The Coherence Chain: Why Strategy Fails and What to Do About It
Ross Sylvester Founder, CEO -- Adrata
Most companies don't have a strategy problem. They have a coherence problem.
The Number That Should Terrify You
Here is a statistic that has barely moved in thirty years: 67% of well-formulated strategies fail due to poor execution.1
Not because the strategy was wrong. Because daily behaviors and operations never aligned with strategic intent.
McKinsey published something even more alarming in January 2025. They surveyed 416 senior executives worldwide and found that only 21% reported their strategies passed four or more of the Ten Tests of Strategy -- a 40% decline from fifteen years earlier, when the figure was already a disappointing 35%.2 Strategy quality is not improving. It is collapsing.
PwC's Strategy& division, in an ongoing global survey of more than 4,400 senior executives, found that more than half said they didn't think they had a winning strategy. Two-thirds said they didn't believe their organization had the capabilities to execute it even if it could.3
And the Brightline Initiative -- a joint effort between the Project Management Institute and the Economist Intelligence Unit -- surveyed 500 senior executives from companies with annual revenue exceeding $1 billion. Their finding: only 1 in 10 organizations effectively achieves its strategic goals. On average, companies fail to meet 20% of their strategic objectives because of poor implementation.4
Read those numbers together.
More than half of senior executives -- the people responsible for strategy -- don't believe their own strategy can win. Two-thirds don't believe their organization can execute it. And ninety percent of organizations fail to deliver on the strategies they set.
This is not a failure of intelligence. These are smart people running large organizations with enormous resources. The problem is something else entirely.
The problem is coherence.
What Coherence Actually Means
Richard Rumelt, in Good Strategy Bad Strategy, argues that most organizations don't have a strategy at all. What they call strategy is a collection of goals, aspirations, and budget allocations dressed up in strategic language. A real strategy, Rumelt says, has a structure he calls the kernel: a diagnosis of the challenge, a guiding policy for dealing with it, and a set of coherent actions that carry out the policy.5
The word he keeps returning to is coherent.
Not aligned. Not synergistic. Not integrated. Coherent.
Coherence means the actions reinforce each other. The guiding policy constrains and channels effort so that every move amplifies every other move. Nothing contradicts. Nothing wastes energy pulling in the wrong direction. As Rumelt writes: "Strategic coordination, or coherence, is not ad hoc mutual adjustment. It is coherence imposed on a system by policy and design."
Roger Martin, in Playing to Win, frames it differently but arrives at the same place. Strategy, he argues, is an integrated set of five choices: a winning aspiration, where to play, how to win, the capabilities you need, and the management systems to support them.6 The key word is integrated. Each choice constrains and enables the others. Martin specifically encourages strategists to "toggle back and forth among the five boxes" -- strategy is not a deterministic, one-way exercise. It is a system of mutually reinforcing choices that must be tested against each other continuously.
If your where-to-play doesn't match your how-to-win, you don't have a strategy. You have a contradiction.
Both thinkers -- arguably the two most important strategy minds of the last two decades -- converge on the same insight: strategy is not a plan. Strategy is coherence.
A plan tells you what to do. Coherence tells you why everything you do fits together.
The Coherence Premium: What the Data Shows
In 2010, Paul Leinwand and Cesare Mainardi published a landmark study in Harvard Business Review called "The Coherence Premium."7 They examined companies across seven industries -- consumer packaged goods, utilities, healthcare, media, telecom, automotive, and financial services -- and mapped capabilities coherence against EBIT margins over a five-year period.
Their central finding: coherence in capabilities correlates strongly with greater profitability. Companies that invested in a capabilities system supporting their way to play and their product and service portfolio consistently outperformed the competition in their industry.
The data was specific.
Coca-Cola, identified as the most coherent company in consumer packaged goods, focused on three core capabilities -- beverage creation, brand proposition, and global consumer insight -- and generated the highest operating margins in the category. Pfizer Consumer Healthcare, by committing to a coherent set of capabilities, grew at approximately double the industry average and was eventually sold to Johnson & Johnson for $16.6 billion -- valued at 20.6 times EBITDA, compared to a typical multiple of 15x.7
Meanwhile, companies with incoherent portfolios -- ConAgra Foods and Sara Lee were named specifically -- demonstrated persistent financial underperformance. Their capabilities didn't compound. They cancelled each other out. ConAgra's portfolio spanned so many distinctly different capability requirements that no single capability system could serve the whole, and profitability suffered accordingly.
