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“We’re working hard” isn’t the same as “We’re delivering results.” If your teams are busy, but organizational performance isn’t improving, it’s time to rethink how your organization operates.
Based on research and over a decade of working with clients going through massive change, we’ve identified why organizations struggle with performance—and how they can finally get the results leaders demand.
What Is “Organizational Performance,” Really?
Before improving performance, leaders need to define it—and that’s where many organizations get stuck (and stay stuck). A meta-analysis of 213 studies found 207 different ways to measure organizational performance.
At its simplest, performance is often reduced to financial results—profit, revenue, shareholder returns. But in reality, most leaders are after organizational effectiveness: financial results plus operational excellence, innovation, and adaptability.
This confusion isn’t just theoretical—it’s a practical problem. If executives aren’t aligned on what “performance” means, teams will optimize for different, and often conflicting, priorities. Before making changes, leaders must first get clear on:
- What outcomes matter most?
- Over what time horizon?
- What trade-offs are we willing to make?
A vague definition leads to vague results. A clear definition creates a roadmap for meaningful change.
The Levers of Organizational Performance
Because your organization’s definition of performance will differ from others, and because your conditions are unique, there’s no single playbook to follow to increase performance. However, there are well-understood levers that have a significant impact on an organization’s long-term performance.
Market Orientation. The best-performing organizations constantly sense and respond to external shifts—customer preferences, competitive moves, emerging technology. The worst? They assume past success will continue, even as the world changes around them. If your organization isn’t deeply tuned into the market, performance will decline—gradually, then suddenly.
Consider this if:
- Teams have lost focus on customer needs or cultural perceptions
- Leaders dismiss competitive threats or downplay industry disruptions
- (Reasonable) risk-taking is avoided or even punished
- Innovation and development have stopped or repeatedly flopped (by failing to connect to what customers really want)
Strategic Planning. A strong, clear, and compelling vision with aligned goals—and aligned leadership—provides the organization with focus. Teams understand what the organization is trying to accomplish, how their work contributes to the larger goal, and what work they should not be doing.
Consider this if:
- Leaders can’t articulate the organization’s goals—or they have their own agenda
- Last year’s Strategic Plan is a 100-slide deck no one’s looked at since, well, last year
- The strategy consists of vague platitudes like “Value” without identifying trade-offs and measurable outcomes
- Teams are fatigued by constantly shifting or conflicting directives from leaders
Information Sharing. In fast-moving organizations, decisions are only as good as the information behind them. Yet in too many companies, critical insights are trapped in silos, buried in reports no one reads, or weaponized by leaders protecting their turf. When information doesn’t flow up, down, and across the organization, teams waste time reinventing the wheel, executives make blind decisions, and performance stalls.
Consider this if:
- Leaders are hoarding information to amass power
- Reports take hundreds of hours to produce but lead to zero meaningful action
- Teams don’t know who to go to ask for information—or if the information even exists
- Front-line teams have no way to surface critical insights before it’s too late
Individual Autonomy. Organizations hire smart people—then cripple them with bureaucracy, bottlenecks, and micromanagement. When employees lack decision-making power, everything slows down, engagement plummets, and the most capable talent leaves for environments where they can actually contribute. The highest-performing organizations don’t just push decisions down—they create the conditions for employees to act with clarity and confidence.
Consider this if:
- Decisions are bottlenecked at the top, making even simple actions painfully slow
- Employees feel like their work is meaningless because they have no say in how it’s done
- Teams have too many dependencies on others and can’t move work forward
- The best employees are quiet quitting or actually quitting—seeking roles where they have real ownership
Skill Building. The market evolves. Does your workforce? Too many organizations assume that if they’ve hired great people, they’ll just “figure it out.” But when employees aren’t trained for new challenges—whether it’s shifting customer needs, emerging technologies, or new ways of working—performance stalls, innovation dries up, and top talent leaves for companies that actually invest in their growth. Skill building isn’t a perk—it’s a performance accelerator.
Consider this if:
- Teams don’t actually know what “good” looks like—there’s no clear standard of excellence
- Employees are struggling with new tools or processes but aren’t given the training to adapt
- Your best people are leaving for roles where they see a clearer growth path
- There’s no structured way for employees to develop beyond their current role
Process Optimization. Organizations rarely fail because of big strategic mistakes—they fail because broken processes slowly strangle execution. Too many companies run on workarounds: bloated approval chains, redundant meetings, and outdated workflows that no one questions. Instead of enabling high performance, these processes create friction, burn out teams, and waste resources.
