A large-scale agricultural producer, for example, may cite sustainable farming as a core value, but those farming practices may limit its strategic ambition to feed large populations. Incorporating desires and aspirations into strategy can be especially problematic, placing unforeseen constraints on the very actions needed for strategic coherence. It is all too easy to create this kind of incoherence when a group treats strategy-making as a type of goal setting, where “goals” are interpreted vaguely as aspirations or ambitions to be “better.” More generally, there is no concentration of effort-no focus-and this contravenes the fundamental principle of strategy. Large investments in new manufacturing technology and expansion in China and Southeast Europe are hard to square with the hoped-for improvements in the income statement and balance sheet. Market share losses, debt problems, and low profitability are symptoms of past overinvestment in poor competitive positions. The list contains implied actions that directly contradict one another.

Leaving aside the fact that having eight priorities violates the very meaning of the word, the policies and intents themselves are incoherent. Become the market leader in China for the category.

Manufacturing technology: double throughput, reduce energy consumption by 25%, reduce emissions by 35%.

Reverse market share losses with new product offerings with new capabilities.

Push return on invested capital above weighted average cost of capital.

Improve debt rating (move EBIT-to-interest ratio from 1.2 to 2.0).

Consider this list of priorities generated during a business strategy retreat by the small executive team leading a Fortune 500 company: But if the company expresses ambitions of both growth and a higher return on capital, the incoherence may be masked. If a company says it will cut capital investment and build new facilities, the incoherence is obvious. In this article, I’ll describe the costs of incoherence, the benefits of focus, the importance of identifying real challenges, and the pitfalls to avoid on the way to strategic coherence. Strategic coherence requires that policies and actions support one another to this end. Before a company’s leaders know it, they have undermined the coherence of their strategy-by which I mean the concentration of effort, resources, and strength where opportunity is greatest or competition is weakest. Knee-jerk responses to such challenges can create new problems, and with surprising speed. For example, a media company that borrows to finance the creation of new content for the streaming wars may have to rethink its strategy when suddenly faced with both higher interest rates and inflation-pinched consumers. Not only do such moments upend the business assumptions underpinning many existing strategies, but they can also inadvertently yield new strategies that arise from an incoherent reaction to the situation at hand. Inflection points push corporate leaders into a strategic danger zone. The millennial workforce exhibits behavior and beliefs that stand in marked contrast to those of older employees. China’s leadership has announced that it intends to supplant the US as the leading technological and military power. We’re living through greater uncertainty about energy and food supplies than most corporate leaders have experienced during their careers. Inflation is rising to the highest level in 40 years. But it may just as likely signal the beginning of the end.” Today, it feels like the world is at such an inflection point. In Only the Paranoid Survive, Andy Grove defined an inflection point as “a time in the life of a business when its fundamentals are about to change.” Speaking from hard-won experience, the former Intel CEO went on: “That change can mean an opportunity to rise to new heights.

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