Managing Organisational Change: The Case of Faslane
1.0 : INTRODUCTION
Research agrees that knowledge of change process is critical to the application of good management skills in organisational leadership (Strebel 2004). Researchers have developed and recommended a number of models for implementing successful change in organisations. According to Kemp, Roth, Marucheck and Trimble (2004), Change is a challenge that faces individuals and businesses. Changes are universal and inevitable as it confronts and tests business ability to create value for clients in a changing environment (Barron & Henderson 1995). It is very important for managers to establish the kind of change they are proposing, can they be regarded as step change or incremental change (Quong & Walker 2010). The purpose of this discussion is to review the process of organisational change with special reference to the case of Faslane, United Kingdom. To provide an in-depth analysis of the case study, this discussion will first provide a description of strategic change in the organisation by applying Balogun and Hailey’s Kaledoscope of change model and Lewin’s Forcefield analysis mode. Secondly, the discussion will provide a comparison of the internal features of the organisation when it was under the management of MOD and Royal Navy (up to 2001) with when it was under Babcock Marine (2002-2010). In this case, Johnson’s Cultural Web model as well as McKinsey’s Seven S framework will be applied. Finally, the discussion will develop a critique of the strategic leadership style that was applied at Faslane between 2002 and 2010 by comparing the organisation against the Five Elements of Successful organisational leadership.
2.0: CASE STUDY ANALYSIS
Question 1: Effective Strategic Leadership Model as described by Lynch (2008).
For changes to be successful, the manager should know how o manage, lead and effectively sell the changes proposed. An effective communication and engagement channels should be established with people or teams affected. Changes can be resisted especially where employees are comfortable and believe the result they are achieving is good. According to Beckhard and Harris (2007), change should not be told or forced to people to avoid damaging workers morale and productivity. Instead, changes should be sold to the people at the same addressing their concerns (Davies & Davies 2004). All the areas affected should be clear; outlining the specific change, impacts of change, need for change and the benefits that will accrue. The manager should provide consistent and visible leadership and be able to handle the communication effectively for the change to bear fruits (Rowe 2001). Managing change requires resources that will enable people to translate vision into actionable steps.
The need for changes at Faslane was driven by the need to reduce the cost at the same time improving operational effectiveness. At that time, MOD management operated under restricts guidelines from the civil service and to bring the changes anticipated Faslane signed a contract with Babcock Marine an industrial firm (Pearce 2008).
Babcock signed a contract of five years, which they were to employ cost-cutting measures without compromising the services provided. When Babcock took the management of the Faslane, 1,700 civil servants, 300 Royal Navy personnel were engaged while 1000 more civil servants remained on site; the others group groups that composed of Faslane population were the MOD guards, police, security personnel and sailors, in total there were 7,500 people involved.
The first change that Babcock manager introduced at Faslane was the cost reduction, whereas the previous managers were civil servants and civil who worked on large budget and no incentives to reduce cost, the new management introduced cost cutting measures. The other change introduce was service delivery where focus was shifted from buildings and infrastructure facilities to customer satisfaction. The new management had to change the mind set of people from conservative to robust free and ready to change without the fear of political consequences.
There was a mixed reactions towards the changes, the previous manager was willing to change and viewed partnership as an opportunity to better manage people, but management teams comprises of people who were supportive and those who felt personally disadvantaged by partnership and less supportive. The existing workforce was fearful of what the changes will affect them after being forced from civil service to private company.
The change path began bringing in people from Babcock who had undertaken such changes and combine them with those from MOD who knew how to manage naval base. Their scope of work was to analyse how money was being spend while taking care of customers’ needs. They also looked at the structure and processes and any need they required was documented and reviewed, where the review process involved every member of the group. The style use was the involvement of the group members and giving them responsibilities, this made it possible to reduce the period of review from 56 days to six days. The extent of change became evidence when the workforce changed their perception and were willing to volunteer ideas and suggestions without fear; they had finally owned the change.
