Sunday, January 19, 2014

Week 30: Faslane Case study

1. Introduction

 Faslane, which was formerly controlled by the Royal Navy and MOD (Ministry of Defense), is a HM Naval Base Clyde. It is the U.K’s nuclear submarines that carry the Trident weapon system. In 2002, they signed an agreement contract with Babcock marine which is a part of Babcock international. The agreement contract was targeted to deliver 76 million pounds of cost saving within 5 years and also to improve operational effectiveness. From 2002 to 2006, John Howie was the managing director of Babcock marine.
The report that I have prepared below is entirely based on the analysis I did on the changes that took place in Faslane. It is an effort I made to understand Faslane’s strategic change processes. The analytical tools I used in this report are:
1)                  Force field analysis
2)                  Change kaleidoscope
3)                  Johnson’s cultural web
4)                  Mc Kinsey’s seven S model
5)                  Kotter’s 8 step process for leading change
6)                  Lynch leadership style model.

1.1Strategic Change Process

This case study is basically about Faslane’s success with the implementation of strategic changes. The strategic change process of faslane is both emergent and intended.
Intended strategy change process is more of a formal type of strategy change process. This kind of strategy is pre planned and were intended to implement from the initial stage. The intended strategy is basically a periodic process of setting goals and objectives for the organization on the basis of long term security. The Faslane had an intended strategic change process implemented, in a sense that, it made an agreement contract with Babcock in 2002 and set a target of achieving 76 million pounds of cost saving and improvising operational effectiveness within 5 years.
Whereas, Emergent strategy is the kind of strategy that comes up by chance or that are unplanned from before. This kind of strategy is generally a diversified development of strategy. I believe, The strategic change in Faslane is an emergent strategy as well in a sense that Faslane analyzed the market scenario and then set the objective of cost saving and operational effectiveness. Likewise, they also re-engineered the management structure to 4 layers from 7 layers and also reduced the management review process to 6 days from 56 days. In addition, eliminating the bureaucratic system at Faslane was also decided later.



2. Analysis

2.1 Change kaleidoscope:








Time:
When the agreement was designed, there was a plan of the collaboration where the Babcock Marine should preserve up to £76 thousand within 5 year. This was the primary focus on at the starting of the agreement.
Scope:
There was new kind of control operating framework presented by Babcock Marine which was completely different from what the workers were used to.
Preservation:
Even though the control was changed, the service offered by Faslane was never modified. It is always managed and provides top quality services in concern of its people and clients.
Diversity:
As there were many various management groups, each had their own handling style and techniques to finish their task.
Capability:
The staffs were already used to with the old management style by the Ministry of defense. The new management that was introduced by the Babcock Marine was difficult for the staffs to adjust with. It was all due to the lack of awareness and experience of the new style of management that had been introduced.
Capacity:
Even after saving some amount there was enough capital remaining for any kind of changes. Since there were many staffs working in Faslane, with the new change introduced many of the staffs had to leave. But it was all due to lack of time to adapt and adjust to it.
Readiness:
The modification in the system had also bought change in the managing style of the managers.so, eventually they had to adapt to the changes. And also make the staffs aware of the changes and help them to adopt and accordingly commit towards it.
Power:
Due to the sudden change the power of autonomy was limited. However, the managers possessed the complete power of control over their workers.

2.2 Force Field analysis of Faslane

Force Field analysis provides a view of change problems that need to be tackled, by identifying forces for and against change.
The Driving forces and Restraining forces are explained more briefly below:
Driving forces (positives):
The main driving forces of Faslane are the target objective of cost saving, improvising of operational effectiveness, new skilled manpower taken from the Babcock marine, implementing change from the low-level at first.
Restraining Forces (negatives):
The restraining forces or the forces that hampered while implementing the change process for Faslane are employees’ unsupportive nature towards the change at initial stage or their fear from the change. Likewise, the cultural challenges and the prevalent bureaucracy system are also the negative forces faced by Faslane during the change process.

