1.
Introduction
In the year 2002
Faslane which was previously managed jointly by the MOD and the Royal Navy
decided to partner with Babcock Marine, a private sector company. The main aim
of such partnering agreement was for the purpose of reducing cost and improving
their services. Babcock Marine was given the responsibility to save the cost as
well as to improve their operational effectiveness. They were given a target of
£76 million saving within five years. With a significant change Faslane was
able to achieve the target and was considered best.
In this report, in
order to analyze the change process and impacts of change has been analyzed.
Mainly, Balogun and Hope Hailey’s Change Kaleidoscope and Lewin’s Forcefield
Analysis was conducted in order to measure the impacts of changes. In addition,
Johnson’s Cultural Web and McKinsey’s Seven S Model are used in order to
analyze the internal features of Faslane. In addition research based view and
competency analysis has been conducted.
Further, Lynch Model and strategic
leadership model was used in order to identify the strategic leadership style.
At last conclusion has been given to summarize the report.
2.
Analysis
In the year 2002, the
HM Naval Base Clyde (Faslane) submarine base which was previously managed by
Ministry of Defence (MOD) was transited to Babcock Marine which is a part of
Babcock International. With the transfer
of control and management, it was important for the management team of Babcock
to improve performance as well as to reduce the cost of operation.
2.1 Strategic Change Context of Faslane
in 2002
From the figure 2.1, we
can see that Change Kaleidoscope has been used to analyze the change process in
Faslane. We can clearly observe that change process was revolutionary because
the main objective was to change the mindset of staffs. There was a huge
participation due to participative programs like “the event in the tent”.
New management team was
given the target to deliver £76 million cost saving in five years. Within such
a short period of time it was very difficult to achieve. The management team
required the transfer of skilled employees who has already faced changes. With
such transfers the time for adaption was reduced and Babcock was able to
achieve its goals. In addition, changes started from the low levels which make
it easy to implement. Talking about the scope the way of working as well as the
structure of the management team was totally different. Before the change
process, staffs were only focused to infrastructures and facilities rather than
people. During the change context, new management team emphasized the
importance of inward looking.
During the change period, Babcock
tried to increase the efficiency without affecting the quality of services
being provided. This was done through changing the mindset of people and
bringing in skilled employees in the Faslane. Management announced that
employees will be able to form their own team and prepare plans and maintain
themselves. In other words, they were given flexibility in the work. On the
diversity factor, management teams were diversified and reduced. On the
capability side, staffs were not fully ready for change because of lack of
experience. Previously it was managed by MOD and Royal Navy and they did not
feel the need of change.
The capacity of Faslane was
positive because the budget was fixed. People were highly skilled by which they
can overcome the impact of change. On the other hand, managerial time was less
as it has to deliver £76 million in just five years. The management was ready
for change because of the previous experience and unique skills and
capabilities. On the other hand, employees were not ready for change because
they have never gone through change. They were having fear that change will not
benefit them.
Figure
2.1 Balogun and Hope Hailey’s Change Kaleidoscope of Faslane
From
the figure 2.2 we can observe the Force Field Analysis where there are factors
which are for and against change. On the pull factors, MOD was in the need to
reduce the cost and improve operational efficiency with better quality
services. There was a great support from the top level as well as customer were
expecting better quality services. Due to vision for the future, the change was
essential.
However,
there were resisting factors against changes. The first factor was traditional
ways of thinking and working. Previously they were just making money and
passing time and change would be very difficult for them. In addition, staffs
did not felt to save money. Management structure was also huge by which large amount
of money was being spent. In addition existence of bureaucracy was the main problem in that public
sector organization. Overall, the need for change was very necessary to cut
over spending. Hence, change process was conducted and it was done for improve
the operational efficiency as well as to save money.
Thus,
the change process at Faslane was a revolutionary change strategic as well as
cultural change. According to G. Johnson(2011), “Revolution is change which requires rapid and major strategic but
also culture change”. Here we have seen the change in the mindset of people and
working pattern. So, it was a revolutionary change at Faslane.
