Episode 316 – The Crux with Richard Rumelt

Richard Rumelt

‘The basic failure of strategy work is a failure to define the challenge that you’re trying to meet.’

Richard Rumelt is one of the world’s leading authorities on strategy. He’s also a keen rock-climber, and it was climbing that gave him the inspiration for his new book: The Crux. 

In this wide-ranging conversation we talk about why strategy is such a controversial concept in business, and also why writing is such an important discipline for business thinkers. 

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Alison Jones: I’m here today with Dr. Richard Rumelt, who is one of the world’s most influential thinkers on strategy and management. McKinsey Quarterly described him as the ‘strategy’s strategist’ and ‘a giant in the field of strategy’. He is of course the author of Good Strategy/Bad Strategy: The difference and why it matters reviewed by the Financial Times as ‘the most interesting business book of 2011’.

And his new book is called The Crux: How leaders become strategists. And if you are watching on YouTube, rather than listening on your podcast platform of choice, you may see those two books lined up in the middle distance behind him there.

So very much, it’s just a pleasure to have you here, Richard, welcome to the show for starters. Great to have you.

So I was absolutely captivated by the way you introduced the concept of The Crux, so if you could just tell people who haven’t read it yet, where the word comes from and the connection you made between watching what was happening and the strategy position.

Richard Rumelt: Well, the crux is a term used by climbers, as well as other people, and it signifies the most difficult portion of a climb that somebody is doing or is trying to do. And I describe in the introduction, I used to live at Fontainebleau in France. I was teaching at INSEAD for three or four years, and I’d go for walks in the forest when the weather was nice.

And the forest of Fontainebleau is very large. Most people don’t even know that there are rock outcroppings there that attract boulderers from all over the world. In fact, that’s where bouldering was invented by Pierre Allain back in early part of the 20th century. And there’s a boulder there called Le Toit du Cul du Chien , which is…

Alison Jones: …you have to tell us…

Richard Rumelt: …the Roof of the Dog’s Ass

Alison Jones: Brilliant.

Richard Rumelt: It’s a particularly, you know, it’s a good hard boulder type. Perhaps the finest sandstone problem in the world. And it’s a face about 12 feet up, and then there’s a roof that comes out over your head about four feet. And then it goes up further from that. Finally, at the top, you’re two stories off the ground trying to gain the top. And I can’t do it. I don’t think I could’ve done it during my better rock climbing years.

One day I’m watching, I watch people fall off all the time. There’s someone there to catch them. There’s a foam pad. But to watch this one girl climb it and do it well, was interesting. She went through a series of moves until she comes to below the overhang. And I describe in the book how she successfully navigates that.

And then I’m talking to some climbers who were coming up from Southern France, and I asked them, well, why did you leave the Alps to come up here to the boulders? And one says, well, I like to climb Alpine mountains. I like to climb the most interesting and challenging one where I can handle the crux. And it clicked in my mind what he was saying.

He’s saying he wants to do the most important or interesting climb where he can actually handle the crux. And he comes up to these boulders to get better at these hard routes and I began to use the word crux then to describe the skills of the best strategists I’ve ever met. And those skills are really three pieces.

One is a good sense of judgment about what’s important. What are the important challenges they face?

And the second is good judgment about what is accomplishable, what you can do. What’s addressable. And that intersection of importance and addressability begins to define the crux. The crux being, okay, here’s the most interesting mountain I can climb where I can handle the crux. And I’m using the word slightly differently in the book, so I’m meaning what are the challenges you face, which one is the most important that you can actually do something about. That’s the crux.

And the third skill of a top strategist is the ability to focus on that and not get distracted by 22 other issues, challenges, or things that could be done. So that’s how I’m using the word in the book and that sort of the connection to climbing, which is really in my head more than in a practical sense. Strategists and leaders don’t climb cruxes, but this intersection of the most interesting or the most important plus what you can accomplish is what the idea means.

Alison Jones: It’s a really powerful metaphor and I want to come back to the metaphor and the way that you draw from experience and lock it into what we can already appreciate. I’ve got to just stay on strategy for a minute though, because I’ve always thought it’s such an interesting concept. It’s part magic, isn’t it? It’s got a sort of mystical aura about it.

And you’re interested in the book about what it’s not, you say for example, it’s not about choosing a decision out of a sort of menu of selections. Why do you think it is so mysterious? And what are you… what is it? Give us a definition.

