Strategic Management of Faslane - Case Study Example

?MANAGING CHANGE AT FASLANE INTRODUCTION Faslane had HM Naval Base Clyde having UK's nuclear submarines along with the Trident weapon system. The location also had base officers’ accommodation, the nuclear warhead processing, and the loading onto submarines. Faslane was originally managed by Ministry of Defence and the Royal Navy. In an attempt to generate operational efficiencies the management planned to develop partnership with private industrial firms. Babcock was assigned contract for the stated purpose. Babcock conducted wide level strategic changes specifically in areas of process re-engineering, management restructuring as well as people’s management. Efforts were successful and within first year of performance Babcock managed to generate efficiencies in excess to targets across the board without compromising any security risks and services. Babcock over years developed successful relationship with all stakeholders resulting Faslane to become home base for the entire UK submarine fleet. The case assessment herein provides the review of the strategic measures exercised by Babcock for the purpose in relevance to academic management literature. CASE STUDY ANALYSIS The strategic changes undertaken by Babcock from 2002 to 2010 changed the strategic model of Faslane. Broadly, the change has been taken in the areas of process re-engineering, people’s management with flattening management structure etc. The section provides the assessment of the referred changed from three aspect as discussed as follows: Describe the Strategic Change Context In 2002 The change undertaken at Babcock has can be defined as the transformational change among options set out below: (Balogun, J. (2001) Transformational change requires changing in believes and the culture in all (Johnson, Whittington, & Scholes, 2011). As noted in the description people at Faslane were more towards Inwards River fencing than actually intending to serve the Navy. John Howie the managing director of Babcock then also declared that efficiencies in the project are to be explored by changing the mindset of the people serving at Faslane to delivering services with minimum possible cost. Babcock adopted the strategic path for change with intense consideration adhered to factors that are sensitive to firm. These considerations were given to underlying situation of the firm within outer, middle and internal context as follows: (Balogun, J. (2001) Changes undertaken were strictly aligned to maintain with the organisational context as focus. Therefore, focus was made changing attitudes and processes than organisation. Low level changes were timed on first place with managerial transformation in later phase. Scope was maintained to change the attitudes towards jobs than changing jobs or people. Such as processes were engineered to ensure value addition to the processes ensuring critical steps preserved while eliminating wastes and redundancies. Almost entire staff was moved towards change with exploring change and efficiency possibilities and capabilities across the board. Small level readiness of employees for changed were enhanced with consistent communication and increased sharing of power. Restructuring, top-down path and participative approach, management leveraging support to understand the value addition paradigm of serving with least possible expense, leadership and involvement of change action team formed the defining characteristics of the strategic change design implemented by Babcock at Faslane. For such change implementation Babcock undertook measures that consistently increased the strength of factors that appreciated and supported change (Milicevic & Ilic, 2010). In line with Lewin’s Force field analysis (Thompson & Martin, 2010), John undertook measures that also weakened the forces resisting change. Change drivers originally strengthened from the Babcok gaining contract for the job. Further, consistent contact with stakeholder ensuring the enhanced quality of service while reducing bureaucratic pressures from employees also strengthened factors of change drivers. Babcock also worked to weaken the resistance. For instance, resistance was expected from the local councils as Babcock reduced almost 400 jobs including some naval post. However, consistent meeting in the initial phase satisfied councils about the path hence, reduced the chances of resistance. Another example also noted from setting “Event in the Tent” where almost 3000 workforce were given opportunity for presenting concerns and getting satisfactory answers. Further, in meeting the challenge from political and naval aspects Babcock reengineered processes so that did not eliminate any critical process such as reduced the review time for management levels but did not eliminate it etc. Hence, context specific change strategy resulted in successfully developing the trust of all stakeholders as well as financially incremental above target performance. Comparison of the Organisational Features under Mod and Royal Navy and Babcock: Incremental cost saving and capability enhancement to the level that Faslane achieved the position of being Home base for entire UK fleet resulted from sound Babcock strategic measures. Comparison of factors under two managements has been developed below ORGANISATION UNDER MOD AND ROYAL NAVY ORGANISATIONAL FEATURES UNDER BABCOCK. CULTURAL WEB (Balogun, J. (2001) Culture at HM Naval Base was typical bureaucratic. Staff undertook services and facilities granted while budget to be spent in full was considered necessary as savings only resulted in budget cuts than incentives. Procedures were being followed for the purpose of way the things were being designed. This remains effective even in critical factors. People at base were ready for radical changes but in the management only; however, had no concept of change for improvement or cost saving. As for transformational change, Babcock undertook measures for change of mind set. Also the cultural change was defined as journey of hearts and minds towards aligning the entire workforce around objectives. For the purpose, power structure as well as organisational structures reengineered in a way that ensure value addition to critical level. Such as requiring trade union to select their own team retained power with them while ensuring the objectives are achieved. The hard elements of Strategy, structure and system were following the traditional thinking of government organisations of going with set standards. Though critical installation yet developing competitive advantage approach was not being followed. System had redundant and long reporting structures increased level of bureaucratic mindset. Primary focus was to conduct the job in a manner that meets the accountability measures than stressing the value of services to the firm. Since hard elements were strictly defined; therefore, the remaining soft elements followed the similar trend of being bureaucratic than value creator and service provider. Hence the shared value revolved around to meet the standards only as defined in system. The new strategy undertook the overhauling of the entire system and structure. Strategy changed from consumption entire budget to meet the accountable standards to best providing services to Navy at least possible expenditure of all resources