Why Do Businesses Become Less Coherent Over Time?
“The strange thing is that nobody seems to be pulling in the wrong direction,” the CEO says. “Every division has a clear rationale for what it is doing, and most of the decisions look perfectly reasonable when we examine them individually.” She pauses before adding, “Yet somehow, the business no longer feels like the same organisation we were running five years ago.” The organisation has changed without anyone consciously deciding to change what it is.
“The strategy has not fundamentally changed,” the COO says. “Our values have not changed, our leadership team is largely intact and we still describe the business in exactly the same terms.” Yet different parts of the organisation now seem to understand those terms rather differently. “I cannot quite identify where the divergence began.” Sometimes the most consequential organisational changes occur without appearing anywhere as a deliberate decision.
Coherence Does Not Survive Automatically
Organisations often assume that coherence is something established once and then preserved. A clear strategy, a strong culture and consistent communication are expected to keep the organisation moving as one. But organisations are not static systems, and every new market, customer, technology or leadership decision introduces another interpretation of what matters. Coherence is not a permanent condition; it is something that is continually reconstructed.
The difficulty is that adaptation usually feels entirely rational at the point where it occurs. A team responds to its customers, another adjusts to competitive pressure, another protects its margins and another responds to a new internal priority. Each movement may be sensible in isolation while subtly altering the meaning of the whole. An organisation can become less coherent through a succession of perfectly reasonable decisions.
Interpretation Quietly Changes The Organisation
Over time, people stop responding only to what the organisation says and begin responding to what they have learned the organisation actually rewards, protects and prioritises. Those lessons are rarely written down. They emerge from thousands of decisions, exceptions and compromises, gradually becoming part of how people interpret what is really important. The organisation’s lived meaning can therefore drift away from its declared meaning.
This is why coherence often deteriorates without an obvious moment of failure. No single decision is large enough to explain the change, yet every decision leaves behind an interpretation that influences the next one. Eventually, different groups are no longer working from quite the same understanding of the organisation’s direction. Narrative drift is created less by contradiction than by accumulated difference in interpretation.
Local Rationality Can Produce Global Fragmentation
The deeper paradox is that the very intelligence that helps an organisation adapt can also make it less coherent. People closest to a problem naturally interpret circumstances through their own information, incentives and experience. Their judgement becomes locally refined, while the organisation’s shared judgement becomes progressively less shared. Local intelligence can increase while organisational coherence decreases.
At this point, leaders often see symptoms rather than the underlying dynamic. Decisions take longer, priorities compete, initiatives overlap and different teams defend interpretations that all appear legitimate. Nothing necessarily looks broken because the organisation is still functioning, but its parts are no longer generating the same organisational direction. Fragmentation does not begin when people stop functioning together; it begins when they stop making sense of the organisation in the same way.
Coherence Is An Invisible Organisational Asset
This changes how we understand organisational strength. A coherent organisation is not one in which everyone agrees, nor one in which change is resisted. It is one in which people can encounter different circumstances and still exercise judgement from a sufficiently shared understanding of what the organisation is trying to become. Coherence is the invisible continuity that allows an organisation to change without losing itself.
Perhaps, then, the important question is not why a business has become more complicated as it has grown. Complexity is inevitable. The more revealing question is whether the organisation’s shared meaning has evolved with that complexity, or whether successive adaptations have quietly pulled it apart. Businesses become less coherent when adaptation changes the parts faster than shared judgement can reconnect them.