Problem Solution: InterClean, Inc. A look at the InterClean strategies reveals that the organization is in a ripe form for change of structure, business process, Human Resource (HR) alignment, communication process and employee management. A change is inevitable; the successful management of a change with buy-in from all affected quadrants is the ideal situation for InterClean to achieve the merger with EnviroTech. Such a solution can be found with the right implementation of the HR domain statement, nine step problem solving process, effective change management and conscientious decision making. The paper tries to identify the various issues related to the merger, challenges, opportunities, solution paths, time lines and risks associated with the implementation of solutions. The paper also provides a set of timelines and metrics for measurement of the outcomes.
Situation Analysis
Issue and Opportunity Identification
InterClean belongs to an eight billion dollar industrial cleaning and sanitation industry. As per the scenario, the principal stakeholders are trying to increase the profitability of the company through change in the business strategy and by the acquisition of a new company EnviroTech, an acquisition that is in-line with new business strategy and bound to achieve the targeted profitability of 40%.(University of Phoenix, 2008). Based on the decisions of David (President and CEO), the HR have taken immediate steps at performing skill gap analysis and identifying the best strategy for staffing the organization. This knee jerk reaction has created lot of confusion amongst the sales staff, with no direct or indirect form of communication establishing the cause-effect relationships leading to creation of an environment fostering disengagement. The opportunity however, is for formalization of the business strategy along with the development of a clear change management plan using the five step process proposed by Cummings and Worley.(Dreher & Dougherty, 2001, p. 16). Clarity and measurement along with detailed plans for sustainability of compensation plans, staffing plans, training plans, benefit plans, and incentive plans can eliminate obstacles to employee disengagement. The organization can plan to maximize the advantage of human capital that can be evolved as a result of the merger. Such plans with basis on well defined strategies can achieve effective, profitable, sustainable and win-win change management.
One of the most striking opportunities available to the InterClean family as they endeavor to transform from a product selling company into a cleaning and sanitation services company construction of a vibrant, dynamic relationship with consumers. Through both the verbalization and behavioral exhibition of a contemporary, accessible and responsive corporate culture within InterClean combined with the tenacious efforts of the marketing department, InterClean can emerge from its current position as a stale and homogenized participant to that of a distinctive and decipherable leader in the industrial cleaning and sanitation market (McShane and Glinow, 2005). In the case of InterClean, the identifiable consumer culture that exists is different from the culture and consumer profile that they need to become if they intend to achieve measurable global success. Currently, InterClean is essentially a products based company. In other words, nothing ethereal takes place when customers sign contracts for delivery of products from InterClean. If InterClean could create an atmosphere and inherent culture within their communication suites, they would not only have a 360 degree industrial cleaning and sanitation service, but a culture that comes with strong consumer association as well. In addition to the many opportunities for growth that are now available to InterClean, additional opportunities can be found in the area of employee motivation, effective merger with EnviroTech in terms of human resource retention, internal communication capabilities, employee retention, and human capital development.
Any of these operational gaps can be bridged effectively through research and analysis in the area of benchmarking. Benchmarking when approached creatively and with an investigative disposition can lead strategists to solutions to issues that may be otherwise obscured. By looking to companies that have encountered similar issues with positive results, other companies in similar situations can essentially borrow strategies to create similar positive manifestations. Benchmarking practices can either be adopted from similar industries or from dissimilar industries. Either way, new ideas are put to practice to solve problems (Maul, 2007). For InterClean generic benchmarking presents the widest selection of creative solutions to the issues the company now faces. Some industries where InterClean might look to find benchmarking practices are within the PC manufacturing, petrochemicals, and pharmaceuticals.