Richard Rumelt: Well, so the strategy comes to us from competition, it comes to us from war. And the order of the General and the preparation of the field for battle and going back to the Greeks, the use of the word, which actually has Indo-European roots, Stra- and -urg are Indo-European roots, meaning to lead or to push a broad thing. So it could be cattle herding originally.

Alison Jones: That’s a really interesting etymological point. I did not know that. Thank you.

Richard Rumelt: It’s creative, because it’s competitive in some sense. There’s a sense of creation about it. That one of the things you want to do in a competition is not be totally predictable. And this creative sense of it is what causes people to have a problem.

I mean, if we were to say, okay, here’s a course on painting and I’m going to give you the formula for making a great painting or the formula for writing a wonderful piece of music, people will say, well, wait a minute, there’s no formula for that. But somehow if you tell a military person or business person, here’s the formula for strategy, or if you say there isn’t one, well, of course there must be. I mean, it’s my job. I have to do this. I have been told by the commander. I have to write a strategy. So what should I do? You’re told to write a popular song. What should you do?

Alison Jones: There’s a creative aspect.

There’s a sort of temporal aspect as well, isn’t there, which I think is part of the problem. Is that you don’t know if it’s a good strategy or not, until you see what happens. And so…

Richard Rumelt: Even good strategies fail. Bad strategies, I got a lot of attention in writing Good Strategy/ Bad Strategy, and people said and a collection of many, many emails saying, oh, thank God, somebody finally called attention to this wordsmithing and bloviation that people are calling strategy because not and it’s, you know, I’ve wondered if I was going crazy. You know, finally someone said, Hey, this doesn’t make any sense. So I got a lot of credit for that.

We’ve devolved in some sense, partly it’s so easy to write and publish nowadays compared to years and years ago. And people say all sorts of things. I, as a younger professor used to give lectures on strategy, I remember having to do a program with the then Coopers and Lybrand, and I had this map, it looked like a winding road, which displayed sort of the history of strategy.

And I’m embarrassed about it now, but the history or strategy was these sets of analytical techniques. These tools…

Alison Jones: Porter’s five forces, all those classics of the MBA…

Richard Rumelt: … whether it’s the matrix or the forces. At some point I grew up in my late fifties and began to realize this isn’t strategy. This is like saying plumbing is about pipe wrenches. No, it’s not about pipe wrenches. Those are tools. And engineering is about calculating. No, it’s not exactly about calculating.

So the strategy is about meeting a challenge. And the basic failure of strategy work is a failure to define the challenge that you’re trying to meet. And people have substituted their ambitions for an actual strategy. Our ambition is to entertain the world.

Alison Jones: Yes.

Richard Rumelt: Well, that’s not a strategy. My ambition is to be a rockstar. It’s not a strategy either.

Alison Jones: Is that big sort of mess of words and the words are problematic: strategy, vision, mission, purpose, you know, they do get a sort of morass don’t they? But I’m drawn back to your original metaphor and drawn back to somebody standing down at the bottom of the rock face going my strategy is to get to the top and you say, well, that’s, that’s great.

My strategy is this piton here or… well no, those are your tools and that’s, that’s your goal. The strategy is, as you say, how you get yourself over the what looks like a completely unaccessible hump.

Richard Rumelt: Yes. Yes. Because if you try to get up over the overhang you fall off because you’ve got these two little finger holes and you got to arch your body back in such a way. Well,

Alison Jones: So maybe the metaphor breaks down when you get into the absolute detail of it, but let’s go back to the metaphor for a second because it’s so compelling, it’s so readable and immediately you get it. And that’s partly because I’ve done a bit of climbing as well and you clearly have, the technical detail you go into. I think it would hold true, even if you hadn’t done any climbing.

But I was interested in A, the thought process that you went through, which you’ve sort of described to us, that kind of light bulb moment when he called it the crux and you go, that’s interesting.

And B, that process by which you go, I can use this. I can help people understand the abstract ideas that I’m trying to communicate through this picture. Just tell me a little bit about how that works for you when you’re writing a book.

Richard Rumelt: Well, I have the image in my mind of the climbing and then that connection, but my own mind doesn’t clarify these things until I write or speak. So a lot of my ideas come out of my mouth. I’m talking to someone and they say, they give me an argument or they say something or other, and I then say something else, I reply. And then I realize what I’ve just said is pretty interesting.

Alison Jones: Yes.

Richard Rumelt: And I don’t know how that happens. My wife comments on it all the time, you’re You’re better off talking to people because then you think of new things. You don’t think of them by sitting there and squeezing your head with your hands.

