a happy ending? This approach becomes much more robust if it doesn't require foresight (i.e., allows correction of mistaken assumptions). I'm also trying to be sensitive to survivorship bias and avoid cherry-picking, which I've seen many leaders (self included) struggle with.
Ray, your questions align perfectly with mine. The second one in particular is the rub. Michael Raynor addresses this in his book The Strategy Paradox. VHS vs. Betamax is a good example. I think BlackBerry is too. It’s a very tricky subject because the better the job you do in making a clear and workable objective for your company to deliver on, the more difficult it is to pivot that if it’s not correct. Whilst there is risk in any judgement call, maybe the best one can do is to continually retest assumptions and ‘persist variously’. Christensen talked about how Honda’s US motorcycle strategy emerged from a pivot to smaller off-road motorcycles. - I do wonder also about creating more of a vc type approach too where you have multiple small teams working on different things.
Prof. Rumelt, I'd be interested in your comparison of the "working specification," to Prof. Camillus' ideas about "muddling through" a "wicked problem." They seem completely opposite. I much prefer your more active and decisive approach.
Wow. Rumelt seems to have a working history of the CCP inside the PRC.
In 2009 the CCP used early Ai to deduct that a O.I.A.F.T. has popped into the PRC reality.
The CCP jiggled a new 'Kinetic' leader into place + poof, the unique World War Xi evolved.
For decades the PRC OIAFT has benefitted the CCP. From the 2014 complete collapse + capitulation in 2014 of POTUS Obama with his facilitation of the Balkanization of independent Ukraine, the USA has viciously denied reality with its refusal to use correct semantics in WW Xi.
Here's the objective! Reverse the 2014 POTUS Obama Betrayal of the WEST by his facilitation of the Balkanization of Ukraine. Who can provide the cognitive matter that the 2026 MAGA POTUS Trump + his elite are missing?
The peer readers can be 'spiritual' guides to the 2026 POTUS elite!
Insightful. I always appreciate your posts. I'm trying to think this one through, confirm my understanding, and specifically relate this to your previous work: Is step 1 here ("identify the challenge") equivalent to defining the critical addressable challenge (i.e., from The Crux). And is step 2 ("create a working specification") equivalent to the proximate objective and/or the guiding policy from Good Strategy Bad Strategy?
Thanks for your thoughtful comments. On the question of failure stories, the most common are upside bets gone wrong. Peloton, CNN+ on paid news subscription, etc. These were "deals" without working specifications. The parallel to Musk would be Motorola's $5 billion failed bet on Iridium. Still, if you look at my examples, they are mostly organizing activity, channeling effort, in a focused direction. With regard to the Kernel/Crux frame, yes, Step 1 is an Addressable Strategy Challenge. And Step two is close to a Proximate Objective, but more carefully tailored to existing routines and capabilities of the working organization.
Love the examples. One thing that stands out: in each case, the leaders made an early bet, in a complex situation, with much ambiguity and uncertainty... AND bet correctly! Are you aware of any examples where the initial bet was incorrect - yet, by clarifying the key assumptions and proactively testing them (and invalidating them), they corrected course and had a happy ending? This approach becomes much more robust if it doesn't require foresight (i.e., allows correction of mistaken assumptions). I'm also trying to be sensitive to survivorship bias and avoid cherry-picking, which I've seen many leaders (self included) struggle with.
Ray, your questions align perfectly with mine. The second one in particular is the rub. Michael Raynor addresses this in his book The Strategy Paradox. VHS vs. Betamax is a good example. I think BlackBerry is too. It’s a very tricky subject because the better the job you do in making a clear and workable objective for your company to deliver on, the more difficult it is to pivot that if it’s not correct. Whilst there is risk in any judgement call, maybe the best one can do is to continually retest assumptions and ‘persist variously’. Christensen talked about how Honda’s US motorcycle strategy emerged from a pivot to smaller off-road motorcycles. - I do wonder also about creating more of a vc type approach too where you have multiple small teams working on different things.
Excellent post, solves a lot of problems I've seen where people go in circles without leadership setting a working specification.
Another incredible post! Thanks!
Prof. Rumelt, I'd be interested in your comparison of the "working specification," to Prof. Camillus' ideas about "muddling through" a "wicked problem." They seem completely opposite. I much prefer your more active and decisive approach.
Wow. Rumelt seems to have a working history of the CCP inside the PRC.
In 2009 the CCP used early Ai to deduct that a O.I.A.F.T. has popped into the PRC reality.
The CCP jiggled a new 'Kinetic' leader into place + poof, the unique World War Xi evolved.
For decades the PRC OIAFT has benefitted the CCP. From the 2014 complete collapse + capitulation in 2014 of POTUS Obama with his facilitation of the Balkanization of independent Ukraine, the USA has viciously denied reality with its refusal to use correct semantics in WW Xi.
Here's the objective! Reverse the 2014 POTUS Obama Betrayal of the WEST by his facilitation of the Balkanization of Ukraine. Who can provide the cognitive matter that the 2026 MAGA POTUS Trump + his elite are missing?
The peer readers can be 'spiritual' guides to the 2026 POTUS elite!
Interesting take on the long-term consequences of the 2014 Crimea annexation and how it shifted the US-China-Russia dynamic. O.I.A.F.T. = ?
Insightful. I always appreciate your posts. I'm trying to think this one through, confirm my understanding, and specifically relate this to your previous work: Is step 1 here ("identify the challenge") equivalent to defining the critical addressable challenge (i.e., from The Crux). And is step 2 ("create a working specification") equivalent to the proximate objective and/or the guiding policy from Good Strategy Bad Strategy?
Thanks for your thoughtful comments. On the question of failure stories, the most common are upside bets gone wrong. Peloton, CNN+ on paid news subscription, etc. These were "deals" without working specifications. The parallel to Musk would be Motorola's $5 billion failed bet on Iridium. Still, if you look at my examples, they are mostly organizing activity, channeling effort, in a focused direction. With regard to the Kernel/Crux frame, yes, Step 1 is an Addressable Strategy Challenge. And Step two is close to a Proximate Objective, but more carefully tailored to existing routines and capabilities of the working organization.