PDF Summary:The Crux, by Richard P. Rumelt

Do you have a complex problem you can’t seem to crack? According to strategy expert Richard Rumelt in The Crux, you have to first identify its core problem (which Rumelt refers to as “the crux”). From there, you can build a successful strategy that not only solves the problem, but also keeps you from getting bogged down by less important issues. The Crux is written for business leaders, strategists, and anyone facing complex challenges in their professional or personal life.

In our guide, we’ll explain what core problems are and how to identify them. We’ll also explain how to use your understanding of the core problem to devise a strategy for overcoming your broader issue, and we’ll detail Rumelt’s advice for implementing that strategy. In our commentary, we’ll add ideas about strategy from other experts, as well as more tips for putting Rumelt’s advice into action.

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• Compare your situation to an analogous situation faced by an organization in another industry. Comparisons with other industries can reveal practices or approaches that could be adapted to solve problems in your industry.
• Compare your situation to an analogous historical situation. Analogies to historical situations can provide insights into how similar issues have been addressed in the past and what outcomes resulted.

The Drawbacks of Comparisons

Rumelt’s practice of using comparisons to understand your core problem reflects the process of analogical reasoning, which is the ability to recognize and draw inferences between two things based on their similarities. It’s a crucial function in human cognition and, according to some scientists, is the most significant difference between human and animal cognition.

However, it can have some drawbacks: Analogical reasoning is limited by your prior knowledge of the ideas you’re comparing, and it places a heavy cognitive load on the thinker. It can also lead you to overgeneralize your comparisons and assume that, because two things are similar in one way, they must also be similar in other ways. Make sure the comparisons you’re using to identify your core problem are accurate and that you understand both of the things you’re comparing well. Additionally, keep in mind that analogies aren’t perfect, nor are they conclusive proof of the idea you’re considering.

In using the specific comparisons Rumelt recommends, keep the following in mind:

• While your current situation may reflect a similar problem in your organization’s history, remember that the factors involved have likely changed over time, especially if the past situation occurred a long time ago.

• You may have a similar problem to one your competitor has faced, but your competitor is a different entity with distinct needs, abilities, and resources.

• Comparisons across industries may be especially risky because of the differences not only between your respective companies, but also between the environments in which you’re operating.

• Comparisons to historical situations can be problematic if you don’t have a comprehensive understanding of the event and its context, and it’s possible that the information you do have about it could be faulty.

Step 2: Group the Information

Rumelt says that once you have all this information, you should group your identified challenges into related categories. For example, you may have one group of challenges related to product design, one group related to customer satisfaction, and one group related to increasing revenue. These groupings will help you identify the differences in your identified challenges, including which aspects of the organization they relate to, how important they are, and how easy they’ll be to solve. This will then give you a better understanding of the overall broad issue and prepare you for the next step: distilling.

(Shortform note: You may find the grouping stage easier if you create a visual representation of your ideas and categories. Research shows that visual explanations significantly enhance comprehension of complex topics. Consider using a tool such as affinity mapping: This method, invented by anthropologist Jiro Kawakita in the 1960s, provides a visual way for you to group your various ideas from a brainstorming session (or the gathering information stage of Rumelt’s process). Write each idea down on a sticky note and place them into the categories you’ve picked out. This will help you and your team better conceptualize the challenges and how they relate to your broad issue.)

Step 3: Distill the Information

At this stage, you’ll likely find that the list of challenges you’ve identified is far too long for you to address all of them. That’s why you’ll need to narrow your list to find the core problem. As earlier discussed, your core problem will be impactful and difficult (but not impossible) to solve. In addition, Rumelt says, your core problem will also be urgent—something that you need to address right away.

Check each item on your list to see if they’re impactful and difficult to solve, and rank them according to urgency. If an item is missing one of the three criteria, eliminate it. This will lead you to your core problem.

(Shortform note: You may find it difficult to eliminate the challenges that don’t fit Rumelt’s three criteria, especially if you invested a lot of time or personnel into identifying or trying to solve them (a result of the sunk cost fallacy). In Essentialism, Greg McKeown argues that it’s easier to eliminate options when you have a clear purpose, so be sure to keep your broad issue top-of-mind during this process so you have a reminder of your purpose. Additionally, be willing to cut your losses on challenges that you decide aren’t essential, and get comfortable saying “no” to people who were invested in solving nonessential challenges.)

