hen a new telephone system was installed at professional
services firm Deloitte early last year, staff were given new
handsets that connected to their PCs.
Most young employees quickly worked out what they could do with the
devices and were really excited. But according to Tony Maurice, head
of Deloitte’s change practice, not all of Deloitte’s staff took to the new
system so effortlessly.
“When the system went live, I was with a partner who couldn’t use the
new handset and couldn’t get his old phone to connect,,” Mr Maurice
recalls. “We ended up having a conference call with a client on a mobile
If a change as simple as a new phone system can cause this kind of
problem, it is little wonder that more complex innovations often fail to
deliver the anticipated benefits.
One reason for this, Mr Maurice says, is that organisations often focus
primarily on the technology and fail to address the psychological
impact of the change it introduces. “People need their hearts and
minds engaged too.”
What is more, the methods that businesses typically use to prepare
employees for technology-driven change are woefully inadequate. They
hang posters announcing the change around the office, for example, or
release balloons on the “go-live” day.
But these tactics do not achieve culture change any more than issuing
mouse mats and mugs to mark the event, Mr Maurice says.
It is not uncommon, he adds, for multinational organisations to spend
a whole year implementing a new system, only to find that employees
are still using their old software – or even pen and paper. “This happens
because they haven’t invested in finding out what the human impact of
the system will be and preparing people.”
Ideally, for any significant transformation, the human aspects of
new technology should be addressed as much as a year in advance,
Mr Maurice advises. This includes evaluating any organisational and
structural impact, such as staff relocation, new lines of reporting,
retraining, recruitment and redundancy.
Technology-driven change can cause huge cultural upheaval within
an organisation, as it often disrupts the working relationships that
employees are used to. Employees can either be left behind or have
to do a lot of learning to catch up, says David Percival, global head of
innovation at another professional adviser, PwC. “Both create angst,
resistance and negative reactions.”
Relationships between workers and management can break down
completely, because neither side understands the other’s function,
says Mr Percival, who often mediates in such situations.
organisations must ensure that their employees understand how their
roles will be affected as early as possible.
by “experts” operating at a distance. This frequently results in users
complaining that the systems don’t work in the real world.
According to Mr Percival, one way to ensure that employees understand
and support technology-driven change programmes is to involve them
in the design and planning phase.
Most employees know ways in which their job could be done better,
he says, or what annoys them, or how costs could be reduced.
Harnessing these ideas improves business efficiency while also helping
to drive change.
Suggestion boxes are the traditional approach, but Internet-enabled
systems can provide enterprise-wide forums, or “idea jams” for staff
to discuss and develop their thoughts. Businesses can capture all
this creativity, says Mr Percival. “Meanwhile, people feel listened to,
involved and supported by the business.”
Similarly, “agile” development, in which users are involved in the
Mind the psychology of change
Workers will resist technological change if they do not understand in
advance how it will affect them
Written by The Economist Intelligence Unit
design and deployment of the systems they will eventually use, can
reduce the chance of user rejection. “There used to be a process of
design, build and deploy, but the borders between the phases are
blurring,” says Mr Maurice.
Change needs to be a continuous process, rather than periodic root-
and-branch reform. Incremental change helps reduce fear, says Mittu
Sridhara, chief information officer of TUI Travel, an international
leisure travel company.
It should also make life simpler. “Ensuring new technology is easy, even
intuitive to use helps achieve change by avoiding the need for constant
retraining,” Mr Sridhara says.
Anticipating the human impact of technology change seems so obvious
that one might wonder why companies do not do it more effectively.
One problem is that following the financial crisis, many business
leaders have been chosen for their ability to cut costs, while corporate
innovators have been let go, passed over or redirected. Leaders at all
levels are now disproportionately cost-cutters, says Mr Percival.
With major technology programmes, people management is often seen
as a “nice to have” that can be cut from the budget without too much
impact. This is the wrong way to manage technological change, says
Mr Maurice. In fact, he says, at least 10% of the cost of any IT project
should be budgeted for people management.
Securing that level of investment for the “softer” side of technology
change will require strong leadership, but the litany of failed IT projects
shows why it is essential.