Over the last few decades, a growing number of movements, models and approaches have emerged alongside signs of the exhaustion of industrial capitalism. Some examples are the Sustainability movement, Stakeholder Capitalism, Conscious Capitalism, the B-Corps,
Humanistic Management, the Economy for the Common Good, and Values-Driven Organisations. The Great Recession of 2008 was the tipping point propelling these movements to the forefront. They claim a need to transform the current economic system into a new, sustainable paradigm that cherishes human development and environmental sustainability. To that end, they put forward an ethical, respectful, and holistic way of conceiving and doing business, in which companies are agents for positive societal transformation.

Companies adhering to these new movements refuse the tenets of profit maximisation and the mechanistic interpretation of organisations. Without dismissing economic and financial performance, they tend to be people-centred, focused on human well-being and the common good, concerned with the environment, stakeholder-oriented, values-driven and based on higher purposes. Several authors point at these movements as the result of a human evolutionary drive, a direct consequence of a paradigm change. While some companies are born in this new spirit, the dominant business model is still anchored in industrial capitalism, and most companies must transition. Academic and practitioner literature have started documenting successful cases of transition. These cases reveal that the transition implies evolving into organisational cultures able to generate particularly high levels of employee
well-being and organisational performance.

These accounts are well-characterised and rich in details, but they focus on large companies and do not necessarily address how the transition operates in practice. The number of Small and Medium Enterprises (SMEs) joining the abovementioned movements is rapidly
increasing. Alongside this increase comes an unmet demand - from SMEs willing to undertake the transition - for management models that can inform and guide the transition to the new business paradigm.

This study contributes to meeting this demand for practical knowledge through applied academic research. The study's objective was to accrue meaningful insights into how the transition plays out for SMEs and, mainly, to find out how the critical mechanisms linking
corporate culture, employee well-being, and sustainable organisational performance operate in transitioning SMEs.

The study took a realist research orientation and employed a research strategy based on a longitudinal, holistic multiple-case study design. The research observed and analysed the evolution of three companies at three different degrees of transition to the new business paradigm (incipient, medium, advanced) for three years. The methodology followed a dominant qualitative approach combining mixed methods. Monitoring data on culture, wellbeing and performance were collected and analysed to identify patterns and qualitative inquiries followed suit for a deep dive into the patterns. Qualitative work used in-depth semi-structured interviews and focus groups, following Edgar Schein's clinical research method.

The study's primary outcome is the development of an initial transitioning model, which can be used in management science and applied in management practice. This model directly contributes to developing a middle-range theory for SME transition. It addresses
the demand from the SME sector for research-based practical knowledge and management models that can inform and guide the transition. The model is complemented with a transitioning tool, a set of ten driving questions framed in the transitioning model. These questions are intended to stimulate thought in a way that helps drive the transition. They are based on the understanding of transitioning mechanisms and how they operate.

This study took place during a challenging time. One year after the start of the fieldwork, the Covid-19 pandemic was declared worldwide. Despite this setback, the continued commitment of the three participating companies made it possible to conduct 15 focus groups, 18 surveys, and 26 in-depth interviews in a sequence of data inquiries that corresponded to pre-covid, during - covid, post -covid situations. This exceptional setting reveals aspects of the transition that would otherwise have remained concealed. As time passes, transitioning to the new business paradigm becomes less of an option and becomes an evolutionary must or a move for business survival. If this assumption is correct, understanding the critical factors behind success, failure, and stagnation when transitioning has become urgent. This research study is a contribution to responding to that call.