Reinvent or Expire - The AI Revolution Demands Transformation

How Decisive Leadership and Business Innovation Is The Sustainable Path to Reinvention.

Evolution as a path to reinvention before expiration

The Reinvention Playbook: A 10-Step Guide for CEOs and Boards

Reinvention is the renewed path to growth and value creation. The hard truth is that companies that fail to business innovate and transform will not survive in the long game. They will eventually reach their expiration date and turn into irrelevance. 

The business world has entered an era where disruption is the norm, and reinvention is not optional — it is existential. This chapter presents a call to action for leaders who recognize the urgency of transformation but struggle to execute it effectively. 

The Norden Advisory approach provides a blueprint for reinvention, enabling companies to break free from legacy constraints and embrace the future with conviction.

Despite the urgency, the pace of reinvention is slow. On average, only 7% of revenue over the last five years has come from distinct new businesses — PwC’s 28th Annual Global CEO Survey.

The struggle is real. The AI revolution is not a distant future — it is happening now, reshaping industries, redefining business models, and making traditional companies obsolete at an accelerating pace. Disruption at the speed of real-time. 

Yet, the corporate world remains largely stagnant. A recent PwC CEO survey underscores this reality: over the last five years, only 7% of revenue growth across organizations has come from truly distinct new businesses. 

This slow pace of reinvention is largely due to indecisive leaders and decision-making processes, and limited resource reallocation creates a misalignment between short-term CEO priorities and long-term industry shifts.

Committing to reinvention before it becomes an urgent necessity is counterintuitive. A company often appears strongest just before a downturn — revenues are soaring, profits are solid, and stock valuations are high. Yet, this is precisely the moment when leaders must act.

Three aspects of hidden S-curves -much faster decline than financial performance does. Source HBR

The Indecisive Leadership Trap: Why Companies Fail to Reinvent

One of the most critical barriers to reinvention is indecisive leadership and poor decision-making. Many executives acknowledge the urgency of transformation but fail to act decisively due to risk aversion, bureaucratic inertia, or short-term performance pressures. As I discussed in my article, Decisive Leadership for Successful Transformations, transformation requires bold, confident leadership that embraces change and executes with precision.

Indecisive leaders often fall into three common traps:

1. Analysis Paralysis — Leaders become overwhelmed by data, competing viewpoints from different stakeholders, and the fear of making the wrong decision. Instead of taking calculated risks, they delay action, leading to missed opportunities.

2. Short-Term Focus — Many CEOs prioritize quarterly earnings over long-term reinvention. This leads to incremental improvements rather than the fundamental shifts required to stay competitive in an AI-driven world.

3. Fear of Failure — Transformation involves uncertainty, and some executives fear the repercussions of making bold changes. However, avoiding risk is itself the greatest risk, as competitors who embrace reinvention will eventually outpace stagnant companies.

Decisive leadership means making informed yet bold choices, committing resources strategically, and fostering a culture where adaptability and execution drive transformation. Without this, even the best strategies will falter.

The Power of Decisive Leadership

Decisive leadership is a cornerstone of growth and value creation. Leaders who make clear, strategic choices enable their organizations to thrive amid disruption. As I emphasized in Decisive Leadership: Creating Growth and Value in Disruptive Times, inaction is a choice with consequences. The most successful leaders understand that even a wrong decision is often better than indecision, as stagnation erodes organizational momentum and market position.

An example of this is a tech company I worked with that struggled with unfocused strategy, attempting to serve too many markets without a clear value proposition and being non-comital to reinventing important parts of the operations to be more competitive and relevant for customers. This lack of direction led to disengaged teams, frustrated managers, and stalled growth. The breakthrough came when leadership embraced decisive action — streamlining the business, prioritizing core strengths, and focusing on market-fit innovation. The result was renewed growth and a cohesive organizational direction.

