FASLANE STRATEGIC CHANGE REPORT
Acknowledgement
I, Priyanka Pandey, BBA final year
student at Islington College would like to express my sincere and honest
gratitude towards the Module Lecturer of Strategic Choices and Impacts, Dr.
Guru Tej for the guidance, support and encouragement that he has provided us
during the completion of this report. This report would not have been possible
without his tremendous amount of help and support.
I would like to thank Islington College
as well as the London Metropolitan University for giving us an opportunity to
test our skills and learn more and more each day. This coursework has provided
me with an insight of strategic analysis even clearer than before that will be
of much use in the future perspectives.
I would also like to thank the whole
Islington Team for providing us with the facilities and environment where we
could learn and grow ourselves. Lastly, I would like to thank my dearest mom
for providing me this opportunity to become the person I am today and for
providing me the courage and motivation to take it further.
Thank you!
PURPOSE
The main purpose of this case analysis is to understand the depth of knowledge students have grasped and to make them familiar with different types of strategic analysis tools that is very useful in the real life business scenarios. These strategic approaches and comparisons with these models helps managers and strategist better understand the business scenarios in the world and learn more about their strategies that has helped them reach the heights they have achieved.
TABLE OF CONTENT
1.0 INTRODUCTION …………………………………………………………………………………………… 1
1.1 INTERNAL ANALYSIS (SWOT) …………………………………………………………………….. 2
1.2 EXTERNAL ANALYSIS OF FASLANE …………………………………………………………… 4
2.0 ANALYSIS …………………………………………………………………………………………….…… 4
2.1 FORCE FIELD ANALYSIS …………………………………………………………………………….. 5
3.0 STRATEGIC CHANGE PROCESS AT FASLANE ……………………………………………... 6
4.0 CHANGE CONTEXT AT FASLANE IN 2002 ……………………………………………………. 8
5.0 COMPARING THE INTERNAL FEATURES OF FASLANE …………………………………11
6.0 EVALUATION OF FASLANE …………………………………………………………………….…19
7.0 LEADERSHIP AT FASLANE ………………………………………………………………………. 20
7.1 LYNCH MODEL …………………………………………………………………………………………. 22
7.2 TRANCEDENT LEADERSHIP ……………………………………………………………………… 26
8.0 CRITICAL SUCCESS FACTORS …………………………………………………………………… 27
8.1 KEY SUCCESS FACTORS …………………………………………………………………………… 29
9.0 CONCLUSION ………………………………………………………………………………………..….. 29
INTRODUCTION
“The
term strategy is derived from a Greek word ‘strategies’ that means
“generalship” but the concept did not originate from the Greeks. Sun Tzu’s
classic, The Art of War, written in about 500 B.C, is regarded as the first
treatise on strategy.” (Jordan, 2012) . Strategy is the art or skill of using
stratagems in endeavors like politics and business. (The American Heritage, 2000)
The reality of
industries is that they will never stand still and they continuously evolve.
The operations improve, markets expand and the major players come and go (Mauborgne, 2005) . Similar thing
happened to Faslane.
Faslane
is a HM Naval base Clyde that is managed by Babcock Marine but is initially
installed by the Ministry of Defense. This part talks about the problems faced
by Faslane in service delivery and cost efficiency.
The
analysis part gives an insight of the company in a clear way. First of all I
have given a brief of what Faslane is and what problems it is facing. Then
there is an internal analysis to clearly show the firm’s strengths and
weaknesses in relationship with opportunities and threats (SWOT ANALYSIS). Then there is an external analysis (PEST
ANALYSIS) for the firm.
After
understanding the internal and external factors affecting the firm, Force Field
Analysis give us a clear picture of what was for and what was against the
change set up at Faslane. Then, the change Kaleidoscope gives us an insight on
the power, time scope and other significant factors during the change process. Likewise
there is McKinsey’s 7s framework and Cultural web to compare the change and
impacts of change in 2001 and 2002-2010. It shows us the before and after
effect of the organization in clear terms.