Figure
2.2 Lewin’s Force field Analysis of Faslane
2.2 Internal Features of Faslane
From the figure 3.3 and figure 3.4 we can see the Johnson’s Cultural web up to 2001 and from 2002 to 2010 respectively and figure3.5 and figure 3.6 represent the McKinsey’s Seven S Model. If we observe the cultural web of these two different years we can see that positive changes in the management style can really help to succeed any organization. Babcock managed loyalty, commitment and welfare which come from the employees’ side. Infrastructures were seen as the assets before and after people were considered as the most important elements of organization. When the Faslane was managed by MOD and the Royal Navy it was working whether it is bad or good. The management structure was huge and complex. People used to just do their job and creativity and business plans were not considered important. Organizational structure was also huge with seven layers and they were having traditional management and organizational structure. Perception of change as a negative or unimportant factor can also be considered. Although Faslane was customer oriented it was not delivering good services due to time consuming decision making styles. In addition, unclear roles and responsibilities were also obstacles. Late adaption to change was seen from the management to employee level. Leaders were experienced but were bureaucratic so only some people were getting benefit from this. Ethnocentricity behaviors were seen in most of the employees as well as the management level that they know better than others
After Babcock Marine, a private
sector company was given the management the face of Faslane changed. Babcock
was able to transfer or change the mindset of people. Management brought new
employees who have already dealt with changes and used them to successfully
implement the change. The change process
became successful because of the active participation of employees. They were
asked to collaborate and emphasized the importance of change. Now management
became strong and staffs were given the power to choose their own team and make
business plan. Now peoples were considered and they were having common
objectives. With this flexibility there was a low power distance and there were
unique management teams having different skills. In the same time, cost was reduced
by reducing the management structure from 7 to 4. In addition, reduction of
review period from 56 days to 6 days was a significant decisions made by the
management. Reappointment of all jobs and cut off in jobs were also the major
factor which helped the company to achieve its goals year by year.
But on the other hand, reducing the cost
may hamper the quality of services being provided. Management is formal but
individuals can create their own ideas and implement it. However such
flexibility may damage hierarchy of organization and can be a serious
problem.But due to this change process there has been a huge loss of jobs. This
may affect the employees’ performance because of fear.
To sum up with, Faslane has gone through
change process and it has totally changed its management as well as
organizational structure. It has been able to achieve organizational goods
within time limits. So, change is in favor of Faslane.
Figure
2.3 Johnson’s Cultural Web (up to 2001)
Figure.
2.4 Johnson’s Cultural Web (2002-2010)
Figure
2.5 McKinsey’s Seven S Model (up to 2001)
McKinsey’s Seven S Model
|
||
SEVEN
|
STRENGTH
|
WEAKNESS
|
HARD ELEMENTS
|
||
STRATEGY
|
Progressive and customer oriented.
|
Time
consuming in decision making.
|
STRUCTURE
|
Clear chain of command
|
Unclear roles and responsibilities.
|
SYSTEM
|
Good
management and improvement in manpower.
|
Problems
in handling customer complaints and late adaption to change.
|
SOFT ELEMENTS
|
||
SKILLS
|
As
most of the staffs are civil servants they are experienced.
|
Unfamiliar
with modern management styles and change process.
|
STYLE
|
Leaders
are experienced.
|
Leaders
are bureaucratic but only some people will be benefited.
|
STAFF
|
Over
1700 civil service staffs were engaged in Faslane.
|
Not
ready for change. Focused more on infrastructure and facilities than people.
|
SHARED
VALUES
|
Commitment
to provide quality services to Navy.
|
Ethnocentricity
beliefs and resistance to change.
|
Figure
2.6 McKinsey’s Seven S Model (2002-2010)
McKinsey’s Seven S Model
|
||
SEVEN
|
STRENGTH
|
WEAKNESS
|
HARD ELEMENTS
|
||
STRATEGY
|
Cost saving and good quality services.
|
Cost
saving may lead to poor quality of services.
|
STRUCTURE
|
Structure is formal but each individual are able to
form team and can present business plans.