How to Use Your Core Problem to Formulate Your Strategy

Once you’ve correctly identified the core problem of the broad issue you’re facing, you can begin working toward a solution for that issue. Rumelt explains that the way to overcome issues is through a powerful strategy—a combination of policy and actions geared toward problem-solving. The core problem tells you what challenge to focus on, but the strategy tells you how to approach it.

After identifying the core problem, create a strategy that will guide your actions in addressing this critical challenge. This strategy should 1) be based on solving a problem, not achieving a goal, 2) include near-term objectives, 3) utilize your organization’s unique advantages, and 4) be strategically coherent. We’ll discuss each of these characteristics in detail next.

(Shortform note: Rumelt goes into greater detail about what constitutes a powerful strategy in Good Strategy Bad Strategy. He explains that just having a strategy is a strategy in itself, because it keeps you from getting swept up in focusing only on day-to-day issues with only a vague idea of what you want from the future, as most organizations do. However, you shouldn’t rely on one strategy to fix every problem—in The 33 Strategies of War, Robert Greene warns that there isn’t a formula for success and that you should adapt your strategy to your situation.)

Focus on Solving, Not Achieving

A powerful strategy is focused on solving a problem, not achieving a goal, explains Rumelt. A goal establishes what the organization is striving for, but if it’s not grounded in an understanding of the problem you’re trying to solve, it will be arbitrary and unproductive. When you examine your core problem, determine what specific obstacles comprise that problem, as well as what you’ll need to solve them and what you’ll gain from solving them. Then, prioritize these obstacles based on their relevance to your core problem and whether you can solve them with your current resources and capabilities.

Many leaders make the mistake of devising their strategy according to the organization’s pre-existing goals, but since those goals aren’t designed to solve the core problem, this approach can distract from the core problem and lead you to focus your energy on the wrong objective. This doesn’t mean you shouldn’t establish goals; rather, you should formulate your strategy based on your broad issue, and then set your goals according to that strategy.

For example, a startup might find that their phone app is receiving low user engagement; they identify poor functionality as their core problem. Instead of setting an arbitrary, achievement-focused goal to “double revenue,” they form a strategy to enhance the app’s functionality and set a goal based on that, such as “increase user engagement by 50%.” This goal is more clearly linked to solving their problem and will help them determine where to direct their resources and energy.

The History of Problem-Focused Management Philosophies

Rumelt’s focus on solving problems rather than achieving predetermined goals represents a significant evolution in management philosophies. Historically, management approaches like Management by Objectives (MBO), popularized by Peter Drucker in the 1950s, emphasized setting clear, measurable goals. This approach became more structured with the adoption of the SMART criteria in the 1980s. However, companies soon recognized that rigid goal-setting might overlook fundamental problems in organizations.

Methodologies focused on problem-solving began to gain prominence with the development of Total Quality Management in the 1950s and Six Sigma in the 1980s, both of which emphasized data-driven problem-solving. These methodologies advocated continuous improvement and addressing root causes rather than just meeting targets.

Contemporary frameworks, such as Agile and Design Thinking, emphasize flexibility and understanding customer needs, reflecting a shift toward solving underlying issues. They advocate iterative processes and receptiveness to change, which better align with dynamic business environments. Rumelt’s approach aligns with this historical trend, reflecting a growing recognition in the business world that addressing fundamental problems often leads to more effective and sustainable outcomes than pursuing predefined objectives.

Near-Term Objectives

As mentioned earlier, strategy isn’t just about ideas: It’s a combination of both policy and actions. Rumelt explains that, once you have your core problem, you’ll establish near-term, achievable goals that make progress toward addressing the problem. He suggests focusing on what you can accomplish in one to three years rather than thinking about what you want to see in 10 years. This is because the prospect of achieving an important goal in the near future is more motivating than a long-term vision and allows leaders to quickly set successive, similarly motivating goals to keep the team engaged. It also makes it easier for teams to put certain goals on hold, knowing they’ll still be able to pursue them in a year or two.