Decisive leadership is built on clarity, focus, and action. Leaders must cultivate deep industry insights, set clear priorities, and maintain a long-term vision while making bold, timely decisions. Strategic reinvention requires a commitment to execution — leaders must not only decide but also follow through with conviction, ensuring that organizations are resilient and adaptive in times of disruption.

LEGO: From Crisis to Market Domination

By the early 2000s, LEGO was in serious financial distress. The company had expanded too aggressively into video games, theme parks, and merchandise, losing sight of its CORE business: physical building sets. By 2003, LEGO faced a $300 million loss, and its debt was mounting. Industry analysts predicted its decline, and the company was on the brink of bankruptcy.

Decisive Leadership and Reinvention Was the Answer

When Jørgen Vig Knudstorp took over as CEO in 2004, he made bold, decisive moves to reinvent LEGO and return it to profitability:

• Refocused on Core Strengths — He cut non-essential product lines and divested theme parks, returning LEGO to its core business: innovative brick sets.

• Reconnected with the Consumer — LEGO engaged deeply with its community, using insights from its most passionate fans to design new, high-demand products.

• Leveraged Strategic Partnerships — LEGO collaborated with major franchises like Star Wars, Harry Potter, and Marvel, leading to blockbuster sales growth.

• Invested in Digital and AI-driven Design — The company embraced technology but in a way that enhanced its physical products, including augmented reality and AI-driven co-creation platforms.

Economic Impact of Reinvention

• By 2008, LEGO had rebounded to a $200 million profit.

• Between 2004 and 2014, revenue grew by 600%.

• By 2023, LEGO’s annual revenue exceeded $9 billion, making it the largest toy company in the world.

• LEGO’s reinvention turned it into a global powerhouse, outperforming competitors like Mattel and Hasbro.

Key Lesson: Reinvention Requires Decisive Leadership: Knudstorp’s decisive leadership, willingness to make hard choices, and commitment to customer-centric innovation transformed LEGO from near-collapse into a thriving, high-growth company that remains a dominant force in the toy industry.

Business Evolution vs. Kamikaze Revolution: The Sustainable Path to Reinvention

One of the greatest pitfalls in transformation efforts is the belief that radical, short-term “revolutions” with limited resource allocations will create long-term value. However, transformation is not about reckless disruption — it is about guided evolution.

At Nordenlund Advisory, we emphasize that reinvention must be evolutionary rather than revolutionary. Kamikaze-style transformations, where companies abandon their core strengths in favor of aggressive and uncalculated shifts, often fail and leave the organizations in disarray and leaders in the dust.

The best transformations are those that build on a company’s existing core assets, reallocate resources effectively, and integrate AI-driven innovation with strategic vision into every fiber of the organization and the next generation of products.

As a point in case which I experienced first hand with Microsoft. The Dynamics business applications reinvented the traditional ERP software with AI and the Cloud. During my time leading global strategy for Microsoft Dynamics, the ERP landscape was dominated by cumbersome, on-premise solutions with mainly General Ledger used to record a company’s ongoing transactions and financial management.

The shift to AI-powered cloud ERP was not just a technical upgrade — it was a fundamental reinvention of how businesses managed operations and subscribed to ERP As a Service. The management system went deeply vertical, integrating AI-driven predictive analytics, operations, HR, and sales and marketing with intelligent automation.

Microsoft Dynamics transitioned from an on-premise software provider to an AI-driven SaaS business partner, generating new revenue streams with CRM integration and strengthening the entire enterprise adoption and value chain with Supply Chain management.

Microsft wass reinventing, but staying tru to their own core compentency in ERP. Evolutionary reinvention ensures sustainability, customer continuity, and long-term market relevance. Companies that attempt full-scale disruption without a strategic foundation in hte corre, often collapse under the weight of their own overreach. The true winners are those who continuously adapt, strategically allocate resources, and make data-driven reinvention decisions.

