LEADERSHIP & CAREER · LESSON 07.06advanced

Strategy 101 for PMs.

Diagnosis + guiding policy + coherent action — Rumelt's three.

↳ tl;dr

Most things called "strategy" are aspirational statements ("become the leader in X"). Real strategy, per Richard Rumelt: a diagnosis of the actual challenge, a guiding policy for tackling it, and coherent actions that execute the policy. Without all three, it's a wish.

Diagnosis — naming the actual challenge

Most strategies fail at the first step. "Increase market share" isn't a diagnosis; it's a goal. The diagnosis is why market share is what it is now — the structural cause. Honest diagnoses are uncomfortable; aspirational goals are comfortable. Strategy work is choosing the uncomfortable path.

Guiding policy — the lever

Given the diagnosis, the guiding policy is the high-level approach. "We'll lean into developer-first" is a guiding policy. "We'll be the easiest tool to adopt" is a guiding policy. It rules things in and rules things out.

Coherent action — what we actually do

The actual moves: which products to build, which markets to enter, which features to ship. Coherent means the actions reinforce each other and the guiding policy. Incoherent action is "we'll be developer-first AND we'll add a no-code builder for non-developers AND we'll target enterprise IT." All three rules-in. That's not strategy; that's wish-list.

the bad-strategy tell

Rumelt's test for bad strategy: it's full of buzzwords and aspirations but doesn't name a hard challenge or rule things out. If the "strategy" could apply to any company, it's not a strategy.

What PMs do with strategy

PMs translate strategy into product decisions. If the strategy is "developer-first," the roadmap reflects that — features that delight devs ship; features that delight end-users-who-aren't-devs are deferred. If the roadmap contradicts the strategy, one of them is wrong.

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Sources cited

  1. [01]
    Empowered: Ordinary People, Extraordinary Products

    Cagan, M. & Jones, C. · Wiley · 2020 · retrieved 2026-05

    Senior PdM operating model — empowered teams, coaches over taskmasters.

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Further reading

  1. [01]
    Empowered: Ordinary People, Extraordinary Products

    Cagan, M. & Jones, C. · Wiley · 2020 · retrieved 2026-05

    Senior PdM operating model — empowered teams, coaches over taskmasters.