The manager at Babcock after consultation with other companies that had managed such changes decided to implement the new managed structure; this helped the company to save £ 14million from a target of £ 3 million. More transformation was needed to strategies the company making it the best and maximize profit, new skill sets was needed, management team reduced and the structure changed.
Compare and contrast the internal features of the organisation when the MOD and Royal Navy (up to 2001) ran it with when it was run by Babcock Marine (2002-2010).
When Faslane was run by MOD and Royal Navy the structures in place relied on structures set by the line ministry. The workforce comprised of civilians and security personnel from military with command spreading across the organisation that was responsible for the creation of different centre of power. Faslane lacked clear strategy, more focus had been put on providing building and infrastructures; no strategy was in place to make the organisation competitive. The system in place was that the civilian were in charge and Navy people used to work for 2-3years and left, then another group brought in. Before 2001, Faslane was a highly secured area, the workforce operated under strict rules from MOD. Faslane staffing was from both civilian and military personnel who had been assigned duties by the civil service depending on the skills available. The style of leadership adopted at Faslane was that of pleasing the politicians and not providing any strategic results.
The management of Faslane between 2002- 2010 under Babcock brought numerous changes. The management of Babcock formulated a strategy, which leads to cost reduction and serve the client efficiently. New structures were formulated which led reduction of personnel thereby reducing operation costs. New systems were put in place where worker were put in groups that formulate strategies, which they implemented as a team. Babcock management adopted a style of leadership that incorporated the entire worker in decision-making. In terms of staffing, the company brought workers who had undergone the same changes that the management was implementing and retained workers with skills that were needed. A new corporate culture was developed in Faslane that comprised the core values of the company with new work ethics developing.
The most significant difference in the management under MOD before 2002 and management under Babcock was the absence of clear structures under MOD. Faslane was being run without clear structure, mostly due to strict guidelines from the parent ministry where service delivery was focused. As long as the budgetary provisions were met and service provided to the navy, the management was satisfied. Before 2002, no strategies were being formulated; the operation was just routine work of providing services with the funds available. The management under Babcock came with new strategies that were meant to help organisation to cut cost and improve on services. Another big difference was in terms of staffing, whereas civil servants comprised the biggest percentage of workforce before 2002, this was changed when Babcock over and engaged highly skilled people from the private sectors.
Strategic change context at Faslane in 2002
To determine the strategic change context in an organisation, Balogun and Hope Hailey (2008) have come up with a model of strategic change that identifies the steps of implementing the process of change, the types of change that can take place and the choice of organisational change in a specific context (Harris 2005). The model, known as the Change Kaleidoscope, helps in understanding the context of change in all organisational situations. In general, the two researchers have provided an advice against change process management that is both independent of context and formulaic in nature because the choices for design are under the influence of the context.
To apply this model in the case of HM Naval Base Clyde (Faslane), there is need to analyze the case based on the flow chart of change (Kaledoscope) developed by Balogun and Hope-Hailey (2008) as follows. First, there is need to consider the question “why” “what” and “how”. In this consideration, we first analyze the competitive position in terms of the changes that were needed at Faslane. Here, we observe that Faslane was under the management of the UK ministry of defense (MOD). First, the “need to change”, the first stage of the Kaleidoscope model, is evident in the case study. For instance, the competitive position was to change the mindset of the government employed workers at the Royal navy in order to encourage them adopt a focus on navy rather than infrastructure. Secondly, the desired future state, as stated in the Kaleidoscope, was evident in that the managers at Babcock Marine were willing to change the organisation so that it puts great emphasis on customer satisfaction rather than spending the whole amount to encourage future spending. In other words, the desired state was to see the company reduce costs but increase its income through customer satisfaction. Looking at the Kaleidoscope model of change, it is worth noting that the third stage (designing of choices) was equally critical at Faslane. For instance, it is in this stage that the new managers worked ensure that the employees were motivated to change their mindsets and realize that through their hard work and service, they, and the company, would achieve their goals. The Kaleidoscope model, as designed by Balogun and Hope-Bailey, further requires the leaders to manage change through management of transition and evaluation of outcomes (Beatty & Quinn 2010). In the case of Faslane, it is evident that the managers at Babcock Marine attempted to make changes at the company by managing the mindsets of the people rather than emphasizing on infrastructure. They recognized human resources as the critical point at which change would be enacted. In this way, they were able to convince the leaders as well as the Navy workers to focus and emphasize on customer satisfaction as well as employee involvement.
