Managing the challenges and mental health impacts of business transformation projects
Sundara Sukavanam, CDO, Firstsource
November 12 2020 - Transformation projects have a poor track record. They promise breakthrough benefits, but the journey can
be painful, with unexpected costs and stretched time frames negatively impacting employees’ mental health. In fact, over a third of business
executives admit to finding these projects as or more stressful than the lockdown itself, according
to Firstsource’s newly released research.
Some level of stress is inevitable. However, by preempting possible challenging areas, and proactively addressing them, businesses can alleviate
pressure and improve the chances of success. With this in mind, the research identified the top five challenges experienced during transformation
and how to manage them.
Balancing optimism and realism
It’s human nature to be optimistic, and no matter how well thought through, every business transformation initiative will have
unknown variables. These can cause projects to over-run on timescales, costs or both. In fact, one Head of Transformation had to say about business
plans "No business case is ever right. It’s never right, they just aren’t". This is why leaders must be grounded and realistic in the planning
One way to achieve this is by involving both optimistic and cautious stakeholders at the start who can present both points of view on
the best and the worst-case scenarios. In reality, the project is likely to land somewhere in between, but factoring in the positive and the negative
from the get-go will help to proceed with cautious optimism.
Firstsource’s Leading Transformation research found that this approach was a key factor in over half of the low-stress initiatives it
identified. To ensure business case success leaders should also:
- Meet key suppliers and partners to assess their credibility
- Ensure they have a detailed drill down into the forecasts and assumptions of the project
- Run a small-scale pilot before rolling out the project
Following these steps will provide leaders with a clear framework for all operational decisions for a smoother, less stressful
Assess how change will affect the wider business
Another key cause of stress during transformation is the failure to account for the knock-on effects of the project. Transformation
will inevitably impact adjacent processes, systems and company culture. Leaders must thoroughly assess all of these factors to understand whether
the organisation is ready to go through a change project or if it will be met with push-back and cause discord. They can do this by consulting senior
executives across the company and paying attention to their reticence or apprehension. It would also be beneficial to carry out a detailed review
and assessment of the impact the project would have on other processes or systems. The research found that 82 percent of low-stress initiatives
included this type of review compared with only 46 percent of high-stress initiatives.
Ensuring dissenting opinions and data are heard
Failing to effectively judge the businesses’ readiness for transformation was the second-highest regret leaders have for business
projects. Their top regret was failing to ensure dissenting opinions were heard and disconfirming data was confronted.
When we’re passionate about something, it’s natural to amplify supporting evidence and arguments and downplay opposing opinions and
data. This can result in important details being missed, some of which can become serious pain-points down the road. An open culture where people
can voice their opinions isn’t enough to avoid groupthink.
Leaders should introduce structures and processes - such as steering groups - that actively encourage everyone to speak up. These
approaches will surface and facilitate uncomfortable, creating more meaningful discussions and helping to find balance.
Creating genuine partnerships with suppliers
Hearing differing opinions shouldn’t be limited to employees within the main business. Change initiatives frequently require
partnerships with external consultants, systems integrators or outsource providers. These parties need to become an extension of the team in order
for the project to deliver in a timely, cost-efficient and minimum-stress manner. Inviting suppliers to become part of the steering group and offer
transparent opinions is one way to ensure this happens. As an interviewed Head of Strategic Finance notes "I think it’s always better to have a
partner with ‘skin in the game’, I think that just makes sense."
Key to establishing solid supplier relationships is ensuring partners are the right cultural fit, and their senior leadership are
sufficiently involved from the get-go. As such, businesses should carefully evaluate potential partners for chemistry, as well as assess whether
there’s an informal avenue for very frank conversations at senior level. This will go a long way in creating a unified team.
Managing the emotional marathon
Every change project will have emotional highs, lows, and stressful moments which will affect all stakeholders. Managing this
emotional marathon is the most complex challenge leaders will face. Not surprisingly, 63 percent said it was difficult to manage. Our research
also identified some of the pitfalls that leaders need to look out for:
- Teams driving themselves too harshly without celebrating wins
- Micro-management from senior stakeholders
- Technology not working as expected
Importantly, leaders also reported that when things go wrong, in some cases the stress resulted in team members becoming less
empathetic and even the development of a blame-culture. To tackle this, the project leads must nurture a positive culture. This means identifying
and celebrating individual and team wins, learning from mistakes, avoiding placing blame and encouraging empathy, especially when things aren’t
going to plan.
Success without the strain
Transformation projects promise break-through benefits, but the journey can be painful. To minimise the potential strain on employees,
businesses must understand and pre-empt the challenges that cause stress. This means being realistic about timeframes, costs and issues that might
arise during the planning process, carefully assessing whether the business is ready to transform, and ensuring supplier relationship fit. Beyond
this they must also be prepared to handle the emotional marathon. By doing so, businesses can reap the benefits of transformation without putting
their employees mental health at risk.