Stakeholder Perspectives/Ethical Dilemmas
Shareholders are facing a dilemma between increased profitability and ensuring employee satisfaction as well as retention during the initial days of the acquisition of EnviroTech. Shareholders are fully aware of risks that can be brought about by high attrition levels, may negate the impact of merger between InterClean and Envirotech.
The management of InterClean face an uphill task of ensuring that the expectations of shareholders are met and at the same time, the interests of another key stakeholder i.e. the employees aren’t compromised. They would like to take aggressive steps to meet David’s deadline of 90 to 180 days for the alignment without creating chaos across all levels of staff. This would impact the credibility of the management team who would look hypocritical in eyes of all employees.
Employees are one of the most important stakeholders and the dilemmas are described above. They are already stressed due to the grapevine and have been shaken out of prevailing comfort factors. Their dilemma is that without proper communication, they don’t see the long-term impact and cannot continue to compromise further with any visible solution in sight. The employees do not also understand the impact of the merger with EnviroTech and many of the employees are considering exiting the company due to such issues.
Indirect stakeholders are the media and the customers who don’t tend to participate in the decision making process but would be inevitably affected by the stories that come out of the board room and subsequent loss of services in case something untoward occurs with InterClean.

Problem Statement
InterClean has to put itself into a trajectory of growth that is sustainable, in harmony with the aspirations of its stakeholders through the strategy of all-inclusive service in the industrial cleaning and sanitation business, whilst delivering value and excellent service to customers.

End-State Vision
InterClean should become a transformational leader in the industrial cleaning and sanitation industry by innovative business strategies leading to increase in profit whilst transforming the existing employees into a valuable and engaged asset base. The leadership at InterClean will turn InterClean into a value based organization typically engaging all stakeholders in decision making and problem solving leading to solutions that would be amicable and win-wins for all. The end state vision also includes a set of measurable outcomes in terms of business success like profitability and achievement of sales targets. These outcomes are required to generate a high level of objectivity for measuring the success of the merger.

