Managing change at Faslane:
the Report
1.
Introduction:
Her Majesty’s Naval Base Clyde – commonly known
throughout the Navy as Faslane – is the Royal Navy’s main presence in Scotland.
It is home to the core of the Submarine Service, including the nation’s nuclear
deterrent, and the new generation of hunter-killer submarines. It is the
ministry of defence (MOD) installation, but managed by private sector Babcock
Marine, part of Babcock International. By 2000 MOD decided to reduce the cost and
improve the operational effectiveness, in 2002 they signed a contract with
Babcock for 5 years to reduce the cost by at least £76 million, and it
was able to achieve the target in the allotted time.
This report has been
prepared as per the academic requirements for the Module: Strategy Choices and
Impact, there is a brief discussion and analysis of various aspects of
strategic change that occurred in the Faslane. In this report Balogun and Hope
Hailey’s Change Kaleidoscope and
Lewin’s Forcefield analysis was conducted in order to analyse the internal
feature of Faslane also Johnson’s
Cultural web and McKinsey’s 7S model. In other to analyze
the internal features of Faslane some analytical tools were used to measure the
changesuch as Mc Kinsey‘s 7S Model and Johnson’s Cultural Web; and
to recognize the strategic
leadership style was compared with Lynch model, and at the end the final conclusion is made to summarize the report.
2.
Analysis:
The MOD decided to agree
on the partnering agreement with
the Babcock international so the marine
which was managed by the MOD earlier was
now managed by Babcock international, this transissation was very important for Babcock international
because it could improve its level of performance by reducing the cost of operation.
2.1.
Strategic Change:
If I have to analyse the strategic change that the faslane has applied then I would say it
has definitely applied the Change of
Kaleidoscope to examine the process of change in Faslane. The process of change has been the
revolutionary one because the main purpose was to revolutionize the way of
thinking of their workforce. The new management team Babcock international was handed
over the responsibility of reducing the operating cost of £76 million in the
time period of five years which was definitely not an easy nut to crack. So the
idea of transfer of the skill of the staff was applied as the MOD provided them with
people who knew how to run a
naval base. It was only the matter of managing the skills of the staffs
in a better way. The transfer was amongst the staffs who had already faced the
change before as well so there was less time consumption in the settlement of
the staffs and for them to adapt to the change that was made initially, from
level zero which made it easier for the implementation. Not only the staff were
changed the management structure as a whole was changed keeping in
mind the risk factor as well after
all it was a nuclear naval base. During the revolutionize framework of
change, the new management team emphasize the importance of inward looking. In the meantime the Babcock international was
mainly focused on the increasing the efficiency of the staffs without its
affect on the quality of service that had been provided, and it was possible by
bringing in skilled workers in the company to work for Faslane. The management
came up with an emergent strategy of letting the employees make their own team, prepare work plans accordingly, work towards fulfilling the goals basically
it made it more flexible to work in the self created working environment, the
management team not only made the working
environment flexible but was
reduced and diversified as well, but work
wise, the staffs were not really adapting to the changes made due to
lack of experience.
The concept was a positive one because the budget was fixed,
the people were highly skilled by which they could overcome the change. On the other
hand, the management had just limited time and had to give the result of £76
million within the same period, and the management team was definitely ready
for the challenge as it had the skills and also had a good track record in the
past and was definitely capable for the management. Whereas the staffs were not really in the
situation to accept the change because they
were not really used to it as it
had never happened before and they
were in dilemma if the change would benefit them or not.
.
Figure 1.1 Balogun and Hope Hailey’s Change
Kaleidoscope of Faslane.
