The policies and actions that make up a firm’s strategy should be coordinated. That is, they should fit and reinforce each other, multiplying their effect. Coherent strategies are those where a tight fit and coordination of policies and actions has been purposefully designed.
Coherence flows out of good analysis of a firm’s situation and challenges. The best business strategists are those who are adept at diagnosing problems – seeing beyond symptoms to the underlying forces and patterns. Once this insight is gained, it becomes possible to identify leverage points through which coordinated policies and actions can work.
In our strategy practice work at ALCG, we never approach strategy from a vision, mission, values and goals perspective. Such an approach is divorced from diagnosing a firm’s main problem or challenge. Usually, a vision-driven approach results in nothing more than a wish list of goals that are disconnected from reality and facts.
Coherent strategies compound a firm’s advantages. Because they are designed with fit between policy and actions in mind, they are much harder for rivals to emulate. Similarly, strategies which are incoherent are much less likely to be effective and result in competitive advantage. Coherence is a key marker for assessing the quality and depth of a firm’s strategy.