Alternative Solutions

Alternative Solution 1

The first alternative solution consists of using Cummings and Worley’s five step change management process consisting of the steps of motivating change, creating a vision, developing political support, managing the transition and sustaining the momentum. (Dreher & Dougherty, 2001, p. 16). The step that has been missed out in the scenario is the creation of a change management team. This team should have good representation from all the business aspects. As a start the author suggests that Tom Jennings (VP, Marketing), Janet Durham (VP, HR), Sam Waters (Chief of compliance), Sally Lindley (CEO of EnviroTech) be members of this change management committee. The structure should be led by Janet considering the experience and knowledge of InterClean. Janet should be directly reporting to David Spencer on the progress of the implementation of strategy. The joint change management team can avail the services of the internal consultant, Carol Stanley for the ground work related to merger and strategy roll-out Communications has been one of the biggest challenges being faced by InterClean. Therefore, the next logical level of organization for the change management will be to identify team members from the sales force who are positive, adaptable to change, and in the top 10% of the performer’s list prepared by Carol. These team members will need to be convinced about the steps taken by organization and the merger requirements. Subsequently, these extended team members can ensure effective transmission of the messages to the frontline staff and ensure that the incorrect information being passed on; therefore, the de-motivational issues from grapevine can be squashed. “This was more important as it concerned with employees who are more concerned about their jobs.” (Renjen & Camara, 2004, p. 4) This strategy was successfully used in the merger of HP and Compaq and results were a smooth merger with reduced attrition levels. (Stahl & Mendenhall, 2005, p. 43). Once the right vision has been set, communicated, and a functional team is setup, the next step would be to formulate the domain statement and organizational structure with the merger. As per Dreher & Dougherty, the formation of a domain statement for HR can provide the missing link between desired employee behaviors and HRM practices.(2001, p. 52). The 19 categories that can help define the overall domain statement have to be finalized before finalizing the organizational structure. This domain statement formulation is akin to the unique brainstorming sessions between the HR executives of Compaq and HP sometime before the merger (Schweiger, 2002, p.51). Subsequent activity would be to finalize the organization structure of the merged company, performance of gap analysis considering the organization structure and the skill level of both companies together. HP’s strategy was very similar and core focus teams were formed to identify the emergent organization structure and map the same to existing people. In this manner a quick gap analysis and training requirement was quickly identified. (Stahl & Mendenhall, 2005, p. 43). From the analysis that has been performed by Carol, the evidences points out divergence in skill sets. However, EnviroTech is already experienced in the area of business that is part of InterClean’s future aim; therefore, the skill sets and talent profile possessed by the EnviroTech employees are the ones that is needed by the new merged organization. Therefore, the creamy layer from EnviroTech should be selected for training the InterClean staff. At the same time, every effort should be made to identify the bottom rung of EnviroTech, as these employees are most likely be unsuitable for the future direction, since they have been part of an established services based business and a lackluster performance in EnviroTech implies that their talents are not suitable for the business. HR should take immediate action to identify an exit path for such employees. Additionally the highly successful employees and executives of EnviroTech should be used to train up the InterClean staff; such a strategy may augur well for the Janet due to the expectations of a reduced training budget. In order for the process to be sustainable, the domain statement’s role in deciding the performance pay, career pathing, review of training effectiveness, performance review will be more than sufficient. The staffing process is a complex process whereby early retirement and severance packages are typically used in conjunction with targeted layoffs to identify and retain the individuals who will be needed to take the new organization forward. Related to these staffing issues is the need to provide career support for displaced employees. Finally, compensation, benefit, and training systems must be integrated and deployed in a way that will contribute to new organizational objectives. While this all has a strategic and planning quality to it, there also are enormous challenges that must be met at the level of relationships between people. Maintaining employee morale when the actions taken by management seem to suggest that people are expendable requires extraordinary leadership skill. The evidence is clear that some firms manage these types of transitions better than others. These management practices, many of which relate to decisions about staffing, are manifested in firm performance. Therefore, the scientific methodology of change management as proposed by Cumming and Worley can be used effectively by InterClean to transform from a product based business to a service oriented industry leader. The organization has a major opportunity to transform itself into a learning based organization with emphasis on people and capable of sustaining organic and inorganic growth.
Alternate Solution 2 The second alternate solution consists of continuity in the same path as has been set by Janet (VP, HR) that involves high level decision making for gap analysis on skill sets. The strategy for HR is something that is essentially set by David who observes that the way forward for the organization is the following steps in the order of execution,
1. Inventory the skills of the current sales force, and identify skills and competency levels needed for the new sales direction and subsequent determination of the gaps that need to be filled with new hires.
2. Establish optimal size and composition of the sales force.
3. Project estimated training and development costs.
4. Develop a staffing audit process, and identify phases of execution.
The plan is relatively simplistic but ignores the fact that the lack of consistent communication as well as the unclear definition of HR domain in the new organization may create several roadblocks for implementation. Additionally the staff may experience stress and consequently increase attrition levels. Some of the talented staff is planning to take a break into education considering the confusions that are reigning at the moment. This doesn’t augur well for the HR as precious resources will be lost during transition whilst adding another burden for HR to replenish these resources. However, the plan is something that has been proposed by David and therefore, the plan already has a buy-in from the shareholder; however, this shouldn’t be seen as a success criterion as much as the bottom lines of the newly merged company.

