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Download your free copy of "The Coherence Premium"
"The Coherence Premium," by Paul Leinwand and Cesare Mainardi, published in the June 2010 issue of the Harvard Business Review, represents the latest in our strategic thinking: the belief that capabilities drive a successful strategy, and that only a coherent company can reliably outpace competitors. Generally, strategy development follows a well-worn path from the market back to the boardroom, focusing first on external positioning and opportunity as opposed to internal capabilities.
Companies succumb to intense pressure for top-line growth and chase business in markets where they don't have the capabilities to sustain success. These attempts at growth emanate not from the core, but from the acquisition of "adjacencies" and the exploration of market opportunities not properly aligned with their central strengths. Standout performers, however, start from the opposite direction. They figure out what they're good at — anything from knowledge to processes to tools — and develop those three to six interlocking, best-in-class capabilities, forming a powerful capabilities system. Strategy then becomes a matter of aligning this distinctive capabilities system with the right marketplace opportunities.