PRICEWATERHOUSECOOPERS:Those organisations that take the time to gain an understanding of human behaviour will find it easier to effect change in their businesses, writes Ciarán Kelly,consulting partner at PricewaterhouseCoopers Decisions should not be made by management behind closed doors without input from the very staff who will be expected to change their behaviour

THE NEED to change the way organisations do business has never been greater. Household names in the public and private sector are feeling the heat of public criticism and have become targets of scrutiny, alongside regulators who are more stringent than before. At the same time, many companies are being forced to restructure their operations to cope with the new economic landscape.

The imperative may be great, but change programmes tend to be surprisingly unsuccessful. About 75 per cent of all such schemes fail, largely because employees feel left out of the process and end up lacking the motivation, skills and knowledge to adopt new systems and procedures.

For change to be successful, senior executives need to recognise how to embed a continuous change culture within the complexities of human behaviour.

Change is a continuous process, which means that change management is an ongoing part of every leader's job. The traditional approach to change management relies on a conceptual model that is now obsolete: unfreeze-change-refreeze.

An organisation unfreezes in order to adapt to change, makes the change and then refreezes again to resume its business course in steady-state mode.

In this model, change is treated as a discrete event that temporarily disturbs an organisation in a generally stable business environment.

In today's competitive and volatile environment, however, change is the new norm. So, in the long run, the most successful organisations are those that learn to adapt continuously to change. That is the meaning behind the mantra: "Change is the only constant."

Contrary to conventional wisdom, people are fearful of change only when it makes them feel out of control, such as when it is forced on them. The belief that it is human nature to resist change is the wrong starting point, because it creates an adversarial climate.

Decisions should not be made by management behind closed doors without input from the very staff who will be expected to change their behaviour.

Few business leaders are daunted by the idea of changing their organisation's technology or processes, but many are fearful of the prospect of changing their people's behaviour.

In today's economic climate, most people understand their job security depends on flexibility and adaptability. People are willing to change if the communications and engagement are right and if they understand and accept the reasons. Behavioural change is therefore most likely to occur when organisations connect with human nature rather than oppose it.

Constant upheavals in the business environment mean that leaders must learn to master the process of implementing change, just as their employees must learn to accommodate change.

Implementing the right technology and streamlining the business processes that flow through it are essential ingredients for effective organisational change.

But the people who need to use these systems in order to supply the flexibility and innovation needed to achieve business success are the most critical ingredients - and the least understood.

In the 1990s, many companies introduced enterprise resource planning (ERP), which consolidated all departments and functions onto one single computer system. Companies were attracted by the promise of seamless integration of critical information flows between financial and accounting, human resource, operations, supply chain and customer information sections.

A successful ERP system can be the backbone of business intelligence for an organisation, giving management the unified view needed to develop the best strategies in a volatile business environment.

Without proper training, incentives and leadership, even the most flexible, integrated system cannot magically produce a flexible, integrated workforce.

Managers need to understand and address the behavioural changes needed to reap the benefits of new systems and business models. Understanding behavioural risk is therefore particularly important in the current economic context. The costs of ignoring it can be very significant.

A frequently overlooked component of change is the human resource (HR) dimension. This is typically regarded as an administrative area, rather than strategic, and is rarely involved in a change project's leadership. Yet offering the right incentives to link corporate or change goals to individual career objectives is a critical success factor. What motivates people is an individual matter and needs to be addressed at this level.

Similarly, the way people learn new things is also individual. Training programmes that require speedy results need to be designed to accommodate the human need for context and relevance.

A person may need to learn 10 new things to do their job effectively, but may only encounter five in a normal work day, three over the next year, and two in exceptional circumstances, by which time the training will have been forgotten.

On-the-job training coupled with self-paced e-learning and online tutorials that help to deliver personalised assistance as required is a more effective way of ensuring people learn what they need to do their jobs. When integrated with proper HR incentives and performance criteria, effective training can be a powerful driver for change.

The level of change that Ireland Inc will have to adopt in the coming years will be exceptional.

Much of this change will involve undoing much of what has become standard practice and accepted behaviour across many industries.

The key question is how this will be achieved and how the people involved will be handled.

Most companies say their most important assets are their people, but few behave as if this were true. For change projects to succeed, a new mindset is required to ensure that investments in people and communications are given the same prominence as investments in infrastructure, technology and process.