When Incremental Change Stops Working (And How to Know It's Time for a Step Change)

In Article 1, we described flux as the moment when incremental change stops delivering results, not because teams are failing, but because the environment has moved faster than the organization.

If that description feels familiar, the next challenge is deciding what to do about it. Do we push harder on execution, or is a more fundamental shift required?

Johnson & Scholes' work helps clarify that decision.

The problem is not that organizations fail to change. The problem is that they keep changing in the wrong mode for too long.

Why incremental change eventually breaks down

Incremental change works when:

• the environment evolves predictably

• cause and effect are reasonably stable

• improvements compound over time

But research on organizational change shows that many systems evolve through long periods of stability, punctuated by shorter bursts of more fundamental transformation.

When the environment shifts structurally, incremental improvement no longer closes the gap. It only slows the drift.

AI is creating this condition in many SMEs, not as a vague "disruption," but by changing the mechanics of work itself:

• how quickly work can be produced

• where decisions happen in the workflow

• and what customers now expect as table stakes.

Three tests to decide whether a step change is needed

A common SME trap: confusing movement with progress

Flux often produces visible activity:

• pilots

• proofs of concept

• experimentation

• internal excitement and anxiety

What it does not automatically produce is direction.

Without a conscious shift in change mode, organizations can remain in flux for years, accumulating tools, debt, and fatigue.

The purpose of Mode 3 is not disruption for its own sake. It is re-alignment.

What "radical" actually means here

Radical change does not mean reckless change.

In the Johnson & Scholes framing, Mode 3 is about:

• rethinking assumptions

• redesigning structures

• resetting how value is created and delivered

For SMEs, this usually means:

• changing workflows before adding more tools

• redefining roles around judgment and outcomes

• clarifying decision rights in faster systems

• intentionally choosing what not to pursue

The question is not whether to change. It is whether your response matches the scale of the shift outside your organization.