Change comes through people - Part 3

We are continuing to revisit the Key Points raised in the Webinar on “Emotional Intelligence.”

Middle managers need to implement change while managing their employees’ emotions – anxiety, resistance and inappropriate behavior

Notice the tone of this statement and the mandate it sets for middle managers: middle managers need to implement change while managing their employees’ emotions. Here are a couple of questions I raised with the presenters during the Webinar:

1.       How much time, energy and money should a company spend in “emotion management”?

2.       At what point should executives stop and re-think their plans when their top-down actions raise anxiety and resistance from middle management and below to such a level that additional resources must be deployed just to “manage emotions”?

This statement amply demonstrates just how out-of-touch executives and managers in some organizations must be with the rest of their enterprise – i.e., middle management and below on the organization chart. Not only so, but it also shows that these same executives have no idea the damage that their distance from the organization’s “heartbeat” is likely to cause. And, I am not talking about damage to the “peons’ egos or sense of self-worth.” I mean sincerely the damage that is done to their enterprise in measurable terms with which CEOs and CFOs should be concerned – namely, lost Throughput and profits.

Interestingly, when I raised the question regarding when executives should stop and re-think their plans, the presenters of the Webinar pretty much told me that in the face of ego-driven ERP, once the enterprise gets far enough down the traditional ERP path to start raising anxiety and resistance from “the masses,” there is no turning back. It is the rare, rare exception that executive management would dare to stop and rethink the project underway.

This is a sad state of affairs and emphasizes just why traditional ERP – Everything Replacement Projects have such a lousy success rate when it comes to delivering return-on-investment.

Middle managers face the challenge of grasping a change they did not design and negotiating the details with others who are equally removed from strategic decision-making

This seems to get more ridiculous the further we drill-down on the details, doesn’t it? This statement reminds me of a combat situation. Here’s the scenario (in metaphor):

The generals (executive management) have come up with a battle plan – apparently with little or no consultation with the boots on the ground. The generals, in their wisdom, have passed this battle plan down from “on high” and told the lieutenants (middle management) in the field just how they are going to “take that hill.” The lieutenants – many of them being 90-day wonders, fresh out of college and with little practical experience – are now tasked with convincing chief master sergeants, master sergeants, gunnery sergeants and ground troops – some of whom have 15, 20 or even 30 years of “boots on the ground” experience that the plan promulgated by the generals is a good plan and ought to be carried out.

The problem is, the lieutenants do not necessarily understand all of the implications of the plan for those who must carry the weapons and bring the plan to success. They do not comprehend what it takes in day-in, day-out hand-to-hand combat to actually “take the hill.”

Nevertheless, it is the lieutenants’ job to “sell” the plan and “negotiate the details” with the seasoned front-line personnel who actually know the risks that they will be taking.

I think you get the picture. Is it any wonder that a firm operating in this way might experience some problems with their traditional ERP – Everything Replacement Project? Is it any wonder that fewer than half the firms undertaking efforts like this achieve any measurable net benefit from their traditional ERP effort?

No, of course there is no wonder.

Complexity rises for middle managers of change as work demands are modified and multiply, thus creating conflicts

This is a traditional ERP – Everything Replacement Project – after all. Executives have decided to tear the guts out of the entire organization and transplant new technological “guts” in the name of “improvement” that the executives themselves have likely not quantified. To say that “Hope is not a strategy” is an understatement at this point.

Executives have, more likely than not, promulgated a technology “strategy” based on little more than “hope” and the so-called “promises” of the vendors or resellers. Then, these same executives have largely left execution in the hands of lieutenants (see above) and third-parties (e.g., the vendors, resellers and consultants). Then, by some inexplicable stroke of magic executive management expects improved profits to be the result at the other end of this journey. Why else would you spend millions of dollars to disrupt virtually every operation in your enterprise virtually simultaneously and continuously for upwards of 18 months?

Of course “work demands are modified.” A “strategy” (falsely so-called) has been set forward and most of middle management have no idea what that strategy will actually mean for the “boots on the ground.” (See metaphor in previous section.) In this case, it is not “the enemy” forcing a change in plans. As Pogo once said, “We have met the enemy, and it is us.”