Clear roles and responsibilities.
Layers of management reduced to 4 from 7.
|
Excessive freedom may damage the hierarchy of the
organization.
Can arise serious problems.
|
SYSTEM
|
Expert
management teams.
Change
the mindset of people.
|
Problems
in handling customer complaints.
Immediate
change process.
|
SOFT ELEMENTS
|
||
SKILLS
|
Most
of the staffs have experience of change.
|
Unfamiliar
with the operation of naval base.
|
STYLE
|
Leaders
are experienced with change process.
|
There are risks associated with the change process in
such industry.
|
STAFF
|
Over
2000 civil service staffs were engaged in Faslane.
Staffs
are focused more on people than infrastructure and facilities.
More
involvement of staffs..
|
Reducing the management layers means loss of job and it
may not motivate staffs to work effectively.
|
SHARED
VALUES
|
Commitment
to reduce cost without damaging the quality of services.
|
As a
private company, Babcock Marine may seek
more
profit which may hamper the its strategy.
|
In addition, to provide clear picture of Faslane I
have conducted Resource based view analysis and competence analysis.
Figure
2.7 Resource Based View of Faslane (2002-2010)
Resource based
View (VRIN) at Faslane
|
||
Before 2001
|
After 2002
|
|
Valuable
|
Buildings,
infrastructures and facilities were valuable.
Resources
could be easily copied.
|
Human
resources, flexibility and achieving goals are more valuable.
Resources
are hard to copy such as management skills and change management.
|
Rare
|
Lack
of rarity in human skills.
|
Employees
were brought who already faced changes.
Heterogeneous
management skills.
|
Inimitable
|
Lack
of inimitable resources
|
Unique
management skills.
Knowledge
about change and adaption.
|
Non-substitutable
|
Infrastructures and facilities were
non-substitutable because the organization was a Naval based industry.
|
Employees
were substituted by Babcok with skilled human resources.
Human
resources and infrastructure are non-substitutable.
|
Figure
2.8 Competence Analysis of Faslane (2002-2010)
Competence
Analysis
|
||
Up to 2001
|
After 2002
|
|
Physical resources (Tangible)
|
Infrastructures
and facilities were seen more important.
|
After
the reconstruction, improvement in the infrastructure.
Capacity
has increased.
|
Financial resources (Tangible)
|
Government
budget (taxpayer’s money)
Over
spending
|
Government
budget.
Able
to minimize spending.
|
Human resources (Tangible)
|
Knowledge
about running naval base.
|
Expert
of change management.
Heterogeneous
management skills.
|
Intellectual capital (Intangible)
|
Buildings
and infrastructures.
Stakeholder
relationship.
|
Unique
management and organizational structure.
Home
base for entire UK submarines fleet.
|
2.3 Strategic Leadership Style at
Faslane
From 2002 to
2006 the Babcock marine managing Director was John Howie and from 2006 the
Managing Director was Craig Lockhart. From the period 2002 there has been a
significant change process. The main aim of giving away the management to
Babcock was because it was more competitive, different targets, experienced
management skills which are totally different from that of service sector.With
the help of figure 2.9 we can compare the organization against the Five
Elements of Successful and Effective Strategic Model. Further, figure 2.10
represents Transcendent Leadership at Faslane (2002-2010).and figure 2.11
represents Figure 2.11 Strategic Leadership at Faslane (2002-2010).
In
this section, let’s examine each elements of successful and effective strategic
leadership model.
·
Developing
and communicating the organizations’ purpose:
According
to this element the first and basic task of leader is to decide on the purpose
of the organization and then communicate it each and every part of the
organization. Management of Faslane allowed employees to make their own teams
and come up with unique business plans. In addition they encouraged and
motivated their employees with open discussion by organizing several events
like “the event in the tent.
For
example, employees were given clear instruction to help the management team
towards saving cost and improving quality of service.
