Acknowledgement
I sincerely
acknowledge with thanks to Islington College, Kathmandu for providing me an
excellent opportunity to work out in project.
I would like
to express my sincere gratitude to my lecturer Dr. Guru Tej for his vital
support and encouragement, his assistance and understanding, for his constant
support and motivation for all his assistance.
Finally I
would like to thank my batch mates for their kind cooperation and assistance.
Sincerely
Yours
Anil Shahi
Thakuri
12064995
BBA 3rd
Year
Islington
College
Introduction
The report has
been prepared for academic purpose on case study of Faslane, Her Majesty’s
Naval Base Clyde for module Strategic Choice and Impact. It includes various
strategic analyses while change process occurs on duration 2002 - 2010 on
Faslane, HMNB. Before 2002 it was manage by Ministry of Defense (MOD) and after
2002 it is managed by the Babcock Marine.
For analyzing
the strategic change process before and after 2002 Change Kaleidoscope of
Balogun and Hope Haily and Lewin’s Force field Analysis is used.
And to analysis changes process Mc Kinsey’ 7S Model, force field analysis, Johnson’s
Cultural Web and kotter's change step is used to measure. Transcendent leadership style is applied and it is compare with Lynch Model.
Her Majesty’s Naval Base Clyde (faslane)
is based on Gare Loch, United Kingdom. It
provides Trident missile programme service and support facilities. The weapon
provided by Royal Naval Armament Depot Coulport (RNAD Coulport) is store for
HMNB Clyde, where the nuclear weapons are stored and removed from submarines
prior to their maintenance works, refitted and for completion.
The case study includes
change situation while partnering Ministry of Defense (MOD) and the Royal Navy
with Badcock Marine at 2002. The purpose of joint venture was to restructure
whole management process by reducing operating cost and improving their
services. There first target was to save
£76
million in 5 years.
Strategy change process at Faslane as more intended
or more emergent
Faslane use both
intended and emergent strategy for change process. They couldn’t have been
success to such a level by using only one of them. Both are very essential in
practical and day to day operation for change process. First, intended strategy
means planned or deliberate action also it’s a set of intentional acts that
contemplated and planned to accomplish a goal. Whereas emergent strategy means
set of certain consistent action that form an unintended pattern that was not
initially anticipated or intended in planning phase.
In 2000, Faslane
was run by MOD and they decided to reduce cost and improve operational
effectiveness of Naval Bases but they find it difficult given the restriction
they operated under as part of a wider civil service. So they established
agreement by partnering with Babcock Marine in 2002 signing a contract that
within 5 years of period they will deliver £76 million of cost saving without
affecting the service provided to the Navy. Change was not easy for Babcock
though they were familiar with change process. Initially Babcock didn’t get any
support from customer despite they were giving more priority to building and
infrastructure facilities. They need to make employee’s perception change that
change process is good and its all for them. Babcock removes the concept of
spending the entire budget and change people mindset to see their job as to
deliver with the minimum possible spend. Every major decision of civil servant
was questioned by political leader which was in less favor for management and
achieving objective. So they make strategy to reduce political interruption and
focus on quick decision. Babcock find out other way for spending cost in
process of change documented and passed through a series of review points. They
reengineer the process and reduce 56 days process in 6days. Babcock encourages
people to come up with their own change idea but culturally that’s challenge,
when for many there’s no incentive to come up with a change. It might mean that
people next get redundant. In 2006, Babcock reduces the management layer from 7
to maximum 4 and reappointed all the jobs. They learn new idea from different
large scale changes in other organization. As a result, they implement
management structural change in low level which was easy and success. In first
year of Babcock in Faslane, they target to met £3million but they achieve £14million of cost saving. This
change leads stakeholders’ perception that change is good and its all for them.
They reduce 400 fulltime equivalent and 98 reductions have been voluntary
redundancies. They held ‘the event in the tent’ sessions where 3000 people
participate in day long discussion and express their views about the
transformation of Naval Base Clyde. They also handle trade union by generating
their own team and departmental business plan.
