Innovation on Empty: Why Capacity, Not Strategy, Will Decide 2026

I’ve noticed something in almost every conversation I've had over the last few months: teams aren’t short on ambition, they’re short on oxygen.

It’s not talent or willingness to work that’s stalling innovation, it’s the weight of constant context-shifting, overstuffed calendars, uncertainty, and decisions stacked on decisions. When every ounce of capacity is spent just keeping up, there’s little left to imagine what comes next.

And it's not just the time to plan, research shows it's also the cognitive capacity to generate fresh ideas, collaborate effectively, challenge assumptions and creatively problem solve.

I got curious to see if there were any proven links between burnout and financial performance - outside the direct costs that are so often cited around turnover and disengagement (which are important, and they're real). Beyond these, turns out.. there is.

Burnout: an Innovation Tax

Most leaders think burnout = a wellbeing cost. But research (including Oxford’s 2023 study on workplace wellbeing and firm performance) proves out there's a lot more to it.

Exhausted teams operate in short-term survival mode, conserving energy, avoiding risk, and oftentimes, defaulting to the familiar.

This is the first silent cost we don't often talk about: the ideas that never make it to the table.

• New ideas stall → Brainstorms feel flat, recycling old playbooks
• Slower decisions → short-term execution means delayed responses to market shifts
• Reduced problem-solving → Meetings shift from ideating in to update-sharing
• Declining risk taking → Teams avoid risk because energy for experimentation is gone

Creativity declines before the P&L does, with slow erosion of effort and creativity showing up before leaders see the impact in black and white. Oxford’s findings are clear: stressed brains produce fewer novel associations.

The sparks behind breakthroughs, customer insights, and competitive moves suffer, and by the time revenue lags, the damage to creative capacity has already compounded.

Downstream Impact on Results - yup they're Real.

As I dug further into the Oxford Study, I was blown away by the analysis, and further proof that there is a lot more cost associated with a burnt out culture than we're talking about. They looked at over 1,600 U.S. companies and found what I hear and feel intuitively every day: when people are well, business performs better.

• Higher market valuation → public companies that protect wellbeing trade higher. Why? Because the market recognizes future capacity.
• Profit isn’t just cost-cutting → even a small lift in employee happiness translated to a 1.7% bump in return on assets. That's billions of dollars reclaimed from wasted effort.
• Outperformance isn’t a fluke → a portfolio of the “highest wellbeing” firms beat the S&P 500 by 20% in just two years. They also looked at the Nasdaq and

The signal is clear: wellbeing isn’t a side benefit, it’s a growth strategy. Leaders who ignore it aren’t saving money, they’re quietly leaving it on the table.

Capacity Is the Currency of Innovation

High-performing organizations don’t just guard “time to think.” They understand the importance of protecting cognitive bandwidth:

• Decision clarity → fewer bottlenecks and wasted cycles
• Meeting discipline → more focus, less bloat
• Recovery rhythms → built-in restoration, not left to chance
• Leadership modeling → sustainable pace replaces silent overwork

Without capacity, ambition turns into frustration, resentment... and missed opportunities.

The financial toll compounds quietly: these missed ideas and slower market moves result in billions of lost opportunity. The Oxford data among other studies by Gallup, Mercer, McKinsey all confirm what we already know from lived experience: wellbeing isn’t a perk, it’s the foundation of growth.

As 2026 planning ramps up, consider this: strategy matters, but only if your team has the capacity to carry it.

👉 Want to learn more about what designing for capacity looks like? I help teams breathe again, so they can think bigger and deliver stronger. DM me or you can discover more at getunburnt.com

New Podcast Drop

I was so honored to join Daniella Bell on her podcast, Where did I go?

We dig in to the experience of walking through life on auto-pilot, how it shows up in a variety of ways, and sadly, how it's become one of the biggest threats to organizational health today. And I would argue, one of the biggest blocker to our everyday happiness.

I loved how Dani ended with urging anyone who listens to recognize that there is absolutely no glory in being someone who is always maxed out.

Check it out for tips on the how to spot some of the early warning signs, and tactical things YOU can do to manage stress personally and on your team.

✨https://open.spotify.com/episode/5lytahFNA3pvSPEWYf6ruw

Thanks so much for reading, and wishing you a wonderful start to September!

All my best,

Alison