In
addition, I have discussed about the Kotter’s 8 steps of change against the
Faslane’s change process and also leadership styles used at Faslane against the
lynch Model and the Transcendent Model to portray the type of leadership they
followed in the firm. Lastly, there is Critical Success Factors and the key
Success Factors at Faslane clearly depicted in the report.
report case study on faslane
1.0
Introduction
Faslane
is a HM Naval base Clyde that is managed by Babcock Marine but is initially
installed by the Ministry of Defense.
Main
problems at Faslane:
·
The customer ethos was
not right.
·
The staff believed that
infrastructures and facilities were more important than the service and support
to the Navy.
·
Here, in Faslane the
focus was primarily based on the waterfront inward rather than them looking
outside towards the ships and submarines.
·
There was a challenge
to become focused on delivering services to the customers.
·
If the budget was not
spent in a year, next year their budget would be cut off.
·
The people believed
that:
-
They were ring-fenced
from the fundamental changes.
-
They felt the base was
doing a good job.
-
They had no feeling of
need to save at all.
-
They used to feel that
they had some kind of ‘flavor of the month’ kind of change programs.
-
However, they were
fearful about what actually the change would mean.
There
were other forces as well:
·
Lots of layers of
workforce
·
Limited autonomy
·
Political influence to
make decisions.
1.1 Internal Analysis of
Faslane - SWOT Analysis
Fig: 1.1 SWOT Analysis before change
Fig: 1.2 SWOT Analysis after change
Figure 1.1 and 1.2 talks about the strengths,
weaknesses, opportunities and threats at Faslane from 2001 to 2010.
1.3 EXTERNAL ANALYSIS OF FASLANE
Fig:
1.3 PEST Analysis
Figure 1.3 talks
about the political, economic, social and technological factors affecting
Faslane.
2.0
Analysis
The
MOD felt a need to reduce the cost at Faslane and they also felt the need to
improve the operational efficiency and effectiveness at Faslane. But MOD found
that difficult given under the condition that there were restrictions since
they were operating as a civil servant. So, in 2002 MOD signed a contract with
the industrial firms to take over the change in Faslane. The contract was
initially a 5 year contract where the target for cost savings was 76 million
pounds in five years. They only wanted a certain percent of the profit for Faslane
and remaining was for the customers as cost reductions without affecting their
levels of service.
Force
field analysis of Faslane
Fig: 2.1 Force field
analysis
Source: (Change Management Coach, 2011)
The
figure 2.2 below shows the strategic concept of Faslane where at the left side are
the stimulating activities that encouraged in initiating the change process at
Faslane and at the right are the restraining factors that could negatively
hamper the change process at Faslane.
Here,
need for cost effectiveness yet customer oriented with a need to improve
operational efficiency encouraged change mostly. But the employee perception
towards infrastructures, facilities, and fear towards change were the
restraining factors.
Fig: 2.2 Force Field
Analysis of Faslane
3.0 STRATEGIC CHANGE
PROCESS AT FASLANE
The
strategic change process at Faslane is a mixture of both deliberate as well as
emergent strategy. When the MOD saw that they need change, it was a deliberate
strategy and as a part of that strategy John was hired. He noticed that the
Navy was not motivated and the customer ethos was not correct. They faced a
challenge to deliver services to customers as well. Then he thought of an
emergent strategy by observing the work and attitude and behavior of the people
so as to manage them better. Business prioritizes the change structure and
other change factors with decent careful observation to understand the scope of
change and know its proper utilization of them to favor the organization (Hailey, 2009) .
Similarly
when MOD gave a target of cost savings, they had a purpose and this change
initiation through Babcock was a part of their deliberate strategy. Likewise,
when Faslane saved 100 million pounds against the target of 76 million pounds
in year 5, it was due to emergent strategies that the leader took that created
the most positive results.
