1 Introduction
Faslane is a HM Naval Base Clyde situated in UK that
operates the Trident weapon system. The base was managed and supervised by the
Royal Navy and Ministry of Defense, under which the customer relationship
culture wasn’t so good. The employees focused more on infrastructural
development and other facilities rather than focusing for the Navy services.
The management system wasn’t effective with lot of managerial hierarchy, inadequate
independence and high political influence on the decision making aspects. After
this, the base decided to partner with ‘Babcock Marine’ a private company on a
5 year contract to bring some reforms to the organization. The primary motive
of the partnership was to improve the services and bring down the operational
cost of the base. The goal of the new partnership was to reduce the operational
cost up to £76 million within the five year period.
2 Strategic Change process
I
would describe the strategic change process made by Faslane to be both intended
as well as emergent. Intended strategy is a pre planned and formulized steps or
processes of conducting and implementing strategies to achieve the goals and
objectives of the organization. Similarly, Faslane initially contacted Babcock in
2002 with fixed sets of goals to achieve £76 million of cost saving within the
first five years.
Emergent
strategy is a pattern of action that develops over time within an organization.
Also known as realized strategy, emergent strategy is a diversified development
of strategy that grows from the lowest level of the organization. In the same
way, Faslane made modifications in its strategic planning by studying the
market situation. The decision regarding the operational effectiveness of the
organization and cost saving steps were conducted through the research of the market.
The seven layer management system was reduced to four layers and the management
review process, which previously was of 56 days, was reduced to only 6 days.
The organization which followed bureaucratic system was changed to democratic
so that the employees could also participate in the strategic planning
processes. As a result of this, the team was able to save £100 million exceeding
the target of £76 million within the 5 year time.
Due
to these factors, we can clearly say that Faslane has implemented both intended
as well as emergent strategies in its strategic development.
3 Analysis
3.1 Change Kaleidoscope
Fig 1: Change Kaleidoscope Of Faslane.
Time:
Faslane had the time limit of five years to increase the organizational
effectiveness and reduce the total operational cost. They had the target of
saving £76 million in its operations within the first five years. To obtain
these targets, the company started from the lower level changes and slowly
moved upward.
Scope:
The primary scope of the Faslane was to increase the organizational effectiveness
and reduce the operational cost of the firm. The changes were to be made
without affecting the overall managerial system.
Preservation:
Faslane under the partnership with Babcock Marine has maintained good relations
with its entire stakeholders. Through clear and factual reports with timely
meetings the company has been able to preserve and maintain healthy relations
among the MOD, Naval Base commanders and other stakeholders.
Diversity:
The new management under John Howie was much more diversified but again systematically
managed. Fixed tasks and responsibilities were given to various diversified
divisions, whose works were coordinated very efficiently.
Capability:
The overall capability of the new management grew through effective planning
and implementation. The company was able to increase its output by huge margins
which can be proved by its £100 million of cost saving against the £76 million target.
Capacity:
Faslane after the change has shown great deal of new capacity in its performances.
In April 2010, it announced it would be the home base for all UK nuclear
submarines along with 2000 additional jobs.
Readiness:
Before the change took place in Faslane, there was mixed groups of people with
different thoughts regarding the change. Some people wanted change in the
overall organizational structure where as some were repulsive towards change.
Power:
Being a national defense organization, the company has always maintained a autocratic
leadership. However in the new management, certain level of decision and
planning rights are given to the employees.
3.2 Force Field Analysis of Faslane:
Driving Factors
The
primary factors driving the change for the company were cost minimization and
improvement in the organizational performance of the company. This was to be
acquired without hampering the performance of the Navy force of the country. The
overall improvement in the performance and cost saving was to be acquired within
the first five years of the new partnership. These targets were achieved by changing
the organizational structures and removing the bureaucratic system.
Restraining Factors
The
employees’ rigidness towards the change was the main restraining factor towards
the change in the Naval Base. The influence of the political conditions was
also one of the major factors limiting the changes in the company. The key motive
of the change was to transform the transactional management style to
transformational style.
Johnson’s Cultural Web
|
Cultural
Elements
|
MOD and Royal
Navy (up to 2001)
|
Babcock Marine
(2002- 2010)
|
|
Symbols
|
·
Home base for nuclear submarines that carry
Trident weapon system.
·
Infrastructural facilities were of more
importance.
|
·
Home base for the entire submarine division of UK.
·
Quality of service and operations were of more
importance.
|
|
Power
Structure
|
·
Limited autonomy in the management.
