Innovating and optimizing both contribute to public performance. Public organizations need to be able to incrementally improve their policies, processes, technology and services as well as innovate them to enhance public processes. This thesis describes which capacities are needed to support both processes, and which organizational antecedents contribute to a balanced approach of innovating and optimizing. It also describes the contribution of innovating and optimizing to performance. A mixed method approach was used: after testing the contribution of connective, ambidextrous and learning capacities at the individual, organisational and network level to optimizing and innovation by structural equation modelling, a focus group approach was used to enhance our understanding of the relationships found. Connective capacity at the individual le