Thursday, December 3, 2009

Appease the Brain and Reduce the Resistance to Change

In view of the dozens of studies conducted over the last 10-plus years, it's clear that companies that embark on CRM without organizational change management (OCM) can expect poor results. Yet, companies continue to do this. The common thread in all of Hitachi Consulting's OCM cases studies is that OCM provides greater economic value faster by effectively developing, deploying and aligning the company's assets on a project.

We often find ourselves asked to rescue projects—even some that are reported to have OCM. We've learned that not all OCM methodologies provide a high project ROI. Why not? Most people think positive project results begin immediately.

But this simple misconception leads most projects astray. Our research shows the reality of all project timelines compared to business performance. The first characteristic of a good OCM methodology is that it reduces this inevitable productivity drop and project timeline creep by managing change throughout the project's lifecycle.

The second important aspect of a good OCM program is that it helps leaders understand the biology of change. Without this understanding, leaders often unknowingly make the very decisions that increase resistance and add to poor project ROI. When there is less resistance, people will do what they need to do, on time and well. So why don't people just do that? Neuroscience can shed some light on this.

The brain

The crux of resistance is a tiny, almond-shaped part of our brain: the amygdala, the part of the brain that interprets. When you hear the boss say, "We are installing a software system. Everything is changing," your amygdala perceives the information negatively and translates it into: "We're replacing you with this technology. You won't be able to put your kids through college, much less keep your job."

Whether it's eventually for good or bad, a change represents a threat to how things are. The amygdala, whose job is to protect the body from change, involuntarily kicks in the biochemical hormones of fear, flight or fight, telling the body, "You are in danger." The consequence of increased resistance, is missed milestones, higher implementation costs and fewer benefits realized.

Neuroscientists tell us that the primordial fear response in all humans can be made worse or less. Business leaders often ask us at Hitachi, "If I can't prevent my employees from these having natural reactions, what can I do to ensure a high ROI?" Such was the case for a high-tech electronics company. This company was replacing more than six separate legacy computer systems, some that had been around more than 20 years, with a new CRM system. With this change, 80 percent of the organization would be affected.

Multiple attempts to replace the legacy systems had met with failure. The users did not see the benefits for them of upgrading the company's technology, and resistance kicked into high gear. Leaders, not understanding the reason for their resistance, kept admonishing the employees. The result was twofold: resistance from the siloed organizations and extreme apathy of end-users and line management.

This time, leaders agreed that failure was not an option—and mediocre results weren't, either. Many had been through unsuccessful implementations. They'd seen ROI and other promised benefits fail to materialize; new processes adopted by only a small part of the organization; critical business systems halted, leading to lost revenue, increased costs, dissatisfied customers and frustrated employees; and projects running over budget, coming in late or not being completed at all.

No more threats

Hoping to avoid failure, the leaders approved a budget for a comprehensive OCM program. Executives participated in risk mitigation and expectation setting and gained tools through OCM that they never knew existed and never deemed valuable. They realized the worst thing they could do was lead via the command-and-control method. They stopped saying things like, "The bus is leaving the station. If you are not on it, you'll be left behind," because statements like that make the amygdala kick into super high gear.

Their new skills carried over into all aspects of their leadership, making them more affective and employees, thus more responsive.
They kicked off the CRM implementation with an open house that included demos of the new technology, helping end-users recognize and value the end result they would be working their tails off to accomplish. Importantly, through business process mapping from the customer's point of view, executives could quickly make the necessary changes to ensure the technology wasn't going to end up providing bad service. As the reasons for change became clearer to employees, they lowered their resistance to it. Employees could see the benefits to them, their customers and the health and strength of the business. In addition, the company formed high-impact, multi-disciplinary teams, tightly aligned with HR and IT, that followed the OCM methodology throughout the project.

By identifying and minimizing the "people" risks associated with the project, the company for the first time had a framework for creating successful change. This OCM framework resulted in:

  • Ninety-seven percent training attendance
  • Immediate 100-percent adoption by end-users at go-live
  • Fewer siloed teams, increased collaboration, accountability and cooperativeness
  • Minimized disruption, revenue loss and costs
  • On-time project completion, within scope and budget

Most importantly, the improvement itself amounted to more than $6 million in annual savings. Sales doubled in half the time expected. OCM had offered a tactical methodology to avoid the failures the company had previously experienced.

From executives to employees, our research shows it is worth doing things differently. And hence the promises of a CRM project's business benefits (increased market share, revenues, profits, loyal customers, employee morale and retention) are possible if leaders can shift paradigms and fund OCM programs as a strategic part of the way they do business.

For more information on Hitachi's OCM case studies, log onto and type in change management in the search box.

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