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This study examines whether superior performance in dynamic markets is achieved through routinized change processes (cf. Winter, 2003; Zollo & Winter, 2002) or more flexible, entrepreneurial acts of management (cf. Teece, 2007). It is argued that the relative effectiveness of the former versus latter view of dynamic capability critically depends on the uncertainty of the environment firms operate in. Examining the performance of US diversified domestic equity mutual funds over the years 2003-2007, this study finds that highly routinized change processes do not lead to improved performance in relatively stable or moderately dynamic environments yet substantially degrade performance in highly uncertain environments.