Alison Jones: But you can think of them by sitting there and writing is what you’re saying?

Richard Rumelt: And then writing. How you say something, how you phrase it, what the edgy metaphor is that’s behind the words, even if you’re not speaking that way. I can’t write a chapter unless I have a sensibility as to what’s the facts, what are the arguments I’m trying to advance, but also how does it feel? How do the words fit together? What’s the melody behind the words that you’re trying to, not so much trying to, that I have to find, otherwise the stuff just comes out in blocks. It’s unreadable. You have to go back and find what, what my wife Kate calls your voice. You found your voice then, okay, now you can make this argument because you found the place to stand where you can make it, but it’s also the place to stand where you can think it.

Alison Jones: I’m interested in that word you use, feel, how does it feel? Because you seem to be saying that there’s the mental processes, the thought behind it, and there’s the way it feels on the page as you read it or as you write it, that there’s a sense of, almost a somatic sort of sense of how you’re writing.

Just tell me a little bit more about what you mean by how it feels, as much as how you’re communicating an idea.

Richard Rumelt: That’s hard.

Alison Jones: I know, that’s why I want to know more about it. It’s really interesting.

Richard Rumelt: There’s a set of themes that one is trying to capture. And you have the idea that you’re going to emphasize this point about focus. And I remember a story. I remember being at camp and learning to focus a magnifying glass. The sun on a piece of paper, a counselor telling me it had to be on a dark fiber not a light fiber or it wouldn’t burn. I was trying to burn things, eight year old boy always trying to burn things. What does focused mean? And, well, it means that. And then what else does it mean, I’m trying to write about focus and focus is the most difficult concept in strategy. It is the core strategy. It is the single word that describes most successful strategies.

In military terms, you focus your strengths on the opponent’s weaknesses, and sometimes for surprise, sometimes for analysis one way or another. What does focus really mean? Well, what does it mean in a more abstract sense, focus for a company like IBM, what do we mean by focus?

And I’m trying to deal with that. I know that focus is important, and I know that it’s hard when we get to complex organizations and I’m trying to find a way to express that through both stories and prose, and in the process I learned what focus means. You know, I want to make an argument that focus is really important, but then you get to a company like IBM and you can’t say it’s focused. It’s all over the place.

So then, well, am I wrong that focus is important? And I have to sort it out. And I realized, well, what’s important is focusing on the critical challenge you’re facing today. That it isn’t like the company has a total focus but the senior management team has to decide where their energy is going to be focused and they can’t focus on 22 different things. It doesn’t work. And so they have to decide on what is the critical issue they’re facing that deserves this focus.

You see international governments where, you know, they can’t decide what’s important. Is it the climate, is it defence, is it medical care? Is it what? And they don’t focus on anything. So they don’t get anything done. This mysterious property, focus, I think it has to do with hierarchy.

Alison Jones: So for you as the writer, as you’re grappling with that and I know exactly what you mean, there’s an idea there, it’s important, but how do you articulate it and how do you get it across without killing it with all the qualification and…

Richard Rumelt: Part of it is the idea changes. The process of getting it across, if you’re honest with yourself, and you’re really trying to get the idea across, the process of trying to explain it, modifies it. Because you realize that aspects of what you were thinking are not true, or they’re not arguable and so you have to change your thesis a little bit.

Alison Jones: I always think that this is one of the best reasons for writing, isn’t it?

Richard Rumelt: Yes, yes, yes, yes. Yes, you write in order to be clear. When I left the university four or five years ago, students couldn’t write, it was just depressing. It was difficult. They’ve lost that training, the educational establishment, now this is a whole lecture on a different subject, but they want to believe that education is about someone who knows something standing up there and blah, blah, blah, blah. Which is not, that’s not education. Education is where you do something and an educated person then tells you what you did wrong or what you did right. And teach you some coaching. But if you don’t do something, you can’t get educated. You can’t just listen.

Alison Jones: We’re reinventing Kohl’s kind of reflective practitioner sort of learning diagram, aren’t we? You have to do it, you have to talk about it, you have to write about it, you have to think, you have to take that back in. And that’s one of the most exciting things

Richard Rumelt: Democracy is operated in a fundamentally similar way, whether it’s teachers or bureaucrats, particularly white collar workers, they change the production methods to make themselves more comfortable and to make themselves seem more important so that they can’t be fired.

