Survey data shows that 43% of companies are looking at digital transformation to increase competitiveness. Another 32% plan to spend at least a fifth of their IT budgets on related projects. Decisions made on the management level, however, often clash with employee attitudes on change. Fear of technology and unwillingness to disrupt the status quo are very much on the agenda. Added to this is the widespread employee anxiety about losing one’s job to robots and algorithms. And when it comes to IoT implementation, these are just a fraction of the issues that need to be tackled as part of IoT change management.
This is especially valid when we look at smaller to medium-sized companies with tightly knit employee communities. Here discontent can spread quickly and hurt everyone. Navigating through topics such as employee engagement and employee sentiment is crucial. Employee sentiment power has become a key factor in corporate decision-making.
Partnerships and internal transformation equally important
A trend study about the Internet of Things (IoT) in German SMEs delivers an unexpected insight. When it comes to organizational challenges in IoT and change management, the study shows, the biggest challenge is not IT or data security. It is getting the company’s employees involved. SMEs face most challenges because of workforce motivation. This is where SMEs are confronted with significant investment in training employees on IoT projects and other digitization topics.
An overall effort to inspire enthusiasm about new technologies is also part of the work of management teams. Transparent communication and focusing on specific, targeted skill areas have been cited as decisive differentiators. Many of the responding companies report that the development of their own IoT competencies is not necessarily conducive to success.
Many SMEs, therefore, turn to partnerships and the help of external consultancies to avoid the risk of missing out on IoT trends. The study cites partnerships as indispensable in the implementation and operation of IoT solutions.
Identification and selection of a suitable partner is a preferred response to the limited in-house IoT competencies. These will deliver insight on IoT device connectivity and IoT device management, recommend ways of dealing with IoT data, or may even end up recommending the use of an IoT platform with device management capabilities for the orchestration of connected devices.
Aiming for internal transformation
But along with that, when it comes to IoT implementation, companies will have to know what they want when addressing the topics of connecting legacy devices, installing IoT sensors, or deciding on the best-suited machine learning algorithms. At the end of the day, they need to make sure that the targeted IoT initiatives and the implemented IoT technology are truly adding value to overall productivity and that this is properly communicated to their employees. This is one step toward successful change management.
Along with partner selection, therefore, internal transformation is cited as one of the key strategic challenges to companies entering the world of Industry 4.0. Only if the added value of IoT solutions is made clear, the implementation is successfully managed, and employees support the effort, can IoT make a lasting contribution to the company’s success, the study says.
Adopting a new digital logic
Whereas turning to digital solutions has almost become imperative, most SMEs do not have resistance management policies in place. And a study by the Bertelsmann Foundation shows that change can only have success within a new culture of work. The takeaway: SMEs need to change their way of thinking. The management needs to change attitudes towards the workforce, and the workforce has to change attitudes towards company policies. A new way of thinking away from the logic of industrial linear production is needed.
The adoption of a new “digital logic” involves a comprehensive digital strategy and a decentralized mindset that prioritizes a culture of continuous learning, transparent communication, collaborative attitudes, and sociocratic structures that remove hierarchies.
Readiness to remain flexible is equally needed to face the insecurities associated with disruptive, sometimes exponential, development. As the study concludes, “the defining image here is that of the responsible and self-aware employee”.
A closer look at resistance
According to the study, digitalization is often hampered not only because “there is often a lack of will and conviction” but also because of “a lack of trust in the workforce”. Rather than ignoring complex employee attitudes, a closer look at resistance is needed. This is how you explicate the exact nature of the setbacks an organization is facing and the concrete needs to be addressed. First, it is essential to evaluate the status quo and set clear boundaries between justified and unjustified resistance.
In the case of justified resistance, the workforce may have reasons to believe that the targeted change is not in the company’s best interest. They may be able to advise on practices better suited to the company’s needs. Decision-makers and managers are often detached from daily business. They may have not been briefed on the needs of the customers and employees. Since not everyone gets included in the decision-making process, you may run the risk of leaving many voices unheard.
Ignoring voices of dissent may indeed lead to the company missing out on key opportunities to improve. The organization may even miss out on implementing projects better tailored to a specific case. Employee competence from specialist departments may be exactly what you need to rethink your solution of preference. This is where conflicts emerge.
Unjustified resistance, on the other hand, does not have a clear logical foundation. It is mostly based on sentiments such as fear of the unknown. Fear is holding many companies back, the 2019 study shows. This calls for careful and empathetic policy implementation.
Dealing with change? A no-fear attitude is crucial
Talk to your employees and make sure that their voices are heard. You cannot underestimate the significance of individual attitudes and opinions in the bigger picture of company success. Establish open communication at all levels. The conversation should be revolving around employee needs and concerns, and not around efficiency and cost-cutting.
So how do you establish a healthy culture of communication?
- Take objections seriously and give employees the feeling that their voices are heard.
- Collect feedback via both formal and informal channels. Give your people as much agency and decision-making power as possible within the circumstances.
- Create forums for improvement suggestions. Clearly communicate your vision on change in meetings, internal email communications, short videos, and working groups.
- Make sure that employees have a point of contact to voice any concerns about processes taking place within the organization.
- Utilize internal networking events to share ideas, prioritize, identify key actions, and develop action plans.
- Fill your central project positions with staff that can lead in an empathetic and motivating way.
And finally, provide reassurance—make sure your employees know that they are still at the center of everything you do.
About Record Evolution
We are a Data Science & IoT team based in Frankfurt am Main, committed to helping companies of all sizes to innovate at scale. So we’ve built an easy-to-use development platform enabling everyone to benefit from the powers of IoT and AI.