Summary of Richard P. Rumelt's The Crux

By IRB Media

Please note: This is a companion version & not the original book. Book Preview:

#1 A strategy is a mixture of policy and action designed to surmount a high-stakes challenge. It is not a goal or wished-for end state. It is a form of problem solving, and you cannot solve a problem you do not understand or comprehend.

#2 The great missing piece in the foundation of almost all writings and teachings about strategy is a weakness well captured more than a decade ago by strategy authority Gary Hamel: Of course, everyone knows a strategy once they see one—be it Microsoft’s, Nucor’s, or Virgin Atlantic’s.

#3 The key steps in dealing with a strategic challenge are a diagnosis of the situation, finding the crux, and then creating reasonable action responses. To take a closer look at these steps, I am going to look at the situation Netflix faced in early 2018.

#4 In 2011, Netflix faced a significant upset. It had been paying $30 million per year to Starz for access to its shows. At contract renewal, Starz asked for an increase to $300 million per year. Netflix had to raise subscription fees by 60 percent.

• Language: English
• Publisher: IRB Media
• Release date: May 14, 2022
• ISBN: 9798822517868

IRB Media

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Insights on Richard P. Rumelt's The Crux

Contents

Insights from Chapter 1

Insights from Chapter 2

Insights from Chapter 3

Insights from Chapter 4

Insights from Chapter 5

Insights from Chapter 1

#1

A strategy is a mixture of policy and action designed to surmount a high-stakes challenge. It is not a goal or wished-for end state. It is a form of problem solving, and you cannot solve a problem you do not understand or comprehend.

#2

The great missing piece in the foundation of almost all writings and teachings about strategy is a weakness well captured more than a decade ago by strategy authority Gary Hamel: Of course, everyone knows a strategy once they see one—be it Microsoft’s, Nucor’s, or Virgin Atlantic’s.

#3

The key steps in dealing with a strategic challenge are a diagnosis of the situation, finding the crux, and then creating reasonable action responses. To take a closer look at these steps, I am going to look at the situation Netflix faced in early 2018.

#4

In 2011, Netflix faced a significant upset. It had been paying $30 million per year to Starz for access to its shows. At contract renewal, Starz asked for an increase to $300 million per year. Netflix had to raise subscription fees by 60 percent.

#5

The idea that a person or organization has one or two primary driving goals is a fantasy invented by economists and certain management thinkers. In reality, most people and organizations have a bundle of ambitions.

#6

The ambitions and dreams of a leader are precursors to strategy. They cannot be accomplished all at once, and they must be balanced against one another. By confronting the situation being faced, a talented leader creates a strategy to further some elements out of the whole bundle of ambitions.

#7

The process of creating a strategy is not simply goal seeking or decision making. It involves examining each alternative and selecting the best, but this is not how strategy works in reality. It is instead the memorization of patterns of clever moves and the search for the crux, where the patterns of forces may allow us to take advantage of an opponent’s weaknesses.

#8

A strategic challenge arises when we know the alternatives, but there are uncertainties and nonquantifiable aspects that make choosing among them difficult. We solve a gnarly challenge by beginning to dig into the nature of the challenge and figure out what is going on there.

#9

The central tension facing the company was that it had grown by renting other people’s material, but that may not work in the future. The market could saturate from subscriber financial limits and content fatigue.

#10

Netflix could expand its presence in the Anglosphere, which has tastes and income levels similar to the United States. It could become the worldwide streaming-content distributor and draw on expertise outside the United States in making video entertainment.

#11

The crux of a boulder for a short muscular climber may be easy for a taller climber. In the case of Netflix, the crux analysis