Here is the paradox: many companies know they have great strategies and great people, but their performance doesn’t meet the aspirations of their top managers or shareholders. The cause of this disappointment may even seem obvious. If the CEO assigns a small task force of senior managers or highfliers to find the answer, it will quickly pinpoint the immediate culprits—confused accountability within the leadership group, perhaps, or an unforeseen shift in the balance of power between business units and the corporate center.

Once the task force has identified the problems, the CEO may be tempted to fix them straightaway—for example, by spelling out the accountability of different executives or rebalancing the rights and responsibilities of the business units and the corporate center. But performance-sapping organizational problems like these may have complicated roots linking one problem to another. Unclear accountability at the top may be symptomatic of a serious power vacuum within the leadership group, and this may be spurring business units to become more autonomous. Trying to fix what is actually an effect of the problem rather than the cause won’t solve anything.

The kind of high-level, "outside-in" diagnosis that reveals the problems undermining performance is unlikely to afford...