Using Lewin’s three-step model of change, it is evident that some aspects of this model took place in the case of Faslane. According to Lewin (1952), the “unfreezing” stage takes place when the organisational management considers introducing new information in order to point out the inadequacies in the existing state (Phipps & Burbach 2010). In addition, it occurs through changing of the people’s attitudes, value and behaviors. In the case of Faslane, this is evident because the previous state was that the managers believed in exhausting the fund allocation to increase the amount of funds in the successive fiscal year (Sanders 1998). However, under the Babcock Marine, the new managers brought in new information that pointed out such inadequacies as the focus on infrastructure, poor customer relationship and poor employee motivation. By changing these aspects, the company underwent through “unfreezing” stage.
Secondly, by developing new values, ideas, concepts and behaviors, a company undergoes the stage of “moving”. In the case of Faslane, the emphasis on customer satisfaction, involving the employees and reduction of costs in the first few years indicate that the company underwent the stage of “moving” (Kotter 2006).
Finally, Lewis model of change empathizes on refreezing. In this case, the modification of the company structure, values and culture brought about increase in profitability as well as overall performance. In this way, the company underwent the final stage of “Refreezing” as described by Lewis (1957).
Strategic Leadership style: The five elements of successful and Effective strategic leadership model
According to Hitt, Ireland and Hoskisson (2005), strategic leadership is the ability of organisational leaders to anticipate, envision, sustain flexibility and empower other parties to an organisation in order to create the necessary strategic changes in the organisation. According to Hitt and Ireleand (2009), strategic leadership has proved to be the most critical issue that modern organisations are facing. Moreover, lack of strategic leadership, an organisations probability to achieve superior performance when dealing with the challenges of a globalized economy can be significantly reduced.
An analysis of the strategic leadership at Faslane requires an in-depth review of the organisational leadership based on the five elements of successful and effective model of strategic leadership as described by Lynch (2008). According to the model, for a leadership to be effective, there must be an emphasis on the five elements of a good strategic leader (Kouzes & Posner 2009). First, development of leadership is a key element in strategic leadership within any organisation. In fact, it is a requirement for all organisations that aim at increasing their performance (Hendry 2006. In this context, strategic leadership is concerned with leading, guiding as well as influencing members and teams within an organisation (Larkin, Sandar & Larkin 2006). The aim is to make them think strategically about their obligations, roles and responsibilities.
In the case of Faslane UK, it is evident that the first critical issues in changing leadership were to apply techniques that would change the mindset of the organisational leaders at the Royal Navy. For instance, prior to takeover by Babcock Marine, the leadership at the Navy believed that for the organisation to get better funds, it ought to exhaust its funds provided by the government in every fiscal year in order to avoid budget cutting in the successive year. With the coming of the Babcock Marine, there was a need to change this kind of belief. This could only be accomplished by influencing the Navy team and its leadership, convincing them on the need to reduce costs on spending and the need to conserve the resources available.
Secondly, the ability to look at the big picture is a key element in strategic leadership. According to Kemp, Roth, Marucheck and Trimble (2004), strategic leadership requires the ability to foresee and to comprehend the environment at the workplace and determine how this can be changed to allow strategic changes in the organisation. There is need for objectivity and the ability to look at the organisation and its environment from a broader perspective. Working knowledge, wider perspective and skills in organisational leadership allows the management to look at the organisation from a broader perspective (Vaill 2001).
