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Multi Business Lines = Multi Conflicts?


As companies grow, a natural evolution is expansion in different geographies and/or business lines. For recruitment companies, this can also be governed with changes in the way people work and how companies engage people. In the 50s, we see a build up of temporary work, in the 80s, outsourcing became a new cost reduction trend and that also included recruitment services. While a company like Nestle can differentiate their products by packaging. Differentiation in a service industry is subtle and lack of it has more detrimental impacts on conflicts of interest.

Consider a common example and a true story. A company is confronted with 2 separate businesses of the same company, one in providing recruitment services, another in providing recruitment process outsourcing (RPO) services. The first team offered recruitment services at X% of salary with potential volume discounts. The second, not knowing their colleagues had pitched recruitment, now offers on-site recruitment services charged with a margin and salary of recruiters on board.

As the company considers both offers, they are left with wondering: if 2 on-site recruiters can handle the recruitment, why bother using recruitment services from team 1? And why is the same company offering me completely different services? At some point, the company will also wonder: if I need 2 on-site recruiters over a period of time, why not just hire them?

The example is simplified but the reality is not far. This happens when there are no clear rules of engagement and differentiation. While the dynamics of a services work best at being flexible, differentiation will be important to give room for each business line to grow without them choking each other’s growth. Sending a clear message also allows the sales team to better communicate the services.

Create differences by considering the following for each business lines. Ideally, when there is no cross over, it will be able to stand on its own and even create hybrid partnerships for their client.

Defining rules of engagement

The business rules should be clear for each business. This will allow them to pursue business within the areas where they should engage and avoid potential conflict with another team. The following can be considered when defining the rules:

  • What is the level and type of candidates recruited by the team? This can mean level of experience, seniority, functional levels, salary ranges, contract or permanent hires.
  • What is the service delivery model? This can mean individual delivery, volume, and geographical coverage.
  • What is the pricing model? Is this by margin, salary of candidates, one-time fees?

Defining rewards and penalties system

Once the rules are defined, it needs to be followed. And each team will need to know the rewards and penalties for following or working outside the rules. They should be aware of:

  • When should a business opportunity be passed over to the other team?
  • What is the reward for passing on an opportunity and/or helping the other team to follow through for win?
  • Who are the authorities to arbitrage a conflict?
  • What kind of penalties are involved for working against the rules?
  • When are these penalties waved or exceptions?

Building a business sharing environment

While rules are established to avoid misbehavior, a positive growth environment is important to create a counter balance to the restrictive nature of rules. This can also be a platform to create hybrids and partnerships. Business sharing is about communication. And communication can be encouraged but without a structured approach, daily activities will choke agendas and communication will be left till the last moment and often too late for any collaborative work.

  • Organize periodic cross team meetings for business sharing of latest wins and losses. This can be organized at the highest level as management meetings and at lower levels with subject matter experts.
  • Make use of intranet to post wins and loses. This can be a form add on to in-house CRM or an extract of CRM information. It can include key accounts, contracts, and potential leads.

Celebrate success and publish case studies

Celebrate cases where teamwork from various teams contributed to success. Creating case studies of hybrid models that worked for clients will also be a form example for future cases. Some times, studying losses are just as important to understand what worked and what does not. This may also provide information for changes in rules where it has not worked.

The above are process changes. In almost all situations, the people aspect is key and needs to be the first to be addressed. An analysis of the different business and existing situation and creating open communication with management to create the desire for change will build strong foundations for future changes.

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