Making strategic coherence work
When capabilities start to work together, strategic coherence begins to emerge. But coherence is not something an organization can set and forget. Left unattended, it either gets reinforced through everyday choices or slowly erodes through small, well-intentioned exceptions.
This is where many organizations stumble. They understand why coherence matters, yet struggle to make it show up consistently in how work actually gets done. The strategy still makes sense, but priorities drift. Capabilities are named, but not always strengthened. In many cases, the missing link is performance management.
Performance management is never neutral. What gets measured, reviewed, and rewarded shapes where people focus their time and energy. When those signals are misaligned with strategic intent, they quietly work against coherence. Local targets may be met, but the capabilities that matter most begin to weaken.
In organizations that are truly coherent, performance management plays a different role. It is not just a way to track outcomes. It helps reinforce the logic that connects value creation, capabilities, and execution. KPIs are chosen to make that logic visible. They clarify what really matters and make trade-offs explicit.
That shift starts with a change in how KPIs are defined. Instead of beginning with what is easiest to measure, coherent performance management starts with results that are strategically critical. From there, it asks a more useful question: what needs to change in performance for those results to be achieved? Measures are not selected one by one, but as part of a system that reflects how capabilities work together.
When performance management is designed this way, the effects are noticeable. Objectives stop competing for attention. Measures begin to reinforce one another instead of pulling the organization in different directions. Conversations about performance become sharper and more constructive, moving beyond reporting toward real decision-making. Performance is managed as a system, not as a dashboard.
Over time, performance management also takes on a governance role. It creates a shared reference point for setting priorities, making investment choices, and adjusting course. Leaders are better equipped to see not only whether targets are being met, but whether the way results are achieved is strengthening or diluting the capabilities that underpin advantage.
This does not make the organization less adaptable. In fact, it makes adaptation easier. When conditions change, coherent performance systems allow targets and measures to be adjusted without losing strategic focus, because the underlying capabilities remain clear.
In the end, coherence becomes durable only when it is built into how performance is managed. Strategy sets direction. Capabilities provide the foundation. Performance management ensures that day-to-day behavior continues to reinforce both.