Kurt
Lewin developed the ‘’Five field
analysis’’ in 1951, and it is used in identifying and analyzing the positive factors of a
situation that helps identifying the
negative factors that hinder an
entity in achieving its objectives. In figure 1.1
I have used the force field analysis to analyze the factors that are for
and against the change which can be seen
in the table below, and for other factors as well, the Ministry Of
Defence (MOD) of was in a desperate need of saving in other words reducing the
cost as well as improve the service as
well. So the change had to start from somewhere so the top level decided
in providing quality service as expected by the customers, there was also the
transfer of the employees within the organization as the vision for sustainable
development. It also have a brief
analysis of other resisting factors as
well such as the impact of the change occurred
and not being sure if it was beneficial for all the individuals individually. The
people working in Faslane was used to the old of working and they were feeling
difficult in working in the new situation or the changed environment, but that
was more helpful for them which brought them out from the monotonous way of
working. Next problem was the bureaucracy that was existing in the
organization. All the above mentioned
factors shows that it was very important
for Faslane to go through certain change
an work differently in order to increase the efficiency and also save money. The change can be regarded as a revolutionary
one as it was both strategic as well as a cultural one.
FORCE
FIELD ANALYSIS
(Table 1.1) Lewin’s Force field Analysis of Faslane
Positive Forces
|
Negative Forces
|
§ It requires cost saving
|
§ It fears from the impact of the
change.
|
§ Improvement in the operational efficiency
|
§ Old management structure
|
§ New ways of working
|
§ Traditional way of working
|
§ Customer expectation
|
§ Focused on cost reduction
|
§ Diversity growth
|
§ Political intervention
|
§ Unsustainable cost
|
§ Slow to change
|
2.2 Internal Features of
Faslane:
The
partnership agreement of MOD with
Babcock, did manage to grab the employees attention and made them believe the change was good and in return
the employees gave them their commitment and loyalty for the succession and welfare of the organization. The change
gives a brief idea about the human assets being the most important asset in the
organization. Babcock also changed the management structure of the company and helped
in eradicating bureaucracy. There was no new plans formulated to change the way
of working, they were following the same way of working, the same way of decision
making, no creativity, just following the traditional way of working. They had the misconception that change was not
at all necessary and change would ruin everything. So they were saying NO to
change.
Then,
entered Babcock international and took over the management from MOD for 5 years
time with a hope to cut down the cost
and give back some profit to the organization. The first step it took was to
change the structure of the organization, brought in experienced
staffs, made the staffs familiar to the change and helped them adapt to
the change, active participation of employees in the work decision making all these successful implementation
helped the organization grow and helped in making some profit for the organization.
Now, people were considered the most important assets in the company rather
than the infrastructure. Now the organization was more diversified with more
experienced and qualified workforce with better management and working with
unique set of skills. The management also reduced the review day from 56 days
too only 6 Days that was a huge cut of 50 days and we can imagine the cost
reduction as well, which was definitely helping in the five year target
achievement of Babcock. The staffs were given full freedom to make their own work
plans and also implement them which was making working more fun and people were
coming up with more creativity. But it also had a drawback because of the decreased layers of management, which resulted in the significant cut off of
jobs that might have put
pressure on the employees to perform or they might be kicked out of the
company if they performed poorly.
In
conclusion, Faslane completely changed the organizational structure of the
company and made people realise that change is necessary and change is good. And
it was the change that helped in achieving the organizational goal within the
given time limit of 5 years.
Figure 1.2 Johnson's Cultural Web.
Figure 1.3 Johnson's Cultural web (2002-2010)
Table 1.2 McKinsey’s Seven S Model
SEVEN S
|
STRENGTH
|
WEAKNESS
|
|
HARD ELEMENTS
|
|||
STRATEGY
|
Ü Improved performance, good quality services with cost savings.
|
Ü Quality of service could decrease through cost savings.
|
|
STRUCTURE
|
Ü Formal structure: provides the staffs with flexibility to create their
own team and develop own business plans.
Ü Roles and responsibilities were clear.
Ü Reduction of management layers from 7 to 4.
|
Ü The hierarchy of the organization can be managed by providing
excessive freedom to the staffs and can result in serious problems.
|
|
SYSTEM
|
Ü Changed the traditional mindset of people.
Ü Expert team of management.
|
Ü Problems were arising in handling complaints from customers.
Ü Immediate change process.
|
|
SOFT ELEMENTS
|
|||
SKILLS
|
Ü Workforce at MOD was experienced in operating the Naval Base.