For example, a software company might determine that the core problem they’re facing is customer turnover. Based on the strategy they’ve devised, the company sets a one-year objective to reduce customer churn by 20% through improved onboarding and customer support processes. After achieving this goal within the allotted year, the company is energized and ready to tackle their next challenge. On the other hand, if they set a longer-term goal not based on their strategy, such as increasing sales by 50% within five years, they may feel like they’re on an endless trek toward a nebulous goal many years in the future.

(Shortform note: To establish your near-term objectives and measure your progress, you could use the Objectives and Key Results (or OKR) management system. In Measure What Matters, John Doerr explains that the OKR system involves identifying the objectives your company should prioritize and establishing key results, or the steps you need to take to achieve those objectives. Doerr suggests selecting three to five objectives, with three to five key results each. He also advises focusing on the immediate future, using objectives you want to accomplish in the next three to 12 months. Then, use your key results to measure progress toward your objectives, which will help you track progress toward solving your core problem.)

Use Your Organization’s Advantages

As you formulate your strategy, explains Rumelt, you should incorporate ideas and actions that play into your organization’s strengths and current advantages. This will help you create a strategy that keeps you profitable against competitors. Such advantages may include specialized information or knowledge, better placement in the market, superior efficiency, or superior management. For example, if you know your organization produces a higher quality of products at the same price as your competitors, you should capitalize on this strength as part of your strategy.

(Shortform note: Smaller companies with fewer resources may struggle to incorporate their strengths into their strategies, particularly when they’re going up against larger, more resource-rich competitors. Business professors Gary Hamel and C.K. Prahalad suggest that smaller companies are better at gaining additional layers of advantage—for example, by expanding their operations—rather than focusing solely on their existing strengths. Hamel and Prahalad also recommend competitive collaboration, or working together with competitors to strengthen your company—for example, by learning about their operations and applying a competitor’s practices in your own organization.)

Strategic Coherence

According to Rumelt, a powerful strategy must also be coherent. This means that every action you take in pursuing your strategy must align with the policy you’ve set forward. If you’re acting in opposition to your policy, you’ll slow your progress toward overcoming your broad issue because your actions won’t be focused on your core problem.

For example, if a fashion brand’s strategy centers around environmental sustainability, all of its actions—from sourcing materials to manufacturing operations to marketing campaigns—must consistently align with its eco-friendly policy. If they begin using materials from non-renewable sources, their strategy will lose coherence.

(Shortform note: Some experts suggest a reverse approach to achieving strategic coherence. They argue that the first step is to identify and develop your organization’s capabilities, and then assess the market opportunities you want to take advantage of (in other words, the actions you can or will take). From there, you develop the policy aspect of your strategy. This method may help you better align your strategy with your company’s abilities and opportunities, rather than just your goals.)

Implementing Your Strategy

Once you’ve identified your core problem and used it to devise a powerful strategy, it’s time to put that strategy into action. Rumelt says this requires you to overcome resistance within your organization and authoritatively make decisions that may not always be popular.

Overcoming Organizational Resistance

Rumelt explains that the biggest roadblocks in effective strategy implementation often come from the organization itself. This is particularly true of larger, more successful organizations. Such establishments are strong in that they’ve figured out how to run on a large scale, but this success can lead to organizational inertia: They become complacent, and they’re resistant to changing traditions and established systems due to bureaucracy, a lack of clear guidelines, and a culture that values conformity over creativity.

For example, a long-established bank may have found that during their inception, their personal interactions with customers gave them an edge over their competitors. However, as technology in the industry advances, the company struggles to adopt digital banking solutions due to outdated IT systems and resistance from employees accustomed to traditional banking methods.

(Shortform note: In Good Strategy Bad Strategy, Rumelt cautions not only against organizational inertia, but also organizational entropy. Entropy is when a successful company loses its coherence and focus as a result of a lack of competition. While the definitions of the two terms have some overlap, we may infer that organizational inertia is the result of complacency among employees, and organizational entropy is the result of complacency among leadership. Businesses should be on the lookout for both to ensure that their strategy doesn’t face internal resistance.)

