When forming an integration team and making appointments to various positions in the new structure, there are two important parameters to consider that affect the success of organizational change: first, how personnel perceives the fairness of personnel decisions and, second, the speed with which these decisions take place. When personnel decisions become delayed, the stress level in the organization increases due to uncertainty.
There are four basic methods that management can use, and their advantages and disadvantages should be well understood.
The first option (the simplest) is to assign a new leader to each area of responsibility, who must recruit his or her team. This is a very quick solution, but such a manager is likely to favor employees from his organization when forming a team, simply because he knows more about them, and as a result, valuable personnel from the other partner will be left out.
The second option is to appoint two specialists to each key position: representatives of both merging companies. In this case, the problems are the opposite – although such a «duo» of managers will have a complete idea of suitable candidates for their team from both organizations, there can be friction within, the decision-making process can be delayed or lead to compromise, resulting in a less-effective end result.
A third option – evaluation of managers by an independent third party, such as a recruiting or consulting company, offers the most effective and objective staffing decisions, although, of course, the method requires more time to implement.
The fourth method is to distribute a company-wide announcement of new job openings. This allows you to find talented and active managers who are interested in the success of the integration. However, this method also requires time to process all internal applications for vacancies, and in addition, it may contradict the employee promotion policy practiced/adopted in a particular company.
Company management should choose the appropriate team-building principle based on specific goals and opportunities, and communicate this principle to all employees before starting personnel reshuffles. Effective communication ensures a smoother integration process and reduces stress and uncertainty within the organization.
One of the challenges that comes with design services is the cyclical nature of the services business. When the economy tightens and corporates are watching their operational expenses, the first step will be to halt any external contracts/contractors which are not deemed absolutely essential.
Whereas the earlier (staircase) model is a good approach in scaling up revenue and creating new revenue streams, the foundation of the company is still based on the service model: headcount continues to be the main driver (typically up to 60-70% of revenue). In terms of (enterprise) valuation the additional revenue streams, however, will already make a significant difference.
Design services companies typically start small (some exceptions when it concerns management buy-outs) and natural growth is a slow process as it requires hiring and training of engineers based on/driven by the revenue stream of the company. Growth of business is tied to growing the team and it is not always easy to find the engineers.