Consider this if:
- Teams are constantly asking for more resources—but the real issue is inefficiency
- Projects take longer and longer to complete, often with more mistakes
- Leaders assume that “this is just how things work here,” even when it’s clearly broken
- Employees ignore formal processes in favor of “shortcuts”—because the official way is too slow or painful
Reward Structure. You get what you reward—whether you mean to or not. Too many organizations set ambitious goals but incentivize the exact opposite behaviors. They say they want collaboration, but reward individual competition. They expect long-term innovation, but only measure short-term results. They demand customer focus, but bonus teams based on internal metrics. If your incentives don’t align with your strategy, your strategy will fail.
Consider this if:
- Employees are doing what they’re measured on, even when it contradicts broader company goals
- Leaders constantly say they want a certain behavior, but it never happens
- Compensation, promotions, or recognition are tied to activity, not outcomes
- The loudest complaints about performance come from the same leaders who built the reward system
How to Start Improving Organizational Performance
Understandably, these options can feel overwhelming—where does an ambitious leader even start? None of these levers operate in silos: a change in Strategic Planning will necessitate a change in measurement, which will impact your Reward Structure and requires Process Optimization, which means you’ll need Skill Building…
Don’t lose hope. Based on our experience working with hundreds of organizations going through change, we’d recommend the following approach to get started.
Sober up about your organization’s external realities
So many organizations navel-gaze, focusing on internal politics, leaders’ whims, and “how we do things around here.” Instead, organizations must focus on market conditions: how are customer needs evolving? What new technologies and competitors are emerging? If your organization doesn’t have the capacity to sense and respond to these shifts, it risks irrelevance. Find a “burning platform”—a clear signal that the organization must change.
One of the most famous (and public) cases of a burning platform was the Domino’s Pizza Turnaround, in which the company aired commercials literally acknowledging that customers didn’t like how their pizza tasted—and showed how they were making the pizzas better.
Find the slogan or mission that will galvanize teams in the near-term
Yes, it will be too simplistic to adopt forever, but in the early days, you are fighting for attention more than anything else. Get all the leaders on the same page about how to operate. Otherwise, the organization will go in multiple directions, and performance will continue to decline.
For instance, Paul O’Neill’s first speech as the newly appointed CEO of Alcoa focused on worker safety. While initially derided, this clear messaging—reinforced with process improvements, transparent communication, and in some cases, firing executives who disregarded safety—galvanized employees and changed the culture. Not only that, it increased Alcoa’s revenue five-fold during his tenure.
Knock down process barriers
You can’t truly assess how good your teams are if they’re always working with one hand tied behind their backs. Ask teams what they need to get work done, prioritize the one or two that you think will have a big impact, and give the team the support they need to improve.
We worked with a world-famous entertainment brand that had a “Fire Drill” culture: teams were constantly reacting to emergencies and last-minute requests, which meant they didn’t have time to address ongoing work—until those, too, became emergencies. We helped them design a process to address and contain these emergencies as they arose. Within a month, the organization shifted from multiple Fire Drills a week, to one or two a month—and they were so well-contained, most of the team didn’t even realize they were happening any more.
Test and learn
The best organizations iterate on performance improvements rather than roll out massive change programs doomed to fail. Pilot small interventions and build in process for Knowledge Sharing so the organization gets smarter over time.
Especially within large, bureaucratic organizations, small teams can make a big impact: at both NASA and ebay, small teams were empowered to challenge the dominant culture and take risks (“break the rules, but not the law.”) The results they delivered proved to the organization that it was worth changing and inspired others to rethink their ways of working.
Support with structure
Only after your systems changes should you consider major structural changes like a reorg. You’ll be more confident about how the work moves through the organization, and may even have to make fewer changes.
One biotech brand we worked with was preparing for exponential growth, and wanted to protect their tight-knit culture. We worked with teams to provide input into what was working, what needed to change, and how teams and processes should evolve. The resulting reorg was actually welcomed by the organization because they’d had a hand in shaping it, and were excited for the benefits it could deliver.
Common Traps of Improving Performance
As you take steps to improve performance, watch out for these common traps:
- Endless talk of performance, and no bold action. Yes, it’s important to align on what performance is and how to improve it—but you must then change behaviors to see a difference.
- Changing without appealing to customer needs. Making changes that don’t align with customer needs can result in backlash—as JC Penney discovered when it moved away from a sales-based strategy.
- Killing projects to free up focus, but starving innovation. It’s always tempting to pause the “important” in favor of the “urgent,” but removing all long-term bets harms your future.
- Prioritizing speed without improving process. You can only push your team for so long or throw so many bodies at a problem before it blows up.
Nor is improving performance a one-time fix: “long-term studies into the birth, survival and death of organizations in America show that ‘the company equivalent of El Dorado, the golden organization that continuously performs better than the market never existed, it is a myth.”
Improving organizational performance, then, is an ongoing project—one constantly assessing for external changes, adjusting and iterating, and moving forward. It’s challenging, but it is possible—and it’s the ultimate job of leadership.