To overcome organizational resistance, you must get commitment from leadership and cut out distractions.

Commitment From Leadership

It’s difficult to break out of traditions and routines, so you need a committed leadership team who is consistently working to implement the strategy and monitor progress. For example, an established university might be working on a comprehensive curriculum overhaul. The leadership, such as the university president and board, can champion the project by engaging with faculty, students, and alumni to build support and address concerns.

(Shortform note: In Leading Change, John P. Kotter echoes Rumelt’s recommendation to get commitment from leadership, explaining that successful organizational transformation requires a strong guiding coalition with enough power to lead the change effort. He recommends creating committees to address organizational problems, appointing people from all levels of the organization and giving prominent roles to people already in leadership positions. This ensures not only that your committee is representative of the organization as a whole, but also that it will have the authority to enact the changes it identifies as necessary.)

Cutting Out Distractions

You can also overcome resistance by refining your organization’s focus and cutting out distractions, Rumelt explains. Cut down on activities that don’t serve your strategy, either by delegating them to third parties or eliminating them altogether. Additionally, narrow your company’s focus by discontinuing products and services that impede progress or interfere with your strategy.

For example, a software company might discontinue support for legacy products, allowing it to reallocate resources to developing new, more competitive offerings. Or a restaurant chain may simplify its menu, eliminating low-margin items to focus on signature dishes, thus improving kitchen efficiency and food quality.

(Shortform note: In Indistractable, Nir Eyal offers some tips for how to cut down on distractions in your own life; these can be adapted to apply to business strategy as well. He recommends that you build your schedule around your values—in our context, that could mean ensuring that every scheduled activity in your calendar helps you implement your strategy. Additionally, he suggests that you identify and monitor your “triggers,” or the things that prompt you to switch over to distracting work. For example, if you know you have an employee who, despite their hard work and commitment, tends to bring up irrelevant or distracting issues, be prepared to redirect them when they approach you or raise their hand in a meeting.)

Making Unpopular Decisions

In addition to overcoming organizational inertia, implementing your strategy requires you to make, communicate, and enforce strong leadership decisions—some of which may be unpopular. Rumelt explains that you’ll have to prioritize certain projects over others, devoting more time, resources, and personnel to the actions that align with your strategy. This may be challenging for a leader who isn’t comfortable telling people what to do and frustrating for team members who feel committed to those lower-priority projects. However, if you can’t make and enforce these difficult decisions, your strategy won’t succeed.

Cultivating Leadership Traits

Making strong leadership decisions requires you to take on the characteristics of a good leader. In The Leadership Challenge, James Kouzes and Barry Pozner outline the traits leaders need to cultivate. Leaders must be competent (capable of making strong decisions), honest (capable of communicating those decisions), and inspiring and forward-thinking (able to move others to carry out those decisions).

They must also be willing to challenge the status quo, despite the discomfort that may cause. To do this, the authors recommend that you take initiative: Boldly identify problems, devise solutions, and put those solutions into action in a timely manner. However, you should make sure those solutions have a strong rationale behind them. There’s no need to over-exercise your authority or unnecessarily frustrate employees when what they’re currently doing is working well, or when the company’s actions are already aligned with your strategy.

When You Lack the Authority to Lead

Sometimes, you may discover that you lack sufficient authority in your organization to make and implement decisions in pursuit of your strategy. This is often the case in large bureaucracies or with temporary leadership positions. In such situations, you’ll be unable to implement your strategy unless you can first effect some structural change that grants you more authority. This may not always be possible, but if you’re committed to making it happen, Rumelt recommends that you formulate your strategy for gaining more authority using the same methods described above.

(Shortform note: You may not always be able to increase your formal authority in an organization. However, in The Practice of Adaptive Leadership, Ronald A. Heifetz explains how you can harness political power to increase your informal authority. This can help you manage your team and potentially effect greater structural change. To do this, Heifetz recommends that you use your current authority to gain access to people with greater authority, giving you leverage for making changes at higher levels of the organization. Also, build your credibility with small successes early on so that people will see you as someone who can wield power responsibly. This will help you use the power you already have and potentially set you up to gain more.)