2.3 Johnson’s cultural web:


Cultural Elements
MOD and Royal Navy (up to 2001)
Babcock Marine (2002-2010)
Symbols
Ø  Home base for entire submarine base
Ø  Building and infrastructure more important than supporting navy
Ø   Change in mindset of people
Ø  Encouraging the staff to be more creative.
Power Structure
Ø  Based on rank
Ø  Functional structure with supervisors and standardization
Ø  High power distance
Ø   MOD as a master
Ø  Motivating staff to participate in management process
Organizational Structure
Ø  Chain of command
Ø  7 management layers.
Ø  Hierarchical and centralized
Ø  Reduction of management team
Ø  4 layers of hierarchical structure
Control Systems
Ø  Formal command and control system
Ø  Full control of MOD and royal navy
Ø  There was more privatization in the system.
Ø  Everyone was motivated to give their ideas.
Rituals and Routines
Ø  Focus on process rather than out comes.
Ø  Unwanted expenses
Ø  Too much time consuming review process.
Ø  The measurement of output was done with the performance scorecard
Ø  6 days review process
Paradigm
Ø  Slow, tired and conservative.
Ø  Limited people with limited autonomy

Ø  Service oriented with less cost
Ø  Acceptance of change process and skilled manpower.
Stories
Ø  Fear of negative impact of change
Ø  Change due to cost of reduction was not accepted.
Ø  More effectiveness in the management system.
Ø  Adaptation of cost saving changes to the employee was encouraged.



2.4.1Mckinsey’s Seven S Model of 2001



McKinsey’s Seven S Model


Strength
weakness

Strategy
Customer focus and infrastructure focus
Requirement of more time and budget
Structure
Centralized bureaucratic system with high difficulty
Unclear regulations and roles
System
Unsuccessful to reduce the cost and maximize the efficiency of service due to poor management system
Required more time for decision making and processing
Skill
All the officers and staffs with training and specific skills
Unknown with the modern management and changes.
Style
Leaders are well experienced
Though leaders are bureaucratic, only some of the people are at benefit.
Staff
Faslane had around 7500 working people
More focus on facilities and infrastructures
Shared values
Being committed to provide quality service to the Navy.
Resistance to change along with ethnocentric beliefs.

 




2.4.2Mckinsey’s Seven S Model of 2002 to 2010



McKinsey’s Seven S Model



Strength
weakness

Strategy
         Cost saving along with good quality services.
           Poor quality of services due to cost saving.
Structure
    Hierarchical structure reduced from seven layers to four layers.
           Clear roles and regulations.
           The organization managerial capability may be affected, since the management team is being halved.
System
             Skilled management teams.
           People’s mindset being changed.
           Difficult to handle complaints of customer’s.
           Process changed immediately.
Skill
          Staffs with experience in change.
           Inexperienced with the work of Naval base.
Style
           Leaders experience of change.
           Change process is risk associated in such industry.
Staff
           Staffs high involvement.
        Staffs more emphasis on people than facilities and infrastructures.
           Management reduction may lead to unemployment and it may demotivate staffs to work promptly.
Shared values
  Dedication in reducing of cost without hampering the quality of service.
           Being a private company Babcock Marine may look for more profit which might eventually affect its strategy.

 




2.5Kotter’s 8 step Process for Leading Change


Establishing a sense of urgency
Identifying and realizing the change for the organizational structure helps to examine the market and competitive realities. This helped to create sense of urgency in the organization.
Creating the guiding coalition
It is necessary to maintain guidance coalition since alliances is required the employees were motivated and encouraged to participate in structural change process. The change process which affected the perception of the employee helped to make cost saving strategy possible.
Developing a change vision
Clear vision of cost saving existed in the organization and increased the operational effectiveness by deducting the management structure to 4 layers from 7 layers.in order to achieve the vision both intended and emergent strategy was developed.
Communicating the Vision
Every possible means is used to communicate the new strategy and vision towards change in behavior of the employees and management structure. Communication plays vital role in the change process.
Remove obstacles
The management structure was deducted to 4 layers from 7 layers. Moreover the review process system to 6 days from 56 days. Adding up Babcock motivated in taking risk and non-traditional ideas.
Creating Short- term wins
In order to achieve the Faslane goals the workforce is motivated and encouraged with a plan for visible performance. The re-engineering of the process was done and reduction of management structure levels to short term wins.
Build on the change
In 2002 john Howie was hired by Babcock, for the implementation of credibility to change systems to the structures that don’t fit the visions of Naval Base. Then new theme was introduced with a project to achieve target £76million cost saving with 5 years. The employees who could implement visions were promoted.
Incorporating Changes into the Culture
They cooperated with the new behaviour and corporate goals. Moreover, they developed way to make sure leadership development and success of cost reduction strategy was done even though employees had no plan to cope with the change in the first place.

