{"id":6522,"date":"2019-06-10T16:48:56","date_gmt":"2019-06-10T16:48:56","guid":{"rendered":"https:\/\/www.walkme.com\/blog\/?p=6522"},"modified":"2023-05-02T15:46:15","modified_gmt":"2023-05-02T15:46:15","slug":"digital-change","status":"publish","type":"post","link":"https:\/\/www.walkme.com\/blog\/digital-change\/","title":{"rendered":"How to Thrive in Digital Transformation: Think Fast and Slow"},"content":{"rendered":"

I am not rational.<\/p>\n

At least not all the time. And neither are you.<\/p>\n

As human beings, we\u2019re hardwired to assess situations and draw conclusions based on instincts and emotional reactions. This is what\u2019s enabled us to survive threats from predators, wars, and other dangers throughout our history.<\/p>\n

But as we all know, in the modern world, and particularly in the context of business, relying on intuition and emotions alone will not lead us to success. Instead, it will drive us to irrational behavior and errant decisions.<\/p>\n

Like I said, I\u2019m not rational all the time. Neither are you, and neither are your employees. No one is.<\/p>\n

Understanding this is fundamental to leading successful organizational change<\/a>. Once you get how people think, assess situations, and make decisions, you\u2019ll be in a position where you can actually drive change forward.<\/p>\n\n

The human side of leading digital change<\/h2>\n

Digital transformation<\/a> is at the top of most leaders\u2019 agendas today. Unfortunately, it\u2019s proved to be one of the most challenging initiatives to execute.\"digital<\/p>\n

We\u2019re all familiar with the dreary success rates. The vast majority of digital transformations fail<\/a>. Coming up with a solid digital strategy isn\u2019t the hard part.<\/p>\n

Most efforts fall flat because managing the human element of change is extremely complicated.<\/strong><\/p>\n

If you can\u2019t relate to your employees, understand their concerns, and importantly, how they interpret the changes around them, I guarantee your digital transformation will get swallowed up by resistance.<\/p>\n

Discover how to use behavioral economics to drive successful digital transformation in this free guide.<\/strong><\/em><\/a><\/span><\/p>\n\n

Before diving in, understand how your employees think<\/h2>\n

I recently read Daniel Kahneman\u2019s book Thinking Fast and Slow<\/em>, which I believe every change leader should study. In the book, Kahneman, a renowned pioneer of behavioral economics, summarizes his lifetime of research of the field.<\/p>\n

Thinking Fast and Slow<\/em> explains the two main systems of thought that drive human reasoning and decision making.<\/p>\n

System 1 is fast thinking.<\/strong> It\u2019s automatic, instinctive, relatively unconscious, and powered by emotions. System 1 is the thinking that tells you one object is closer to you than another, that 2+2=4, or that the sound of a gunshot signals danger.<\/p>\n

System 2 is slow thinking.<\/strong> It\u2019s deliberate, logical, and conscious. System 2 enables you to focus on one person\u2019s voice during a conversation at a loud party, decide what type of behavior is appropriate in social settings, or determine how much to pay for a new microwave.<\/p>\n\n

Here\u2019s the point<\/h3>\n

Kahneman proposes that usually, System 1 runs automatically at the forefront while System 2 operates in a relaxed mode in the background. When a situation is too complex, System 2 steps in to process and interpret the information.<\/p>\n

In other words, System 2 functions as a lazy supervisor, whose main function is to monitor and correct the thoughts and actions first proposed by System 1.<\/p>\n

Sounds like a decent system, right? The problem is it doesn\u2019t always work like this.<\/p>\n

Often, we let System 1 do all the work. But without the slower, more deliberate thought processes, we end up resorting to biases and heuristics that lead us to draw wrong conclusions and make bad decisions.<\/p>\n\n

System 1 thinking is stifling your digital transformation<\/h2>\n

Everyone knows that resistance to change is powerful<\/a> enough to completely derail your digital transformation. But understanding what contributes to this resistance is more complicated<\/a>.\"change<\/p>\n

Fear of the unfamiliar, fear of incompetence, fear of failure, fear of losing status \u2014 all of these fears fuel resistance. But let\u2019s dig even deeper. Now that we know the two main systems of thought, it\u2019s easier to understand which cognitive processes lead to these (often irrational) fears.<\/p>\n

According to Kahneman, thinking fast contributes to perceptions and decisions based on biases and fallacies. Instead of processing information slowly and deliberately, we automatically draw conclusions based on mental shortcuts and heuristics that are readily available to us.<\/p>\n

So, when you tell your employees change is coming, System 1 is already in high gear. It\u2019s automatically processing the information you provide and suggesting conclusions (fear and anxiety).<\/p>\n

Here are a few examples.<\/p>\n\n

Availability heuristic<\/h3>\n

This is when people judge how likely it is something will occur based on how easily a similar example comes to mind.<\/p>\n

For example, if in the last six months you saw three plane crashes in the news, you might become really stressed when boarding your next flight. Even though the actual chance of your plane crashing is close to zero, the fact that you can easily draw up memories of other crashes makes it seem more likely.<\/p>\n

The availability heuristic<\/a> is a major contributor to employee resistance during organizational change<\/a>. Let\u2019s say Kevin, a new employee, was laid off from his previous company after a failed organization-wide digital transformation led to downsizing. This negative memory is fresh in Kevin\u2019s mind, so when you announce your company will be pursuing digital change, he\u2019s instantly resistant.<\/p>\n

Kevin\u2019s automatic fear of the proposed change is System 1 at work. But if he thought about it more closely, he could realize that this is a new company with different leadership, a different strategy, and different ways of doing things. Just because his last company\u2019s failure ended up causing him distress doesn\u2019t mean it will happen again. On the contrary, this digital transformation could be an opportunity for him to gain new skills and opportunities to boost his career.<\/p>\n

Like what you\u2019re reading? Subscribe to the blog for fresh insights delivered right to your inbox!<\/strong><\/em><\/a><\/span><\/p>\n\n

Anchoring<\/h3>\n

Anchoring<\/a> is an effect of priming. It\u2019s when the first number you are exposed to serves as a reference point and influences later judgment.\"resistance<\/p>\n

If you are going to buy a microwave and the first one you see is $79, would you be willing to buy one for $85? Probably. What about $95? Yes, but you\u2019d expect it to be much higher quality. But what if the first microwave you saw at the store cost $199? Now, this number is your new reference point. Subsequently, you might be willing to spend $210 or $220, by the same logic.<\/p>\n

In digital transformation, the order that you present information to employees has a serious influence on whether they will embrace or reject the proposed change. Say you present a study that 91% of sales teams that use this new CRM bring in an average of $1.5 million more a year. I\u2019m sure your sales team will be more than willing to make the change<\/a>. But if the first piece of information they hear is that transitioning between CRMs demands four extra hours of work a week, they won\u2019t be happy.<\/p>\n\n

Loss aversion<\/h3>\n

The theory of loss aversion states<\/a> that the pain of losing is twice as powerful as the joy of gaining.<\/p>\n

Loss aversion has a profound effect on people\u2019s behavior. It\u2019s why people are more willing to take risks, be dishonest, or engage in reckless behavior in order to avoid a loss than to gain something. It\u2019s why someone who\u2019s already lost $1,000 gambling wants to keep trying to make it back, rather than cut his losses.<\/p>\n

Imagine that, after analyzing how your HCM was performing, your leadership team comes to the conclusion that it isn\u2019t working. There\u2019s poor usability, it doesn\u2019t offer all of the features you need, and the interface is too complex. But, your VP of HR, who spearheaded the implementation, doesn\u2019t want to give it up. They invested a lot of time researching, meeting with the vendor, and creating a plan to implement the HCM, and it\u2019s only been one year.<\/p>\n

Instead of cutting their losses and understanding the need to invest in something better, they want to hold on. Again, if System 2 took control, they could see the fallacy of clinging to a bad investment.<\/p>\n\n

Steer your employees toward data-driven decisions<\/h2>\n

Once you understand how people think and which biases influence their behavior, you can be more deliberate about how you lead change. System 1 thinking is automatic, so expect it. This is what \"digitalcontributes to irrational beliefs and decisions.<\/p>\n

System 2 thinking is analytical, deliberate and data-driven. An effective change leader<\/a> brings this mode of thinking to the forefront by empowering employees to ask the hard questions, demand answers, and make decisions based on facts.<\/p>\n

\u201cThinking slow\u201d doesn\u2019t mean slowing down. It means interpreting situations and making decisions based on data. It means relying on careful analysis and conscious thought, not gut instincts.<\/p>\n

Now it\u2019s time to put this in practice. The information you provide your workforce should include real data, not biases or feelings. Ensure every meeting is planned thoughtfully, present the right data, and promote transparency.<\/p>\n

When you give employees access to the information that\u2019s driving your digital transformation efforts, you\u2019re equipping them to think with System 2. You\u2019re exposing the fallacies that fuel their resistance, and showing them opportunities for exciting change.<\/p>\n

That\u2019s how you thrive in digital transformation.<\/p>\n

WalkMe\u2019s Digital Adoption Platform (DAP)<\/strong> transforms the user experience in today\u2019s overwhelming digital world. Using artificial intelligence, engagement, guidance, and automation, WalkMe\u2019s transparent overlay assists users to complete tasks easily within any enterprise software, mobile application or website. Discover how a DAP can revolutionize your business.<\/em><\/span><\/p>

Request a Demo<\/a><\/div><\/div><\/div>","protected":false},"excerpt":{"rendered":"I am not rational. At least not all the time. And neither are you. As human beings, we\u2019re hardwired to…<\/span>","protected":false},"author":171,"featured_media":6524,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"mobile_image_id":0,"tablet_image_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[89],"tags":[350,110,153],"class_list":["post-6522","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-digital-transformation","tag-change-leadership","tag-digital-transformation","tag-wmb-dt"],"acf":{"__coauthors":""},"yoast_head":"\nHow to Drive Successful Digital Change: Think Fast and Slow<\/title>\n<meta name=\"description\" content=\"Driving successful digital change requires a deep understanding of how your employees think and make decisions. 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