If there is one principle humans perpetually struggle with, it’s that we don’t operate in a logical, straightforward fashion. For example, research shows that uncertainty—such as being told there’s a small chance you will be shocked with electricity—causes more stress than knowing you will for sure be shocked with electricity. In addition, change often registers as danger in the brain, causing it to switch from logical thinking to fight-or-flight impulses. And learning that your organization is going to undergo a big shift from the way it has always operated registers in the brain as criticism and lowers self-esteem, even if it’s not personal. No wonder so many companies find digital transformation so difficult.
Among experts studying these issues is Hilary Scarlett, author of the series Better Organisational Change Through Neuroscience, who has done extensive research on the neuroscience of management, leadership, and organizational change. In her four-part series for HRZone, she wrote about the responses people have to large changes—such as digital transformation—and how those responses are tough to manage because they come from evolutionary triggers, past personal experiences, and individual perceptions.
In other words, no matter how well you try to handle the change management aspect of a digital transformation, employees are going to experience a wide array of emotions—some of them very difficult.
No matter how well you try to handle the change management aspect of a digital transformation, employees are going to experience a wide array of emotions - some of them very difficult.
Digital transformation isn’t an event. It’s a long-term process during which everything is up for renegotiation. Operational methods the company has used for years may be replaced. Long-standing customer service policies may be dissolved in favor of a new focus on the customer journey. Even the organizational business model may be overturned in favor of one that is more appropriate for a digital environment. This means that every person’s job description and duties are likely to change significantly. Most people are going to have to reskill, at least to some degree. And since this change was likely thrust upon them, rather than initiated by them, they’re going to struggle. No leadership team can change the truth of that, but the most savvy can make it easier.
Start with a shared vision
At the onset of any digital transformation, senior leadership has to commit to and communicate a clear vision of the reason for the digital transformation, said George Westerman, principal research scientist with the MIT Sloan Initiative on the Digital Economy. The MIT Sloan initiative defines digital transformation as “radically changing the performance or reach of the organization through technology,” said Westerman. It’s not a technology problem, he explained; it’s a transformation problem.
“You start with a big vision for how you’re going to be a different kind of company,” he added. “If you’re going to sell uptime, not sell your equipment…that’s the change…. If you’re a manufacturer, it’s understanding that building intelligence is as important as building things out of metal. If you’re a bank, you might say ‘Nobody likes us, so we’re going to try to figure out a way to make banking joyful.’”
Even from this earliest stage, it is wise to listen to employees’ input about that vision as a means of getting everyone on board. I spent years helping to research and write a book with author Danny Gutknecht called Meaning at Work and Its Hidden Language. Gutknecht pointed out that employees come to a company with their own ideas about what is meaningful and their own understanding of an organizational mission and how they fit into it. Leadership can’t supplant those ideas with new ones, no matter how inspiring those ideas are. Instead, leaders have to help employees tie what’s meaningful to them about their work and the company into the organizational vision going forward.
Leadership can't supplant those ideas with new ones, no matter how inspiring those ideas are. Instead, leaders have to help employees tie what's meaningful to them about their work and the company into the organizational vision going forward.
Sometimes it’s just a matter of understanding that each person uses language in his or her own way. So instead of just communicating a mission like “Make banking joyful” from on high, companies should discuss the idea of banking and joy with employees. They might ask questions such as “What does the word joyful mean to you? What is a joyful experience? What would a joyful banking experience be? How does the idea of a joyful banking experience connect with how you see our bank’s mission?” These conversations should continue as long as the organization—and especially the transformation—does, and should go a long way toward keeping people on board as things change.
Foster employee resilience
Then there are elements of the human psyche to safeguard throughout the process. In her HRZone series, Scarlett used the acronym SPACES to detail what helps to cultivate employee resilience in times of change.
Self-esteem: As Scarlett noted, saying that things must change can make employees feel as if you’re saying what they were doing before wasn’t good enough. Technically it wasn’t good enough, but that’s not their fault. To move employees from feeling wounded and defensive, find a way to empower them, recognizing them as the team that can take the company to great new horizons (if in fact they are). Help build resilience by encouraging employees to think of another time they successfully navigated a big change.
Purpose: Understanding and having an opportunity to contribute to fulfilling a shared purpose feeds resiliency. Studies show this is especially true if people are working together to help someone else.
Help build resilience by encouraging employees to think of another time they successfully navigated a big change.
Autonomy: As much as possible, give employees a chance for some control over the process, the output, the timing, and the discussion.
Certainty: The more uncertainty you can eradicate the better. Know what is going to happen on what timelines. Communicate constantly, even if the news is bad. People feel better knowing what’s coming—positive or negative.
Equity: Digital transformation is tricky. It often requires recruiting or partnering with talent a company doesn’t have in-house. And it causes roles and jobs to change. Some people are going to get mad and quit. But as much as possible, be transparent and fair about what’s happening. Our sense of fairness runs deep.
Social connection: As Scarlett pointed out, social rejection is very painful and reduces our ability to think. Since the inception of technology, in-groups and out-groups in that field have existed. At first the techies were the out-group—weird nerds who talked about things other people couldn’t understand and didn’t care about. In many respects, they are now the in-group, and those who are not tech-savvy are the out-group. But there are also many other types of out-groups and in-groups. The more you can consciously address and eradicate these exclusionary groups as they exist or form during the transformation, the more cohesive and frictionless the process will be.
[Read also: How to change the way you deal with change]
Build on small wins
According to MIT’s Westerman, digital transformation falls into three primary buckets: operations, customer service, and business model. People tend to think of the last bucket as the sexy one, he said. But often what makes sense for an organization is to begin by solving a problem in one of the other arenas and iterate from there. When there’s an obvious shared problem in an organization, solving it can build support for the digital transformation.
When there's an obvious shared problem in an organization, solving it can build support for the digital transformation.
“There will be one that is natural for you,” he said. It might be as simple as using an ERP system or switching to a CRM system that gives a 360-degree view of the customer. “You’re always looking for opportunities: ‘Now that we’ve done this, what can we do for the other areas?’” he said.
Westerman is a big believer in building on small wins and keeping the focus on the organization, not the technology. The point is to dissolve silos, increase efficiency, improve productivity, or invent a better customer experience. The technology is simply a tool that makes it possible.
One company he wrote about, Japanese insurer Tokio Marine Holdings, was getting a lot of requests for short-term insurance policies. Customers were asking for a product, service, and experience the company was not equipped to provide. Rather than just saying “We don’t do that,” Tokio Marine Holdings began to look for ways it could. The result was a short-term insurance policy that customers could sign up for only through a dedicated mobile app and that would cover them on a ski trip, for example, or when borrowing a friend’s car. The technology wasn’t the answer; finding a creative solution to meet customer needs was the answer. Technology just made that possible to do without changing the company’s core business. Not everyone in the company necessarily needs to innovate, Westerman said. It’s about doing what makes sense, not jumping on the digital transformation hype cycle. Keeping the organization and customers at the center is key.
The formula for preparing employees for a change such as digital transformation is nothing new: “[It takes] a lot of engagement and communication and preparation and handholding,” Westerman said. Then it’s using the technology to solve a problem the company has. Step-by-step, win-by-win, as long as leaders are driving the change and conscientious about bringing employees along, the process will build support. After all, transformation takes time.