Leinwand and Mainardi later expanded this research into the book Strategy That Works, where they studied fourteen companies that consistently closed the strategy-to-execution gap -- Amazon, Apple, CEMEX, Danaher, Frito-Lay, Haier, IKEA, Starbucks among them.3 They identified five practices that distinguished these companies. The first: commit to an identity. Know what you are. Then make every decision flow from that knowledge.
In their broader survey, they found something else that should stop every executive in their tracks: roughly 80% of senior executives said their overall strategy was not well understood, even within their own company. Nine out of ten conceded they were missing major opportunities in the market.3
Not because opportunities were scarce. Because their organizations lacked the coherence to recognize and capture them.
Why Execution Is Not the Problem
The conventional framing -- "We have a great strategy, we just can't execute it" -- is almost always wrong.
If you can't execute your strategy, you don't have a strategy. You have a wish.
A real strategy, as Rumelt defines it, includes the coherent actions required to carry it out. If those actions are beyond your capabilities, the strategy is incoherent. If the organization resists those actions, the strategy doesn't account for the actual challenge. If the market doesn't respond to those actions, the diagnosis was wrong.
Kaplan and Norton, the creators of the Balanced Scorecard, estimated that 90% of organizations fail to execute their strategies successfully.8 Their research revealed the mechanism: less than 5% of employees understood the company's strategy, 85% of leadership teams spent less than one hour per month discussing strategy, and 50% spent no time at all.
Think about what that means. The strategy exists on paper. It may even be well-formulated. But the people who need to execute it have never internalized it, and the leaders who need to steward it barely discuss it. The chain from strategy to action was never connected.
Harvard Business Review reports that executives estimate they lose 40% of their strategy's potential value to breakdowns in execution.9 But the authors of that research argue the real problem is not execution failure. It is planning that treats strategy and execution as separate activities.
The "strategy-execution gap" is not a gap between two separate things. It is a symptom of incoherence within a single thing. The strategy itself is broken -- not because the thinking was poor, but because the chain from diagnosis to action was never made tight.
Martin makes this point directly: strategy that doesn't drive action is not strategy. It is aspiration.6
And Rumelt: "Good strategy works by focusing energy and resources on one, or a very few, pivotal objectives whose accomplishment will lead to a cascade of favorable outcomes."5
Focus. Coherence. A cascade.
That is the coherence chain.
The Incoherence Epidemic
If coherence drives outperformance, why is it so rare?
Because incoherence is the natural state of organizations.
Every company accumulates contradictions over time. A new product line that doesn't fit the existing capability set. A geographic expansion that dilutes focus. A reorganization that optimizes for one metric while destroying performance on another. An acquisition that makes financial sense but strategic nonsense.
McKinsey estimates that misaligned strategy implementation costs companies up to 10% of annual revenue.10 For a billion-dollar enterprise, that is $100 million evaporating annually into organizational friction -- not through incompetence, but through incoherence.
And it gets worse over time. The McKinsey January 2025 survey didn't just show that strategy quality is low. It showed that strategy quality is deteriorating. The percentage of executives whose strategies pass basic quality tests has dropped by 40% in fifteen years.2 Organizations are not getting better at coherence. They are getting worse.
The reason is structural. Every year brings new pressures that pull against coherence: a new competitive threat that demands a response, a board member who wants to enter an adjacent market, a key customer who asks for a feature that doesn't fit the product vision, a talented hire who wants to build something that doesn't align with the strategy.
Each accommodation seems small. Each "pragmatic exception" seems reasonable. And each one stretches the chain a little further until it snaps.
The Five-Link Chain
Based on the combined work of Rumelt, Martin, Leinwand, Mainardi, Kaplan, and Norton, the coherence chain can be described as five links. Each must connect tightly to the next.
Link 1: Diagnosis
An honest, specific assessment of the challenge you face. Not a SWOT analysis. Not a market overview. A clear statement of the one or two critical issues that, if resolved, would unlock everything else.
Rumelt considers this the most neglected element of strategy. Most companies skip past it. They jump from aspirations to actions without ever doing the hard analytical work of defining the actual obstacle.
How this link breaks: A company targets "digital transformation" as the problem. But digital transformation isn't a problem -- it's a category. The actual problem might be that mid-market CFOs can't get real-time visibility into cash flow across fifteen ERPs after a series of acquisitions. That level of specificity changes everything downstream: the messaging, the channel, the sales motion, the proof points. When the diagnosis is vague, everything else becomes vague too.
