Insights

Why most performance fixes fail, and what to look for instead

For years I’ve worked with leaders of large, complex service organisations to improve performance. One pattern keeps coming up. When productivity slows and costs rise, we reach for the obvious levers: a restructure, a hiring freeze, a new reporting dashboard. Each feels decisive. Most deal with the symptoms, not the cause.

The symptoms are familiar. Backlogs grow. Good people leave. Projects run late. Customers complain about the same things they complained about three years ago. Each one gets its own fix, and each fix adds another layer of process.

What the research says is going on underneath

In 1991, James March described a trap that still catches most mature organisations. Organisations have two jobs: exploiting what they already know (doing today’s work more efficiently) and exploring new possibilities (finding tomorrow’s work). Exploitation pays off quickly and reliably. Exploration is uncertain and slow. So over time, organisations drift towards exploitation until they become very good at things that matter less and less. March called this a competency trap.

That drift doesn’t show up on a dashboard. What shows up is the symptom: flat productivity, rising cost per transaction, falling engagement.

The same year, Fariborz Damanpour pulled together decades of studies on what drives innovation in organisations. The factors that mattered most were structural and cultural, not technical: managers’ attitudes to change, the depth of specialist knowledge, internal communication, and having some slack to experiment. Centralisation worked against innovation. In other words, the conditions for improvement sit in how the organisation is designed and led.

Three questions to get beneath the symptom

When I sit down with a leadership team, I ask three questions before anyone proposes a solution:

1. Where has our effort gone? How much of our capacity goes to running today versus building tomorrow?
2. What has stopped flowing? Information, decisions, ideas: where do they get stuck between teams?
3. Who already knows the answer? Frontline staff and customers usually see the root cause long before the executive does.

The answers rarely point to a single broken part. They point to an organisation that has fallen out of balance.

The point

Cutting harder or adding more controls won’t fix a system that has lost its ability to learn. The work is to find the root cause and restore the conditions for improvement. That’s where sustainable performance comes from.

If your organisation keeps solving the same problems, let’s talk about what sits beneath them.

References: March, J.G. (1991) Exploration and exploitation in organizational learning, Organization Science 2(1). Damanpour, F. (1991) Organizational innovation: a meta-analysis, Academy of Management Journal 34(3).

Why I don’t bring innovation in. I help you unlock it.

When organisations want to innovate, they often look outward: a new consultancy, a new platform, a new hire with “innovation” in their title. I understand the instinct. But in my experience, the ideas that transform a service usually already exist. They sit with the people doing the work and the customers receiving it.

The question isn’t whether your organisation has good ideas. It’s whether the conditions exist for those ideas to surface, be heard and be acted on.

People speak up when it’s safe to

Amy Edmondson’s research on teams showed that psychological safety, a shared belief that it’s safe to take interpersonal risks, drives learning behaviour. Teams that feel safe ask questions, admit mistakes and propose new ways of working. Teams that don’t stay quiet, even when they can see the problem clearly.

In many large organisations, years of restructures and cost pressure have taught people to keep their heads down. The knowledge is still there. It just isn’t moving.

Everyday leadership matters more than big announcements

Teresa Amabile and colleagues tracked how leader behaviour affected creativity day by day. What mattered wasn’t the inspiring all-staff speech. It was the small, everyday moments: whether a manager listened to an idea, supported someone through a setback, or shut a suggestion down. Those moments shaped whether people felt supported, and that shaped what they produced.

That’s encouraging, because it means every leader can change the conditions for innovation from tomorrow.

Customers and partners are part of the system too

Henry Chesbrough’s work on open innovation showed that the best organisations don’t rely on internal ideas alone. They draw on customers, suppliers, partners and communities. For service organisations, the people who use the service are often the clearest source of insight into what isn’t working and what could.

Bringing it together

My work is about bringing these sources together: frontline staff, leaders, customers and partners, working on real problems in a setting where it’s safe to challenge and experiment. When that happens, the collective intelligence in the room is remarkable. It’s usually far greater than anything an outside expert could bring alone.