On
the other hand, most of the employees lost their job because of the change
process. The reduction of management structure layer to level 4 and reduction
of 400 full time posts has discouraged employees to work efficiently.
·
Sustaining
Competitive Advantage over time
Another
factor that is important is sustainable competitive advantage over time.
Leaders and managers are considered to be responsible for maintaining as well
as preserving organizational competitive advantage. In the case of Faslane,
management team was able to £100 million in five years. This saving is a great
competitive advantage of management team. In addition, small and unique teams
and quick decision making are the competitive advantage of people. Further,
Babcock employed those people who have already faced change process. The best
evidence is that Babcock being private company has been successful in
transferring culture of private organization to publically owned organization. With
this competitive advantage, Faslane is expected to become home base for the
entire UK submarines fleet.
On
the other hand, such competitive advantage may not sustain for a long time.
Babcock being private company can withdraw its management team anytime. And if
that happens then MOD may not be able to sustain competitive advantage.
·
Managing
human resources & organizational decisions
Leaders
are the most important person for managing, motivating, and developing key
talents and skills of employees.
Babcock
was able to manage human resource by reducing cost with the help of cutting off
the jobs. The management team also reduced the number of review period from 56
days to 6 days which saved a lot of time as well as money.
On
the other hand, due to the fear of losing job employees were not motivated to
work. Additionally, more training means more cost which may impact the main
goal of the organization.
·
Setting
ethical standards
According
to Lynch model, leaders are responsible for setting and monitoring ethical
standards and corporate social responsibility (CSR) of the organization. In the
case of Faselane, the MOD made a five years contract with Babcock in order to
minimize the spending by restructuring the organization. As it will be
unethical to spend tax payers’ money it has maintained the standard of ethics.
In addition, the management team was able to convince employs that they are for
developing them.
On
the contrary, Faslane corporate social responsibility may increase the budget
and may hamper the objectives of the organization.
·
Defining
and delivering to Stakeholders
According to Lynch
Model, leaders need to maintain good relation with stakeholder inside and
outside the organization. Faslane was able to deliver the best quality
services. To the Navy, the service was better than before. For MOD, Babcock was
able to meet the target by which it has satisfied both the stakeholders.
On the other hand, due to the numerous
job losses it was not able to satisfy its employees.
Hence, it can be said that they have
used the Lynch Model properly and Faselane was very successful by utilizing all
its resources to achieve its goals and objectives that is cost saving. It has
been found that with its good performance, it was able to meet its target and
was able to manage the entire UK submarines fleet.
Figure
2.9Five Elements of Successful and Effective Strategic Leadership Model
 |
Sources:
Lynch, R., (2009) Strategic Management, 5th Edition, Prentice Hall, chapter 16,
pp619
|
Due to the huge spending Faslane
was seeking for strategy that might help to save cost. At that time, Faslane
signed a contract with Babcock Marine to meet the target of £76 million with
improvement in the services. Babcock adopted emergent strategy by changing the
organizational as well as management pattern of the organization. This was
mainly achieved through accumulated experience and heterogeneous management
skills. Hence, emergent strategy also needs a lot of planning and experience.
With the implementation of such strategies, management was able to change the
mindset of employees, change the management and organizational structure and
was able to meet the target easily. I think the strategic leadership at Faslane
comes under level 3: Competent Manager. The two leaders were able to manage
people and bring people from outside who already faced such change situation.
They were able to meet their target and utilized maximum resources of the
organization.
Figure 2.10 Transcendent Leadership
at Faslane (2002-2010)
Figure 2.11 Strategic Leadership at
Faslane (2002-2010)
Strategic
Leadership
|
|
Six Skills
|
From 2002 to 2010
|
Anticipate
|
Leaders were constantly seeking for
change mainly changing behavior of people and management structure.
|
Challenge
|
Set and exceed big targets.
Management of entire UK submarines
fleet.
|
Interpret
|
As the management has already faced
changes, the accumulated experience might help them to interpret strategies.
|
Decide
|
Target was met
before the deadline.
