Why 65% of Companies Rewrite Their Model Every Two Years and Still Fail to Execute It
There is something revealing about the fact that a survey of more than 700 senior executives across 12 countries produced, as its central finding, a gap that any chief operating officer would recognize instantly: organizations know they must change, they approve the change, they frame it within a strategy, and then they go no further. The Project Management Institute has just published the results of that research, alongside a Manifesto for Business Agility developed in collaboration with Agile Alliance, and the numbers that emerge are not those of an industry in the process of maturing. They are those of an industry with a structural design problem that has gone without precise diagnosis for years.
The most uncomfortable finding is not that 93% of senior executives acknowledge that operating models must be reviewed at least every five years. That percentage merely indicates that there is intellectual consensus around the need for change, which costs very little. The figure that matters is this one: 65% of organizations are already rewriting their business approaches every two years or less, and yet 35% of CEOs identify as their primary barrier a disconnect between planning and execution. Two-year reinvention cycles, with 35% of the most senior leaders admitting they never manage to implement what they plan. That is not a speed problem. It is an architecture problem.
The Map Nobody Is Following
There is a distinction that the PMI research does not explicitly articulate but that runs through all of its findings: the difference between organizations that have a change strategy and organizations that have built a change capability. These are different things, with different structures, measured by different metrics.
A change strategy is a document, a set of initiatives, a transformation calendar. A change capability is an operational condition: the organization can detect signals, reallocate resources, make decentralized decisions, and execute in short cycles without every movement needing to travel up and down the full hierarchy. The first can be produced in a week of executive work. The second takes years to build and is destroyed quickly when organizational design does not sustain it.
What the PMI describes as "reinvention as a rhythm" points precisely to this. Giles Lindsay, Chief Information Officer at Agile Delta, articulates it with precision when he says that reinvention "becomes a capability, not a program." But the leap from that statement to the structure that makes it possible is exactly where the 35% of CEOs stuck in the planning-execution gap are stranded. Declaring that reinvention must be continuous is easy. Designing the governance mechanisms, the review cycles, the thresholds for autonomous decision-making, and the metrics that accompany each stage of the process is another matter entirely. Most existing operating models were built for stability and scale, not for two-year cycles. When they are asked to sustain permanent reinvention without modifying their internal structure, they creak.
The PMI research records that the rate of change across six simultaneous factors — technology, talent, economics, geopolitics, climate, and consumer behaviour — grew by 183% since 2019, and that 88% of senior leadership leaders expect that pace to accelerate. What it does not record with the same clarity is how many of those organizations have modified their decision-making architecture to absorb that speed. Approving a transformation strategy every two years without redesigning how operational decisions are made is like changing the destination of a flight without touching the engines.
Silos Are Not a Cultural Problem — They Are a Design Problem
Approximately one in four CEOs surveyed identified the presence of functional silos and the absence of shared accountability as the central obstacle to business agility. It is a diagnosis that sounds familiar because it has been appearing in organizational transformation reports for two decades. What changes is the interpretation.
Silos are not primarily a cultural problem to be solved with collaboration workshops or leadership messages about shared objectives. They are the predictable result of incentive systems, reporting structures, and metrics designed to optimize the performance of individual functions, not the aggregate outcome of the organization. When the Chief Marketing Officer is evaluated on acquisition metrics, the Chief Operating Officer on cost efficiency, and the Chief Technology Officer on system availability, coordination among them does not occur naturally. It occurs in spite of the design, not because of it.
Howard Yu, professor at IMD Business School, notes that the most agile organizations are "always two or three steps ahead of the competition." What is not always stated is that this advantage does not come from more talented teams or more innovative cultures in the abstract, but from structures that allow information to flow horizontally, decisions to be made close to the problem, and resources to be reallocated without every movement requiring executive approval. The competitive advantage of agility is, at its core, an advantage in decision speed. And decision speed depends on how the structure is designed, not on how much collaboration is discussed in leadership meetings.
The Manifesto for Business Agility that PMI and Agile Alliance are launching aims to establish this level of analysis as the standard in boardrooms and senior leadership teams. The initiative has historical logic: the original Agile Manifesto of 2001 was born in the domain of software development and took more than a decade to infiltrate the general management of organizations. This expanded version is designed to operate from the outset at the level where operating model decisions are made. The question is not whether the framework has conceptual value, but whether the organizations that adopt it will use it to audit their structural design or simply to underpin transformation narratives that already existed.