Lack of clarity renders new demands uncertain and frequently misunderstood; without clear understanding, managers can be seen as taking wrong actions or no action at all

Given our discussions up to this point, does anyone have an difficulty in understanding just why there might be “lack of clarity” in the traditional ERP – Everything Replacement Project?

Maybe it is because, while it is necessary to understand the operation of your organization as a whole – that is, as an integrated “system” – it is not possible to “focus” on the whole organization all at once.

If executives ask themselves the question, “What needs to change in order for our company to start making more money tomorrow than we are making today?” How likely is it that the answer that would come to mind would be, “Everything!”?

My guess is that the answer would never be everything! Typically, the number of things that need to change to begin making more money tomorrow is very small – say, fewer than a half-dozen. And, even if there are a half-dozen, they need not all be undertaken at once. Then, add to that, the fact that among those half-dozen things that need to change, it may probably be found that half or fewer of those things actually require a change in technologies to support the change.

Yet, purveyors of traditional ERP- Everything Replacement Projects will try to convince executives that what needs to change is everything – and then the company will make more money. Unfortunately, many executives are all too willing to believe this is actually “the solution” of which they have always dreamed. “Just pour it in and everything will run smoother, faster, longer and we’ll get better mileage, too.”

Summary

As W. Edwards Deming said, “You do not install knowledge,” and “Knowledge comes from theory.” These executives go far afield from actually helping their organizations improve because they lack a valid “theory” about how their “system” – their enterprise – actually functions in carrying out the customer-to-cash chain of inter-dependent functions and events.

Virtually all of what they need to know lies resident within their own organization in what I call “tribal knowledge.” But such executives as would seek to manage their employees’ emotions through “Emotional Intelligence” – read: manipulation – will never reap the benefit of unlocking the treasure of “tribal knowledge,” because, it seems, this knowledge comes from “the working class” and it is beneath their dignity to learn from “the man that runs the machine.”

It is the executives with such a mind that are the losers as a result. But their employees lose, too. Firms under such management will never be as profitable or durable as they otherwise might be. Employees cannot be paid as much, because profits are too low. Some employees will lose their jobs because the company cannot compete.

This is all too senseless.

©2010 Richard D. Cushing

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Change comes through people - Part 2

If, as we have shown, people do not willy-nilly resist change, let us take a look at just what might be happening in traditional ERP – Everything Replacement Projects – where management feels the need to bring in emotional management specialists to help smooth the way. We will step through the list provided in the Web presentation.

Only 30% of “change initiatives” succeed

Of course, in the context of the presentation, the presenters made it clear that a major contributor to the failure of “change initiatives” is the changing organization’s failure to properly apply emotional intelligence (EI) management to the reactions to change coming from “middle management” and below in the organization’s hierarchy.

One of the things that surprised me about the attitudes expressed in the whole presentation was the us-against-them sense, where it was executives and top managers pitted against the unruly emotions of the lower classes (e.g., middle management and below). With the help of EI, the ruling elite could, in fact, learn to foist things upon the “lower classes” and make them like it – or least squelch outright rebellion in the ranks.

Sadly, in my limited contact with folks from “Big ERP,” their attitudes frequently have reflected this same elitism. Their snobbery seems to be rooted in a sense that “the ruling class has chosen us, so you – the masses – must listen up and fall in line.” I am certain that they are not all this way, but I have no doubt that some are.

I soundly reject this kind of management. I am confident that no one knows more about running the machine than the one who runs the machine day-in and day-out. The people who know best what needs to change in each part of “the system” – the entire organization – are those in the trenches. Most people really want to do a good job and really want the company they work for to succeed. These people frequently fight an uphill battle against poorly thought-out policies, procedures and assumptions promulgated by executives and managers trying to make things “work.”

Apparently, EI dumps on these people, suggesting that what is needed is for the elite to learn how to “manage” the emotions of the working class rather than learn from the wealth of “tribal knowledge” carried about in the hearts and minds of those who “run the machine.”

