The Systems Psychodynamics of complex technological projects

Written by Dr. Mannie Sher

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The Horizon Europe EU-ALMPO project provides an exemplary contemporary setting through which to explore the relevance of system psychodynamics in complex, technologically mediated environments. 

The project seeks to address labour and skills shortages across the European Union by designing an AI-enabled observatory capable of informing and supporting more effective Active Labour Market Policies (ALMPs). Although its remit is technical and future-facing, the initiative is saturated with emotional, symbolic and systemic processes characteristic of system psychodynamics concerns.

Tavistock Institut gGmbH (TIG, Germany) is leading the evaluation of the EU-ALMPO project, using a systems psychodynamics approach to develop the Theory of Change (TOC) which lays the foundation for the evaluation.

Organisational anxiety and the search for containment

As Menzies Lyth (1959) argued, organisations often mobilise structural and procedural defences to manage collective anxiety. The EU-ALMPO project emerges in a climate of material uncertainty (especially labour and skills shortages, demographic shifts, migration debates and digital disruption) and symbolic anxiety regarding the future of work and institutional legitimacy. AI tools are positioned as rational, evidence-driven solutions, but unconsciously they also function as containment mechanisms that promise order in the face of systemic turbulence.

The project’s use of a ToC methodology exemplifies this dynamic. Ostensibly a planning and evaluation instrument, the ToC serves as a psychological container, a transitional space (Winnicott, 1965), in which partners can articulate hopes, projections and fears about AI, responsibility and institutional risk. In this sense, the ToC process is a socioanalytic intervention: it structures reflection, slows defensive flight into action and facilitates symbolisation.

Boundary, authority and role dynamics

Systems psychodynamics emphasises how individuals and groups take up roles within multi-bounded systems (Rice, 1963; Miller and Rice, 1967). The EU-ALMPO project consists of partner organisations representing multiple stakeholder groups: AI developers, academics, training providers, including VET and second chance schools, social partners (trade unions), applied research institutes, learner associations and policymakers. Such diversity creates ambiguity around who has authority to define problems, who owns the task, what constitutes legitimate knowledge and how decision boundaries are negotiated across jurisdictions.

These dynamics of boundary, authority, role and task (BART) are intensified in cross-border digital projects. Various stakeholders and potential tool users may feel anxiety related to potentially changed ways of working and shifted relations within and across the institutions,  while AI specialists may carry hopes and anxieties related to the tools and changing work flows (for example, omnipotent hopes, that “the AI tools will solve the problem” or potential persecutory anxiety that “the AI tools will be misunderstood, resisted or misused”.

Projection, trust and the fantasy life of technology

Armstrong’s (2005) “organisation-in-the-mind” concept helps illuminate how AI becomes infused with organisational fantasy. Within the EU-ALMPO project, AI is alternately imagined as a neutral arbiter delivering objective truth, an omniscient machine that will replace human judgement, a threatening instrument of surveillance or a symbol of modernisation and competence.

These fantasies shape relationships of trust and risk.

Fragmentation, systemic defences and the social unconscious

The EU-ALMPO project aims to overcome fragmentation in European labour-market governance — divergent data standards, strategies, AI readiness and coordination. From a systems psychodynamics standpoint, such fragmentation is not merely structural; it reflects the social unconscious (Long, 2013), including historical tensions between EU-level and national sovereignty, divergent cultural narratives about unemployment and responsibility, institutional competition for funding and recognition and unspoken anxieties about migration, demographic change and technological disruption.

Fragmented systems often defend against collective anxiety by segmenting, siloing and disavowing interdependence (Hirschhorn, 1997). By constructing an observatory to harmonise data, align practices and connect systems, the EU-ALMPO project engages in a form of psychodynamic “system repair” that inevitably evokes resistance.

Containment, trust and digital authority

Socio-technical theory, which is a seminal theory developed by the Tavistock Institute in the 1950s, highlights how digital tools embed implicit norms like speed, transparency, objectivity, that can undermine relational containment. Within the EU-ALMPO project, AI reshapes authority and identity in ways that are often unspoken: algorithmic authority displaces human agency and discretion (Diamond, 2016), performance metrics create surveillance anxiety, digital tools weaken embodied cues necessary for relational containment and data centralisation raises questions of political trust and equity.

Systems psychodynamics-informed interventions like reflection spaces, role dialogues, structured boundary work are essential components within the EU-ALMPO programme, working to re-establishing containment within such disembodied digital landscapes.