Innovation isn’t done to an organisation. It comes from within.

Want to find out what your people and customers already know? Let’s start that conversation.

References: Edmondson, A. (1999) Psychological safety and learning behavior in work teams, Administrative Science Quarterly 44(2). Amabile, T.M., Schatzel, E.A., Moneta, G.B. & Kramer, S.J. (2004) Leader behaviors and the work environment for creativity, The Leadership Quarterly 15(1). Chesbrough, H. (2003) The era of open innovation, MIT Sloan Management Review 44(3).

Why high-performing organisations stay in equilibrium, and how to tell when yours isn’t

At the centre of how I work with leaders is a simple idea I call the innovation equation. Every organisation has to balance two forces: delivering reliably today and adapting for tomorrow. When those forces are in balance, performance is sustainable. When they fall out of balance, productivity, growth and morale decline, often slowly enough that no one notices until it’s serious.

Two forces, both essential

James March called these forces exploitation and exploration. Exploitation is refinement: efficiency, standardisation, doing what we know well. Exploration is search: experimentation, discovery, testing what we don’t yet know. An organisation that only exploits becomes efficient and obsolete. One that only explores becomes creative and chaotic. Neither survives for long.

Most large organisations I meet are heavily weighted towards exploitation. Years of efficiency programs, compliance demands and budget pressure have squeezed out the room to explore. The equation is out of balance.

Balance by design

Michael Tushman and Charles O’Reilly studied organisations that managed both at once. They called them ambidextrous organisations. Their insight was that balance doesn’t happen by accident. Successful organisations protect space for exploration, often in separate teams with different ways of working, while the senior team holds the two together around a shared purpose.

Balance in everyday leadership

Balance also happens in individual leaders. Kathrin Rosing, Michael Frese and Andreas Bausch described ambidextrous leadership: opening behaviours that encourage experimentation and new thinking, and closing behaviours that set routines, standards and deadlines. Good leaders switch between the two as the work requires. Too much opening and nothing gets delivered. Too much closing and nothing new gets tried.

Signs your equation is out of balance

• Every new idea has to prove its return before it can be tested
• Improvement work is always “after BAU”, so it never happens
• Your best people spend their time managing risk, not creating value
• The same problems appear in every annual plan

Restoring balance

Balancing the equation doesn’t mean abandoning discipline. It means deliberately creating space and leadership for exploration alongside strong delivery, then connecting the two so new ideas actually scale.

Balance the equation. Unlock the innovation within.

Curious where your organisation sits on the innovation equation? Let’s find out together.

References: March, J.G. (1991) Organization Science 2(1). Tushman, M.L. & O’Reilly, C.A. (1996) Ambidextrous organizations, California Management Review 38(4). Rosing, K., Frese, M. & Bausch, A. (2011) Explaining the heterogeneity of the leadership-innovation relationship: ambidextrous leadership, The Leadership Quarterly 22(5).

Why new technology alone won’t fix your productivity problem

Every few years a new technology promises to transform how organisations work. Today it’s AI. Before that it was cloud, digital transformation and automation. Many leaders I speak with have invested heavily and are quietly disappointed. The systems work, but productivity hasn’t moved.

There’s a good reason for that, and it isn’t the technology.

The productivity J-curve

Erik Brynjolfsson, Daniel Rock and Chad Syverson studied why major technologies take so long to show up in productivity figures. Their answer is the productivity J-curve. To get value from a general-purpose technology, organisations must also invest in what they call intangible complements: new processes, new skills, new ways of organising work and new business models. Those investments take time and effort, so productivity often dips before it rises.

Organisations that buy the technology without redesigning the work around it get stuck at the bottom of the curve. They have the cost of the new system and the inefficiency of the old way of working.

