Technology and business executives who fail to manage the psychology of their projects do so at their own peril. Elisabeth nash knew she would have to coax good people onto a project with the seemingly fatal 'carrot' that they might have no job to go back to. And that was just the start of her attempt to overhaul the processes and systems at mortuary giant service corp.

An elderly gentleman steps into a funeral home in Chicago. He and his daughter have come to make arrangements for his wife?her mother?who died the day before. Through tears, the man tells the funeral director what he wants. A modest casket, a spray of red roses on top. She nods, jots information on forms and gently makes suggestions.

Perhaps commemorative prayer cards, to give to family and friends? Yes, he answers, and his daughter helps select a design. After 90 minutes, the two leave, comforted in their mourning by the funeral director's warm concern.

Elisabeth Nash, a new vice president from the funeral home's corporate parent, Service Corp. International, watched this exchange. She vividly recalls how the funeral director went about her job. "To have to sit there and help them make business decisions while they're grieving really gave me some insight into [a funeral director's] passion and compassion," Nash says. "It's not everyone's cup of tea."

The transaction was one of several Nash witnessed during a tour of 15 funeral homes and cemeteries in early 2002?just as she was about to lead one of the biggest process and systems overhauls in Service Corp.'s 40-year history.

The Houston company had hired her to run Delta Project, a two-year, $25 million plan to replace Service Corp.'s central software systems and streamline the field procedures that are core to the $2 billion business. Nash needed to understand how the company and, more important, its employees worked.

Though a newcomer to the funeral business, Nash is a veteran project manager?experienced enough to know that when a company overhauls its information systems, managing the temperament and behavior of both individuals and groups is as critical to a software project's success as the quality of the code.

Indeed, managers who fail to manage the psychology of their projects do so at their own peril. Dismissing soft issues such as anxiety and resistance to change in the transformation of an organization is a sure path to failure, say management experts such as Mark Goulston, a psychologist and executive coach at Sherwood Partners, a consultancy that helps companies manage restructurings. Nothing can derail a systems project faster than a disenfranchised technology staff that delays or even sabotages a software installation. And how can a new process succeed if employees refuse to use it?

Nash was intent on succeeding. For more than two years, she would inspire, shove, nurture and squelch disruptions from the 50 members of her Delta Project team and the rest of the company's 20,000 employees.

Nash applied psychology as best she could to get results she wanted?and acceptance of them. She recruited top-notch field staff to market the new systems and procedures to skeptical peers, so Service Corp. didn't have to count only on Nash's own credibility. She even stole observational techniques from professional poker players, watching colleagues for "tells"?tics, such as slouching or hair twirling, that emerge during stress?to know when to throttle back pressure. When necessary, she would hold, or slap, a hand.

Successful project managers often see their role as that of pseudo-parent, according to Goulston. Sometimes they push, sometimes hug, he says, but they never lose sight of their job to "prepare subordinates, or children, to be competitive in a competitive world."

The soft stuff wasn't always easy for Nash, who holds an accounting degree and has no formal training in psychology or project management. People who have led projects of any size will recognize the problems she faced: New to the company and to the funeral industry?and about to make waves?she would somehow have to twist her outsider status to advantage. She would have to coax technology staff and key experts from other parts of the company, such as trust accounting, legal, funeral operations, cemetery services and others, to join her project team. And then to own, and carry out, her goals.

Keeping the psychology of her staff and the company as a whole under control could mean the life or death of the project itself. It is tough enough, for instance, to see 30 of the company's 40 programmers laid off just as a contract is signed with an Indian outsourcing firm for more programming. And the anxiety ante would be raised when a contingent of the offshore programmers came to the United States to work directly in the company's Houston offices, which those 30 programmers had called home.

She would have to overcome resistance from the 12,600 members of the company's funeral home and cemetery staff, not all of whom were interested in giving up old software they knew well.

Along the way, she'd also have to deal with technical employees who would leave, worn out or unhappy with some decisions.

The team also had to recover from mistakes of its own making. Initial training of the company's employees in the new ways of recording funeral business wasn't disciplined enough. Using software-based training programs or reading manuals wasn't mandated, merely advised. Many employees, as a result, considered them optional and skipped them. Which jammed the company's help desk in 2003 with irritated, untrained callers when the first phase of the software went live, affecting more than 5,000 employees. By the time the second phase rolled out last summer to 400 more workers, Nash had revamped the training approach to include exams and the reporting of test results to bosses.

But Nash and her team overcame the tensions of putting careers on the line and the difficulties of changing long-standing ways of doing business. A little more than two years after she visited the Chicago funeral home, the new system has been successfully implemented. Service Corp. posted a profit of $85 million in 2003, after losing $233 million in 2002. And the company has dropped its debt to $1.2 billion, from $3.1 billion in 2000.

Service Corp. chief executive Robert Waltrip credits the new system, along with Delta Project's other process improvements, with underpinning the turnaround.

Here's the Nash playbook on how to manage the psychology of a project.