Fig.: Faslane
1.0 Introduction:
Faslane, a former HM Naval base Clyde is the
U.K’s nuclear submarines that carry the trident weapon system. It had been
solely run by the MOD (Ministry of Defence) and the Royal Navy and managed by
private sector, Babcock marine which is a part of Babcock International. From
the year 2002 to 2006 John Howie was the managing director of Babcock marine.
In 2002, they established a partnership relation with industrial firms and
initially made an agreement contract of five years with Babcock to deliver £76
million. Their main intention for the agreement was to reduce the cost and
eventually improve operational effectiveness. The following report is an effort
to basically analyse and understand the strategies and changes Faslane
implemented for success. The report includes several analytical tools such as:
1) Force
Field analysis
2) Balogun
and Hope Hailey’s change Kaleidoscope
3) Johnson’s
cultural web
4) McKinsey’s
Seven S framework
5) Kotter’s
Change steps
6) Lynch
leadership Model
2.0 Strategic Change Process at Faslane:
“The term strategy is derived from a Greek word ‘strategies’ that means “generalship” but the concept did not originate from the Greeks. Sun Tzu’s classic, The Art of War, written in about 500 B.C, is regarded as the first treatise on strategy.” (Jordan, 2012) .
There are two types of
strategic change process that any organisation can adapt to and they are
intended strategy and emergent strategy. Intended strategy is more of a formal
and pre-planned strategy. This kind of strategy is basically a periodic process
which would help an organisation to accomplish a series of goals and objectives
and thus helps secure the future of the organisation. Whereas, emergent
strategy is a kind of pattern that is unintended and comes across as a series
of decisions in an organisation. It is not included in the planning phase and
does not value for the long term purpose. This kind of strategy happens by
chance, without planning.
In my opinion, Faslane’s
strategic change process is both intended and emergent. Intended in a sense
that, in 2002, Faslane signed a contract of five years with Babcock in order to
deliver £76 million of cost saving providing more improvised service to the
Navy. This seems to be more of a future oriented planning. However, if analysed
the same strategic change they made in a different way than, I would say
Faslane adapted emergent strategy change process. They analysed the market
situation and then made the decision of cost saving and operational
effectiveness. Eventually, the seven layers management structure was reduced to
four layers and also the pre-existing bureaucratic system was eradicated to
give preference to the views and opinions of the employees. They also reduced
the management review process to 6 days from 56 days. Similarly, they made a
decision implementing low level changes at first as they were less time
consuming. Thus, with all these strategic changes they brought up made a
delivery of £100 million cost saving within five years.
3.0 Analysis:
3.1Force Field Analysis:
Force field analysis
was created by Kurt Lewin in the 1940s. It is one of the useful decision-making
techniques. It helps an organisation to make right decision by analysing the
forces for and against the change classified as driving forces (positive) and
restraining forces (negative).
Driving
forces for Faslane: The main changes to be made were the
cost saving and improvised operational effectiveness within five years without
affecting the services provided to the Navy. For these changes to be made, some
of the positive forces are eliminating bureaucratic system, reducing management
level layers and reducing management review process.
Restraining forces for
Faslane: The negative force towards the change at the initial
stage was the employees had a negative perception on the change. Likewise, the
employees only focused on the infrastructures rather than quality service. And
also the reduction in management style layers eventually changed the
transactional management style to transformational management style. In
addition, Faslane also had to face political interventions on the decision
making by the civil servants.
3.2 Change Kaleidoscope:
Change Kaleidoscope was developed by Hope Hailey & Balogun (2002) to be a way of pulling together and codifying the wide range of contextual features and implementation options that require consideration during change. In this sense Change kaleidoscope is more of a model than a method, but it is usable tool for conceptualizing the nature of change.( proworkproject.com, 2014)
Time:
Faslane had a target of delivering £76 million of cost saving and operational
effectiveness without affecting the service provided to the Navy. The target
was to obtain this within 5 years of time.
Scope:
The main scope of Faslane was the set
target of delivering the services with minimum cost and maximum management
effectiveness without affecting the initial service provided. They eradicated
the bureaucratic system and reduced the management levels from 7 to 4.
Preservation:
Faslane was to maintain and preserve the quality of service they provided. They
also maintained good relationship with MOD, Naval base commander and other
stakeholders.
Diversity:
John Howie made diverse set of management levels divided into various groups
and division. He also focused on the cost reduction and appointed
responsibilities to public sector manager with a proper large budget which had
no incentive to reduce costs.
Capacity:
Faslane had the capacity of minimizing the cost with improvised operational and
management effectiveness even when they reduced the management structure level
to 4 from 7. With only the team of 250 people, Faslane was capable of achieving
the target goal.
Capability:
Faslane have the ability to motivate and encourage its employees. They were
able to set positive mentality among their employees so as to achieve set goals
through sharing of opinions and manage transformational period.
Readiness:
With a diverse mix of people, Faslane had people who were ready for the change
but at the same time had people who initially did not support the thought of
change. However, eventually with the effort of managers, the employees were
committed towards personal change.
