ROI and Reinvention in SME Context

Reinvention is about change and transformation. Consequently business change is a transformation that takes place on a business level. Business is organized but not an organization.

The traditional and minimal way of seeing business is to consider it as an interplay between a producer and and a customer.

A modern business model perspective is wider and it is typical to explicitly include other actors than just producers and customers to business. Business change is then a multiparty transformation.

Business transformations fail

Transformations are not easy. We know from big corporations that over 70% of transformations fail. The situation is probably not any better in smaller companies as a whole.

Because I don't have factual or research data available the following is an analytical exercise to go deeper into the subject. First, what is meant by a business change failure?

It means that you don´t reach your targets. Behind that is a variation ranging from total failures to smaller failures. In transformation context the first priority is to make more successful changes. The less failures, the more returns!

It is not matter of just a single transformation. Change is a continuos process. If there are faults in a change system, it means that same kind of mistakes are made over and over again. The more there are changes the bigger the total financial impact of these failures.


Reinvention investment refers to situation where Reinvention Method is taken into use in a business transformation context. It is matter of a system investment.

The new system can be seen as an upgrade, because all businesses are somehow changed no matter how haphazard or bureaucratic the current way of doing such a transformation can be.

Some Reinvention Method characteristics

  • modern and integrated method responding specifically to change questions and needs
  • people make a difference and human aspects are emphasized more than in traditional business change approaches
  • The Method is not only for producers but can be applied also in customer and partner contexts

Potential investment to build Reinvention Method system

  • leader(s) as system gatekeeper(s) need to understand and support new method
  • one person inside a company dwells deeper into Reinvention Method
  • Reinvention team; people involved in change activities get basic knowledge of the Method and support from an outside Reinvention expert during start
  • (modern way: also specific customers and partners learn reinvention basics before a change begins)

Rough estimation of initial investment cost: 20k$


Let´s assume that there is 10M$ business that has 10% profit margin. How much should profits grow to reach a breakeven point where Reinvention investment becomes profitable?

Investment cost is 20k$ and current profit is 1M$ which means that other things equal breakeven is reached if profit growth is 2 % in the next change.

If we assume that use of Renvention Method would lead to 10% increase in profits, we could calculate the corresponding ROI. In the above mentioned example:

  • it means 0,1 X 1M$ = 100k$
  • then ROI is 100k$ / 20k$ = 500 %

Above calculations were made based just on a single business change and as system produces improved results continuously ROI is actually much higher as investment in the basic system is sustainable.

Key success criteria in here are how good those people involved are to learn Renvention Method and to apply it in a business transformation and what is the starting position meaning what kind of change system there has been previously.

All in all investing in Reinvention Method system is a lucrative investment option for a SME.

Big Bonus

Revention method is not only meant for business level changes but can be used in any small or big change contexts within and beyond organizations. The broad application scope of Reinvention Method makes business systems more agile and productive. Business change is then no longer a threat but becomes a source of competitive advantage for a business community in question.

Have you experience or data that would supplement this kind of generic analysis?