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Khaled Soufani and Samsurin Welch argue that companies can reinvent themselves by identifying and repurposing existing strengths rather than abandoning the core. They name these embedded strengths "kernels of reinvention": capabilities, assets or relationships inside the firm that can anchor new business models. The approach is illustrated by Ørsted (then DONG Energy), which in 2009 still produced 85% of its power from fossil fuels yet pivoted using its offshore-wind experience to become a renewables leader, and by Fujifilm’s product renewals. Their case, as first reported by MIT Sloan Management Review, emphasizes reuse of what already works as the mechanism for change.
Key takeaways
- Authors and thesis: Khaled Soufani and Samsurin Welch argue companies should build new businesses around "kernels of reinvention"—embedded capabilities that can be repurposed.
- Ørsted example: Ørsted (then DONG Energy) still had 85% of its power from fossil fuels in 2009 and used existing offshore-wind experience to pivot toward renewables.
- Fujifilm example: The authors cite Fujifilm’s development of renewal products as an instance of turning legacy capabilities into new revenue streams.
Table of contents
Why starting over often fails and what a kernel is
Executives face two familiar but flawed choices: cling to the legacy core or abandon it for a clean start. Soufani and Welch show both paths carry costs. Sticking to the legacy risks locking a company into obsolete product or process choices; Kodak’s attachment to film is the canonical example. Starting over discards invested capabilities, customer relationships and organizational trust, and it can isolate the people and assets that would enable a successful shift.
A kernel of reinvention is a specific, transferable capability inside the firm that can support a different business model. Examples include a proprietary manufacturing process, a distribution network in a new geography, customer data, engineering know-how or an early pilot project. The strategic move is not wholesale abandonment but selective reuse: find the kernel, test whether it confers advantage in the target market, and scale from that anchor.
Conceptually, this reframes reinvention as an architecting problem—rearrange and reconnect existing modules—rather than as a demolition-and-rebuild. That reduces the political and economic friction of change because it preserves parts of what stakeholders already value, while redirecting them toward growth.
How to identify and repurpose internal capabilities
The authors recommend a diagnostic that maps what the company already does well and asks which elements are portable to adjacent markets. Start by listing technical skills, production assets, customer relationships and regulatory know-how; then test portability with small experiments. A pilot that uses the candidate capability in a new context reveals whether the kernel yields comparable advantage outside the legacy business.
Operationally this means creating tight, time-boxed trials that pair the kernel with a stripped-down business model. Keep the experiment focused on proving a single causal claim—does this capability reduce cost, raise quality, unlock distribution, or shorten time-to-market in the new domain? If the claim fails, retire the trial quickly; if it succeeds, invest to scale while protecting the original business from talent and resource drain.
Governance matters: assign a small, cross-functional team to the kernel, give it a separate performance yardstick, and limit formal ties to legacy budgeting cycles. Repurpose internal capabilities without smothering them in old incentives by separating incubation metrics from legacy KPIs until the new unit achieves external market traction.
Lessons from Ørsted and Fujifilm: concrete moves that worked
Ørsted’s transition began with an inventory of what the company already controlled: offshore-wind technical experience, a portfolio that included the world’s first offshore wind farm, and project-management skills for large marine builds. Rather than abandoning its energy business outright, leaders redeployed those assets into a coherent renewables strategy and moved capital toward wind projects while shrinking fossil exposure. The 2009 snapshot—85% fossil power—is useful because it underscores how entrenched the old identity was before the pivot.
Fujifilm’s case, cited by the authors, shows a different kernel: core competence in chemical and imaging processes applied to new products. The company developed renewal and regeneration products that drew directly on its R&D, turning legacy science into contemporary offerings. In both cases the kernel was concrete—specific knowledge or assets—and the firms ran targeted projects to demonstrate the kernel’s value in the new market before scaling.
These examples share common mechanics: identify a portable capability, test it with a focused team, separate incentives for incubation, and shift capital only after proof points appear. That sequence preserves value and reduces the danger of wasting resources on a full restart that foregoes existing advantage.
| Company | Existing capability | How it was repurposed | Initial context |
|---|---|---|---|
| Ørsted (DONG Energy) | Offshore-wind engineering; project management | Scaled wind development as fossil exposure shrank | 85% of power from fossil fuels in 2009 |
| Fujifilm | Chemical and imaging R&D | Created renewal/regeneration products from core science | Repurposed lab capabilities into new product lines |
What could drive success or stall it
The case for
- Repurposing preserves assets and relationships, lowering the political and financial cost of change and allowing faster time-to-market for new offerings.
- Focused pilots tied to separate incentives reduce organizational friction and produce clearer go/no-go signals before large capital shifts.
The case against
- Kernels can be misidentified: a capability that performs inside a legacy model may lack value in a different market and therefore produce false confidence.
- Cultural identity and legacy incentives can still pull resources back to the core, starving promising kernels before they achieve external traction.
What to be careful about
- Misreading a capability’s portability and scaling it without rigorous pilots.
- Incubation teams being starved for resources because legacy budgeting priorities dominate.
- Regulatory or market shifts that make the targeted adjacent market less attractive after investment begins.
- Overreliance on a single kernel that proves defensible in one use-case but noncompetitive at scale.
The bottom line
Reinvention need not mean demolition. Soufani and Welch show that by mapping and testing "kernels of reinvention"—concrete capabilities already inside the firm—leaders can redirect resources toward new markets with lower political and financial cost than a full restart. The practical sequence is diagnostic, focused pilot, separate governance, and scaled investment only after proof points. That path does not guarantee success, but it preserves value and gives managers a clearer, evidence-based way to choose between protecting the core and pursuing transformation.
What to watch
- Watch whether corporate strategy teams publish measurable pilot results for repurposed capabilities; no public date has been set.
- Watch for major energy firms to report shifts in asset allocation toward wind and renewables in their next capital-planning cycle; no public date has been set.
Frequently asked questions
What exactly are kernels of reinvention?
Kernels of reinvention are embedded capabilities—technical skills, assets, customer relationships or regulatory know-how—inside a firm that can be repurposed to support a new business model, a concept named by Khaled Soufani and Samsurin Welch.
How did Ørsted use a kernel to pivot into renewables?
Ørsted (then DONG Energy) leveraged its offshore-wind engineering experience and its ownership of an early offshore wind farm to shift capital and operations toward wind, even though 85% of its power came from fossil fuels in 2009.
When should a company start over instead of repurposing?
The authors argue repurposing is preferable when a clear, portable capability exists; a full restart may be necessary only if no credible kernel can be identified or if the market opportunity requires capabilities the firm cannot reasonably acquire.
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