Thus,
the strategic process of change was a mixture of both emergent as well as an
intended strategy for Faslane.
After
discussing about the change process and type and the key factors that initiated
and restrained the change, let us go for a little in-depth understanding of the
Change kaleidoscope at Faslane.
In
2002, MOD signed a contract with the industrial firms to take over the change
in Faslane. The contract was initially a 5 year contract where the target for
cost savings was 76 million pounds in five years plus operational effectiveness.
Faslane only wanted a certain percent of the profit and remaining was for the
customers as cost reductions without affecting their service level. (R., 2009)
When
John Howie came, the commodore in charge supported the need for change as he
saw partnering with Babcock as an opportunity to manage the people in better
and effective way. However, there was a mix of supportive as well as not so
supportive employees as well. He noticed the following things at Faslane:
·
The people believed
that:
-
They were ring-fenced
from the fundamental changes.
-
They felt the base was
doing a good job.
-
They had no feeling of
need to save at all.
-
They used to feel that
they had some kind of ‘flavor of the month’ kind of change programs.
-
However, they were
fearful about what actually the change would mean.
John
decided to bring in people from Babcock who also faced similar changes and had
no idea of how the naval base worked. He looked carefully on how the money was
being spent with the customer perception on mind and read the structures of
Faslane to understand how they could be managed in a different way. He let the
employees participate so that the bureaucratic burden was freed.
4.0
CHANGE CONTEXT AT FASLANE IN 2002
Fig:
4.1 Change kaleidoscopes at Faslane
Figure
4.1 talks about the change kaleidoscope and for the change kaleidoscope the
following things are its key elements:
1.
Power:
Faslane was more bureaucratic in nature in 2002 when the change was initiated. MOD
found that difficult given under the condition that there were restrictions
since they were operating as a civil servant. The power belonged to the people
in high posts. Here, even for the ministry of defense, as a civil servant,
major problem for every decision they made was questionable by an elected
politician. Mainly due to the political influence people got more conservative
and rigid, with low autonomy and more layers in the firm as the people, where
need to answer to higher authorizes, will have to make an audit path of
everything they do.
2.
Time:
They have time limits to achieve the cost savings plus operational
effectiveness in the firm in yearly basis. They had very little time with a
very difficult mindset that needed to be changed. In year 1, the MOD had set a
target to reduce 3 million ponds. In year 2, MOD had set a target of reducing
12 million pounds and at the end of year 5, Babcock was expected to save 76
million pounds and that too without affecting the service quality of Faslane.
3.
Scope:
They had a scope to become highly independent with the change that followed.
They were experienced but bureaucratic system made it very difficult to think
beyond the traditional methods.
4.
Readiness:
the staff and other people at Faslane were resistant to change initially. But
there were a few who supported the change and saw that the partnering of
Babcock and Faslane was an opportunity to manage people in a better way.
However, people had a very different sat of perception towards change as they
did not feel any need to save money as if they did not spend the budget this
year, their budget would be cut the next year. They used to have flavor of the
month typed change programs and hence had a very fearful and negative feelings
towards change because they were uncertain and scared of what the change would
actually mean.
5.
Capacity:
the staff capacity regarding the skills and experience was very high but they
were managed poorly. The chain of command was very weak and unclear as the
responsibilities were not clear to people. They could do much better if they
were guided in a proper way towards efficiency. The firm had the capacity to
work under such huge budget cut offs as even when the targets were already set,
they managed to save so much more than the target amount with better quality,
service, communication and responsiveness. The staff had high capacity in terms
of skills and experience but they needed to transfer employees to netter
undertake the change process. Firm had high capacity on resources and Babcock had
high capacity about changing the whole total mindset of that many people at
Faslane. Plus there was a neutral cash flow in the firm.
6.
