The cost of staying with the old

Resistance to change is human and normal – but when change is needed, it can also be a recipe for disaster. This is especially true when it comes to the software systems that keep our businesses running.

What do people really want? Terry Pratchett suggests it is “only that things go on as normal and tomorrow is pretty much like today”. Those of us who have lived close to chaos – which is almost everyone these days – would heartily agree. A day without any nasty surprises is a good day.

This desire for sameness helps us preserve an illusion of control, which helps us to stay sane. But there are times when keeping the status quo becomes a lot more dangerous and costly than accepting a change. In business, there can be a tendency to over-promote change for the sake of it—which in turn can lead to fed-up employees digging their heels in and refusing on those occasions when change is really necessary.

Updating, upgrading or switching to more up-to-date software is one of the places where change is most easy to resist, but at the same time most necessary. When chugging along in the same old way is not causing immediate and obvious problems, we put off making changes. Unfortunately, over time this can lead to a lot of missed opportunities as well as real and potentially ruinous costs.

What are the potential costs of not staying up to date? Top of the list is falling victim to hackers and ransomware attacks, followed closely by compliance risks. The older your software, the more likely it is to include vulnerabilities that hackers have learned to exploit. Could you afford to be locked out of your own operations? What would the effect be on your business if sensitive customer data was stolen? Things can go very wrong, very fast, which means “if it ain’t broke, don’t fix it” is not good business advice.

Beyond the obvious costs, there are the lost opportunities. If switching software can increase the efficiency of a team by say 10%, then what have you lost if you delay by a year? What possibilities for increased collaboration, insight or improving are you missing? How much productivity are you losing to slow systems and user frustration?

Users get attached to their systems and change is hard – but reluctance can be overcome if there is a clear vision of the future that can inspire people to keep going through the hard parts of a change. And holding the vision, after all, is every leader’s most important job.

Human resistance to change is often caused by what psychologists call cognitive biases, which are ways of thinking that lead us to ignore or misunderstand reality. Confirmation bias is one of the most famous: we all tend to focus on evidence that supports what we already believe. So if we start out believing that a change is a bad idea, we’ll notice the negative consequences and ignore the positive ones. This isn’t deliberate, it’s just a bug in human programming. The sunk cost fallacy, which causes us to carry on throwing good money after bad, is another famous cognitive bias.

As published in Accountancy SA - May 2020