Analysis
Change kaleidoscope
Hope
Hailey and Balogun developed change Kaleidoscope in 2002 to be a way of pulling
together and codifying the wide range of contextual features and implementation
options that require consideration during change. It is more of a model than a
method, but it is usable tool for comprehensive framework which deals with all
of the factors that the authors deemed significant by the literature. The model
include an outer ring which is concerned with the features of the change
context that can either enable or contain change, and an inner ring that
contains the menu of implementation option open to chan
Figure no. 1
Table of change Kaleidoscope for Faslane
Time:
|
According to agreement within 5
years of duration 76 million costs should be save.
|
Scope:
|
New management should increase in
efficiency by reducing cost and without affecting quality of services to
customer.
|
Preservation:
|
Service provided before should not
be affected in quality.
|
Diversity:
|
Reduce management layer from 7 to
4 and new leadership style was applied.
|
Capability:
|
Faslane previously run through
MOD. So it’s hard to adopt change process by Babcock Marine.
|
Capacity:
|
Enough cash for operation but have
a limited time. Also have to reduce manpower for adjusting operating system
and inexperience.
|
Readiness for change:
|
Management system was change so
manager need to support and help for adopting changes process and commitment
for change.
|
Power:
|
Limited autonomy so employee won’t
resist change. Managers have control over employee for change process.
|
Table no. 1
Above
figure no. 1 shows the use of change kaleidoscope for analyzing change in
context of Faslane. In time of change the main objective was to deal with save
cost. After 2002, the new management system (Babcock) was included to manage
Faslane and their main challenge was to improve performance by reducing cost within
5 years of period. Change kaleidoscope was a perfect tool for analyzing the
change context of Faslane.
After
2002, it was difficult for Babcock to manage because customers were not
supportive and at the same time they have target met £76 million in 5 years. The Babcock focuses
on power and autonomy, diverse workforce and skill employees who already faced
change. They reduce bureaucracy level and 400 full time equivalent posts. They
also reduce management level from 7 to 4. Initially the customer was not
supportive because they think they were doing right without changes. They have
a fear that in time of change and reducing cost they won’t get any incentive.
Moreover they fear of losing jobs was always on the top. It was never a easy
task for Babcock to bring change in organization by changing employee
perception. They implement change in low level which was a success. They were
focusing on increasing efficiency without affecting the quality of services.
They slowly change perception of people by bringing skilled employees. There
was a good communication, better employees to adopt changes easily. The
leadership style was change so limited autonomy was given to employee.
Force field
analysis
The principle force field analysis
was developed by Kurt Lewin, 50 decade ago is a major contribution to the field
of psychology, organization development, social science, change management,
process management and social psychology. It looks forward at forces that are
either blocking movement towards goal (hindering force) or driving movement
towards goal (helping force). The hindering force (restraining force) is
related with hurdle of changes whereas the helping force (driving force)
represents competition, demographics and technology that drive force of change.
|
RESTRAINING FACTOR
|
|
·
Cost saving
|
·
Management structure
|
|
·
Change support by naval Base
|
·
Fear of change impact
|
|
·
Improve operational efficiency
|
·
Staff traditional perception
|
|
·
Diversity growth
|
·
Slow change process
|
|
·
Unsustainable cost
|
·
Political intervention
|
|
·
Customer expectation
|
·
Bureaucracy
|
|
·
Quality service
|
·
Organizational process
|
|
·
Future vision
|
·
Conservative staffs
|
Table
no. 2
The above table
no. 2 shows both driving and resisting force factor for Faslane during change
process. The challenge to reduce operating cost improving efficiency by
increasing the quality in service for customer was the driving force factor for
change Faslane. Moreover the commodore in change was willing to bring change
initially but some of his predecessor hadn’t work. The plan target for 5 years,
vision for future and customer expectation was also supporting for change. At
last, the successful initiative by implementing of low level change was huge
driving force for bibcock team.
Beside driving
forces, there were some resisting forces factors which were pushing away
Faslane from changes such as limited autonomy level with the employees,
unsupportive customer, no incentive to reduce cost, political interruption and
fear of losing jobs. Initially the manager structure was not success to give
proper output more over 7 hierarchy of management resist to change because of
political interruption. Any major decision of a civil servant was question by
an elected politician.
Both driving and
resisting factors affect Faslene for changing process but change was very important
so they reduce management level from 7 to 4 and also encourage employee by
motivating them.
Analyzing the internal feature of Faslane
Johnson’s cultural web
In 1992, Gerry
Johnson and Kevan Scholes developed a model cultural web; it provides one such
approach for looking at and changing organization’s culture. It helps to expose
culture assumption and practices and set to work aligning organizational
elements with one another and with strategy.
Johnson’s
cultural web till 2002
Figure no. 2
Johnson’s cultural web from 2002 to 2010
Figure no. 3
MC Kinsey’s 7s framework
The well known
business consultant Robert H. Waterman Jr. and Tom Peters developed MC Kinsey
7s framework. The model includes tool to assess and monitor changes in the
internal situation of an organization.
