Jean Gomes, Managing Director of change management specialists, dpa Corporate Communications, argues that complexity is the new barrier to change – drawing on on recent research and Sony Business Europe as a case study.
HR leaders are still asking two questions that have exercised managers since the beginning of the Industrial Revolution.
How do we tap the potential of our people to get a better return for the business? And how do we reshape the business to become more efficient and profitable? Most HR professionals are concerned with change issues such as these, directly or indirectly, every day of their working lives.
I write ‘change’ because it is at the core of what many organisations are trying to achieve – changes in strategy, structure, organisation and culture – in pursuit of greater profits, effectiveness or efficiency.
However, the sheer complexity of modern business is making change more difficult to implement. In fact, millions of pounds are wasted every year on change management programmes that fail to meet their objectives.
Complexity is a major block to change within organisations, because employees can rarely see the ‘big picture’ due to the intricacy of their working environments. And what they don’t understand they can’t, or won’t, engage with. This lack of effective employee engagement in more than 80% of organisations (as opposed to purely transmission-based communication) is a significant limiter of corporate agility.
There is growing evidence from disciplines as diverse as physics, sociology and systems thinking that highly complex societies or organisations are inherently unstable. For instance, research by sociologist John Urry suggests that large-scale human networks – such as multi-nationals – are poised between stability and chaos, and that even relatively minor changes can have unforeseen and detrimental effects. It follows that organisations must tread carefully when dealing with change.
HR leaders frequently cite globalisation and new technology as sources of organisational complexity. Networked computers, the worldwide Web, mobile telephony and e-mail have changed the way that individuals communicate, but they have also brought new layers of complexity into business. Paradoxically, the impact of this technology is felt most keenly at the human level. Whereas modern technology makes it easier to communicate across time zones, it does little or nothing to address the pressures that arise from coping with language and cultural difficulties.
Often it is the application of technology that produces these pressures. An example is electronic customer relationship management (CRM), which can introduce unlooked for complexity into the workplace, while raising shareholders’ expectations of improved performance and profit.
The problem with CRM systems is that they are technically hard to implement, and generate results that are inherently complex and difficult to interpret. Recent research amongst CRM users has revealed that organisational culture and resistance to change are the two main causes of CRM failure – with only 17% of projects seeing a clear return of investment. Every CRM project comprises three key components: people, process and technology. However, to date, people issues have been largely overlooked: the majority of industry attention focuses on business process and technology issues even though the principal reasons for CRM failure relate to people. Perhaps this is why an estimated 70% of all CRM projects fail to meet their objectives.
Many of the HR leaders we meet want to tackle people-related barriers to change, to make it easier for their employers to introduce CRM or other major innovations. They are looking for tools to help employees see the big picture, and to understand and support corporate strategy.
Some of the most effective means of doing this are based on experiential learning principles and the dictum that people retain only 30% of what they read and hear, but 90% of what they read, hear, see, say and do. The more you involve them in the thinking and discussions around decision-making, the more they will comprehend, retain and accept. Acceptance leads to changed beliefs, which can in turn lead to changed behaviour.
The Sony experience
In an ongoing programme for Sony Business Europe, dpa has used experiential learning tools to support the company in a process of transformation that will help employees to sell audio-visual solutions more effectively to new and existing customers. The first step was to work with senior managers to analyse the thinking behind the strategy. The second was to develop visual and written stimuli to present all the key information and arguments in favour of the solutions-selling approach.
The stimuli were used across Europe to get employees talking about the business challenges for Sony, and the contribution they could make individually and collectively to implementing the strategy. A post-event survey revealed that 90% of those who took part came away with an improved understanding and greater acceptance of the strategy.
The need to help employees understand the complex drivers behind organisational change is one of the biggest challenges facing HR professionals. However, it is also a great opportunity, because those with the ability to identify and remove barriers to change will be in a position to directly influence the achievement of business goals.
Of course, that kind of influence brings responsibility as well as opportunity. Aidan Tod, HR Director of Sony Business Europe, reflects this when he says: “Since I came into the profession 20 years ago, I have heard HR people say they have lots of good ideas and want more influence at board level, but don’t know how to get it. However, the situation is changing. In my experience, if you demonstrate that you understand the business, and go to the board with ideas that are commercially relevant, you will get a hearing. That’s certainly true if you focus on areas of ‘pain’ within the business, where you can permanently influence attitudes and motivation.”
To exert this influence, HR professionals will first have to understand the issues that are blocking change within their organisations. And the starting point is coming to terms with complexity for themselves.