Is it any wonder, then, that only 30 percent of change initiatives succeed? It is quite likely, if what we are seeing and hearing is, in fact, the attitude of executive management, that only 30 percent of what they promulgate as change is worthy of success. Perhaps only 30 percent of “change” handed down from on-high will really have any positive effect on the ability of the organization to achieve more of its goal, and “the masses” know it better than the executives do.

It takes about five years to see ROI from a typical ERP implementation

No wonder!

The organization we have just seen depicted in the us-versus-them, the executive elite versus the common man, cannot possible be working as an integrated “system.” Not only it is very likely that there are departmental and functional silos within such an organization, having high and nearly impenetrable walls between them; it seems apparent that there is an even higher and more impenetrable wall between “management” and “the workers.”

In such a situation, there cannot be “integration” and the organization cannot possibly be managed as “a system.” When a business enterprise is not managed as a system, the symptoms are consistent:

·         Lower than expected overall performance

·         Sometimes overwhelming challenges in securing or maintaining a sustainable competitive advantage in their markets

·         Financial difficulties

·         Nearly constant fire-fighting by management

·         Rarely meeting customer service expectations

·         Chronic internal conflicts

Not managing the organization as “a system” is a management and cultural issue that cannot be remedied by installing “integrated” software. Technical integration does neither mandates nor assures functional and interpersonal integration across organizational silos. And it certainly does not create integration vertically in the chart of accounts.

With only 30 percent of change initiatives succeeding and the organization continuing to experience all of the symptoms associated with the failure to manage the organization as “a system,” it remains no mystery that it takes five years or longer to see return-on-investment from a traditional ERP – Everything Replacement Project.

Change fosters significant confusion for middle managers, which can spur anxiety and stress, thus impeding or paralyzing decision-making

The change that “confuses” middle management (and below) is the change for which they are not yet convinced of the true benefit to the organization. Intuitively, most managers understand that “good” decisions in a for-profit organization are those leading to actions that will tend to help the organization make more money tomorrow than it is making today. Such actions, naturally, lead to stability and increasing job security.

If executives and managers have really thought through their traditional ERP – Everything Replacement Project – and are well aware of just how (in measurable terms) ripping the guts out of the organization’s infrastructure and replacing it with something that is promoted as being “newer,” “faster,” or “better” will really help the firm make more money tomorrow than it is making today, then let them come forward and explain those details to “middle management” (and below), and the confusion, anxiety and stress will largely be assuaged.

The fact that executives and managers are not forthright with middle management (and below) when a traditional ERP project is undertaken is, for the most part, the executives and managers do not, themselves, know (in measurable terms) just how ripping the guts out of their organization and replacing it with “newer,” “faster,” or “better” will – in reality – help the firm make more money in the future than they are making today. Instead, their decision is likely predicated largely on hope and generalizations supplied by promises from the vendor or reseller of the new technology.

It is, then, no wonder that middle management remains confused, anxious, and full of stress.

[To be continued]

Stay tuned.

©2010 Richard D. Cushing

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Change comes through people - Part 1

Today I attended a Webinar on applying “Emotional Intelligence” or “EI” in the implementation of ERP systems. The name of the organizer and presenters shall go undisclosed because it is not they who are the target of my disagreement. Rather, my disagreement is with the thrust of the application of EI.

Definitions

In the presentation, the following definitions were given:

·         ERP Change Management (CM) – refers to identifying, assessing and managing the elements that are needed to move an organization from its current state to a future state when ERP software is the transaction engine.  The goal is to realize ROI of the project.  The areas addressed include change strategy, leadership, envisioning, project team building, change history and readiness, benefits realization, stakeholder management, communications, approach to handling reluctance and sustaining commitment, Knowledge transfer, organization and business impacts, new skills and ways of working, organization restructuring, roles and responsibilities, alignment with HR processes and the enterprise strategy. [sic]

·         Emotional Intelligence (EI) – refers to the ability to recognize and understand emotions and the skill to apply this awareness to manage ourselves and others through transitions.  Emotional Intelligence is made up of 4 unique skills that cover how one recognizes and understands emotions, manages his or her behavior, and manages relationships.  These skills are self-awareness, self-management, social awareness, and relationship management. [sic]