Ü Experience of change (most of the staffs).
|
Ü Workforce from Bobcock Marine were unfamiliar with the operation of
Naval Base.
|
|
STYLE
|
Ü Leaders have experience of change process.
|
Ü Such industries carries a potential for risks associated with change
process.
|
|
STAFF
|
Ü More than 2000 staffs from Civil service working with Faslane.
Ü More focus on people rather than infrastructure and facilities by the
staffs.
|
Ü Loss of jobs arises after reducing the management layers and this is
not a motivating factor for the staffs.
|
|
SHARED VALUES
|
Ü Committed to reduce cost while not damaging the quality of services.
|
Ü The strategy of the organization can be hampered because Bobcock is a
private company which will seek more profits as the time goes.
|
|
2.3 Strategic Leadership
style at Faslane:
In
2002, came a new managing director of Babcock Marine, it was Craig Lockhart who
replaced John Howie, that was when Faslane saw significant change from 2002.
The two companies were completely different from each other. Babcock was a private company, with more
skilled resources and a goal oriented organization mostly focused in target
achievement and achieving the competitive advantage.
Figure 1.4
Below are the elements
of successful and effective strategic leadership:
·
Developing and communicating the
organizations purpose:
This element states the ultimate job of
the leader is to make decision on the ultimate purpose of the company or
organization itself and after the decision is finalised he has to make sure
that it is circulated amongst all the staffs working in the organization. In Faslane
also the employees were given full authority to make teams make team plans and
work toward the attainment of the perceived goals.
But if we think from the other side,
many employees had to lose their jobs because of the reduction of the
management structure.
·
Sustaining
competitive advantage overtime:
This one
states that the leader of the organization is responsible for gaining the
competitive advantage for the organization or maintaining them for ultimate goal
achievement of the company. In the case study it is stated that the company was
able to gain almost £100 million in just five years and this was possible
because of proper management and goal focused mission and vision. With this capability and ability to bring
change in short span of time Faslane is expected to become home base for the
entire UK submarine fleet.
On the
other hand such competitive advantage may not sustain for a very long time.
·
Managing
Human resource and organizational
division:
This
element states that the managers are the ultimate leaders of the company who
are responsible for managing, planning, organizing, motivating, training and
development of the employees in the organization. That is what Babcock did it
cut down the cost of the company by cutting down the jobs and cutting down the
review period as well.
On
the contrary, it might create wrong impact on the employees of the company
because they will be pressurised in working and also fear of losing the job and
might not be able to perform.
·
Setting
Ethical Standards:
If we
consider the Lynch model, it states that the leader is responsible for
maintaining the standards, setting the rules and goals and monitoring the corporate
social Responsibility. In the Faslane
case study a contract was made between two parties for five years to minimize
the cost of the organization. If the
contract was not fulfilled than that would have been ethically incorrect.
·
Defining
and delivering to stake holders:
The
Lynch model also states that the leaders must maintain good relationship with
the employees within the organization and with the stakeholders outside the
organization. Faslane was able to deliver best quality services after Babcock
came into the picture, as it made Faslane meet all its targets and by doing
that it was able to satisfy the stakeholders as well.
Conclusion:
After
going through the case study and finishing my analysis on Faslane, it is clear
that working while following all the strategically rule is not an easy job
because after the analysis I have realised that though it may seem like an easy
job and task to follow but to come with a successful end result is not an easy job.
Faslane being a public company was successfully managed by a private firm, not
only managed well but helped in getting perfect results. The end results have
been just perfect. Babcock successfully conducted the transformation with the help
of skilled employees, proper management, and proper use of resources. Faslane
was able to fulfil all the five elements
of successful and effective strategic
leadership, from good flow of
communication, effective strategy, proper leadership etc, after the successful result
of Faslane was given the entire UK submarine fleet to handle.
Managing change at Faslane:
the Report
1.
Introduction:
Her Majesty’s Naval Base Clyde – commonly known
throughout the Navy as Faslane – is the Royal Navy’s main presence in Scotland.
It is home to the core of the Submarine Service, including the nation’s nuclear
deterrent, and the new generation of hunter-killer submarines. It is the
ministry of defence (MOD) installation, but managed by private sector Babcock
Marine, part of Babcock International. By 2000 MOD decided to reduce the cost and
improve the operational effectiveness, in 2002 they signed a contract with
Babcock for 5 years to reduce the cost by at least £76 million, and it
was able to achieve the target in the allotted time.