Power:
The system of autonomy was limited due to changes made. However, the managers
still had full power to control their workers according to the new change.
3.3 Johnson’s Cultural web:
Cultural
Elements
|
(until 2001)
|
2002-2010
|
Symbols
|
>only nuclear submarine’s home base
>mainly infrastructural facilities
were emphasized
|
>Entire U.K. submarine’s home base
> emphasis on quality service and
operational effectiveness
|
Stories
|
>Ineffective management system and
management review process
>Cost reduction concept not
accepted
|
>Effective management system and
management review process
>Adaptation of cost saving changes
|
Organisational
structure
|
>250 staffs in a management team
>7 layers management structure
|
>Reduction of management team to
half of the previous number
>4 layers management structure
|
Power
structure
|
>only top level management made the
decisions i.e. bureaucratic system was prevalent
|
>bureaucratic system reduced and all
the employees could share their opinion.
|
Control
system
|
>Ministry of Defence (MOD)
controlled Faslane
>Only elected politicians had the
right to question the decision of civil servant
|
>Privatization in the
organisational system
>encouragement to individual
decision making
|
Rituals
and routines
|
>56 days of management review
process
>Carelessness in spending
|
>only 6 days of management review
process
>outputs measured by performance
scorecard
|
Paradigm
|
>Change process not adapted
>time consuming and use of traditional method
|
>quality service and cost saving
>Accepted change process
|
3.4 Mc Kinsey’s seven S framework:
The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements:
Hard elements: Strategy, Structure and Systems
Hard elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems.
Soft elements: Shared values, Skills, Style and Staff
Soft elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful.
Until the year 2001
when Faslane was managed and controlled by MOD and the Navy:
Mc
Kinsey’s 7 models
|
Strengths
|
Weaknesses
|
Strategy
|
Emphasis on good infrastructures and
buildings
|
high cost and time consuming
|
Structure
|
clear cut decision making by the top
managers i.e. bureaucratic system
|
7 layers of management system, which
is a lot
|
System
|
Transformational
changes were not required due to smooth running of public sector as well as
base.
|
Interference of elected politicians in
decision making thus, making the process time consuming and inefficient
|
Styles
|
Implementation of bureaucratic
leadership style
|
Many people did not like bureaucratic
leadership style
|
Staffs
|
7,500 total population of staffs and
250 people in management team
|
Main focus of work for the staffs was
only for infrastructure developments and building facilities
|
Shared
Values
|
Quality services provided to the Navy
|
Unaccepting change process
|
Skills
|
Experienced and skilled manpower, most
of them being civil servants
|
More focus on waterfront and
unawareness on the change in management styles
|
Mc kinsey’s seven S
model from the year 2002-2010 when Faslane was managed by Babcock marine:
Mc
Kinsey’s 7 models
|
Strengths
|
Weaknesses
|
Strategy
|
>Cost saving and improvisation in
operational effectiveness without hampering the quality services provided to
the Navy
|
>Strategy of cost reduction has the
chances of affecting employee’s performance ultimately hampering the quality
of service
|
Structure
|
>4 layers management structure
>Low-level changes put up front
>Change process accepted by the
employees
|
>Changed management system could
lead to failure
>only 250 members in the entire
management team
|
System
|
>Employees
had positive mind set about the management change strategy
>less
time consuming and cost efficient structure
|
>Drastic change in management
system was implement in a short period of time
|
Styles
|
>reduction of bureaucratic system
and skilled staffs had an involvement in the change process
|
>implementation of excessive
democracy system which is risky
|
Staffs
|
>The staffs had to focus and
emphasize more on the goal and objective of Faslane rather than it’s
infrastructural developments
|
>Less number of staffs in the
management team gradually leading to less effectiveness in performance
|
Shared
Values
|
>Improvisation of quality service,
cost saving and maintaining quality service
|
>Babcock being a private company
may focus more on profit which eventually can risk the reputation of Faslane
|
Skills
|
>Use of skilled and experienced
workforce
|
>However, the Naval base operations
were new for them to operate
|
3.5 Kotter’s 8 step process for change:
Step
1: Establishing a sense of urgency
John Howie the former
managing director was able to identify the problem of high operational cost and
need of management structural change for Faslane. He identified the change
process was a case of urgency after analysing the market scenario.
Step
2: Creating the Guiding Coalition
While the employees
were not ready to accept the cost saving changes, the effective managers were
able to set positive perception in employees’ mind on the change process. The
250 members’ management team along with the employees were encouraged to work
for the management change process effectively.
Step
3: Developing a change vision
John Howie basically
set a changed and clear vision/goal for the organisation. The target was to
reduce cost, improvise operational effectiveness and continue to provide
quality service. Faslane then made a change by reducing 7 layers management
system to 4 layers management system and also adopted both intended and
emergent strategy in order to achieve the goal.
Step
4: Communicating the vision
It was a hard task to
communicate vision of management structural change to the staffs as some staffs
were ready to accept the change while others were not. However, they conducted
sessions such as ‘event in tent’ which resulted to be successful in sharing
ideas and visions of all the members.