Short term
goals such as meeting targets was achieved and long term goals like changing
the management and organizational structure was also achieved.
|
Align
|
Flexible environment motivates
employees to share their plans.
Employment opportunities to local
people as a trust building activity.
|
Learn
|
Leaders of Faslane have got
accumulated experience for change management.
With their experience, leaders were
able to successfully implement change.
|
3
Conclusions
From the above
analysis, it has been clear that Faslane has been successful in implementing
change process. With the change in the mindset of people it has been able to
perform well as well as meeting its goals and objectives. Allowing freedom and
flexibility to the staffs has helped to transform Faslane into a successful
organization. It has been an evolutionary transformation because a public
sector organization was managed by private sector.
It
has been seen that there were some negative aspects that were restricting the
change process in Faslane but management was strong and experienced. Hence,
change process was conducted with the help of employees.
When
the internal features were compared then it was clear that previously when
Faslane was managed by the MOD and the Royal Navy there was no proper services and
management structure was unnecessarily huge. There was no creativity. Employees
were just following the routines. But after 2002, employees were given a chance
to explore themselves. Babcock has made it clear that the most important assets
of an organization are human capital. Further, it was having clear roles and
responsibilities and management structure was also reduced. With this change
process, the cost burden of the organization was reduced.
Faslane
has been able to comply with all the five elements of Successful and effective
strategic leadership. It was able to communicate organization’s purpose to all
the stakeholders. It was also successful in maintaining ethical standard as
well as managing human resources. With its good performance, it was able to
meet its target and was able to manage the entire UK submarines fleet.
At last, Faslane
has been able to perform well because of its unique management styles and
adaption of change process. Rather than cutting the job of employees of
Faslane, the management can provide job opportunities in other sector so that
it will motivate employees toward achieving organizational goals and
objectives.
4
References
F. Ostroff, ‘Change management in government’, Harvard Business Review, vol. 84, no. 5 (May 2006), pp. 141–147.
G. Johnson and K. Scholes (eds), Exploring Techniques of Analysis and Evaluation inStrategic Management, Prentice Hall, 1998.
J. Balogun, ‘Managing change: steering a course between intended strategies and unanticipated outcomes’, Long Range Planning, vol. 39 (2006), pp. 29–49.
J. Balogun and V. Hope Hailey, Exploring Strategic Change, 3rd edition, Prentice Hall, 2009.
Johnson, G. Whittington, R. & Scholes. K. (2011) „Exploring Strategy‟, 9thedition, Prentice Hall.
J. Kotter, ‘What leaders really do’, Harvard Business Review, December (2001), pp. 85–96.
Lynch, R., (2009) Strategic Management, 5th Edition, Prentice Hall, chapter 16.
Schoemaker. P., Krupp, S., and Howland, S. (2013) Strategic Leadership: The Essential Skills, Harvard Business Review, January-February, pp131-134.
F. Ostroff, ‘Change management in government’, Harvard Business Review, vol. 84, no. 5 (May 2006), pp. 141–147.
G. Johnson and K. Scholes (eds), Exploring Techniques of Analysis and Evaluation inStrategic Management, Prentice Hall, 1998.
J. Balogun, ‘Managing change: steering a course between intended strategies and unanticipated outcomes’, Long Range Planning, vol. 39 (2006), pp. 29–49.
J. Balogun and V. Hope Hailey, Exploring Strategic Change, 3rd edition, Prentice Hall, 2009.
Johnson, G. Whittington, R. & Scholes. K. (2011) „Exploring Strategy‟, 9thedition, Prentice Hall.
J. Kotter, ‘What leaders really do’, Harvard Business Review, December (2001), pp. 85–96.
Lynch, R., (2009) Strategic Management, 5th Edition, Prentice Hall, chapter 16.
Schoemaker. P., Krupp, S., and Howland, S. (2013) Strategic Leadership: The Essential Skills, Harvard Business Review, January-February, pp131-134.
Babcock International Group PLC (2009),
Interim Management Statement Feb 2009.
Available at:
