Gauging the Human Factor

More than three-quarters of organizations that conduct a corporate restructuring fail to consider the emotional impact on employees, according to Dr. Richard Earle.

In fact, says the managing director for the Canadian Institute of Stress (CIS) in Toronto, an estimated 60 per cent of restructuring

efforts under-perform or fail outright against their intended claims, he says.

“”There’s a three-step model to how people react (to a corporate shuffle),”” he explains. “”Stress rises, personal satisfaction drops, and people disengage themselves from caring.

“”Stress is a biochemical and emotional means to psyche ourselves up for energy. So, for instance, if you’re merging two corporate cultures or making a radical IT change, the sources of stress are two-fold: typically people are doing more work, hence they need more energy, and . . . a high level of uncertainty drives stress levels.””

Earle has been conducting research into the effects of stress and corporate change since 1984 when the A&P grocery store chain acquired Dominion.

“”I observed some interesting patterns then that have become more frequent today,”” he says.

Today, Earle oversees the CIS’s Centre for Corporate Vitality

(, an organization that’s in the “”corporate marriage renewal business.””

“”Humans by nature are pessimistic,”” he says. “”People are roughly three times more likely to see the downside of things than the upside . . . so when threats occur, people are revved up for the other shoe to fall and they stay revved up by keeping their stress levels higher.””

Earle says corporations are making a mistake by not showing appreciation for workers.

“”The best of IT systems or management (don’t) work because of flow charts,”” he continues. “”Restructuring or initiatives work because people care enough to make them work. KPMG found that 70 per cent of new IT initiatives produce negative returns because people don’t care to make them work.””

Earle says the old business adage that suggests companies work well due to flow charts and that “”people should be grateful to have jobs,”” is a linear mindset that can’t be reinforced with proactive leadership. “”That’s nonsense,”” he says. “”So many senior executives that I’ve spoken to think they can. People will remarry with their workplace when they’re given fair consideration.””

He says the three elements workers value most are recognition for good ideas, respect in general, and most of all, respect from management for knowing how to do their jobs. “”The feedback loop rarely gets activated by companies,”” Earle says. “”They don’t see the human success factor.””

Kevin Brown, vice-president and CIO of Epcor Utilities Inc. in Edmonton, is fast becoming an experienced hand in the consolidation game. For starters, Epcor — the City of Edmonton’s electricity, gas, and water utility — has been evolving since Brown joined the company in 1995. Upon his arrival, he noted there was “”no substantial (bi

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