While organizational variables play an important role in the adoption and implementation of evidence based practices in mental health, most researchers have assumed that successful implementation leads to improving organizational performance. Yet existing organizational theory suggests that implementation differs by organizational characteristics, and certain configurations can lower organizational performance. This paper shows how implementation of evidence based practice impacts organizational performance.  Specifically, we present a system dynamics simulation model of implementation and organizational performance based on existing theory, system dynamics research, and key informant interviews.  By varying organizational characteristics we learn how implementation affects organizational performance, and then explain these effects through subsequent behavioral analysis.  These analyses lead to a simplification of the theory and model. The theory implies that benefits from evidence-based practice depend on how fast managers can implement the innovation relative to the quality improvement process.