The Signal That Most Unsettles an Organizational Architect
There is one data point in the PMI research that deserves more attention than it has received in the public analysis of the report. The proportion of organizations that rate themselves as highly agile rose from 35% in 2021 to 44% in 2024. At first glance, it looks like progress. And in part it is. But placed alongside the other numbers from the same study, it produces a tension worth examining.
If 44% of organizations declare high agility, while at the same time 35% of CEOs admit a gap between planning and execution, and 25% identify functional silos as the main obstacle, something does not add up. Either the organizations that rate themselves as highly agile have structural problems that their own perception fails to detect, or the operational definition of "high agility" is capturing something different from the actual capacity to execute transformation. Both possibilities are concerning, though for different reasons.
The first implies that progress in agility is partly illusory: teams adopt agile rituals, leaders learn the language, reports reflect improvement, but the mechanisms that generate the gap — function metrics over company metrics, centralized decisions, annual budget cycles that do not align with biannual strategic review cycles — remain intact. The second implies that the measurement standard needs to be better calibrated to distinguish between organizations that have adopted agile practices and organizations that have redesigned their operational architecture to sustain continuous transformation.
Data from the Boston Consulting Group cited in the research provides a complementary perspective: the probability of a transformation succeeding is 70% greater when leadership is aligned on scope and actively communicates to employees why they should be part of the change. That number matters not so much as a celebration of leadership but as an indicator of how much variance remains concentrated at the apex of the organization. A truly distributed organizational architecture should reduce — not maintain — the dependence on leadership alignment as the determining variable for success. The fact that 70% of the difference between successful and failed transformations is still explained by what the three or four most senior executives do or fail to do suggests that the operating model most of these organizations are attempting to transform remains, at its core, hierarchical and centralized.
What Is Built Versus What Is Declared
There is a distinction that most reports on organizational transformation tend to blur because it is uncomfortable for everyone involved. The distinction between declaring that reinvention is continuous and building the operational infrastructure that makes it possible for that to be true.
Declaring is relatively costly in terms of executive time and relatively cheap in terms of organizational design. Building requires the opposite: modifying reporting structures, redesigning metrics systems, distributing budgets with different time horizons according to the stage of each initiative, establishing review mechanisms that do not collapse early learning under the performance criteria of a mature business. It requires, in sum, doing the work that nobody sees but that determines whether what was declared gets executed.
The PMI research documents with precision the state of the first level: consensus on the need for change is almost universal, the language of transformation is widely adopted, and the most frequently cited leaders speak clearly about experimentation culture and psychological safety. What falls outside the frame is the second level: the structural audit of how many of these organizations have concretely modified their governance models, their budget cycles, their metrics systems, and their distribution of decision-making autonomy to sustain what they declare.
David Dabscheck, CEO of GIANT Innovation, argues that "reinvention thrives in cultures where people feel safe to experiment and learn." That is correct, and it is not trivial. But psychological safety to experiment in cultures where the innovation budget is reviewed with the same profitability criteria as the core business has a very short half-life. Teams learn quickly that the space to fail and learn exists as long as experiments do not consume visible resources or produce results that contrast with the performance of the established business. As soon as they do, the existing organizational design activates its natural protection mechanisms.
The problem is not that leaders do not want to create those environments. The problem is that operating models have not been redesigned so that those environments are sustainable once the experiment begins to scale and compete for resources with the business that pays the bills.
The Operating Model Is Not Reinvented With a Manifesto
The publication of the Manifesto for Business Agility, with all of its institutional backing and its grounding in data from 700 executives, represents a genuine step forward in formalizing the problem. Naming a structural gap precisely is a necessary step toward closing it. But the distance between a leadership manifesto and a concrete modification of the operating model of a large organization is the same distance that separates the 93% executive consensus on the need for change from the 35% of CEOs who cannot manage to execute it.
What the PMI research reveals, read through the lens of organizational design rather than project management, is that the central deficit of most large organizations is not one of ambition or strategic vocabulary, but of operational engineering: the capacity to build structures that convert the intention of transformation into decisions made in the right place, with the right metrics, at the right moment.
When 65% of organizations are already rewriting their model every two years and still fail to close the gap between what they decide and what they implement, the problem does not lie in the pace of reinvention. The problem lies in the fact that the architecture that should sustain that reinvention was never redesigned. And an operating model that was not built to change does not become agile simply because its leaders sign a manifesto asking it to.