 2.6 Strategic Leadership Style of Faslane

The difference between the leadership style of the Babcock and the MOD, has been compared by the lynch Model. Before the change was made, up to 2001 Faslane was a transactional style because the main focus of the management was on the completion of the task and their role. But for the Babcock, they implemented the transformational approach.

Lynch’s Leadership Model of Faslane from 2002 to 2010
Developing and communicating the organizations’ purpose
          Visibility and exposure of business performance
    Outputs were actions and employees were arranged around common goals.
Sustaining competitive advantage overtime
   Cost saving and setting financial targets helped to secure the financial stability
         Improvement on the services provided.
Managing human resources and organizational decisions
     Management being re-structured and re-engineered
       Assigning autonomy
           Own change ideas being developed
Setting ethical standards
      To understand customers attitude
       Changing employees mind-set
       Public sectors having improved services at cost saving price
      Discussion done by the trade union of the organization
Defining and delivering to stakeholders.
     Satisfaction gained by the stakeholder by the cost saving
        Partnership with clients and believe in workforce.

In order to, encourage autonomy, the Babcock choose this style of leadership by eliminating the shackles. In order to, re-align the workforce so that the objectives and goals are achieved. Due to the creative nature of transformational leadership it is more effective. With this opportunity, Babcock created an event” even in the tent” in order to motivate the staffs to express themselves and challenge their thoughts relating to the changing process. By doing this event, the Babcock was able to evaluate their workers and handle the HR division and was able to demonstrate the objective and direction of the company to its stakeholders.

Transcendent Leadership Model

The transcendent leaders believe motivation empowers them so they are more concerned about their followers. The leadership consists of these forms: the organization, self and others. Centralization of nonhuman elements such as structure, strategy, rules and procedures is there.
Same as the Lynch Model, it understands the changing external environments, portraying the exact picture to organizational members. Transcendent leadership model contains of
·         Leadership of self: John Howie, the former managing director at Babcock marine being a leader had a clear set vision and objective of cost saving, improvising operational effectiveness and providing quality service to the Navy. 
·         Leadership of others: All the employees at Faslane were given the opportunity to share their views and opinions. They were well aware of the targeted goals and had a chance to participate on the decision making process.
·         Leadership of organization: The organization clearly communicated the requirement of changes in the management to all the employees. They did a whole re-engineering of the management review process and the management structure. Likewise, Faslane continually maintained good relationship with their stakeholders.


Transcendent Leadership Model of Faslane 2002 – 2010

Leadership of Self
·         Howie must work according to the changing environment and continue implementing the complexity of the change.
·         He must he must be aware and conscious about his employees and the difficulty faced by these employees.
·         Voluntary works were good example of moral thinking
·         He must measure the performance and improve the operational efficiency.

Leadership of Organization
·         Leaders must adapt to the management structure to support change by reducing the number of management by half, and removing the layers to encourage organizational flow.
·         Establishment of direction and sense of transparency and incorporating series of financial cost.
·         Explain the changing process to the stakeholders in relation with the transformational change.

Leadership of Others
·         Encouraging and motivating staff to challenge and share their views in the event held, ‘event in the tent’.
·         Creating connection with those companies who have experience the similar changes.
·         Adapting to the change, the employees may fear or opposed to the changing process.
·         The organizational symbol shows the Faslane base and moving the commander to the base.

3. Conclusion

The report has been concluded. Finally Faslane has adapted to the change process accordingly with success. Though changing the mind-set of the people was a hard work but finally it was done. This change leads to achievement of objectives and goals. Introducing the new flexible management style the employee has been motivated and the change in the process has been accepted in a positive way which eventually led to booming success for the Faslane organization.
Faslane operated the Royal Navy and Ministry of Defense before Babcock Marine. The management structure was poor with no new innovative created and due to which the employees were not motivated in doing their work. But somehow in Faslane a change was bought in 2002 with a new operating private company, Babcock Marine. The change that was brought in 2002 made a huge difference and a good impact in the managers managing style and employees working style. Though this change was difficult for the people to adopt to, this change was a positive change.
From the analysis done above, the report concludes to be very knowledgeable, providing information on different types of analytical tools which helped to understand the case study in depth.
Faslane by 2010 became the entire UK submarines fleet including the nuclear submarine.
People are usually used to what is being done at the moment, so a little bit of change can make a lot of difference in an individual’s life. The same thing happened in Faslane’s situation. The people were used to the same process and with the change the people took time to adopt. But as time passed, the people adapted the change. Resulting, Faslane to a booming organization.

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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