Why success can become the very thing that prevents organizations from getting better.
— 8 minute read.
Some organizations are in crisis. They know something needs to change.
Others are doing just fine.
Their clients are happy. Their programs are running. Revenue is stable. Their employees generally get along, and their leadership teams have developed reliable ways to make decisions and get things done.
There isn’t an obvious problem to solve.
And that might be precisely why the organization has stopped evolving.
We spend a great deal of time talking about how to turn struggling organizations around. There are countless frameworks for addressing poor performance, broken cultures, ineffective leadership and operational inefficiency.
But what about the organizations that aren’t struggling? What happens when being good at what you do starts getting in the way of becoming better?
It’s worth asking, because organizational excellence isn’t simply the absence of organizational problems.
It’s something considerably more interesting.
Success has a way of reinforcing itself
When something works, we naturally do more of it.
A nonprofit develops a successful community program. Over time, the delivery model becomes more refined, staff become increasingly efficient, and funders begin to recognize the organization for its expertise.
A business finds a profitable market, develops reliable processes, builds a strong reputation and trains new employees to deliver work consistently.
These are legitimate accomplishments. Organizations invest enormous effort in reaching this level of stability.
But success also teaches organizations what to believe.
The methods that worked yesterday become the preferred methods for tomorrow. The people who know how things have always been done become valuable sources of institutional knowledge. Decisions that once required careful consideration gradually become automatic.
Eventually, the organization can become exceptionally good at repeating what it already knows.
The problem isn’t that these practices are wrong. It’s that their continued success can reduce the incentive to question whether they’re still the best approach.
Organizational researcher James G. March explored this tension in his influential 1991 paper, Exploration and Exploitation in Organizational Learning.
March distinguished between exploiting existing knowledge – improving what we already do – and exploring new possibilities through experimentation, discovery and innovation.
Both are essential.
Organizations that only explore may struggle to deliver anything consistently. Organizations that only exploit what they already know risk becoming increasingly efficient at activities that may eventually lose their relevance.
This is particularly important because the benefits of refining existing operations are often easier to see and measure. The benefits of experimentation are less certain and may take considerably longer to materialize.
So naturally, we allocate more attention, people and resources to what we know works.
And sometimes, without realizing it, we stop asking what else might be possible.
The difference between improvement and excellence
Most organizations have some commitment to continuous improvement.
They review performance, update procedures, invest in professional development and try to make their services more efficient.
There’s nothing wrong with any of that.
But there’s an important difference between improving an existing system and questioning whether the system itself is still appropriate.
Imagine a nonprofit that has spent ten years delivering a successful employment program.
It tracks participation, completion rates, client satisfaction and the number of people who secure employment. Its results are consistently positive.
Each year, the organization finds ways to improve the program. It strengthens training materials, simplifies registration and introduces better reporting tools.
These improvements matter.
But consider what happens if the local labour market has changed. Perhaps the population the organization originally served now faces entirely different barriers to employment. Perhaps employers have changed their hiring expectations. Perhaps another organization has developed a more effective way to address the same problem.
If our nonprofit only measures how efficiently it delivers its established program, it may never notice that a different approach could create substantially greater impact.
It is improving the answers without reconsidering the questions.
Organizational theorist Chris Argyris described a related distinction through the concept of double-loop learning.
In simple terms, single-loop learning asks how to correct an error or improve a result within existing assumptions. Double-loop learning also examines the assumptions, goals and rules that produced the result in the first place.
Consider the difference:
“We need to increase participation in our program.”
versus:
“Is participation still the right measure of success, and is this program still the best way to achieve our mission?”
One question improves performance within an existing model.
The other creates space to reconsider the model itself.
Excellence requires the capacity to do both.
Being excellent doesn’t necessarily mean being bigger
There’s another assumption worth challenging: that exceptional organizations must continually expand.
We often describe organizational achievement through growth. More employees. More clients. More programs. More locations. More revenue.
Growth is visible, measurable and comparatively easy to celebrate.
But growth and excellence are not interchangeable.
A nonprofit might double the number of people it serves while reducing the depth or effectiveness of its support.
A business might increase revenue substantially while creating an unsustainable workload for its employees.
An organization might expand into new markets without developing the leadership, financial resilience or operational capacity to support that expansion.
These organizations are growing. Whether they’re becoming better organizations is another question entirely.
At Positivist Group, we frequently return to the importance of defining what meaningful growth actually looks like for a particular organization.
Sometimes the most valuable next step is expansion.
Sometimes it’s strengthening the quality of an existing service, improving how decisions are made, investing in people or making the organization less dependent on one or two individuals.
And sometimes excellence requires choosing not to grow.
Imagine a community organization that deliberately limits the number of people it serves so it can offer more intensive, relationship-based support. If that approach produces better outcomes and is financially sustainable, it may be a more excellent organization than one that continually expands its reach.
The point isn’t that smaller is better.
It’s that excellence has to be defined in relation to purpose and outcomes, not simply organizational size.
The uncomfortable side of organizational learning
If excellence requires us to question what currently works, we have to acknowledge that doing so isn’t always comfortable.
Success creates identity.
People become proud of the work they’ve built. Leaders develop confidence in their judgement. Teams establish routines that help them feel competent and effective.
These are important features of healthy organizations.
But they can also make it difficult to challenge established ways of working.