The test: Can every leader on your team describe the same core challenge in one sentence -- without jargon, without buzzwords, without mentioning your product?
Link 2: Identity
A clear, committed answer to the question "What are we?" This includes where you play, how you win, and why you have the right to win there. Martin's five-choice cascade lives here.6 It is not a vision statement. It is a constraint.
Identity is what enables speed. When everyone in the organization knows what the company is, decisions get made faster and with less friction. People don't need to escalate every judgment call because the identity provides the decision framework.
How this link breaks: A B2B SaaS company builds a strong self-serve motion in SMB. Growth is solid. Then the board wants bigger deals. The company decides to "move upmarket" while also "maintaining the velocity of our self-serve motion." They hire enterprise AEs but keep PLG pricing. The enterprise reps can't sell against established vendors without real implementation support. The self-serve funnel gets neglected because leadership's attention is on the big deals. Eighteen months later, neither motion works. Not because either was wrong -- but because the company never committed to an identity. It tried to be two companies at once.
The test: When you say no to an opportunity, do you know exactly why? If you can't articulate the specific aspect of your identity it violates, your identity isn't crisp enough to serve as a constraint.
Link 3: Capabilities
The three to six distinctive capabilities that deliver your identity. These must form a system -- each capability reinforcing the others.
Leinwand and Mainardi are precise on this point. It is not enough to have capabilities. The capabilities must cohere. A list of unrelated strengths is not a capabilities system. It is a portfolio of assets that may or may not work together. IKEA's flat-pack design reinforces its self-service retail model, which reinforces its global supply chain efficiency, which reinforces its price positioning. Remove one and the economics of the entire system change.
How this link breaks: The company has a real diagnosis and a clear identity, but no proprietary capabilities to deliver either. They compete on features. Their pitch decks look like everyone else's. Their differentiation section says "best-in-class platform" -- which is what every competitor's deck also says. Without a distinctive capability system, the strategy defaults to brute force: more reps, more spend, more noise.
The test: Can you draw a diagram showing how each capability strengthens the others? If any capability stands alone -- useful but unconnected -- it is a vulnerability, not a strength.
Link 4: Actions
The specific initiatives, investments, and decisions that build and deploy your capabilities. Every action must trace back to a capability, which traces back to the identity, which traces back to the diagnosis.
This is where most strategies lose coherence. The daily work drifts. The SDR team emails outside the ICP because they need to hit numbers this month. The product team builds a feature for one whale account. The marketing team chases a trend that doesn't reinforce the insight. Each exception seems small. Together, they shatter the chain.
How this link breaks: Leadership decides the strategic choice is to focus on a specific ICP -- say, Series B-to-D fintech companies. Marketing builds campaigns around that ICP. But the SDR team is still measured on total meetings booked, so they blast outreach to anyone with a pulse. AEs take meetings outside the ICP because their quota is their quota. Customer Success onboards accounts that should never have been sold. Every team is working hard. None of them are working coherently.
The test: If you observed your sales team, your marketing campaigns, and your customer success playbooks for one week without telling anyone -- would they reflect your strategic choices? Or would they reveal a different, emergent strategy?
Link 5: Feedback
The measurement, learning, and adaptation loop that tells you whether the chain is holding. Martin calls this toggling -- moving back and forth among the choices, testing whether they still fit.6
This is not annual strategic planning. It is continuous. The market shifts. The diagnosis evolves. The capabilities need to adapt. But the chain itself -- the logic that connects diagnosis to identity to capabilities to actions -- must hold.
How this link breaks: The company hits its revenue number but discovers that 40% of new logos churn within twelve months. Leadership celebrates the bookings. Nobody traces the churn back to the incoherent ICP targeting in Link 4, which stemmed from the identity crisis in Link 2. The outcome looks fine on a dashboard but is screaming that the chain is broken. Without coherence-aware measurement, you optimize for metrics that mask structural decay.
The test: Do your success metrics measure coherence or just activity? Are you tracking leading indicators that reveal chain breaks -- not just lagging indicators that confirm what already happened?
Coherent vs. Incoherent: Two Strategies in the Wild
HubSpot: Coherence as a Growth Engine
HubSpot's strategy is a textbook coherence chain.11
- Diagnosis: Small and mid-market companies can't afford or manage the Frankenstack of disconnected sales, marketing, and service tools that enterprises use.