Mc
Kinsey’s Seven’s Model Faslane before 2002
|
||
SEVEN S
|
STRENGTH
|
WEAKNESS
|
HARD ELEMENT
|
||
Strategy
|
Customer
oriented
|
Delay
decision making process
|
Structure
|
Management
level chain of command
|
Not
clearly identify role and responsibilities
|
System
|
Systematic
management and better human resources
|
Slow
response on customer feedback
|
SOFT ELEMENT
|
||
Skill
|
New
partnership diversify skill
|
Traditional
management system and fear of changes
|
Style
|
Run
by Royal Navy and Mod so Autocratic in nature
|
Little
were enjoying bureaucratic
|
Staff
|
1700
civil service was engage
|
Conservative
environment
|
Shared
values
|
Quality
service
|
Resistance
to change process
|
Table no. 3 Before
2002
Mc
Kinsey’s Seven’s Model Faslane 2002-2010
|
||
SEVEN S
|
STRENGTH
|
WEAKNESS
|
HARD ELEMENT
|
||
Strategy
|
Quality
operation services with cost saving
|
low
quality service on behalf of cutting cost saving
|
Structure
|
Flexibility
to create own team
Reduce
management layer
|
Excessive
freedom may hamper hierarchy of organization
|
System
|
The
56 days process reduce to 6 days process
|
Difficult
to manage customer complaints
|
SOFT ELEMENT
|
||
Skill
|
Experience
staff for change process
|
Operation
structure were new for Babcock Marine
|
Style
|
Suitable
leadership style for change process
|
Risk
associated with change process
|
Staff
|
Staff
are focus more on people than infrastructure and facilities
More
than 2000 civil service staff were engage in Faslane
|
Reduction
in management layer affect on job
|
Shared
value
|
Committed
to reduce cost without affecting quality of service for customer
|
Babcock
belongs to private company so in need of more profit it may hamper
organizational strategy
|
Table no. 4
Duration between (2002 -2010)
The above figure
(2 to 3) represents Johnson’s cultural web and table (2 and 3) represents MC
Kinsey’s 7s framework model for Faslane before and after run by Babcock. We can
lots improvement in Faslane after run by Babcock. Before employee give more
priority to building and infrastructure but later after change employee give
more priority to organization objective. Babcock reduces management layer to 4
as a result there was improve in coordination between employees towards
achieving organizational goal and their roles and responsibilities. Babcock
removes employee’s perception and fear for change. They improve management and
encouraged employs to participate fully in change process. They provide power
to employee for creating own group and planning department. The change process
was challenge for Babcock but they successfully made change with lots of
improvement.
Evaluating the Faslane change using Kotter’s change
steps
Kotter’s change steps
were developed by Dr John Kotter. After 3o years of research, Dr John Kotter
developed that about 70 %of organization fail in change process. The reason for
fail in change process was organization often do not concern about holistic
approach require to see change through. However he develop 8 steps for change
which are explain below (Kotter International, 2012)
Figure:
4
1.
Establishing a sense of
urgency
Faslane was in
need of immediate change so Babcock took over the management system and proceed
for change. They have to reduce cost and improve operation efficiency without
affecting services to Navy.
2.
Creating the guiding
coalition
They encourage
staffs to share ideas and opinion also provide power to create own group and
plan for department. They reduces management layer to 4.
3.
Developing a change
vision
They make target
to achieve 76 million of cost saving in 5 years period without affecting the
services provided to the Navy. They help and support employees to adopt the
change process.
4.
Communicating the
vision of buy in
Babcock Marine
reduce management layer to 4and make organization structure transparent. They
fully support employee for change and make sure to achieve the organization
goal.
5.
Empowering broad based
action
They reduce
political interruption as well as management layer. They also remove the fear
of employees for change process. Experience employees for change process were
brought so that other existing employees of Faslane will adopt change quickly.
6.
Generating short term
wins
They
successfully implement change in low level and change perception of employee
that change process is for good. They improve performance and quality in
services. They also break their 5 years plan and make yearly target which was
to achieve 3 million but they was able to achieve 14 million.
7.
Never letting up
Babcock Marine
find positive change after reduce in employee perception of fear and management
layer. New leadership style was better to achieve the target of organization.
8.
Incorporating changes
into the culture
The new
leadership and management for Faslane was success to met target. They improve
the quality and services for customer. As a result, Faslane got chance to
manage entire UK’s submarine fleet.
Strategic leadership style at Faslane during 2002
-2010
Strategic
leadership means to deal successfully with change in organization; all
executive must need skills and tools for both strategy formulation and
implementation. Strategy leader are require to manage change and ambiguity that
will not only provide a sense of direction but also build ownership and
alignment within the work group to implement change.(J.H. Paul, 2013)
Figure: 4
In change
process during 2002-2010, Faslane was run through John Howie and Craig Lakhart
from Babcock Marine who was very experience in change process. In that interval
they bring many positive changes and improve organization to its highest level.
