Strategy Kernel

The strategy kernel is Richard Rumelt’s structure for explaining a strategic choice: a diagnosis identifies the challenge, a guiding policy chooses an approach, and coherent actions carry it out together. The relationship matters. A diagnosis should explain why the chosen approach addresses the obstacle, and the actions need to support that approach without undermining one another.

In Rumelt’s Nvidia example, falling behind in chip performance led to a policy of releasing improved chips at a faster cadence. Overlapping development teams and simulation facilities supported that cadence. The example shows why actions belong together: the release ambition needed changes to how development and validation worked.

What it rules out

Rumelt’s warning signs of bad strategy include avoiding the challenge, substituting goals for strategy, poor objectives, and empty abstraction. They are not a one-to-one list of missing kernel parts. A document may identify a challenge and an approach yet propose objectives that available skills and resources cannot achieve. Examine the evidence, the fit of the policy, and the feasibility of the actions, not just the presence of the headings.

Applied to technology

For technology strategy, investigate business outcomes with users, operators, and technologists. Their observations and records can expose problems in responsibilities, procedures, data, or software. In the fictional retailer in Forty-Seven Initiatives and No Strategy, stale inventory and batch allocation constrain delivery. The chosen approach improves the shared inventory view and allocation process, with sequenced investments and explicit dependencies. The team separately funds required obligations before comparing discretionary proposals. A concise summary helps communicate the argument, but supporting evidence determines whether it holds. An architecture principle can carry its direction into recurring design decisions.

References

• Richard Rumelt, The perils of bad strategy, McKinsey Quarterly, 1 June 2011