including budget, human capital and time. Structure was re-engineered with eliminating redundancies as well as flattening of the organisational structure. Well defined structural and systematic approach was implemented with increased stress on the soft factors. Skills missing for the objective were leveraged from naval side as well as Babcock personnel. More participative style of leadership with opportunity provided to everyone to provide the ideas for improvement as well as getting real responses to concern appreciated staff participation in the business. Hence, increased interconnectivity among factors resulted in sharing values intended to provide the services to Navy at least cost possible; however, without compromising on any unavoidable risk. Hence, new organisation performing similar task featured more interconnected system components to value addition (Peng, 2009). Therefore, reaped results and managed to become home for entire UK fleet under two leaders of Babcock John John Howie from 2002 to 2006 and Craig Lockhart that succeeded John after 2006. Strategic Leadership Style at Faslane during Change Period Of 2002 To 2010 The strategic leadership Style at Faslane that managed to transform the organisation was transformational in nature. John can be called as transformational leader in line with what Wheelen & Hunger (2011) pointed that transformational leadership gets successful as it manages to get the work willingly done from the people. Wheelen & Hunger (2011) further noted that the referred willingness is generated from the providing the sense of ownership to people. For instance, Organisations provided the broader plan to the unions and required them to fill in details in their own ways with finding best position of performance for themselves and also selecting their own team for work. Such sense of ownership was evident in the entire phases where every objective was achieved in participation with lower level of employees. Assessing leaders at Faslane against the five element of successful and effective leadership revealed that success of the firm in achieving the above target cost savings and home position for the entire UK fleet base is attributable to the presence of the below mentioned five elements in the leadership. (Lynch, 2008) For instance, Leaders constantly developed the communication for the organisational purpose to the employees and focussed on changing the mindset of the people towards service orientation from bureaucratic attitudes. The communication attempt enabled leaders to manage no resistance from human resource despite consistently tightening the procedures and elimination of redundant jobs. Therefore, cost saving was being achieved with identifying the efficiency opportunities in the entire process. For example time resource required for single review were 56 days while the new management re-engineered the same and reduced the time resource required for every review to six days, hence saving 50 days from single process reengineering. With constant communication the leadership also managed to successfully develop trust based relationship with stakeholders. The organisation along with conducting meeting the critical stakeholders such as councils and commodore also provided extensive communication opportunities to the other employees in all. Evidence for this comes from the Event in the tent addressing almost 3000 employees. Further, delivering to the stakeholders was also witnessed in organisation managing to fetch cost efficiencies of around 11 million pounds saving in addition to the target of three million British pounds. Organisation was also transformed greatly from cultural perspectives where spending all was considered the order of the day instead of providing services to navy being primary objective. Further, even the critical decision making reviews were not given the due attention and attended just as a matter of interest. Babcock developed the ethical standards to maintain the core objective to serve the Navy with minimum possible expenditure and without compromising the risk inherent in the entire job. All these service orientation decisions resulted in the extensive expansion of the competitive advantage. Faslane from being the fleet home for submarines only gained position of the Home fleet for the entire UK’s fleet. Hence, success of the organisation’s transformation is extensively attributable to immense presence of the five elements of effective and successful leadership in the transformational leaders of Babcock. CONCLUSION The case study provided the comprehensive perspective of the strategic change implementation. Faslane had HM Naval Base Clyde of UK’s submarines managed by the Ministry of Defence and Royal Navy. Since the management of the base was providing services to wider civil services; therefore, in order to integrate efficiencies management decided to develop partnership with industrial firm. Partnership aimed managing the base and exploring the cost efficiencies and effectiveness. To mention, partnership and not outsourcing was conducted in order to retain the control of naval services in all. Babcock developed partnership with Marine base and successfully achieved the objective. Realising the critical need of the business to remain in similar organisational context; Babcock undertook change with transforming the organisation. Organisational transformation focussed on re-engineering the processes as well changing the mindset of the personnel towards services. Babcock changed the organisational culture centrally from the paradigm of spending all to do job that meets accountability standards to mindset of providing best services to the Navy with least possible expenditure. Organisational transformation was conducted in broader connection of organisational context with strategic design aligned to meet the change requirement. The change imperative focussed on participative approach with building relationship. Hence, has shared values for entire system components. In achieving the change the role of leadership has been very prominent. Under two leaders within the change time frame from 2002-2006 under John Howie and Craig Lockhart during 2006-2010 Babcock managed to achieve exceeding cost saving consistently in addition to the targets set since first year of performance. The leaders driving change Faslane have been regarded as the transformational leaders that exhibited the characteristics of successful and effective leadership in full. List of References Balogun, J. (2001). Strategic Change. Management Quarterly, Part 10. Available from http://www.tomorrowsleaders.com/A5569D/icaew/content.nsf/DocumentLookup/ICAEWSTR0109/$file/MQ10+Strategy.pdf [Accessed 17 April 2013] Johnson, G. Whittington, R. & Scholes. K. (2011) ‘Exploring Strategy’, 9th Edition, Prentice Hall Lynch, R. (2008) ‘Strategic Management’, 5th Edition, Harlow: Prentice Hall Milicevic, V., & Ilic, B. (2010). New strategic management and global innovation economy. Strategic Management, vol. 15, no. 3, pp. 18-27. Peng, M. (2009). Global Strategy. Mason, OH: South-Western Cengage Learning Thompson, J. L., & Martin, F. (2010). Strategic management: awareness & change. UK: Cengage Learning EMEA. Wheelen, T. L., & Hunger, J. D. (2011). Concepts in strategic management and business policy. Upper Saddle River, NJ: Prentice Hall Read More