Today's managers face a paradox. On the one hand, the number of tools, techniques, and technologies available to improve operational performance is growing rapidly. On the other hand, despite dramatic success in a few companies, most efforts to use them fail to produce significant results. To understand and resolve this paradox, this article investigates the difficulties organizations face in implementing processes and techniques such as lean production, TQM, computer-aided design and development tools, stage-gate product development processes, and improved customer service systems. The inability of most organizations to reap the full benefit of these innovations has little to do with the specific technique. Instead, the problem has its roots in how the introduction of a new improvement effort interacts with the physical, economic, social, and psychological structures in which implementation takes place. This article presents a framework to understand how these failures arise and illustrates strategies for overcoming the pathological behaviors through case studies of successful improvement.