Preservation:
Faslane wanted to preserve the service quality, skills of the people and the
relation with them. They wanted to preserve and enhance the operational
efficiency in the firm. They also wanted the customer orientation to be intact
with them as their branding strategy as they were going to take only a certain
percentage of the profit for Faslane and remaining bulk would be gone to
customer cost reductions so as to maintain the quality of service.
7.
Diversity:
they had a very diverse management and employee skills with positivity in terms
of experience and knowledge base of the employees.
5.0 COMPARING THE INTERNAL FEATURES OF FASLANE
After understanding
about the change and change kaleidoscope of Faslane, let us now discuss some of
the comparison methods of change in 2001 and change in 2002-2010.
Fig:
5.1 McKinsey’s 7s Framework (2001)
McKinsey’s 7s framework
for Faslane in 2002-2010
Fig:
5.2 Mckinsey’s 7s Framework (2002-2010)
Cultural
Web – 2001
FIG:
5.3 Cultural-web for 2001
Cultural
web 2002-2010
Fig:
5.4 Cultural-web for 2002-2010
Figure 5.1-5.4 discusses about the change process and its implementation. Employees
supported Babcock by which it was able to manage loyalty, commitment and
welfare.
Previously, the management was huge and there was no proper
utilization of resources. There used to be various problems at that time.
Although Faslane was customer oriented but it could not delivery quality
services to the customers. Leaders were experienced but due to bureaucratic
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.
New recruitment in the employees was made for those who have already dealt
with changes and were successful also. Employees were asked to work together
and underlined the importance of the change consequences.
Even the management became stronger and staffs were given power to choose
their own team and make plan for business. Similarly, there was low power
distance and employees were highly motivated towards organizational goals and
objectives. Along with this, there was reduction in the management structure
from 7 to 4. Flexibility in working environment for the employees was also
observed.
Comparison between 2001’s Faslane and 2002-2010
Faslane
|
2001
|
2002-2010
|
|
Bureaucracy
|
Democracy and
participation
|
|
Delayed service
|
Better service
|
|
High spending budget
|
Cost effectiveness
|
|
Money wasted
|
Cost saved
|
|
Operational
efficiency was not up to the mark
|
Efficiency was very
high
|
|
Fearful of change
|
Excited about change
|
|
Traditional methods
of thinking
|
Emergent and
strategically well thought decisions
|
|
Unclear chain of
command
|
Clear and well
organized chain of command
|
|
Not very motivated
staff
|
Well motivated staff
|
|
Resources not
utilized properly
|
Fully utilized
resources
|
6.0
EVALUATION OF FASLANE
KOTTER’S
8 STEPS OF CHANGE FOR FASLANE
Fig:
6.1 Kotter’s change steps
Step
1: Establishing a sense of urgency- John
and Craig along with the MOD identified a need for change and later helped
employees and other people to understand and see the need for change and also
motivated them with time to act for it and work for a common purpose.
Step
2: Creating guiding coalition- here, for
Faslane MOD and the Commodore in charge was the guiding and influencing people,
who made a team and supported the change process to lead the change in the
firm.
Step
3: Create a Vision- the vision of the future
was to reduce cost and enhance operational efficiency at Faslane that was
targeted by the MOD in the initial contract itself. This vision helped take the
change process further.
Step
4: communicate the vision- Faslane used
every possible channels to communicate the vision by implementing the process
of feeling similar obstacles. They brought in people with similar changes in
the jobs to make people at Faslane better understand the vision that needed to
be accomplished.
Step
5: Empower others- the management systems
were changed from bureaucratic to participative, the layers were cut down to 4
from 7 and the 250 management staff were cut down to half with cost effective
strategy by redundancies in the jobs.
Step
6: Plan for and create short term wins-
They planned to give autonomy to the employees and also gave a 6 day review of
employees and they were given enough space to learn and grow. The short term
targets would be yearly cost cutting targets that were met without any
problems. This boosted the confidence and motivational level of the firm.
Step
7: consolidate improvements- they
considered credibility to change the policies and procedures that did not fit
the vision. They had to chuck off many employees and recruited new ones that
fit the main vision of change and being cost efficient with better operations.
