When I'm speaking with executives at our clients, one of the most common things I hear is: "our people are ready for change, so ERP organizational change management isn't going to be an issue for us." This is one of the most challenging perceptions to overcome.
Employees may be tired of the old legacy systems and broken business processes, but organizational change management may not seem difficult on the surface, but it is and will be. Not because people don't want to support the transformation, but because it will be more difficult than they think. This is why a proactive organizational change management strategy and plan is so important.
In fact, I have yet to meet an executive or project team who, after the fact, says that they invested too much – or even enough – effort in organizational change management. It’s the one thing that project teams always say they could have and should have done better.
The difficult part is helping the broad section of executives, project team members, and project stakeholders understand that organizational change is going to be more difficult than they think. Success requires more than hiring a change team with PROSCI certification and assuming your bases are covered.
Below are a few of the common challenges and pitfalls we see project teams succumb to from an ERP organizational change management perspective:
Internal misalignment is one of the most challenging things to overcome. It all starts with the executive team: they need to be on the same page with what they want to be when they grow up. Even assuming we have that as a baseline, it is rare to see a company’s executive strategy clearly articulated in terms of what it means to the digital transformation or ERP implementation.
For example, let’s say your company’s strategy is to standardize business processes across multiple departments and locations. If you then underinvest in defining business process improvements before you start your transformation – which most companies do – then your initiative will be misaligned from the start.
It is extremely difficult for a project to succeed with this sort of misalignment. This is where an effective and strategic organizational change management strategy can help.
Resistance to change is much like an iceberg. At the beginning of the project, most employees are excited for change. They can’t wait to get rid of their old, crappy legacy systems. All is well on the surface, so we surely don’t need to worry too much about organizational resistance – right??
But lurking underneath the tip of the iceberg lies dark and murky human fears and quirks. We are okay with the idea of transformation until we realize that our world is about to get rocked. Some of our everyday tasks are about to replaced by automation. That spreadsheet that we spent years creating, fine-tuning, and managing is about to be taken away. That tribal knowledge that has made us so indispensable to the company for 20 years is about to be commoditized.
Now we have a problem. Now we start to dig in our heels. Not because we intentionally want to sabotage the transformation, but because we are reverting to the survival layer of Maslow’s hierarchy of needs. Everything is still ok on the surface, but our underlying unintentional fears and resistance are going to slow things down and make change more difficult.
An experienced organizational change management team will find ways to identify these sources of resistance early on in the project. More importantly, they will know how to prescribe strategies that pinpoint and mitigate these unique resistances to change. It is important to note that strategies and tactics will need to be tailored for the unique needs of different parts of your organization.
Large ERP systems integrators are notorious for slapping together some boilerplate train-the-trainer tactics and convincing their customers that they have change management covered. Chances are very high that they don’t.
A well-oiled organizational change strategy and plan will include a variety of tactics to address resistance to change and mitigate the risk of operational disruption during your transformation. For example, here are some effective tactics that are either omitted by most systems integrators and ERP consultants, and/or overlooked and underrated by project teams:
To further complicate matters, it’s not just a matter of asking whether or not you have included these and other effective organizational change activities in your overall transformation strategy. It is also a matter of objectively assessing how complete and how effectively these tactics are being deployed. Even ERP consultants and project teams that check these items off their lists fail to realize that they are using ineffective, outdated, or incomplete approaches.
Old ways of managing organizational change clearly aren’t working. This is one of the key factors that has contributed to the shocking list of biggest ERP failures of all time. It’s time to rethink the paradigm.
Whether you are implementing S/4HANA, Oracle Cloud, Dynamics 365, or any other ERP or HCM system, change management will be critical to your success. Be sure to avoid these and other common change management pitfalls outlined in the video above.
Contact me to brainstorm ideas on how to overcome resistance you may be seeing or anticipating in your digital transformation. I am happy to be a sounding board as you continue your transformation journey!