“A good strategy must have an essential logic structure that I call kernel.” – Richard Rumelt
Within the complex world of business strategy, where countless models and frameworks compete for attention, Richard Rumelt’s “Kernel of Strategy” stands out for its simplicity and effectiveness. Introduced in his seminal book, “Good Strategy Bad Strategy,” Rumelt provides a straightforward yet profound way to craft effective strategies that can guide organizations through the turbulence of modern markets.
The concept of the strategy kernel is intended to provide a clear, concise framework for developing effective strategies. The analogy behind the kernel is rooted in the idea that, just as a kernel is the essential core of a seed from which growth stems, a good strategy must have an essential logic at its core. This essential logic, or kernel, contains three crucial elements: diagnosis, guiding policy, and coherent actions. Let’s explore the analogy and reasoning behind each element of the strategy kernel.
The Kernel Analogy
A kernel, in a biological sense, is the innermost part of a seed. It contains the vital elements necessary for the growth and development of a plant. Similarly, in the context of strategy, the kernel represents the essential core logic that drives the formulation and execution of a successful strategy. Just as a plant cannot grow without its kernel, an organization cannot effectively move forward without a clear, core strategy.
The kernel of strategy is a concept that distills strategy formulation into three essential components:
1. Diagnosis: Identifying the Core Issues
A clear understanding of the critical aspects of the situation.
- Analogy: In biology, understanding the soil, climate, and environment is crucial for a seed to sprout and thrive. Similarly, in business, understanding the environment, challenges, and opportunities is essential.
- Explanation: Diagnosis involves identifying and comprehending the critical aspects of the situation. It simplifies the complexity of reality by highlighting the fundamental issues that need to be addressed. A good diagnosis helps in pinpointing the root causes of problems, not just the symptoms.
2. Guiding Policy: Crafting the Approach
An overall approach chosen to cope with or overcome the obstacles identified in the diagnosis.
- Analogy: Just as a seed needs a plan for how it will grow (root system, stem, leaves), a strategy needs a guiding policy that directs how the organization will tackle the diagnosed issues.
- Explanation: The guiding policy provides an overarching approach or method for addressing the diagnosis. It is a broad-stroke plan that sets the direction and approach for solving the core issues identified. This policy must be clear enough to give direction yet flexible enough to adapt to unforeseen changes.
3. Coherent Actions: Taking Coordinated Steps
A set of coordinated steps that are designed to carry out the guiding policy.
- Analogy: For a plant to grow, various parts must work in coordination – roots absorbing water, leaves performing photosynthesis, etc. Similarly, for a strategy to be effective, all actions must be coordinated and aligned with the guiding policy.
- Explanation: Coherent actions are the specific initiatives and steps taken to implement the guiding policy. These actions must be logically connected and mutually reinforcing to effectively address the diagnosis and achieve the strategic objectives. Each action should support and strengthen the overall strategy.
Why Rumelt Created the Concept
Richard Rumelt developed the concept of the strategy kernel to combat the prevalent issues he observed in many organizations’ strategic planning processes. He noticed that many so-called strategies were often just a mix of vague aspirations, unconnected goals, and wishful thinking. These “bad strategies” lacked a clear and logical core. By introducing the kernel concept, Rumelt aimed to emphasize the importance of having a solid, essential core that includes:
- A deep understanding of the challenges (Diagnosis).
- A clear plan for addressing these challenges (Guiding Policy).
- Specific, coordinated steps to implement the plan (Coherent Actions).
Applying the Kernel of Strategy
The kernel of strategy is not just a theoretical concept; it is a practical tool that can be applied to a wide range of strategic challenges. Here’s how you can apply it in your organization:
- Conduct a Thorough Diagnosis: Take the time to deeply understand the challenges your organization faces. Look beyond the surface and identify the underlying issues that need to be addressed.
- Develop a Clear Guiding Policy: Craft a guiding policy that provides clear direction but remains flexible enough to adapt to changing circumstances. Ensure it aligns with the diagnosis and sets a clear path forward.
- Implement Coherent Actions: Design and execute specific actions that are aligned with the guiding policy. Ensure that these actions are coordinated and reinforce each other to effectively address the diagnosed issues.
Conclusion
Richard Rumelt’s kernel of strategy provides a powerful yet simple framework for developing effective strategies. By focusing on diagnosis, guiding policy, and coherent actions, organizations can create strategies that are not only clear and actionable but also deeply aligned with their core challenges and opportunities.
A glimmer of clarity can be found in the foundation of strategy, especially in the fast-paced, unpredictable business climate of today. The kernel of strategy helps leaders cut through the noise, focus on what truly matters, and steer their organizations toward sustained success. By adopting this approach, contemporary executives can enhance their strategic acumen and lead their organizations more effectively in the VUCA (volatile, uncertain, complex, and ambiguous) world.