Analysis of Alternative Solutions
Alternate Solution 1 The first solution is based on the scientific practices of Cummings and Worley in relation to change management. (Dreher & Dougherty, 2001, p. 16). Therefore, the solution has a high probability in delivering profitability to the shareholder as per the expectation of 40%. Generic benchmarking with HP and Eli Lilly is proof enough of the viability of the five step change management process. Hence this goal gets the full five points. The second goal of organizational capability is achieved because of the strong focus on domain statement and builds up of a structure and capability in alignment with business practices. The focus on domain statement puts the spotlight on the people and process, areas that are vital to the future success of the merged company. Additional value addition because of the inclusive nature of the change management structure is an added boost to the organization capability. Therefore, the goal of organization capability advancement gets a high four points. The third goal of effective change management is vital to the whole sustainability of InterClean. The key to change management is ownership of the change. Generic statements asking all employees to own up to the change may not make sense. The formation of a strong and inclusive change management team that is empowered to take the necessary decisions is an important element in the start of the process. Effective communication channels, inclusion of periodic audits during the implementation, audit continuity after the implementation, monitoring of individual performance during change management are all steps designed for effective change management. The utilization of competencies from EnviroTech for organization building and training and decision to downsize the lower performing rank of EnviroTech can be termed as smart decisions that can ease up the pain for InterClean and reduce the overall cost of the transition. Therefore, effective change management gets a high four point. Overall perspective is that first solution is well organized, based on well established theories, found effective in generic benchmarking studies conducted by the class, and lastly measurable.
Alternate Solution 2 The second solution is more in the lines of proceeding as per the suggestions and views of David. The steps have already taken by HR keeping in mind these suggestions. The suggestions tend to focus too much on staffing and less on people, motivation, organizational capability, and training. It has also been seen that the strategy has resulted in stress and drop in motivational levels of the workforce. Continuance of this strategy doesn’t point out at the success in achieving business profitability, one of the primary goals of the merger. Therefore, the goal of profitability doesn’t look like being achievable and gets a low rating of two.
The second solution doesn’t cater to the buildup of a strong organizational capability as well as the retention of people. The concept of effective change management doesn’t exist as the overall solution is a push from the management without proper formal and informal communication, HR domain statement definition, and formalized change management committee. Therefore, the goals of organizational capability advancement and smooth change management are rated as a low two scores. In the same breadth, lack of domain statements and effective change management will lead to higher levels of frustration and de-motivation amongst workforce. This can result in flight of labor and the solution has got an adverse impact on human capital. Therefore, the rating of one has been provided for the goal of human capital sustenance.
Considering the two scenarios, the first solution gets the maximum number of points and has a better chance of business success for InterClean. Therefore, solution one has been chosen for the future direction of InterClean and further analysis will proceed with this resolution.

Optimal Solution The optimal solution would consist of identifying the right domain statement for the newly merged organization. The HRM implications associated with a merger of this scope are many. The solution proposes that change management consists of a series of integrated activities.
As a start, the need for the change and the vision for the new company must be thoroughly communicated to all employees. This would be the first step of the Cummings and Worley process (Dreher & Dougherty, 2001, p. 16) .Next, the organizational structures and work processes need to be specified for the newly merged organization. Then the new enterprise needs to be staffed. However, before this staffing process is started, the organization must undertake a domain statement definition; a domain statement includes 19 dimensions or categories within which HRM practices can be classified. From within these dimensions, firms can vary their approach to managing human resources.(Dreher & Dougherty, 2001, p. 52). The identified domain statements and suggestions for action taken for InterClean are attached in the table below,
Variable Action Taken
Pay level
Lag
Meet
Lead

Meet
Pay at risk
None
Moderate
Extensive
Moderate to extensive

Performance contingent pay
Individual
Team
Organization

Team

Job pricing
Internal equity
External equity Internal
Skill based pay
Yes
No Yes
Seniority based pay
Yes
No No
Benefit system flexibility
Yes
No Yes
Benefit level
Lag
Meet
Lead

Meet
Career system orientation
Internal
External Internal
Candidate preference
Potential
Achievement Potential
Organization fit
Right types
Diversity values; Right type

Exit orientation
Security
Managed turnover Security
Skill orientation
Technical
General General, but will depend on career stage
Training method orientation
Informal/on-the-job
Formal/classroom Informal and formal
Career pathing
Yes
No Yes

Succession planning
Yes
No Yes
Skill inventories
Yes
No Yes
Measurement type
Results
Process Results and process
Measurement source
Traditional
360 degree
Peer review and after maturity transition into 360 degree for management, traditional for sales staff