The Reinvention Playbook: A 10-Step Guide for CEOs and Boards

At Nordenlund Advisory, we provide a practical and results-oriented playbook for reinvention. This 10-step guide helps companies move from stagnation to sustained transformation:

1. Acknowledge the Urgency

CEOs and boards must openly recognize that change is necessary. This means prioritizing transformation in corporate strategy discussions and setting clear reinvention objectives.

Output: Leadership commitment to change. Deliverable: Transformation mandate from CEO and Board

2. Conduct a Strategic AI Impact Assessment

Assess how AI and digitalization impact your industry and business model. Identify areas where AI presents threats or competitive advantages.

• Output: Identification of risks and opportunities. Deliverable: AI impact report and risk-mitigation strategy

3. Reallocate Capital and Resources

Shift investments from non-value-creating and/or outdated business units to high-potential AI and technology-driven initiatives. This requires fact-based decision-making from leadership.

• Output: Budget alignment with transformation priorities. Deliverable: Resource allocation plan shifting investment from legacy to AI-driven growth

4. Establish Innovation Sandboxes and Ventures 

Create controlled environments where AI solutions can be tested with minimal risk. Innovation labs and ring-fenced ventures allow businesses to iterate quickly before full-scale implementation.

• Output: Agile test environments for AI-driven business models. Deliverable: Pilot programs with clear success metrics

5. Develop Strategic Partnerships

Collaborate with AI startups, research institutions, and technology providers to gain insights and accelerate AI adoption.

• Output: Access to AI expertise and emerging technologies. Deliverable: Formal alliances with AI pioneers and integrators

6. Deploy AI-First Business Models

AI should be at the core of new business strategies, product development, automating processes, enhancing decision-making, and creating data-driven revenue streams.

• Output: Transformation of core offerings with AI-driven insights. Deliverable: Business model roadmap integrating AI solutions

7. Redesign Organizational Structures

Organizational hierarchies should shift towards agile, flatter, more flexible structures that encourage faster decision-making and cross-functional collaboration.

• Output: Agility in decision-making and execution. Deliverable: Restructured leadership and operational model aligned with AI adoption

8. Empower Leadership and Innovation First Culture Shift

Build a culture that embraces AI and continuous learning. Train leaders and employees in AI literacy and encourage a mindset of adaptability.

• Output: Future-ready workforce and adaptive leadership. Deliverable: AI training programs and leadership development initiatives

9. Implement Performance Metrics and Accountability

Establish KPIs and track progress on AI adoption, market expansion, and operational efficiency to ensure transformation remains on track.

• Output: Clear benchmarks to measure reinvention success. Deliverable: Transformation scorecard and periodic executive reviews

10. Scale and Sustain AI-led growth

Reinvention is not a one-time event but an ongoing process. Companies must embed AI-driven agility into their corporate DNA for long-term competitiveness.

• Output: Continuous reinvention as a core competency. Deliverable: Institutionalized innovation culture with long-term AI vision

Final Call to Action: The Reinvention Mandate

The lesson is clear: reinvention is not a luxury but a necessity for survival. Traditional companies must wake up and transform, or they will be left behind. The AI revolution is not slowing down, and the pace of change will only accelerate. The winners of this new era will be those who embrace reinvention not as a one-time initiative but as an ongoing strategic priority.

Arcules, a cloud video surveillance company I founded and incubated in the Canon group, emerged from a traditional security sector constrained by legacy hardware and on-premise solutions. By shifting to an AI-powered, cloud-native model, Arcules redefined video surveillance, offering real-time analytics, automated anomaly detection, and scalable SaaS solutions. The transformation not only secured new enterprise customers but also positioned Arcules as a leader in the next-generation surveillance industry.

For leaders willing to take the bold steps required, the path to reinvention is clear. The approach offers a proven blueprint to navigate the complexities of transformation, break free from stagnation, and build future-proof businesses that not only survive but thrive in the age of AI.

Reinvent or Expire. The choice is yours.