They also used several possible means to communicate the new vision of
management structure change.
Step
5: Remove obstacles
John Howie eventually
reduced the 7 layers management system to 4 layers management system. He also
reduced the 56days of long management review system to only 6 days. Likewise,
the changed structure also focused on cost saving and encouragement towards
non-traditional methods.
Step
6: Creating Short-term wins
The immediate change
made by reducing the days of management review process and management structure
layers can be counted as the short-term wins of Faslane.
Step
7: Build on the change
Firstly, Babcock
brought John Howie in 2002, John then saw the need of change in the entire
management structure and strategy. They targeted an achievement of £76 million
cost saving and the improvement in operational effectiveness. To achieve the
target, John strengthened the process with new theme and also the employees who
could implement the vision were promoted.
Step 8: Incorporating Changes into
the Culture
They identified the
needed change and set new vision of change. They encouraged and motivated
employees towards cost saving strategy even though they were not accepting to
implement such change.
3.6
Strategic Leadership styles at Faslane (2002-2010):
In the year 2002, John
Howie became the managing director of Babcock, he handled the position until
2006 and then Craig Lockhart took his position in the year 2006. During these
periods Faslane underwent a drastic change of success. Both the directors managed
Faslane with same change in management structures and strategy which ultimately
turned out to be a success factor for Faslane.
3.6.1 Lynch Leadership style model
(Faslane):
The five elements of
successful and effective strategic model (Lynch Model) of Faslane:
§ Developing and communicating the
organisation’s purpose: Faslane’s main objective was to
achieve cost saving and operational effectiveness. They did their best to
communicate the changes to be made to the employees by operating open discussion
sessions and changed the negative perception of employees towards change into
positive.
§ Sustaining competitive advantage
over time: Faslane’s change strategy worked well, achieving
the targeted goals at targeted time of 5 years. This secured the financial stability
of Faslane. In addition, they became the home base for the entire U.K.
submarine.
§ Defining and Delivering to
stakeholders: They had a set goal and objective to
describe to the Stakeholders which was to reduce the cost and maintain quality
service provided to the Navy. They continually conducted meetings with the
stakeholders and also maintained a good relationship with the naval base
commanders, officers’ e.t.c.
§ Setting ethical standards:
Faslane was able to maintain minimum operational cost and also was able to
generate 2000 employment opportunities by the year 2010, setting a standard.
§ Managing human resources and
organizational decisions: Faslane re-engineered the whole
management structure. They set an ultimate goal for everyone to work on
effectively. Developed autonomy, giving employees the chance to share their
views.
3.6.2 Transcendent Leadership style
model in Faslane:
The transcendent
Leadership style model includes the following,
Leadership of self: The
former managing director of Babcock marine, John Howie, as a leader had a clear
vision of changes he had to implement. He focused on the cost saving factor and
delivering quality service factor from the beginning and finally implemented it
within the targeted time.
Leadership of others: All
the employees had the chance to share their opinion and ideas and participate
on the decision making process. They were encouraged to work for a common goal.
Leadership of the organisation:
The need of change in management structures and strategies was clearly
communicated among all. Re-engineering of the management review process and
management structure was done. The organisation also maintained good
relationship with its stakeholders.
4.0 Conclusion
Faslane, a public sector organisation formerly
managed by MOD and Royal Navy was afterwards managed by a private sector
organisation Babcock marine from 2002. After this transformation, Faslane went
through several changes which gradually turned out to be as effective and
successful for them. After thoroughly going through the case study of Faslane
and then critically analyzing it with the help of various strategic models, we
could get to a conclusion that Faslane adopted various strategic and management
structural changes which ultimately helped it be successful. As we can see,
from the case study only after Babcock started to manage Faslane, all the
critical management structural change and review process changes took place. Faslane
eventually went through a management structure change, change in objective,
change in employees’ perspective and change in management review process and
achieved several short-term wins and finally was able to succeed by becoming a
home base for the entire U.K. submarine.
5.0
References
Kotter, J. (1995)
‘Leading Change: Why Transformation efforts Fail’ Harvard Business Review,
March-April pp.59-67.
Lynch, R (2008)
‘Strategic Management’, 5th Edition, Prentice Hall, pp. 619.
Johnson, G. Whittington
& Scholes K. (2011) ‘Exploring Strategy’, 9th Edition, Prentice
Hall.
J. Balogun and V. Hope
Hailey (2009) ‘Exploring Strategic Change’, 3rd Edition, Prentice
Hall
Jordan, R.M.G.a.J., 2012. Foundations of Strategy. John Wiley & Sons.
mind tools.
(n.d.). Retrieved December 28, 2013, from www.mindtools.com:
http://www.mindtools.com/pages/article/newSTR_91.htm
Pro work Project. (n.d.). Retrieved December 30, 2013, from www.proworkproject.com: http://www.proworkproject.com/prowork/change-kaleidoscope.html
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