This report has been
prepared as per the academic requirements for the Module: Strategy Choices and
Impact, there is a brief discussion and analysis of various aspects of
strategic change that occurred in the Faslane. In this report Balogun and Hope
Hailey’s Change Kaleidoscope and
Lewin’s Forcefield analysis was conducted in order to analyse the internal
feature of Faslane also Johnson’s
Cultural web and McKinsey’s 7S model. In other to analyze
the internal features of Faslane some analytical tools were used to measure the
changesuch as Mc Kinsey‘s 7S Model and Johnson’s Cultural Web; and
to recognize the strategic
leadership style was compared with Lynch model, and at the end the final conclusion is made to summarize the report.
2.
Analysis:
The MOD decided to agree
on the partnering agreement with
the Babcock international so the marine
which was managed by the MOD earlier was
now managed by Babcock international, this transissation was very important for Babcock international
because it could improve its level of performance by reducing the cost of operation.
2.1.
Strategic Change:
If I have to analyse the strategic change that the faslane has applied then I would say it
has definitely applied the Change of
Kaleidoscope to examine the process of change in Faslane. The process of change has been the
revolutionary one because the main purpose was to revolutionize the way of
thinking of their workforce. The new management team Babcock international was handed
over the responsibility of reducing the operating cost of £76 million in the
time period of five years which was definitely not an easy nut to crack. So the
idea of transfer of the skill of the staff was applied as the MOD provided them with
people who knew how to run a
naval base. It was only the matter of managing the skills of the staffs
in a better way. The transfer was amongst the staffs who had already faced the
change before as well so there was less time consumption in the settlement of
the staffs and for them to adapt to the change that was made initially, from
level zero which made it easier for the implementation. Not only the staff were
changed the management structure as a whole was changed keeping in
mind the risk factor as well after
all it was a nuclear naval base. During the revolutionize framework of
change, the new management team emphasize the importance of inward looking. In the meantime the Babcock international was
mainly focused on the increasing the efficiency of the staffs without its
affect on the quality of service that had been provided, and it was possible by
bringing in skilled workers in the company to work for Faslane. The management
came up with an emergent strategy of letting the employees make their own team, prepare work plans accordingly, work towards fulfilling the goals basically
it made it more flexible to work in the self created working environment, the
management team not only made the working
environment flexible but was
reduced and diversified as well, but work
wise, the staffs were not really adapting to the changes made due to
lack of experience.
The concept was a positive one because the budget was fixed,
the people were highly skilled by which they could overcome the change. On the other
hand, the management had just limited time and had to give the result of £76
million within the same period, and the management team was definitely ready
for the challenge as it had the skills and also had a good track record in the
past and was definitely capable for the management. Whereas the staffs were not really in the
situation to accept the change because they
were not really used to it as it
had never happened before and they
were in dilemma if the change would benefit them or not.
.
Figure 1.1 Balogun and Hope Hailey’s Change
Kaleidoscope of Faslane.
Kurt
Lewin developed the ‘’Five field
analysis’’ in 1951, and it is used in identifying and analyzing the positive factors of a
situation that helps identifying the
negative factors that hinder an
entity in achieving its objectives. In figure 1.1
I have used the force field analysis to analyze the factors that are for
and against the change which can be seen
in the table below, and for other factors as well, the Ministry Of
Defence (MOD) of was in a desperate need of saving in other words reducing the
cost as well as improve the service as
well. So the change had to start from somewhere so the top level decided
in providing quality service as expected by the customers, there was also the
transfer of the employees within the organization as the vision for sustainable
development. It also have a brief
analysis of other resisting factors as
well such as the impact of the change occurred
and not being sure if it was beneficial for all the individuals individually. The
people working in Faslane was used to the old of working and they were feeling
difficult in working in the new situation or the changed environment, but that
was more helpful for them which brought them out from the monotonous way of
working. Next problem was the bureaucracy that was existing in the
organization. All the above mentioned
factors shows that it was very important
for Faslane to go through certain change
an work differently in order to increase the efficiency and also save money. The change can be regarded as a revolutionary
one as it was both strategic as well as a cultural one.