·
Power was retained in the top level of management.
|
·
Less bureaucratic system
·
Increase in the employees decision making rights.
|
|
Organizational
Structure
|
·
Seven layer management structure.
·
250 members in Management team.
|
·
Four layer management structure
·
Management members were reduced to half.
|
|
Control
Systems
|
·
The company was controlled by MOD.
·
The decision making was influenced by politicians.
|
·
The company went to partnership with private firm.
·
Employment involvement in decision making was
encouraged.
|
|
Ritual and
Routines
|
·
The review process would last for 56 days.
·
Extra expenses were included in the budget.
|
·
The review process was shortened to only 6 days.
·
The budget was much more carefully constructed
|
|
Paradigm
|
·
Rigidness towards change.
·
Traditional and time consuming.
|
·
Professional and qualified team of management.
·
Effective management and cost saving.
|
|
Stories
|
·
The plan of cost reduction wasn’t being accepted.
·
The managerial and review process wasn’t effectively
planned.
|
·
The cost saving changes was adapted by everyone.
·
The managerial and review process were effectively
planned.
|
3.3 McKinsey’s Seven S Model
·
Condition
when Faslane was operated by Royal Navy and MOD (up to 2001)
|
McKinsey’s
Seven S Model
|
||
|
Seven Models
|
Strength
|
Weakness
|
|
Hard Elements
|
||
|
Strategy
|
More importance over infrastructure and
building facilities.
|
Budget weren’t
formulated properly and decisions making took excessive time.
|
|
Structure
|
Clear chain of
command with limited autonomy.
|
Several layers
of command structure.
|
|
System
|
Change in the organization
was being considered and were ready to implement changes.
|
The review
process was much time consuming and costly.
|
|
Soft Elements
|
|
|
|
Skills
|
Staffs were
skilled and experienced.
|
Repellent
towards managerial system changes.
|
|
Styles
|
Followed
Bureaucrat leadership.
|
Control was in
top level management only.
|
|
Staff
|
Employed about
1700 civil servants.
|
Focused on infrastructural
development rather than quality services.
|
|
Shared Values
|
Provided
satisfactory services to Navy.
|
Traditional beliefs
and were resistant to change.
|
·
Condition
when Faslane was operated by Babcock Marine (2002-2010)
|
McKinsey’s
Seven S Model
|
||
|
Seven Models
|
Strength
|
Weakness
|
|
Hard Elements
|
||
|
Strategy
|
Cost reduction
and service quality improvement without affecting the facilities provided to
the Navy.
|
Cost reduction
could negatively affect the services provided by the employees.
|
|
Structure
|
The 7 layer
management structured was modified to 4 layers. The lower level changes were
implemented first.
|
The change in
the managerial structure could bring difficulties to the employees.
|
|
System
|
Employees were
positively motivated towards the change in the managerial structural.
|
The change was
brought drastically in the organization.
|
|
Soft Elements
|
|
|
|
Skills
|
Staffs were
skilled and experienced.
|
Work on the
Naval base was new for the employees.
|
|
Styles
|
Skilled
employees operated the structural change.
|
More
democratic style could derail the organizational plans.
|
|
Staff
|
Employees were
motivated to achieve the organizational targets rather than infrastructural
development.
|
Less staffs in
the teams could de-motivate the employee’s effectiveness.
|
|
Shared Values
|
Operational
effectiveness helped to maintain quality service and reduction in the cost.
|
The partnership
with a private company could reduce the share value of the company.
|
3.4 Kotter’s eight steps for Leading Change
Step 1: Establishing a sense of
Urgency
The
need for the organizational change was realized by researching the market and
competitive factors. The problem of high operational cost and reducing organizational
effectiveness were the main factors identified that lead to the change.
Step 2: Creating the Guiding
Coalition
It’s
the nature of employees to resist towards changes. It was a must to change the employee’s
perception towards change in order to implement the cost saving strategy in the
organization. The team first motivated and encouraged the employees to see the
positive aspects of the change and convene them it was for the better good for
the organization as well as them.
Step 3: Developing a Change Vision
Both
intended and emergent strategies were used to accomplish the goals and targets
of the firm. Goals of achieving specific cost reduction and organizational
effectiveness were the clear targets of the firm.
Step 4: Communicating the Vision
It is necessary to communicate the mission, vision,
goals and objectives of the change to the employees and other stakeholders of
the company. Faslane too used every possible means of communication to
communicate their new targets towards their employees and other members. This
is necessary to change the perception of the stakeholders towards change.