Imagine suggesting that a successful program may no longer be the best use of organizational resources.
Or that a leadership approach responsible for years of growth may now be limiting the organization’s potential.
Or that the very thing an organization is known for may need to evolve.
These conversations can feel personal because people have invested their time, expertise and identities in the organization’s success.
This is where organizational culture becomes especially important.
Amy Edmondson’s research on psychological safety and learning behaviour in work teams helps explain why.
Her research found an association between psychological safety and team learning behaviour. The study highlights the importance of environments where people can ask questions, acknowledge mistakes, request help and challenge assumptions without fearing interpersonal consequences.
It’s tempting to interpret psychological safety as making everyone comfortable.
But meaningful learning often requires exactly the opposite: the willingness to engage in uncomfortable conversations without making those conversations personally threatening.
A team can disagree vigorously while maintaining respect and trust.
In fact, an organization where people are consistently polite but unwilling to challenge one another may be missing important opportunities to learn.
Excellence requires more than talented people who know how to do their jobs.
It requires conditions where those people can question whether they’re doing the right jobs, in the right ways, for the right reasons.
Excellence is not a management model
One of the challenges with organizational excellence is our tendency to turn it into a destination.
We develop standards, certifications, maturity assessments, scorecards and frameworks that describe what an excellent organization should look like.
These tools can be valuable. They provide structure, create a common language and help organizations identify opportunities for improvement.
But no single model can fully account for the complexity of every organization.
A leadership structure that works beautifully for a small professional services firm may be inappropriate for a national nonprofit operating through a network of community partners.
An approach designed to improve manufacturing efficiency may not translate neatly into an organization delivering highly individualized social services.
Even within the same sector, organizations face different constraints, histories, resources and stakeholder expectations.
This is why we believe organizational development should be informed by multiple perspectives rather than governed by one preferred methodology.
There is much to learn from systems thinking, organizational learning, behavioural science, strategic management, quality improvement and human-centred approaches to change.
The value isn’t in declaring one framework superior to every other.
It’s in understanding what each perspective helps us see — and recognizing what it might overlook.
A useful organizational model should make us more curious about the organization in front of us, not less.
The same principle applies to excellence itself.
If our definition becomes too rigid, we risk turning excellence into another exercise in compliance: something to demonstrate against a checklist rather than something to continually pursue.
So what does the pursuit of excellence actually look like?
Perhaps the most important distinction is that excellent organizations don’t simply become very good at delivering their current work.
They develop the capacity to continually reconsider, improve and sometimes fundamentally change that work.
This doesn’t mean endless restructuring, strategic planning retreats or an expectation that employees constantly reinvent everything they do.
Quite the opposite.
Sustained excellence requires stability as much as adaptability.
Organizations need reliable systems, clear responsibilities, financial discipline and consistent delivery. These create the foundation from which meaningful experimentation becomes possible.
The question is whether the organization has also preserved enough curiosity, flexibility and collective intelligence to recognize when those foundations need to change.
A few questions are worth bringing into the next leadership or board conversation:
- What are we particularly good at, and when did we last question whether those activities still create the greatest value?
- Which assumptions about our clients, employees, services or operating environment have we stopped testing?
- What are we measuring because it’s easy to measure, rather than because it tells us whether we’re making a meaningful difference?
- Where are we protecting established practices because they’re effective, and where might we be protecting them simply because they’re familiar?
- If we were designing this organization from the beginning today, what would we do differently?
These aren’t questions that need to produce immediate changes.
Sometimes a thoughtful examination of current practices will confirm that the organization is doing exactly what it should be doing.
That’s a useful outcome too.
The goal isn’t to make change for its own sake.
It’s to ensure that our decisions are intentional rather than inherited.
Good enough is an achievement. It just isn’t always the destination.
There’s a danger in conversations about excellence that we should acknowledge.
Constantly telling people that good isn’t good enough can create exhaustion, perfectionism and a sense that their contributions will never be sufficient.
That’s not the kind of excellence we’re talking about.
An excellent organization doesn’t demand endless improvement from every individual, every day. It understands the importance of recovery, sustainable performance, and sometimes simply allowing something that works well to keep working.
Nor does excellence mean chasing an increasingly distant ideal of perfection.
Perfection implies a fixed endpoint.
Excellence, as we’re describing it, is the organizational capacity to recognize what matters, learn from experience and make increasingly thoughtful choices about where to invest attention and effort.
It requires the discipline to improve what works, the curiosity to question what doesn’t, and the judgement to distinguish between the two.
And perhaps most importantly, it requires organizations to remain open to the possibility that their next stage of development won’t look like the last one.
The question isn’t whether your organization is good enough.
It’s whether you’ve created the conditions for it to keep becoming better at what matters.
What could excellence look like for your organization?
If your organization is performing well but you’re wondering what comes next, that’s a conversation worth having.
At Positivist Group, we work alongside leaders and their teams to examine what’s working, challenge assumptions and explore what their organizations are capable of becoming. Whether that involves strategic planning, leadership development, organizational design or simply asking better questions, we believe the best place to start is with curiosity.
Let’s explore what’s possible for your organization.
With love,
Erin
This article is part of Positivist Group’s Pursuit of Organizational Excellence series, exploring the ideas, decisions and organizational capabilities that help businesses and nonprofits move beyond simply functioning well.