Key points

Some pertinent points were brought in the course of the presentation, not the least of which were these:

·         Only 30% of “change initiatives” succeed, while 70% of “change initiatives” fail

·         “It takes about five years to see ROI from a [typical] ERP implementation”

·         “Change can foster significant confusion for middle managers, which can spur anxiety and stress that impede or even paralyze decision-making”

·         “Middle managers need to implement change while managing their employees’ emotions, including anxiety, resistance and eager but inappropriate behavior”

·         “These managers face the challenge of grasping a change they did not design and negotiating the details with others, equally removed from the strategic decision-making”

·         “Complexity rises for these managers of change as work demands are modified and multiply, which can create conflicts”

·         “Lack of clarity renders new demands uncertain and frequently misunderstood; without clear understanding, managers can be seen as not taking action or taking the wrong action”

These points all raised many, many questions in my mind, and I hope to speak of them in this article. However, here was the real kicker that came in response to a question at the end of the presentation:

"A lot of ERP decisions are made on the basis of executive ego.... [Therefore], there are a lot of cases where the ERP [software selected] is a mismatch [for the firm]."

Mind you: these statements – and, most notably, this final statement – is coming from two professionals serving companies of all sizes in industries including finance, health care, education, and manufacturing. And the presenter’s statement did not stop there. Examples were given in terms of “being the first in an industry,” or “having the biggest Peoplesoft implementation ever,” and more.

Notice also that the presenter did not say, “Sometimes” or “occasionally”; rather, the statement made was that “[a] lot of ERP decisions are made on the basis of executive ego.” And, frankly, my own experience confirms this – if not the original purchase decision, at least the decision to carry on with a project even when the evidence may be almost overwhelming against the net result being a positive one for the firm undertaking a traditional ERP – Everything Replacement Project.

It’s got to work

At an international trade show I attended some years ago, I became involved in a conversation with an executive from a fairly large firm. I asked him if they were considering a new ERP system, at all. His response was, “Oh, no! We are just wrapping up an SAP implementation now – after a little over two years.”

So, I said, “Well, you’re to be congratulated, then. There just aren’t a lot of companies that ever actually ‘wrap up’ a SAP project. It seems that they so frequently become ‘evergreen’ projects for SAP developers and DBAs.”

To this, he chuckled. Then, with renewed earnestness he said, “Well, there are still a few things that aren’t quite right, but we’ve spent so much money already that it’s got to work!”

This is telling, don’t you think? If ego did not initiate this ERP implementation, ego was certainly going to see it through. No executives in that company were going to admit that – after spending some millions of dollars – the ERP solution they selected was not going to work for them!

Dispelling an old myth

Who do you think started the myth that “people hate change” and “people resist change”? Do you think it was started by the people being accused of “resisting” and “hating,” or do you think it was started by those in power – monarchs, politicians, generals and executives – who wanted certain changes to occur, but were having some difficulty in getting “the people” to accept the changes set forth?

I think you will agree with me that it was, most likely, the latter group and not the former that leveled the charge and created the myth.

The following should dispel that myth once and for all – at least for my readers:

The Change	Scope of Change	Comments
Getting married	Monumental	Most people embrace and look forward to this change. They do not resist it. In fact, they dream about it and even plan for it.
Having children	Monumental	Here again, even though this is a huge change in their lives, most people look forward to having children and many even lay out plans in advance for childbearing.
Announcement that one’s salary will be doubled starting next month	Big	This change will likely bring significant lifestyle changes, yet I doubt that many would be found resisting this change.
Announcement that one’s salary will be cut in half beginning next month	Big	The magnitude of this change is equivalent to the magnitude of the change for doubling of one’s salary, yet this change is likely to bring screaming resistance.

The point is, people do not resist change. What people resist are changes about which they are not yet convinced the result for them will be positive. For example, in getting married – even though most candidates for marriage recognize that there may be some down-side to the marriage compact – they are convinced that the change will be a net positive for them in the long run.

With this in mind, in our subsequent posts in this series, we are going to revisit the Key Points raised in the Webinar on “Emotional Intelligence.”

Stay tuned.

©2010 Richard D. Cushing

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