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Dynamics of Reinvention

This paper examines the psychological aspects of reinvention by initially discussing the case of a failed reinvention in a large engineering organization (LEO). The change involved initiation of business planning in each of its three major plants to spur development of new products and value-added products. This required altering mindsets or routines. Routines had to be changed with regard to the behaviour of individuals at junior levels, actions at senior levels, basis for actions, norms for sharing information, assuming responsibility, communicating expectations, working across functions and so on. When there is little attention paid to altering routines, change programme does not stand much chance of success. The change at LEO also required a clear and shared understanding of the final destination. The issue of sub-goals pulling in different directions had to be examined. In LEO, while there was clarity on what was needed to be changed and why, there was little exploration of how changes could be brought about. The organizational architecture at LEO did not allow the change to take roots. Yet, neither the organizational architecture was changed nor its incompatibility considered and factored in. Thus, the existing organizational arrangements were ignored in the mental maps of the key decision-makers. As a result, they were surprised by the unexpected resistance to change and were even paralysed by it. As the challenges of mindsets, final destination, and existing organizational architecture were not addressed, there was absence of effective conversations and distortions in people's thinking and actions. Ineffective conversations made it difficult to integrate information, ideas, and insights distributed across different levels and functions into thinking and actions that are appropriate for the demands of the problem. Distortion in people's thinking was reflected in their behaviour of ignoring real problems and getting busy with pseudo-challenges that could protect their sense of competence. When individuals feel marginalized, experience little or no support or recognition, they tend not to engage with the problems that they believe are too large for them to make a difference. After examining the major hurdles to the success of reinvention, this paper discusses the story of successful transformation of Nissan. The case examines how the goal setting was approached how cross-functional teams were created to address the organizational architecture demands for Nissan's strategic challenges what was done to provide key actors a sense of competence and control as they approached the fuzzy destination and uncharted terrain. The paper then derives key lessons on how to manage reinvention. More specifically, implications are discussed in terms of how destination can be clarified and goals set, how structural barriers to engagement can be removed, and how routines can be attended to so that understanding of reality is influenced and effective conversations are promoted.