The Emotional Cycle of Change and the Software Implementation Timeline

Perhaps no activity undertaken by an organization requires more change than the implementation of a new ERP system. During a typical ERP system implementation project, thousands of decisions are made regarding (1) how products will be purchased, inventoried, manufactured, and shipped to clients, (2) how cash flow will be managed, and (3) how all of these activities will be reflected within the financial statements and other business intelligence reports.

While this sentiment of course refers to Microsoft Dynamics 365 Business Central, it also applies to any other ERP system. While the complexity of these projects and the amount of change required typically increase with the size of the organization - this change applies to all sized organizations from small businesses to enterprise organizations.

Beyond Business Central and other ERP solutions, these concepts also apply to the implementation of a new CRM system - or any other system that is used to manage a significant aspect of an organization's operations. This could be a rental management application, an engineering management solution, or a business intelligence and reporting service.

With all of this change likely to occur, it is important that everyone involved understands that accepting and adapting to change will be required. To better understand the emotional ebbs and flows that are likely to be experienced, it is helpful to share with everyone the Emotional Cycle of Change.

The Emotional Cycle of Change was developed by Don Kelly and Darrell Connor in 1979 and was published in "1979 Annual Handbook for Group Facilitators". This model outlines the 5 key emotional stages that individuals typically go through when implementing change.

To quickly summarize The Emotional Cycle of Change, the 5 stages noted in the original work are:

1) Uninformed Optimism

2) Informed Pessimism

3) Hopeful Realism

4) Informed Optimism

5) Completion

I have made some adjustments to the terminology used for each of the stages and I also added a 6th stage - since in an ERP implementation project, while there should definitely be an official end to the implementation project, the opportunity to optimize and improve the usage of the new software never really ends.

Below is my visualization for The Emotional Cycle of Change and the Software Implementation Timeline ©

On this visualization, the X and Y axes represent Peformance and Time respectively, with the typical phases of a Software Implementation project overlaid on the bottom and expressed over time in order to match each phase with each of the 6 stages I have included on the Emotional Cycle of Change. I understand that some software implementation methodologies may differ from the phases included on the visualization, but for many organizations, these phases are typical within their ERP or CRM implementation projects. In most of these types of software implementation projects, there is an assumption or expectation that some custom development may be required, but the overall goal is to minimize customizations and use the system "out of the box" as much as possible.

Software Selection

Most software implementation projects begin with a decision by the management team to implement new software. This is where the cycle of change's "future performance expectations" (represented by the blue line in the graph) begins on the Current Baseline status of the organization (represented by the red line in the graph). We begin at "ground zero".

During the software selection phase, the organization will participate in multiple demonstrations by various software providers. The software providers of course love to highlight the most attractive features of their software, and in particular the features that may differentiate their solution from the competition. Participating in these demonstrations creates a sense of optimism surrounding the future capabilities of the organization once the new software is deployed.

Unrealistic Expectations

From an emotional perspective, as the Software Selection phase continues, people's future performance expectations continue to increase throughout the conclusion of this phase. By the time the new software has been selected, most people have entered into a state of Unrealistic Expectations where they expect that the organization will be able to utilize and fully leverage every potential feature presented by the new software provider.

Project Planning

Early in the Project Planning phase is when future performance expectations peak. By the time the end of the Project Planning phase is reached, these expectations begin to decline. This is primary due to the realization that a significant amount of time and effort will be required in order to fully take advantage of all of the new software's capabilities. This work will include a great deal of training, decision-making, and strategizing the organizations shift of data and processes from the legacy software to the new software. For most people, the realization sets in that all of this work will need to be done above and beyond their already high workload, which introduces a new set of stresses into their lives.

Key User Training

The Key User Training phase is when business leaders, managers, and key decision makers begin training on the setup and use of the new software. During this phase, future performance expectations continue to decline. This is primarily due to two factors:

First, and this is typically not adequately expressed during the Software Selection process, for many software projects (in particular ERP implementations), there are literally thousands of decisions that may need to be made by the project team over the course of the entire implementation project. And often these decisions are inter-related, leading to greater complexity and difficultly than originally anticipated. A sense of doubt that the organization will be able to navigate their way successfully through all of this decision-making.

Second, as users are trained on the new software, they begin attempting to match the existing workflows and processes to how the new software works, and many times this results in gaps between what is required and what is available with the standard features of the new software. Another sense of doubt enters the picture about the software's ability to meet the organization's required workflows.

The Moment of Truth

Typically, at some point during the Key User Training phase, the Moment of Truth is encountered. This is the point when there is an acknowledgement that the new software is not likely to meet all of the expectations set in the Software Selection phase. The Moment of Truth is something that each user or project team member may acknowledge only privately at first, afraid to share their viewpoint with other project team members out of fear that they may be the only one experiencing these feelings. Eventually, the Moment of Truth is recognized publicly (and more formally) amongst the project team, for example during a project team meeting. It is important to recognize that although the original unrealistic expectations are not likely to realized, the project still may have great potential to lead to overall improvements within the organization.

