How “Reversible Design” Transforms Organizations: Lessons from Panasonic Connect’s Executive Retreat

The “Reversible Organizational Change” Demonstrated by an Executive Retreat

Recently, it was reported that Panasonic Connect held a retreat for executives at the director level and above, using a designated book to drive organizational change. The company separated and became independent from the Panasonic Group in 2022 and is in the process of building a new corporate culture.

What’s interesting about this initiative is the use of a relatively soft tool—a “designated book”—to encourage a shift in executive mindset. Rather than forced personnel changes or restructuring, this approach gently aligns the organization’s direction through reading and dialogue.

For small and medium-sized enterprise (SME) owners, organizational change is always a challenging theme. While there’s a sense of urgency to “change,” there’s also the persistent fear that “once we change, we can’t go back.” However, the Panasonic Connect case shows that “reversible design” is possible even in organizational transformation.

Why “Reversible Design” is Necessary for Organizational Change

Many business owners tend to think of organizational change as something you “commit to completely once decided.” However, based on my experience supporting over 38 clients, I can say there are no “absolutes” in organizational change.

For SMEs in particular, “reversible design” is crucial for the following reasons.

Limited Human Resources

Unlike large corporations, SMEs don’t have the luxury of forming a dedicated team to drive change. Key members must handle their daily tasks while also working on transformation. If the burden of change is too heavy, it can disrupt daily operations.

Risk of Concentrating Management Resources

Organizational change requires time and money. If the change fails, SMEs have limited capacity to recover the losses. Without a “reversible design,” a single failure could threaten the company’s survival.

Ensuring Psychological Safety

“Irreversible” change puts immense pressure on employees. In a situation where failure is not an option, employees avoid taking risks, slowing down the pace of change. It’s the reassurance of being able to “go back” that encourages employees to actively participate in the transformation.

Key Takeaways from Panasonic Connect’s Retreat on “Reversible Design”

What specific lessons about “reversible design” can we learn from this case? Let’s break down a few points.

The Strength of a Soft Approach

Using a designated book and a retreat is a much more “reversible” method compared to personnel changes or restructuring. If the effect seems weak, it’s easy to choose a different book next time or even cancel the retreat altogether.

This “reversibility of the method” significantly lowers the hurdle for starting organizational change. An attitude of “let’s try it first” encourages business owners to make a decision.

A Process Centered on Dialogue

Reports indicate that the retreat focused on dialogue after reading the designated book. This is a process of building a shared understanding within the organization through dialogue among executives, rather than top-down directives.

Dialogue has the characteristic of being “reversible.” Opinions once expressed can be revised in later discussions. Also, if the dialogue itself is framed as an “experiment,” participants find it easier to speak freely.

Setting an Evaluation Period in Advance

The core of “reversible design” is deciding on an evaluation period beforehand. While it’s unclear how often Panasonic Connect holds these retreats, if they decide, for example, to “evaluate the effects after six months,” they can then decide to continue, stop, or adjust.

This “postponement of judgment” brings calmness to the business owner. It frees them from the pressure of “I have to decide right now.”

Concrete Steps for SMEs to Practice “Reversible Organizational Change”

So, how can SME owners specifically practice “reversible organizational change”? Here are some action plans.

Start Small

There’s no need to launch a company-wide transformation all at once. I recommend starting with small changes at the department or project level.

For example, change how the sales team conducts meetings or modify the weekly report format—start with changes that have a limited impact. Accumulating small successes reduces resistance to larger organizational changes.

Establish “Provisional” Rules

When starting a new initiative, it’s crucial to state clearly, “This is a provisional rule.” Setting a deadline, like a “three-month trial period” or “review after six months,” helps employees see it as “temporary” and makes them more cooperative.

In one manufacturing client I consulted for, we framed the introduction of a new quality control process as a “three-month limited experiment.” As a result, there was little resistance from the field, and the implementation went smoothly.

Define Clear Observation Points

It’s also important to define “observation points” for measuring the effects of change in advance. In addition to quantitative metrics like sales revenue or customer satisfaction, keep an eye on qualitative changes such as employee engagement or overtime hours.

If the points to observe are clear, the decision to “go back” can be made objectively. Making a judgment based on a vague feeling like “it doesn’t seem to be working” increases the risk of regret.

The Management Margin Created by “Reversible Design”

Incorporating “reversible design” into organizational change creates “margin” for business owners. This margin is the key to sustainable management.

This margin allows business owners to make calm decisions. It reduces the risk of making hasty decisions out of panic or irrational choices driven by emotion.

For employees, the reassurance of being able to “go back” also encourages them to take on challenges. An organization where people can propose new ideas without fear of failure is more likely to generate innovation.

Panasonic Connect’s retreat might seem like a modest initiative at first glance. However, from the perspective of incorporating “reversible design” into organizational change, it’s a highly insightful case.

Why not start your company’s organizational change with a “reversible” first step?