The Coherence Premium
Terms in this set (9)
Define a coherent company.
The company that has aligned its differentiating internal capabilities with the right external market position
Define a capability.
Something you do well that customers value and competitors can't beat
Aligning strategic purpose (way to play) with a product or service answers what questions?
1. How are we going to face the market?
2. What capabilities do we need?
3. What are we going to sell, and to whom?
How does coherence create value?
1. Strengthens a company's competitive advantage
2. Focuses strategic investments on what matters
3. Produces efficiencies of scale
4. Creates alignment between strategic intent and day-to-day decision making
List the steps to score coherence.
1. Define the segments each company serves
2. Identify the capabilities that drive value for the company in each segment
3. Determine the number of common capabilities across all the segments the company serves
What must be aligned for a company to be coherent?
1. Way to play
2. Capabilities system
3. Product and Service fit
What is meant by way to play?
Executives, managers, and employees at every level understand the way the company creates value for customers
What is meant by capabilities system?
The engine of value creation is the system of 3 - 6 capabilities that allow companies to deliver their value proposition
What is meant by product and service fit?
All products and services leverage the same capabilities system
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