Transcendent leadership
Transcendent
leadership is a form of leadership that leads ship out of the troubled
corporate waters. Human beings are limited to themselves by defining what they
can or cannot do. Transcendent leader works toward the undoing of those limits
also envision new modes of thought and have a deeper sense of feeling. (Aldon,
L.J. 2004)
1.
Leadership for self
Change was never
easy for John Howie and Craig lakhart. Despite the employees resist to change
they reduces change complexity. After employee’s realization towards change
perception many volunteer works were done more importantly 98 people gave up
their job without forcing which was appreciable for Faslane.
2.
Leadership of organization
To restructure
the management system in the organization they forces on transparent style for
spending. Moreover they explain change process to stakeholders in relation with
transformational change.
3.
Leadership of others
They organize
event called ‘event in the tent’ where staff are encourage to share ideas and
opinion. In addition they make good network with organization which gone
through large scale change process.
Comparing Babcock leadership approach with Lynch’s
Model
1.
Developing and communicating
the organization purpose
Communicating
from top to low level within the organization is very essential. Without it,
it’s impossible to achieve organizational target. Babcock marine create a
communication channel where everyone was welcome for sharing new ideas and
opinion in change process with aligned workforce around a common objectives.
2.
Setting ethical
standards
Faslane was a
public company so if they don’t use allocated budget, it would be cut following
year. So to use it, sometime they did unnecessary expenses. But after handle by
Babcock it reduces cost by restricting the organization.
3.
Managing human
resources and organization decisions
Babcock Marine
properly utilizes and manages human resources and organization decision. They
encourage autonomy as well as motivate employees to share idea and opinion also
provide power to create own group and plan for department. They successfully
implement change in lower and reduces layer in management.
4.
Sustaining competitive
advantage over time
In success in
reducing cost and improving performance Babcock marine was able to met target
within a 1st year of duration. It leads better communication, services
and attitude of employee. They also got chance to manage entire UK’s submarine
fleet.
5.
Defining and delivering
to stakeholders
Babcock saves
cost more than their expectation in 5 years which was 100million instead of 76
million. Through this stakeholders were encourage to participate in change
process.
Conclusion
Faslane was in
need for immediate change, so in 2002 they partner with Babcock Marine (part of
Babcock international) with agreement of bringing positive change in whole
organization. They have a deal to achieve £76 million of cost saving in five
years of period without affecting the services provided to the Navy. In the
meantime for achieving their objectives they apply different intended and
emergent strategy as per required. Change was not easy for Babcock because initially
the customer was not in their favor. So to change people’s mindset Babcock
start to motivating for change as their earning was based on the saving of the
cost. Babcock encourages to shares new ideas and opinion through whole day
discussion. Babcock was experienced in change process they already knew the
things need to reduce and improved in Faslane. They reengineer the structure of
an organization. By reducing the management layer from 7 to 4 they were success
to reduce cost and improved operational effectiveness without affecting in
quality of services. They focus on transparent communication from top to bottom
level of management. They reduce about 400 full-time equivalent posts.
From different
analytical tools used to analyze for internal and external change environment
make us easy to understand the specific change process in Faslane. Babcock has
wisely used their experience and strategy for change process which make them
success to achieve their objective and also more than expectation.
Reference
1.
Aldon, L.J. (2004),
Transcendent Leadership and the evolution of consciousness. London: Lightening
Source UK Ltd
2.
Babcock International Group PLC, (2009), Interim Management Statement Feb 2009. [Online] Available at: <
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> [Accessed on1/2/2013)
3.
Hofer,
C. W., & Schendel, D. (1978).Strategy Formulation: Analytic concepts. St.
Paul: West.
4.
J. Balogun,’ Managing
Change: Steering a course between Indented Strategies and Unanticipated
Outcomes’, Long Range planning, vol. 39 (2006), pp.29-49
5.
J.H.Paul, (2012), Strategic
Leadership: The Essential Skills, (online), http://hbr.org/2013/01/strategic-leadership-the-esssential-skills/ar/1 (Accessed on 8/1/2014)
6.
Johnson, G.Whittington,
R&Scholes. K. (2011), Exploring Strategy, 9th edition, prentice
Hall
7.
Kotter international,
(2012), The 8 Steps Process for Leading Change, (online), http://www.kotterinternational.com/our-principles/changesteps (Accessed on 10/1/2014)
8.
Lynch,
R. (2008) ‘Strategic Management’, 5th Edition, Prentice Hall, pp 619
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