Step 5: Remove Obstacles
Clearance
of the obstacles is necessary to attain the goals and targets of the company.
Similarly, the change of the managerial style was necessary for the company to
meet its cost saving targets. John Howie, the managing director of Babcock
Marine took risk and went for non traditional styles to obtain the goals of the
organization.
Step 6: Creating Short term wins
The
managerial structure was reduced and the review process was rearranged to gain
short term wins. Faslane planned for visible performance improvement by
encouraging the employees to participate in the change process and help to achieve
the goals.
Step 7: Build on the change
By
partnering with Babcock Marines, Faslane was able to initiate changes in the company
that helped to attain the goals and objectives of the company. The company then
went ahead to change the employees perception towards change and involved them
in the changing atmosphere of the company.
Step 8: Incorporating Changes into
the culture
The
company was able to initiate change according to their plans. The new
strategies were effectively able to replace the old ones and the whole
organizational structure was slowly able to adapt to it.
3.5 Strategic leadership style at Faslane during 2002- 2010
The
strategic leadership style was very much effective and efficient in the
organization due to the changes brought by the new management under Babcock
Marines. Their operations increased to such standards that they were soon able
to become the home base for the entire nuclear submarines of UK. Some of the
significant changes brought are as follows:
·
The employees’ attitudes toward the
change were modified and were able to extract maximum efficient output from
them.
·
The major objective was to improve the
quality of service provided to the customer, i.e. Navy officials.
·
Bureaucratic system was removed.
·
The seven layer management system was
changed to four layers.
·
The changes were carried out from the
lower levels to upper levels.
·
The new management made sure that they
had right parties on their sides, such as the Naval Base commander.
·
Team work was encouraged in the new
management.
A. Lynch Model: The Five Elements of successful and effective strategic leadership model
Developing and communicating the
organizations purpose: Faslane had the task of developing
effective plans and procedures to attain their new set of targets and their
first step was to communicate their changing style to the company’s employees. Programs
such as “event in the tent” were conducted so that the employees could get the
idea behind changes and express their views toward the changes.
Sustaining competitive advantage
over time: The Company was able initiate change in
a very short time period and attain all of its targets within five years. They
were able to change the attitude of the employees and extract quality work
under less expense along with reducing the management structure to four layers.
They were so efficient in attaining the competitive advantage that they were
able to become the home base for every nuclear submarine in UK.
Defining and delivering to
Stakeholders: The Company was also successful in relaying
their motives towards change to their stakeholders. They understood the
importance of stakeholders, in their case the MOD, Navy board, Commanders and
the local community and effectively communicated their motives, gradually bring
them on their sides.
Setting ethical standards: The
Company also gave great importance to the ethical aspects along with the
change. They made sure that the employees were treated properly during the
change and even were able to create 2ooo more job opportunities.
Managing human resources and organizational
decisions: The
Company made sure that the changes were carried out through effective planning and
that the human resources were structured according to nature of the new
management system. The employees were given more freedom to express their opinions
on the decision making and were considered one of the important assets of the
company.
B. Transcendent Leadership in Faslane
4 Findings
Situation before the Change.
·
Unwanted layers of management.
·
High political influence in the decision
making aspect.
·
Power was centralized to the upper
managerial level.
·
Less priority was given to the customer
service.
·
More focus was given to the
infrastructural development rather proving quality services to the Navy
officials.
Situation after the Change took
place, in 2002.
·
Management structure and the review
process were drastically changed.
·
The management group was reduced to half
its initial size.
·
Employees’ opinions in the decision
making were considered.
·
More
independence was provided to the employees.
·
Employees began to take more
responsibility towards their work.
·
The new management style was able to
increase the overall performance of the organization.
5 Conclusion
Faslane
under the management of MOD and Royal Navy wasn’t performing efficiently
enough, so on 2002; the management was transferred to Babcock marines, a
private sector that brought many changes in the pre existing system. Through
detail study and analysis of this case study, and using various analytical
tools and strategic concepts it is clearly visible that the application of the
new processes were effective to the company. Cost reduction and improvement in
the operational effectiveness of the naval base was the primary target of the company.
It was a huge challenge to change the employees and other stakeholders’
perception towards change, but later on through the coordination of the employees,
the changes were able to carry out. Finally Faslane was able to exceed its
targeted goals and objectives and become the home base of entire nuclear
submarine of the UK.
6 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
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