But yes, so I mean, you know, education is now taken over by teachers who redefined it in a way that they prefer that’s much more comfortable for them than the actual, stressful, actual education.

Alison Jones: And you could say the thing about business as well, couldn’t you? The messiness.

I wanted to pick up on something that you wrote in the introduction, one of the things that really struck me about this book was how articulate you are, particularly in the introduction, about the way that you write, which is why I’ve been pressing you on some of those aspects. I thought it was so fascinating.

And one thing that really struck me, and I know that people struggle with this when they’re writing business books, is the way that you balance your own opinion with research, with fact, and how you present those things and you are just completely unapologetic about using I and, and I just want to… I think it’s great.

‘I use the first person to explain how I’ve come to know and believe certain things. These things are often not facts or logical arguments, they’re conclusions and views I’ve developed over a lifetime of work.’

And it’s just, it’s beautifully written. It’s very simple. It’s very straightforward.

But actually it’s very profound because owning that, because this is not a research document, it’s not evaluating the literature. It is very much, here’s what I’ve concluded from my experience and owning that I think is really important.

Richard Rumelt: Part of my voice that I had to discover in order to write this book.

Alison Jones: So if somebody is struggling to do that, what would you tell them?

Richard Rumelt: Well, you have to separate out the part of your writing that’s discursive and the part that is from you. It doesn’t all have to be ‘I’, but I find it helpful to do that. When I wrote research papers, mathematical models, statistical stuff of course you don’t do that too much. Although I do it more than some other people would because I appears there, I decided to do it this way.

Alison Jones: It speaks certain confidence in your opinion, doesn’t it.

Richard Rumelt: Yes, you have to. I mean you have to have a confidence in your opinion, because it’s all about opinion. Particularly if you’re writing business books, it’s about your opinions about things mainly. If you’re writing history, we shouldn’t do that because you weren’t there, unless it’s a ‘kiss and tell’ book about my day in the Trump White House or something, but in general if I’m writing stuff about what I think and what I’ve learned over the years, that’s what I learned. It’s not what other people told me. This is what I see. This is my experience.

And unfortunately you can’t deduce management practice or strategy from some fundamental principles. It’s not a deductive science. You can’t say, well, here are the axioms, like Newton’s Laws and then from that, we can figure out the strength of a bridge.

No, it doesn’t work that way.

Alison Jones: And there’s a generosity to the reader there as well. I think it’s important because you acknowledge that actually, you know, if this is my opinion, then yours may be different. Your experience is different.

Richard Rumelt: You owe it to the reader if you’re going to say ‘I’ to explain how you acquired that little chunk of wisdom, that little chunk of opinion. But you know, sometimes you skip over that a little bit, but it’s, if you’re being a little flippant about it. But really there’s a reading we used to have at Harvard Business School when I was a doctoral student by a guy named Charlie Gragg and it was called Because Wisdom Can’t Be Told and it was about why we use the case Method of Instruction, why we study cases. And it’s because according to Charlie Gragg, and he was writing about the old case method and it’s because you learn by both discussing something and having your ideas conflict with those of other people, then having to defend yourself. And that’s how you get wise about something. And don’t get wise because of the lectures that go here’s the right way to think. You learn which ways of thinking survive arguments with others. And that’s sort of what case method originally was about.

Increasingly it’s about, you know, someone’s economic theory and trying to illustrate it with a case example. But how do you communicate something you’ve learned over 50 years? That strategy is problem solving that it’s not a plan. Well, I can’t say as a fact that’s true because if you go and look at other people’s books and writings, they say it’s a long-term plan. And so I have to bolster why I think that’s wrong and why I think what’s right. I’m an unusual business writer in that I spend time on what’s wrong. Most people don’t do much in that.

The business press certainly doesn’t ever criticize a company unless they’ve failed. They never say, well, that’s a dumb move beforehand, you know, merging Chrysler and Daimler-Benz, they always play it up. They have no principles whatsoever about how things ought to be or should work or anything. And part of being an expert in management and strategy is having some ideas about how things ought to be. You’re getting me to run on here.

Alison Jones: I’m going back to that idea. The thing about case theory reminds me of, again, I’m coming back to the image of climbing is that, you know, every climb is different. You can’t just take a sort of plan for one climb and apply it to another, but you can take the principles and you can see similarities and you can adapt, yes and…

Richard Rumelt: Skills of how to climb. This kind of move versus that, you can practice those and get better at them.

