How to Do a Rumelt Evaluation Method
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Richard P. Rumelt is a professor at the Anderson School of Business at the University of California Los Angeles (UCLA). He developed four criteria to use in the evaluation of a business strategy: consistency, consonance, feasibility and advantage.
The Rumelt method is used to evaluate a business strategy by assessing the strategy on each of these four criteria.
Read and understand the business strategy you are evaluating. Get answers to any questions you have about the strategy before you begin the evaluation.
- Richard P. Rumelt is a professor at the Anderson School of Business at the University of California Los Angeles (UCLA).
- Get answers to any questions you have about the strategy before you begin the evaluation.
Evaluate the strategy for Consistency. Compare business unit and other functional or departmental strategies within the company to the overall business strategy. Assess how well these strategies are aligned with the overall business strategy.For example, compare the company's sales strategy to the overall business strategy to make sure they are aimed at achieving the same goals.
Make an assessment on Consonance. Consider the environmental and other external trends that might impact the business strategy to identify the external influences that support the strategy and those which do not support the strategy. For example, assess how any current or anticipated government legislation will support the business strategy.
- Make an assessment on Consonance.
- For example, assess how any current or anticipated government legislation will support the business strategy.
Evaluate the strategy for Feasibility. Compare the amount of effort required to implement the business strategy with the available resources such as money, time and people to determine the likelihood of a successful implementation. For example, estimate the amount of financial investment needed to implement the strategy and compare that to the available financial resources of the company.
Assess the Advantage of the business strategy by evaluating how the strategy will help create and maintain a long-term competitive position in the marketplace. For example, assume that in three years, the business strategy has been successfully implemented and compare the current competitive position of the company to what its competitive position might be in three years.
Steve McDonnell's experience running businesses and launching companies complements his technical expertise in information, technology and human resources. He earned a degree in computer science from Dartmouth College, served on the WorldatWork editorial board, blogged for the Spotfire Business Intelligence blog and has published books and book chapters for International Human Resource Information Management and Westlaw.