Problem Solution: Interclean Inc

MBA/530 Human Capital Development

Problem Solution: Harrison-Keyes Inc.

"It takes a deep commitment to change and an even deeper commitment to grow. --Ralph Ellison" (Jager, 2000, p.8). InterClean Inc. wants to grow, become better, and have continued success. For that, InterClean is seeking other avenues to grow from the success that the company has already seen. They have acquired EnviroTech to transition into a solution based company and gain competitive advantage in the industry.

The current plan of InterClean does not seem to be feasible when integration of both companies is yet to happen. This solution paper looks into the issues involved with InterClean's strategy to implement this new course of commitment, opportunities, stakeholder perspectives, alternate solutions, risk assessment, and a final plan to achieve this new direction for InterClean. When two large companies merge, the fun stops--and the work begins--after the deal is made (Davenport, 1998).

Describe the Situation

InterClean, Inc. is a major player in the cleaning and sanitation industry. Based on industry demand, they want to move towards solution and services rather than just products and some services. They want to start the new solution-based selling marketing campaign in the next three to six months. In order to make the shift, they are planning to make some changes in sales department. They are also thinking of hiring additional employees to achieve their goal.

Issue and Opportunity Identification

The first priority of the new company should be to focus on completing the merger. Merger brings its own set of problems and looking into history and research it is quite evident if things are not handled very carefully, it will fail. One of the most important things that cause the failure is not taking care of employees of both the sides. The fear and uncertainty lies on both the sides.

Merger also brings in lot of opportunities. If InterClean can successfully complete this merger then they would have the people and knowledge to provide solution based services which would make them the first company in the cleaning and sanitation industry do so. With successful merger, InterClean will have one of the best workforces of the industry which will lay the foundation of future success.

Stakeholder Perspectives/Ethical Dilemmas

Janet Durham, VP of human resources has the dilemma of having a bias for the InterClean employees, and this might make Janet not look objective enough when it comes to choosing the best people for the job. Tom Jennings, VP of Marketing, his dilemma lies in having a close and long relationship with Mr. Spencer, and might not state his objective opinions when it comes to Spencer's direction. The employees also have a dilemma of not sabotaging the training and development of new and acquired salespeople, spreading rumors, and aiding in the decline of employee morale. Shareholders face the dilemma of supporting the current acquisitions or not as success of integration of companies have not been too high. Research has shown acquisitions and mergers do not give them much of return. Davenport (1998) concluded that the hard work required to bring two companies together often produces little payoff for shareholders.

Frame the "Right" Problem

InterClean can increase sales and profit by successfully completing the merger and helping their employee to adapt to new the vision of the company by end of 2007.

Describe the "End-State" Vision

InterClean will increase sales and profit by a) Successful merger with EnviroTech, Inc. in three months b) Improve communication c) Increase employee satisfaction by 80% and d) Increase customer satisfaction by 50%

Identify the Alternatives and Benchmarking Validation

Follow best practice during merger with EnviroTech, Inc.

A Datta and Grant (1990) study has shown that though some mergers turn out to be brilliant success, the success of more than 40% of all acquisitions fail to live up to its expectation. The success of merger and acquisitions depends largely on employees of both the companies. Key people from both InterClean and EnviroTech should be involved in planning and executing the merger. This will give them opportunity to show their abilities and prove that they can work together effectively. Key performers from both the companies needs to be identified and retained.

InterClean should take into consideration the culture of both the companies, as this impacts the behavior of employees. "Not surprising to veterans of the merger wars, incompatible culture heads the list of impediments to the successful melding of two organizations" Davenport (1998). Clash of culture has led to the failure of some mergers. Davenport (1998) emphasized the value of culture on mergers:

In the 1993 merger between Mellon Bank and the Boston Co., Mellon crunched all the numbers and concluded that the deal looked like a winner. However, the analysis didn't consider how cultural conflict could drain the combined company of its most important acquired asset--the talents of Boston Co.'s money-management wizards. Offended by Mellon's cost-conscious management style, a key executive left the organization. Within the next three months, he had taken 30 of his coworkers with him, along with $3.5 billion in assets and many of the firm's clients.

InterClean should follow a phased approach to complete the merger as mentioned by Davenport (2005). Experience and research suggests that, by using the following five-phase process, companies can reduce resistance to the creation of a new workplace: a) Break with the past - Provide legitimate, externally validated reasons for change. b) Mobilize for change - Begin by clearly signaling that change is coming. c) Realize a new contract - Look to line managers to forge new contracts with employees. d) Embed the new contract - Underpin the new contract with changes in organizational structure and people-management processes. e) Live the new contract - Make sure line managers from the CEO down send consistent messages about the new ways of doing business, and that they reinforce their words with deeds. Inconsistency breeds uncertainty, and uncertainty drains energy that should go into building the newly integrated business.

Improving Communication

It is a well known fact that communication is the key to success but still in many companies, it not properly implemented or followed. As in many companies, e-mail