Another metaphor I use in the book is that strategy is a journey. And this translates into the climbing metaphor again, in that, you know, you start off climbing up a side of a pretty big mountain and then you think, well, I think I’ll go up that crack to that ledge and then we’ll see. You get to the ledge and where you thought you could keep going now you can’t, you traverse to the right and try something else and so on and it’s a journey,

Alison Jones: And the map is not the territory.

Richard Rumelt: Right and yet there’s literally hundreds of authors out there that say a strategy is a long-term plan. It’s a vision of where you want to be.

 I probably annoy some of my colleagues at Stanford by saying, you know, their idea that first establish your long-term goals and then develop your strategy.

And obviously that’s ridiculous: where do these long-term goals come from? just appeared in front of you? This is silly.

Alison Jones: Especially these days, long-time goals feel laughable at the moment, don’t they?

Richard Rumelt: We get in the business world, and particularly in the strategy world, people got distracted by economics. Economics is a fascinating subject, but economists have made it approachable for themselves by making these assumptions that everybody has a utility function, a value, then you want to maximize that. Firms want to maximize profit or they want to maximize the value and then what should they do to do that.

It’s simply not true. That’s not the way humans are built. People have multiple ambitions.

Alison Jones: I always ask guests to recommend a book and I’ve got this lovely, slightly mischievous sort of desire for you to recommend books that you don’t like, you know, going on the sort of negative data principle. So I’m sure there could be loads and loads of them, but I’d better not. So I’m going to ask you to recommend a book that you think people should read, apart from your own, obviously.

 What books do you think are really interesting?

Richard Rumelt: I’m a big fan of history. And if you feed me a few drinks, I’ll say that history is the only valid social science, the rest are bunk, but that’s too strong a statement. But I like books about things that happened or books that come from real expertise. You know, if it’s about strategy,

I like, this is old now, but I liked, I loved Andy Grove’s book Only The Paranoid Survive. He was a genius and the book is about just an incredibly important set of issues. So detecting an inflection point when the world changes, the hinge of history.

Alison Jones: It may be an old book but it sounds very timely.

Richard Rumelt: The good books are timely forever.

Alison Jones: Yeah. brilliant.

Richard Rumelt: Walter Isaacson’s book on Steve Jobs is wonderful,

Alison Jones: Yes, it’s a classic biography. Isn’t it?

Richard Rumelt: I like about management and management’s a hard subject. Linda Hill’s written the best book about management. It’s called Becoming a Manager…

Alison Jones: yes

Richard Rumelt: …and she actually gets into what it’s like to be first made into a manager and sort of the stages of discomfort and learning that one goes through. The transactional management, first you’re trying to deal with eight different people and then gradually learning to lead the group rather than each of the eight people and the stages of learning that take place. Just excellent really.

I love John Kay’s, Sir John Kay’s book Obliquity, there’s a subject that nobody is able to tackle. I’m afraid to tackle it. It’s the truth. The truth is you don’t accomplish something by trying to accomplish it directly, typically. It’s certain things, you know, if you’re like, I’m a little old now I’m almost 80, but you know, if you’re on a date and you’re thinking to yourself, I wonder how I’m coming across.

I hope she likes me. The answer is No. You’re not coming across.

Alison Jones: If you have to ask the question.

Richard Rumelt: It’s stupid. You know, if you have to think about something, you don’t think about, you know, what is she saying that’s interesting and I don’t know, the more you think about your objective there, the more you undermine

Alison Jones: Brilliant.

Richard Rumelt: The more you think about I want to make money, I want to make money, the more you lose track of the basics of business, which is to create value for someone and do it using something you know about rather than accounting or financial engineering.

And so Obliquity, it’s just an incredibly important idea that’s very hard to get precise about. I like John Kay’s book.

Alison Jones: Wonderful. I’m going to stop you there because I think we could probably talk about the books you would recommend all day. And part of me just wants to do that, but I have to stop, but thank you for those recommendations. Obviously the transcript of this conversation, all those recommendations will be up on the show notes at extraordinarybusinessbooks.com.

But Richard, before we go, if people want to find out more about you, more about your books, where should they go?

Richard Rumelt: Well, there’s a website coming up about the book, then that’d be attached to a blog. I think the website’s called thecruxbook.com and it’s almost published.

Alison Jones: Well, by the time this goes out, it will be there. So I will put that link up and people can go find it there.

It’s been such a pleasure talking to you about climbing and strategy and everything. It’s been wonderful. Thank you for your time today. I’ve really enjoyed it.

Richard Rumelt: Thank you for the interview.

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