FORCE
FIELD ANALYSIS
(Table 1.1) Lewin’s Force field Analysis of Faslane
Positive Forces
|
Negative Forces
|
§ It requires cost saving
|
§ It fears from the impact of the
change.
|
§ Improvement in the operational efficiency
|
§ Old management structure
|
§ New ways of working
|
§ Traditional way of working
|
§ Customer expectation
|
§ Focused on cost reduction
|
§ Diversity growth
|
§ Political intervention
|
§ Unsustainable cost
|
§ Slow to change
|
2.2 Internal Features of
Faslane:
The
partnership agreement of MOD with
Babcock, did manage to grab the employees attention and made them believe the change was good and in return
the employees gave them their commitment and loyalty for the succession and welfare of the organization. The change
gives a brief idea about the human assets being the most important asset in the
organization. Babcock also changed the management structure of the company and helped
in eradicating bureaucracy. There was no new plans formulated to change the way
of working, they were following the same way of working, the same way of decision
making, no creativity, just following the traditional way of working. They had the misconception that change was not
at all necessary and change would ruin everything. So they were saying NO to
change.
Then,
entered Babcock international and took over the management from MOD for 5 years
time with a hope to cut down the cost
and give back some profit to the organization. The first step it took was to
change the structure of the organization, brought in experienced
staffs, made the staffs familiar to the change and helped them adapt to
the change, active participation of employees in the work decision making all these successful implementation
helped the organization grow and helped in making some profit for the organization.
Now, people were considered the most important assets in the company rather
than the infrastructure. Now the organization was more diversified with more
experienced and qualified workforce with better management and working with
unique set of skills. The management also reduced the review day from 56 days
too only 6 Days that was a huge cut of 50 days and we can imagine the cost
reduction as well, which was definitely helping in the five year target
achievement of Babcock. The staffs were given full freedom to make their own work
plans and also implement them which was making working more fun and people were
coming up with more creativity. But it also had a drawback because of the decreased layers of management, which resulted in the significant cut off of
jobs that might have put
pressure on the employees to perform or they might be kicked out of the
company if they performed poorly.
In
conclusion, Faslane completely changed the organizational structure of the
company and made people realise that change is necessary and change is good. And
it was the change that helped in achieving the organizational goal within the
given time limit of 5 years.
Figure 1.2 Johnson's Cultural Web.
Figure 1.3 Johnson's Cultural web (2002-2010)
Table 1.2 McKinsey’s Seven S Model
SEVEN S
|
STRENGTH
|
WEAKNESS
|
|
HARD ELEMENTS
|
|||
STRATEGY
|
Ü Improved performance, good quality services with cost savings.
|
Ü Quality of service could decrease through cost savings.
|
|
STRUCTURE
|
Ü Formal structure: provides the staffs with flexibility to create their
own team and develop own business plans.
Ü Roles and responsibilities were clear.
Ü Reduction of management layers from 7 to 4.
|
Ü The hierarchy of the organization can be managed by providing
excessive freedom to the staffs and can result in serious problems.
|
|
SYSTEM
|
Ü Changed the traditional mindset of people.
Ü Expert team of management.
|
Ü Problems were arising in handling complaints from customers.
Ü Immediate change process.
|
|
SOFT ELEMENTS
|
|||
SKILLS
|
Ü Workforce at MOD was experienced in operating the Naval Base.
Ü Experience of change (most of the staffs).
|
Ü Workforce from Bobcock Marine were unfamiliar with the operation of
Naval Base.
|
|
STYLE
|
Ü Leaders have experience of change process.
|
Ü Such industries carries a potential for risks associated with change
process.
|
|
STAFF
|
Ü More than 2000 staffs from Civil service working with Faslane.