- Identity: The all-in-one platform for SMB and mid-market. Not Salesforce for small companies. A different kind of company entirely -- one where ease-of-use and time-to-value are the core differentiators.
- Capabilities: Freemium product architecture. An inbound content engine that generates demand without paid acquisition. Product-led growth with sales-assist layered on top. Over 70% of customers arrive through self-serve channels.
- Actions: Free CRM as the entry point. Content marketing as the growth engine. Gradual upsell through product usage, not sales pressure. Every action reinforces the identity.
- Outcome: From $15M to over $2B in revenue. 100%+ net revenue retention. Every link reinforces the next.
Each link logically follows from the previous one. The diagnosis demands the identity. The identity justifies the capabilities. The capabilities dictate the actions. The actions produce the outcome that validates the chain.
Danaher: The Operating System as Strategy
Danaher's coherence is even more instructive.3 Their capabilities system -- continuous improvement, lean manufacturing, measurement discipline, known collectively as the Danaher Business System -- is not an execution layer bolted onto a strategy. It is the strategy. The operating system is both how they win and what they win with. Strategy and execution are indistinguishable. That is what coherence looks like at scale.
The Incoherent Counter-Pattern
Contrast these with the "Series B Identity Crisis" I described in Link 2. Each link may look reasonable in isolation. But together, they are a contradiction. The diagnosis is for SMB. The identity attempts to serve both SMB and enterprise. The capabilities were built for self-serve. The actions pull in two directions. The outcome is mediocre on both fronts.
This isn't a strategy failure. It's a coherence failure.
What This Means for Founders and CEOs
If you're building a company, coherence is the highest-leverage thing you can build.
Not a product. Not a team. Not a market position. Coherence.
Because coherence is what makes the product, the team, and the market position work together. Without it, you have a collection of good things that don't add up. With it, you have a system that compounds.
Here is a practical exercise. Walk through the five links with your leadership team. Write down your answers independently. Then compare them in silence.
If the answers don't match -- if your VP of Sales has a different diagnosis than your VP of Marketing, if your head of product describes a different identity than your CEO -- you have found the breaks in your chain.
Those breaks are where your strategy is leaking value. They are where the 40% goes.9
Stop asking "Is our strategy good?" Start asking "Is our strategy coherent?"
A good strategy that's incoherent will lose to a mediocre strategy that's coherent. Every time. Because coherence compounds. Each coherent link amplifies the others. And incoherence compounds too -- in the wrong direction. Every misaligned action creates drag on every other action.
Audit the chain, not the parts. Most strategy reviews examine each function in isolation. Marketing presents its metrics. Sales presents its pipeline. CS presents its retention numbers. Nobody maps them back to the chain. Start your next QBR by walking through the five links. Ask where the breaks are.
Make coherence a leadership discipline, not a one-time exercise. Strategies don't become incoherent overnight. They erode, one "pragmatic exception" at a time. The SDR team that starts emailing outside the ICP because they need to hit numbers this month. The product feature built for one whale account that doesn't serve the broader strategy. The marketing campaign that chases a trend instead of reinforcing the insight. Each exception seems small. Together, they shatter the chain.
Accept that coherence requires saying no. When you try to do everything, you believe in nothing. The hardest -- and most valuable -- thing a leader can do is kill an initiative that's working in isolation but breaking the chain.
The Quiet Advantage
There is a reason coherent companies are hard to compete against. It is not because they have better talent, more money, or superior technology. It is because their system of choices is internally consistent in a way that is extremely difficult to replicate.
You can copy a feature. You can poach a team. You can match a price.
But you cannot copy coherence. Because coherence is not a thing. It is a relationship between things. It is the way the diagnosis shapes the identity, the way the identity shapes the capabilities, the way the capabilities shape the actions, and the way the feedback reshapes all of it.
To replicate a coherent competitor, you would have to replicate the entire system simultaneously. And that, as Rumelt observes, is the definition of a durable competitive advantage.5
The companies that figure this out -- the ones that build the chain and keep it tight -- are the ones that win. Not because they are louder or faster or better funded.
Because they are coherent.
And in a world where more than half of executives don't believe their own strategy can win, where strategy quality is declining rather than improving, and where the average company fails to achieve 20% of its strategic objectives -- coherence is the quietest and most devastating advantage there is.
Check your chain.
