The Power of Coherence

It is very difficult to focus in every direction and come out best in all. It is a very rare trait of any company who directs its complete attention towards ‘what they are best at’ such companies are called as coherent. To become a coherent company, companies are required to direct their attention towards internal capability over external power. If we see, strategy formation is a core part of any company that is being developed inside and directed across the market, while cost cutting is a broader area. it doesn’t mean that companies can ignore market demand. If we see around the market London economic times and Walmart have acknowledged the practices that give them competitive edge. What works for them is mutual alignment. They have integrated different departments according to their efficiency which overall also supports the company’s vision.

Power of coherence

Coherence helps in integrating firm’s different sections like it, R&D, marketing and process that allows a company to stand against competitors. A company becomes coherent in a true sense when it aligns its vision with strategic purpose. It helps in answering question like:

1. Who are our customers?

2. How are we going to deal with the market?

3. What are the strengths the company needs?

4. What will be the product and for whom?

Biopharma is a good example of coherent company. Biopharma set the goal of becoming a leader in the health sector. In the health sector, the market was highly divided and was highly constrained by government regulation. Biopharma analysed that to lead a market it needs to focus on innovation that can give edge to Biopharma to increase its brand worldwide.

 It analysed 6 core areas:

1. R&D innovation.

2. To take control on regulatory management.

3. Innovation and credible product development.

4. Target marketing and highly demonstrated product benefit.

5. Value chain management.

6. Focused execution and branding across the geographical boundaries.

To succeed in a global market, Biopharma needs innovative and science based products. It needed a process and features that got approved by regulators. In 2001 Biopharma launched its personal and skin care product and sold its confectionery to different business partners. This led biopharma to concentrate more on growing better health care brands. By 2009 Biopharma became the top brand in healthcare with an annual turnover of nearly 6 billion dollar.

The winners:

Pepsi- one of the most profitable companies- highly focused on brand creation, and gaining valuable customers. Pepsi has been completely focused on its beverages branches around the world. Its ability to tap its customer preference around the globe helps it create emotional connection with customers.

The losers:

Nocil Ltd operations were highly unfocused. It has undertaken many major projects in just five years and tried to tap into coherence premium, with targeting many non core areas.

‘Way to coherence’

‘Incoherence’ is something that is easy to adapt in the organisation. Coherence requires out of box strategy. Focusing on one thing needs determination and hard bound processes. It also involves stopping yourself from making big profits by diversifying into a new market. There are many companies who are transforming themselves or have transformed themselves already. Like Nicico, Irisl and Ksc, with their core capability have established strong places in the market. Coherence helps in building strong leaders. It helps in aligned employees with organizational goals and vice versa.