Capability, not just tools

David Teece, Gary Pisano and Amy Shuen argued that lasting advantage comes from dynamic capabilities: an organisation’s ability to sense change, seize opportunities and reconfigure itself in response. Technology can strengthen each of these, but only people can do them. A tool can show you a pattern in your data. It takes people to understand what it means, decide what to do and change how the work is done.

What people-led, technology-enabled means in practice

In my work, people and culture sit at the heart of every innovation. Technology is a powerful enabler, but it comes second. In practice that means:

1. Start with the problem, not the tool. Work with frontline staff and customers to understand what’s really getting in the way.
2. Redesign the work. Change processes, roles and decisions alongside the technology, not after it.
3. Build capability as you go. Help people learn to use new tools to solve their own problems.
4. Expect the dip and plan for it. Leaders who understand the J-curve hold their nerve and keep investing in the complements.

The point

Technology multiplies what an organisation is already able to do. If the culture, capability and ways of working aren’t ready, it multiplies the problems too. Lead with people, use every available technology to amplify them, and the gains become sustainable.

Investing in AI or digital change and not seeing the results? Let’s talk about what’s missing.

References: Brynjolfsson, E., Rock, D. & Syverson, C. (2021) The productivity J-curve: how intangibles complement general purpose technologies, American Economic Journal: Macroeconomics 13(1). Teece, D.J., Pisano, G. & Shuen, A. (1997) Dynamic capabilities and strategic management, Strategic Management Journal 18(7).

Why cost-cutting alone fails, and how The Catalyst Incubator offers another path

When performance declines, the default response in many large organisations is to get smaller. Cut budgets, reduce headcount, consolidate functions. Sometimes that’s necessary. But as a strategy for sustainable performance, it rarely works. You can’t shrink your way to greatness.

Why good management can block new ideas

Clayton Christensen and Joseph Bower found something counterintuitive. Leading firms often fail not because they’re badly managed, but because they’re well managed. Their resource allocation processes reward investments that serve existing customers and deliver predictable returns. New, uncertain ideas lose every time. Without separate protection and resourcing, innovation is starved by the very disciplines that make the core business efficient.

Cost-cutting makes this worse. When every dollar is under scrutiny, exploration is the first thing to go.

Protected space for exploration

Tushman and O’Reilly’s research on ambidextrous organisations showed a way through. The organisations that kept innovating created dedicated units for exploration, with their own processes and culture, while the senior leadership team kept them connected to the core business. That connection is what allows a promising idea to scale rather than stay a pilot.

Ideas and implementation need different support

David Hughes and colleagues reviewed the research on leadership and innovation and drew a useful distinction. Creativity, generating new ideas, and innovation, implementing them, are different processes. They need different kinds of leadership support. Many organisations are good at running ideas workshops but have no pathway to turn the best ideas into changed services.

The Catalyst Incubator

The Catalyst Incubator is my response to these findings. It’s a structured, lab-based approach that:

1. Diagnoses the root cause. We use evidence-based diagnostics to cut through the noise and find what’s really holding performance back.
2. Creates protected space. Leaders, frontline staff and customers work together on a real challenge, separate from the pressures of BAU.
3. Moves from idea to action. We test solutions quickly, using every available technology, and build the case for scaling what works.
4. Connects back to the core. Senior leaders stay engaged throughout, so successful ideas become part of how the organisation operates.

The aim isn’t a smaller organisation. It’s a better one: more productive, more adaptive and more sustainable.

Ready to explore an alternative to cutting? Find out how The Catalyst Incubator could work for your organisation.

References: Christensen, C.M. & Bower, J.L. (1996) Customer power, strategic investment, and the failure of leading firms, Strategic Management Journal 17(3). Tushman, M.L. & O’Reilly, C.A. (1996) California Management Review 38(4). Hughes, D.J., Lee, A., Tian, A.W., Newman, A. & Legood, A. (2018) Leadership, creativity, and innovation: a critical review and practical recommendations, The Leadership Quarterly 29(5).