The Trough of Despair

Toward the end of the Key User Training phase, we reach the Trough of Despair. This can indeed be a very dark place for many team members. Sentiments expressed while users dwell in the Trough of Despair may include statements like:

"Wow, what did we get ourselves into?"

"We definitely chose the wrong system!"

"This can never work."

"Get me off this project team!"

"We are all doomed!"

Unfortunately, a trip through the Trough of Despair cannot be completely eliminated. Instead, the goal is to keep this emotional state as shallow and short as possible. Check-in with everyone on the project team regularly to make sure everyone is on the same page on how to move forward with the project. This is where open and honest communication amongst project team members will yield the greatest results.

The Trough of Despair can be kept more shallow simply by being aware and acknowledging that it is perfectly normal be exist in this emotional state at this point in the project. Remind users that during key user training, the system is not yet fully configured for the organization and no customizations yet exist to fill some of the gaps identified and documented. My suggestion is to be sure that everyone has a forum to express and acknowledge their concerns, but to continue onward and hold off on reaching a final opinion until after the testing phase of the project has been completed.

Development

The Trough of Despair can be kept short by immediately moving into the next phase of the project - the development phase. During the development phase, the required software customizations are designed, developed, and tested. My suggestion is to begin development with the most critical and important customizations and test the new functionality with the user team to demonstrate that the most critical gaps have been eliminated. Put another way, remove the largest "chunks" of risk first and continue in this manner to provide the quickest path out of the Trough of Despair.

Pilot Testing

During the pilot testing phase of the project, users begin full-cycle transaction testing. As this phase begins, future performance expectations are usually near the lowest point, and will continue to increase as the pilot testing phase advances.

Light at the End of the Tunnel

Through the repetition of the testing process, users begin to gain more in more confidence in how to navigate through the new software. They find that they are also able to complete many of the day-to-day tasks in their job roles. The sentiment shifts to, "OK, maybe this isn't so bad after all." On the Emotional Cycle of Change visualization, this is referred to as Light at the End of the Tunnel. This is the realization that the new software will be able to meet their requirements. There may even be whispers heard that the new software will end up being even better than the legacy software.

I would not expect a ringing endorsement of the new software at this point, but optimism, confidence, and momentum should begin to build. By the end of the Pilot Testing phase, all data setups and workflows that will be used to operate day-to-day activities in the new software should be confirmed. The next step will be to begin introducing more and more users to the new software.

End User Training

After verifying and documenting the data setups and workflows, it is time to train the end users. End users are those users will did not have any involvement in the project previously and are now being instructed on how they will use the software to carry out their job tasks.

Gathering Momentum

Prior to the conclusion of the End User Training phase, on the Emotional Cycle of Change visualization, we reach the Gathering Momentum stage. The future performance expectations, confidence level, and momentum amongst all users should continue increasing and accelerating. There should now be a "positive buzz" gaining steam about how the new software will improve everyone's daily tasks.

By the time the Gathering Momentum stage is reached, the overall future performance expectations should be greater than the current baseline (the existing software). This effective indicates and establishes that the new software will be an improvement and will generate a positive return on investment over time.

Deployment

Deployment, or "go-live" as it is commonly referred, includes the cutover of all data and activities from the legacy software to the new software. We remain in the Gathering Momentum stage, however while the future performance expectations continue to increase above and beyond the previous baseline, the growth begins to decelerate. This is because users are actively absorbing all of the change, while also dealing with some level of required short-term handling of transactions due to the cutover of data and activities from the legacy software. It is possible there is no growth in the future performance expectations during deployment (the blue line remains flat).

Operations

After the go-live cutover has been completed and the "Open Issues/Punch List" tasks have been completed, the organization enters the Operations phase. After a formal Project Closeout meeting (to celebrate the completion of a very difficult project), the Operations phase begins.

The New Normal

After the project has officially been closed and the Operations phase begins, The New Normal stage of the Emotional Cycle of Change also begins. During The New Normal stage, users continue to gain confidence as additional features are implemented and additional gains in efficiency, effectiveness, and visibility are realized.

A new level of performance has been achieved (the blue line is above the red line), and future performance expectations should continue to slowly and continuously increase over time as new features and functionality are deployed.

Summary

The implementation of a new software solution may require more change than any other endeavor undertaken by an organization. There is a clear correlation between the current phase of the software implementation project and the stages of the Emotional Cycle of Change.

It is important for everyone to recognize (in advance!) the emotions that are typical when implementing this level of change, so each person can properly prepare and plan accordingly. Take the time to explain the Emotional Cycle of Change and how it maps to each phase of a software implementation project.

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