Importance of the People Side
Introduction
A major cause of failed transformations is the chronic underinvestment in the people side of change (ie, adoption, culture, behaviour, etc) relative to the investment in technical solutions (processes, systems, tools, etc).
The “oversight” is a budgeting mindset that favours outputs (eg, delivering software, process changes, etc) over outcomes (ie, people adopting new ways of working, etc).
Main Points & Supporting Observations
1. Technology & process aren’t enough
- You can install new systems or redesign processes quickly, but actual value comes only when people embrace, adopt and sustain new ways of working.
- Leaders, not systems, are responsible for bridging strategy to execution via people.
2. Underfunding the human dimension is common and costly
- Many organizations allocate less than 5% of the project budget to change management on the people side.
- It has been found that organizations that succeed tend to invest 10–15% on readiness, communication, training, stakeholder engagement; these are the efforts that drive adoption.
- The cost of failed adoption shows up in missed deadlines, frustrated employees, damaged trust and reputational consequences.
3. The leadership gap and timing misalignment
- Leaders often live in the “future state” while front-line teams remain in “current reality,”; this results in underestimating how long transitions take.
- Many leaders suffer from the “curse of knowledge” (this state of mind assumes others already understand or accept the change).
- The old command-and-control model is less effective: today’s employees expect more clarity and purpose rather than orders.
- Active and visible executive sponsorship is critical and remains the most reliable predictor of change success.
4. The return on investing in change capability
- Moving from poor to excellent change management processes makes an organization 7× more likely to deliver results; going just one step from “poor” to “fair” still triples the likelihood of success.
- Change capability should be treated as a core organizational competency, not as an afterthought.
- Investments should aim beyond individual projects and embrace longer-term assets such as building infrastructure, methodologies, training, internal change-management talent, a common language across the organization, etc.
5. Practical steps & audit questions
Before approving budgets, leaders should audit their top 3 strategic initiatives to see how much is allocated to the people side; if it’s less than 10%, it’s a red flag.
Need to ask:
- Are we funding technical delivery or business results?
- Are we building solutions or building capability?
Summary
- Transformation failures are often less about flawed technology or process, and more about neglecting how people will integrate and live the change.
- A strategic shift in budgeting is needed so that new investments in adoption and human readiness are regarded as essential, not optional.
- Leadership must own this shift, not delegate it, and also ensure that change capability is embedded in the organization for future initiatives.
- Measuring success should go beyond deliverables to adoption, behaviour change and actual business outcomes.
(main source: Scott McAllister, 2025)
Benefits of Human-centered Approach
(source: Alice Ratcliffe, 2025)
Sequence for innovation (human-centred focus)
Tips
(source: Alice Ratcliffe, 2025)