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.

Raised expectations

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.

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.