Richard Rumelt: Thank you. Lenny: I thought we'd start at the beginning and then work our way up and kind of see where the conversation goes. What is the simplest way to understand a strategy? What is a strategy, and then what are the essential components of a good strategy? Richard Rumelt: Well, a strategy is a design for overcoming a high-stakes challenge. It's a mixture of policy and action designed to deal with a challenge. The challenge could have an upside. It could be, "Oh geez, we were fooling around in the back 40 and we discovered oil, what we do?" Or it could be negative, could be that new innovation is driving us out of the market. But a challenge is the hardest strategy. The work comes from Strategos, which is Greek. The Greeks elected 10 Strategoi to serve as strategic leaders at Athens. And they were elected and they dealt with issues of the day, the Persians are invading, there's a plague in town, we need money for a new temple. And that's where the word comes to us from. It isn't just military, it wasn't in Athens. So strategy is always about dealing with an issue, a challenge, a problem. What are we going to do about global warring? What are we going to do about China wants to reunify with Taiwan?
It could be, "Oh geez, we were fooling around in the back 40 and we discovered oil, what we do?" Or it could be negative, could be that new innovation is driving us out of the market.