Overview of the domain statement The domain statement has been arrived after the generic benchmarking that was conducted on the HP-Compaq merger and the Eli Lilly case study of growth. BP-Amoco merger in 1998 also has given good insights on the suitability of the domain statement definition. This paper is meant to suggest a set of categories for InterClean to consider during the management of the change and set guidelines around the implementation. Some of the categories like the measurement source have taken the political factor that may occur during the merger with EnviroTech. Suggestions on pay level, pay at risk, career, performance contingent pay, job pricing and skill based pay have been made considering the need to retain staff and motivate them to higher degrees of performance. Suggestions on benefits have been made to ensure continuity of senior, experienced and retention of highly experienced resources in either organization. Training programs and recruitment category suggestions are based on the availability of skilled resources within EnviroTech for the new business strategy and ability to train new people with the potential to learn and implement.
Change management Solution one involves the creation of a change management committee that shall be the primary driver tasked with the assimilation of EnviroTech and movement into a new business scenario. Based on the benchmarking study with HP, the author recommends that this committee should be divided into two levels with the first level consisting of the leaders with a second level of executives for formalizing communication channels and brainstorming sessions. (Stahl & Mendenhall, 2005, p. 43). The author recommends Janet Durham, Tom Jennings, and Sally Lindley to be part of the first level of leadership. The second level can consist of sales executives from EnviroTech and InterClean who can effectively communicate with other peers and ensure continuous movement of the communication. This change management committee can finalize the organization structures for the new entity, formalize working procedures, ensure compliance to regulations and procedures, setup training programs, conduct gap analysis and identify staffing requirements. The committee can be headed by Janet who has a long history of association with InterClean and is the senior most executive to take charge of this assignment. Most of the issues related to the merger are people related, the presence of a HR executive will ensure adequate care will be provided to people issues. Lastly the staffing process is a complex process whereby early retirement and severance packages are typically used in conjunction with targeted layoffs to identify and retain the individuals who will be needed to take the new organization forward. The committee should formulate these plans and provide financial impact analysis for David to take closure decisions.
Finally, compensation, benefit, and training systems must be integrated and deployed in a way that will contribute to new organizational objectives. (Dreher & Dougherty, 2001, p. 65). All these HR activities should be in compliance with the domain statement definition that has been discussed earlier. While this all has a strategic and planning quality to it, there also are enormous challenges that must be met at the level of relationships between people. “Maintaining employee morale when the actions taken by management seem to suggest that people are expendable requires extraordinary leadership skill.” (Renjen & Camara, 2004, p. 4). HR is strategically suited to take leadership of the ensuing change and drive the organization to sustainable growth. The evidence is clear that some firms manage these types of transitions better than others. Finally to ensure sustainability, the change management committee should be part of a 360 degree feedback with the dual purpose of identifying a future leader and avoid power politics from occupying center stage during the change management process. The authors recommends setting of an HRMA (Audit) committee to be headed by Sam Waters reporting to the change management committee; tasked with conducting periodic audits of the implementation of the domain statement, builds up of organization structure and verification of the effectiveness of the change management. The audit can be conducted along with surveys of employees to understand the total effectiveness of the leadership and impact on the people motivation. Human capital is about considering the employees as a valuable asset base and investing in the employees. These surveys can act as their voice and could induce changes to the steps being taken by the change management committee. The surveys can give useful pointers to the overall mental health of the workforce and identify trust issues even before they become show stoppers to business success. In this entire process of change management, the opportunity for InterClean to establish a strong HR system design can be fulfilled.

Conclusion As companies restructure, evolve, and become more efficient; the pressure and endency for each employee is to carry far more responsibility for the sales, assets, and ultimately, the value of the company than before the restructuring. Thus, every decision to hire, promote, or layoff has more impact on business results for InterClean now, than in the past. As asset-to-employee, sales-to-employee, and equity-to-employee ratios grow—as they have dramatically done since the mid-1970s—each employee, and the associated staffing decision regarding that employee, has become more important than ever before.
The merger with EnviroTech presents a good opportunity for InterClean to enter an era of exponential growth. The industrial cleaning and sanitation industry has witnessed several mergers like EQ-HI PO Inc that have become very profitable after the merger and achieve accelerated rates of growth (Kosdrovsky, 1998). Therefore, the precedent has been set and with a very stable change management team and high quality HR Domain statement definition, the path for a successful merger that can stimulate human capital and business growth can become a reality within the targeted 180 days.