Step
8: Institutionalize change- they
continually articulated the connections between the new ways of working system
and contributed to corporate success. They weaved the new leadership style and
management style to develop and improve the organizational effectiveness.
Source: (Kotter International, 2012)
7.0 LEADERSHIP AT
FASLANE
John
Howie when came for the change initiation, to manage the people in better and
effective way, there was a mix of supportive as well as not so supportive
employees as well.
John
brought in people from Babcock who also faced similar changes and they had no
clue about how Faslane worked. As a strategic leader, he carefully analyzed how
the money was being spent keeping the customer perception on mind as well as
the structures of Faslane to understand how to better manage them. Participation
was encouraged to reduce the bureaucratic burden.
After
observing, he managed on the following things:
·
The management
structure was not correct.
·
There were 7 layers
that were reduced down to 4 layers.
·
They reappointed all
the jobs.
·
Implemented the low
level changes upfront
·
Delivered 14 million
pounds of cost savings in first year
·
The target was just 3
million pounds in the first year though.
·
They changed the whole structure
of management
·
They cut the management
team of 250 to half of it.
·
They reduced by 400
full time equivalent posts.
·
98 redundancies were
voluntary.
They
also achieved:
·
14 million pounds was
saved in year 1 against the target of 3 million pounds.
·
16 million pounds cost
reduction in year 2 where the target was just 12 million pounds.
·
By 5th year,
they delivered 100 million pounds where the target was 76 million pounds.
·
20% of reduction in
annual running cost.
·
Navy also believed they
were receiving better service, attitude was better, the communication flow plus
the responsiveness was better.
·
They delivered proper
cost savings plus better quality of service.
Craig
Lockhart came in after john in 2009.
·
2nd year of
using the performance scorecard.
·
Started to measure
outputs
·
The employees are aware
that performance does not need to be hidden.
·
The planning of
business had been top down
·
They had to align the
workforce towards common and shared objectives.
·
Held ‘event in the
tent’
·
3000 people went
through day long discussions
·
The employees were
allowed to express the views about the change.
·
They started to get the
trust of people as they were honest.
·
Power and autonomy was
given
·
Belongingness among the
employees was noticed.
In
2010
·
Faslane would become a
home base for entire UK submarines fleet was announced.
·
2000 more jobs at the
base by 2014 was expected.
LYNCH MODEL
Fig:
7.1 Lynch Model
LYNCH MODEL
7.2 TRANCEDENT LEADERSHIP
Fig: 7.2 Transcendent Model
8.0 CRITICAL SUCCESS
FACTORS
Fig: 8.1 Critical
Success Factors
Source: Knowledgenet.carmichaelcentre
Fig: 8.2 Critical
Success Factors at Faslane
In
short, the above table 8.2 describes the critical success factors for Faslane
and the below figure 8.4 shows the key success factors of Faslane:
Fig: 8.3 key success factors of Faslane
change process
9.0
CONCLUSION
It
is comprehensible after analyzing the change process through various models and
strategic approaches that the process was successful. The major problems were
noticed by the MOD and initiated a partnership with Babcock to enhance their
operational efficiency as well as to become cost effective. They permitted
flexibility and gave higher levels of autonomy to the staffs that has really
made an impact on the employee mindset on the change process. Some of the
decisions were not fully ethical when creating redundancies in the firm, it
could have been a disaster but it went smoothly.
When
the features were compared, it was seen that Faslane was struggling to meet
customer expectations with lower response and communication and a very
different view that lacked motivation in the firm. Only after the change was
initiated, employees were given chances to rediscover themselves and Faslane
could better manage its human resources.
Faslane
communicated clear purpose to the stakeholders, customers and every other factor
related to them. Due to positive attitude, shared values and other important
success factors, Faslane could manage the change cutting off costs and was
effective in terms of implementation process.
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