A Survival Guide To Overcome Change Saturation In The Fourth Industrial Revolution - Part 1

    Aug 5, 2021 | Posted by Andre Low

    The Impact Of The Fourth Industrial Revolution On Businesses

    Previously, we have discussed extensively the velocity, magnitude and scope of change that companies are facing today. The collision of major breakthroughs in technologies from different fields are pushing our physical, biological and digital spheres to fuse together. Consequently, this phenomenon is creating bigger, faster, more complex and interconnected changes within global and local business environments, creating more scenarios where organisations are saturated with more change projects than they have capacity to successfully deliver. In this blog post, we explore if and how effective change management matters in this context.

    If we take communications for instance - a factor which recent research studies have established to be the most important key to unlock high performance, the onset of ultra fast and cheap internet will connect billions more people in a global digital web. This enables more collaborative, innovative and sustainable ways of doing business, resulting in huge leaps in productivity and efficiency. This brings a seductive proposition onto the business table as it paints the picture that companies across all industries (if they can successfully leverage this capability) can operate at significantly lower cost base and achieve higher profitability than before. Furthermore, new business operating models will create opportunities for small but disruptive and agile companies to enter the market.

    The Challenges

    However, realising these promising opportunities is easier said than done. How many times have we seen technological and transformation projects fail in the worst ways imaginable, despite them having larger budgets than most others? Yet, we continue to see many organisations investing heavily in the installation of new technologies that forecast large benefits shortly after go live.

    In most technology driven projects, we've seen that as much as 80% of the entire return of investment (ROI) is estimated to be people-dependent. Therefore, it is concerning that most organisations do not understand why Change Management Maturity matters. Unless their executive sponsors and project teams help impacted employees adopt and assimilate the new ways of working demanded by emerging technologies into their work lives, neither they nor the customers they serve will capture the business benefits they have been sold. Even organisations which are starting to realise the value of change management regularly do not budget adequately in their projects for the scope of effective change management. This is largely why many studies consistently find that 70-80% of digital transformations fail. And failure of the project is not even the most worrying part, the leftover mess is.

    Consequences Of Change Failures And Excessive Change

    Companies that have experienced big and/or multiple project failures tend to face two consequences. 

    The first is more easily observed; an abundance of sceptical, cynical and change resistant employees. Having been through the pain of multiple change failures, people lose faith in their leaders' ability to sponsor change and become protective of their status quo - a zone that is likely to be more comfortable than going through another change failure. 

    The second consequence of repeated change failures may take longer to emerge. Abysmal user adoption rates and proficiency levels ultimately lead to a vicious and unsustainable cycle whereby new IT systems are constantly commissioned into the organisation's enterprise architecture while still having to maintain expensive, outdated and under-utilised legacy systems. Ideally, in order to optimise performance, companies should redirect IT spending from maintenance to innovation instead of introducing new technologies whenever strategic goals are not met or a new CEO/CTO/CIO takes office. Further, the continuous addition of new technologies, particularly if they are done so within a short span of time, introduces a whole lot of process and functional changes onto impacted employees, constantly putting them under unnecessary pressure to re-orientate and re-skill. 

    Change Saturation

    The imminent danger of the above-mentioned scenario is change saturation. When an organisation becomes over laden with change, they lose sight of the strategic big picture and the business benefits that each change project is intended to deliver. According to Prosci® 2015 study of 1120 participants who were involved in change projects, 78% indicated that their organisations were near or past the point of change saturation.

    Change saturation is severely detrimental to the organisation, its projects and its people. Resources are wasted and disproportionately allocated; productivity and morale of employees fall while absenteeism and employee turnover rise; culture and trust are eroded away; customers and shareholders do not get the most value out of their money. Over time, the organisational system starts to fall apart as the massive and poorly managed portfolio of change(s) eats away the resilience of the company.

    What can you do to mitigate this for your organisation?

    To be continued...in Part 2. 

    A Survival Guide To Overcome Change Saturation In The Fourth Industrial Revolution - Part 2

    Topics: Business Transformation, Change Saturation, Employee Engagement, Leaders of Change