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Why do so many corporate renewal efforts fail, despite following current best practices?  

Research from Aalto University and Harvard University found that while a structural approach to increasing innovation is commonly accepted as the pathway to growth for companies, the emotional impact of the changes often undermines innovation efforts. The study examined the relationship between ambidextrous structures seeking to optimise both short term performance and long term innovation, and interpersonal dynamics, at more than a dozen companies over 15 years. 

‘We consistently found that ambidextrous designs create major emotional tensions within and between senior management, board of directors, traditional core business and the innovation unit. These tensions then undermine innovation efforts,’ says Aalto University’s Timo Vuori, the lead author of the study.

The research found negative emotional dynamics between the firm’s core business model and its exploratory business models. Without active senior leadership engagement, the core impedes exploratory efforts. The authors found these dynamics at Deloitte consulting, Nokia, Italian energy company ENEL and many other organisations that were part of the study. Leaders from HAVAS, a French advertising company, for example, explained how the innovative approaches to content development threatened the traditional leaders and made them hostile to the new technology. 

“The new leader who spearheaded the innovation had doors slammed shut in front of him,” says Harvard Business School Professor Michael Tushman, who co-authored the study.

Both authors emphasize that they have encountered similar tensions in numerous executive teams and organizations in both private and public sectors in Europe, Asia, USA and North Africa.

It doesn’t help that the world appears awash with emotional decision-making right now — from geopolitics to trade wars, Vuori points out.

‘Artificial intelligence, war, and tariffs have created a chaotic world, intensifying our emotions. At the same time, AI tools and digital platforms enable snap judgment –– meaning emotional impulses can have instant impact across the globe,’ he says. ‘Leaders need to recognise that taking people and emotions into account is now more important than ever.’ 

What can management do better?

The study proposes five practices for leaders to overcome emotional tensions. The authors argue that companies could radically improve their chances of success in today’s turbulence if they follow them. 

Leaders should actively:

• Make the future concrete and emotionally salient for employees
• Expand firm identity
• Make clearer rules around innovative work
• Increase self-awareness
• Institutionalise empathy in communication

‘A skilled approach is about maintaining pride for past achievements, but also building enthusiasm towards a shared future vision, so that innovation is respected rather than seen as a threat. In renewal organizations, there are always tensions, and when people feel heard, these tensions become less harmful,’ says Vuori.

 The key points are expanded on in  in a forthcoming edition of the the California Management Review, with an early viewing copy published online May 6, 2026.