Ü More focus on people rather than infrastructure and facilities by the
staffs.
|
Ü Loss of jobs arises after reducing the management layers and this is
not a motivating factor for the staffs.
|
|
SHARED VALUES
|
Ü Committed to reduce cost while not damaging the quality of services.
|
Ü The strategy of the organization can be hampered because Bobcock is a
private company which will seek more profits as the time goes.
|
|
2.3 Strategic Leadership
style at Faslane:
In
2002, came a new managing director of Babcock Marine, it was Craig Lockhart who
replaced John Howie, that was when Faslane saw significant change from 2002.
The two companies were completely different from each other. Babcock was a private company, with more
skilled resources and a goal oriented organization mostly focused in target
achievement and achieving the competitive advantage.
Figure 1.4
Below are the elements
of successful and effective strategic leadership:
·
Developing and communicating the
organizations purpose:
This element states the ultimate job of
the leader is to make decision on the ultimate purpose of the company or
organization itself and after the decision is finalised he has to make sure
that it is circulated amongst all the staffs working in the organization. In Faslane
also the employees were given full authority to make teams make team plans and
work toward the attainment of the perceived goals.
But if we think from the other side,
many employees had to lose their jobs because of the reduction of the
management structure.
·
Sustaining
competitive advantage overtime:
This one
states that the leader of the organization is responsible for gaining the
competitive advantage for the organization or maintaining them for ultimate goal
achievement of the company. In the case study it is stated that the company was
able to gain almost £100 million in just five years and this was possible
because of proper management and goal focused mission and vision. With this capability and ability to bring
change in short span of time Faslane is expected to become home base for the
entire UK submarine fleet.
On the
other hand such competitive advantage may not sustain for a very long time.
·
Managing
Human resource and organizational
division:
This
element states that the managers are the ultimate leaders of the company who
are responsible for managing, planning, organizing, motivating, training and
development of the employees in the organization. That is what Babcock did it
cut down the cost of the company by cutting down the jobs and cutting down the
review period as well.
On
the contrary, it might create wrong impact on the employees of the company
because they will be pressurised in working and also fear of losing the job and
might not be able to perform.
·
Setting
Ethical Standards:
If we
consider the Lynch model, it states that the leader is responsible for
maintaining the standards, setting the rules and goals and monitoring the corporate
social Responsibility. In the Faslane
case study a contract was made between two parties for five years to minimize
the cost of the organization. If the
contract was not fulfilled than that would have been ethically incorrect.
·
Defining
and delivering to stake holders:
The
Lynch model also states that the leaders must maintain good relationship with
the employees within the organization and with the stakeholders outside the
organization. Faslane was able to deliver best quality services after Babcock
came into the picture, as it made Faslane meet all its targets and by doing
that it was able to satisfy the stakeholders as well.
Conclusion:
After
going through the case study and finishing my analysis on Faslane, it is clear
that working while following all the strategically rule is not an easy job
because after the analysis I have realised that though it may seem like an easy
job and task to follow but to come with a successful end result is not an easy job.
Faslane being a public company was successfully managed by a private firm, not
only managed well but helped in getting perfect results. The end results have
been just perfect. Babcock successfully conducted the transformation with the help
of skilled employees, proper management, and proper use of resources. Faslane
was able to fulfil all the five elements
of successful and effective strategic
leadership, from good flow of
communication, effective strategy, proper leadership etc, after the successful result
of Faslane was given the entire UK submarine fleet to handle.
References:
· Johnson, G. Whittington, R. & Scholes. K. (2011) „Exploring
Strategy‟, 9thedition, Prentice Hall.
· Babcock International Group PLC (2009), Interim
Management Statement Feb 2009. Available at: [Accessed on 14th May 2013]
· Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition,
Pearson Education, Chapter 14
· J. Balogun and V. Hope Hailey, Exploring
Strategic Change, 3rd edition, Prentice Hall, 2009
References:
· Johnson, G. Whittington, R. & Scholes. K. (2011) „Exploring
Strategy‟, 9thedition, Prentice Hall.
· Babcock International Group PLC (2009), Interim
Management Statement Feb 2009. Available at: [Accessed on 14th May 2013]
· Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition,
Pearson Education, Chapter 14
· J. Balogun and V. Hope Hailey, Exploring
Strategic Change, 3rd edition, Prentice Hall, 2009