Ross Sylvester is the Founder and CEO of Adrata, a revenue acceleration platform that helps B2B sales teams close deals faster through buyer intelligence and strategic coherence.
Endnotes
Footnotes
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Mankins, M. and Steele, R., "Turning Great Strategy into Great Performance," Harvard Business Review, July--August 2005. The widely cited 67% failure rate for well-formulated strategies. See also: Sull, D., Homkes, R., and Sull, C., "Why Strategy Execution Unravels -- and What to Do About It," Harvard Business Review, March 2015. ↩
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McKinsey & Company, "How Strategy Champions Win" (2025). McKinsey Strategy Method Survey of 416 senior executives conducted December 12, 2024 -- January 7, 2025. Only 21% of executives reported strategies passing four or more of the Ten Tests of Strategy, compared to 35% in the 2010 survey of 2,000+ executives -- a 40% decline in fifteen years. ↩ ↩2
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Leinwand, P. and Mainardi, C., Strategy That Works: How Winning Companies Close the Strategy-to-Execution Gap (Harvard Business Review Press, 2016). Based on an ongoing Strategy& global survey of more than 4,400 senior executives: more than half said they lacked a winning strategy; two-thirds said their organization lacked the capabilities to execute; approximately 80% said the strategy was not well understood within their own company; nine out of ten conceded they were missing major market opportunities. Studied fourteen companies including Amazon, Apple, CEMEX, Danaher, Haier, IKEA, and Starbucks. ↩ ↩2 ↩3 ↩4
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Brightline Initiative / Economist Intelligence Unit, "Closing the Gap: Designing and Delivering a Strategy That Works" (2017). Survey of 500 senior executives from companies with $1B+ annual revenue. Only 1 in 10 organizations effectively achieved their strategic goals. On average, companies fail to meet 20% of their strategic objectives because of poor implementation. ↩
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Rumelt, R., Good Strategy Bad Strategy: The Difference and Why It Matters (Crown Business, 2011). The strategic kernel -- diagnosis, guiding policy, and coherent actions -- is defined in Part I. "Good strategy works by focusing energy and resources on one, or a very few, pivotal objectives whose accomplishment will lead to a cascade of favorable outcomes." See also the McKinsey interview: "Why Bad Strategy Is a Social Contagion". ↩ ↩2 ↩3
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Martin, R. and Lafley, A.G., Playing to Win: How Strategy Really Works (Harvard Business Review Press, 2013). The five-choice strategy cascade: winning aspiration, where to play, how to win, must-have capabilities, management systems. Martin encourages practitioners to "toggle back and forth among the five boxes" rather than treat them as a one-way, deterministic exercise. See also Martin, R., "Decoding the Strategy Choice Cascade", Medium. ↩ ↩2 ↩3 ↩4
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Leinwand, P. and Mainardi, C., "The Coherence Premium," Harvard Business Review, June 2010. Examined seven industries and mapped capabilities coherence against EBIT margins over five years. Pfizer Consumer Healthcare grew at approximately double the industry average; sold to J&J for $16.6B at 20.6x EBITDA vs. typical 15x multiple. Incoherent portfolios (ConAgra, Sara Lee) showed persistent underperformance. Full PDF: strategyand.pwc.com. ↩ ↩2
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Kaplan, R. and Norton, D., The Execution Premium: Linking Strategy to Operations for Competitive Advantage (Harvard Business Press, 2008). The 90% failure rate is drawn from early Balanced Scorecard research and a 1996 Renaissance survey, originally referenced in Fortune Magazine (c. 1999). Supporting data: less than 5% of employees understood company strategy; 85% of leadership teams spent less than one hour per month on strategy; 50% spent no time at all. ↩
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Sull, D., Homkes, R., and Sull, C., "Why Strategy Execution Unravels -- and What to Do About It," Harvard Business Review, March 2015. Executives estimated losing 40% of strategy's potential value to execution breakdowns. See also: "5 Ways the Best Companies Close the Strategy-Execution Gap," Harvard Business Review, November 2017. ↩ ↩2
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McKinsey & Company, research on strategy implementation costs: misaligned strategy implementation can cost companies up to 10% of annual revenue. See also: "Flaws in Strategic Decision Making: McKinsey Global Survey Results". ↩
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GTMonday, "The GTM Strategy Behind HubSpot and Salesforce's Growth"; Pocus, "HubSpot's Product-Led Sales Strategy". ↩