In the case of Faslane, it is evident that this element of strategic leadership was applied to some extent between 2002 and 2010. For instance, the new management under Babcock Marine did its best to look at the organisation as a profit making entity rather than a government-funded machinery. In this case, the managers at Babcock Marine used their knowledge and skills in managing marine business to change the perspective at the Royal Navy, where leadership had been more focused on infrastructure and buildings rather than service provision. The new management was concerned on how money was being used and spent while at the same time focused on customer service rather than government spending. The leaders were aware that they did not own many physical assets, but rather the people were the most crucial asset to the company. By changing the mindsets of the Navy leadership, Babcock Marine leaders were able to make them look at the company from the perspective of the human resources, which was aimed at increasing productivity and reducing spending.
Motivation, as a key element of strategic leadership, was evident in the case of Faslane. According to Beckhard and Harris (2007), strategic leaders ought to have a zeal for their work, which must go beyond power and money to include investing on people by motivating them to achieve their goals with determination and vision. In the case of Faslane, the leadership at Babcock Marine did many things to motivate its employees as well as the employees at the military section. For instance, there new management focused on removing shackles so that people could come up with own ideas on the best way to improve the organisational performance. In fact, the leadership under Babcock Marine attempted to make the employees believe that they were part of the company and their work would help them achieve personal as well as organisational goals.
Balogun, J & Hope-Hailey, V 2008, exploring strategic change, FT Prentice Hall, London.
Barron, BG & Henderson, V 1995, “Strategic leadership: A theoretical and operational definition”, Journal of Instructional Psychology, vol. 22 no. 2, pp. 178.
Beatty, K, & Quinn, L 2010, “Strategic Command Taking the Long View for Organizational Success”, Leadership In Action, vol. 30, no. 1, pp. 3-7.
Beckhard, R & Harris, RT 2007, Organizational transitions: managing comlex. Addison Wesley, Reading, MA.
Davies, BJ & Davies, B 2004, Strategic leadership School Leadership & Management, Washing borough Foundation Primary and Nursery School, UK; University of Hull, UK
Fullan, M 2011, Change leader: Learning to do what matters most, Wiley, New York, NY
Greiner, LE 1967, “Patterns of organization change”, Harvard Business Review, vol. 45, no. 3, pp. 119-130.
Harris, B 2005, Supervisory behavior in education, Prentice Hall, Englewood Cliffs,
Hendry, C 2006, “Understanding and Creating Whole Organizational Change Through Learning Theory”, Human Relations vol. 49, pp. 621 – 639.
Kemp, A, Roth, A, Marucheck, AS &b Trimble, D 2004, “The Knowledge Factory for Accelerated Learning Practices”, Planning Review vol. 22, pp. 26 – 33.
Kotter, J 2006, Leading change, Harvard Business School Press, Cambridge, MA
Kouzes J & Posner, B 2009, “To Lead, Create a Shared Vision”, Harvard Business Review, vol. 87, p. 20-21.
Larkin, Sandar & Larkin, T 2006, “Reaching and Changing Frontline Employees”, Harvard Business Review, vol. 74, pp. 95 – 104.
Lewin, K 1951, Field theory in social science, Harper & Row.New York
Pearce, C 2008, Follow the Leaders, MIT Sloan Management Review.
Phipps, KA & Burbach, ME 2010, “Strategic Leadership in the Nonprofit Sector: Opportunities for Research”, Journal of Behavioral and Applied Management, pp 137-154.
Quong, T & Walker, A, 2010, “Seven Principles of Strategic Leadership International Studies and Education Administration”, ISEA, vol. 38, no.1
Rowe, W G 2001, “Creating Wealth in Organizations: The Role of Strategic Leadership”, The Academy of Management Executive, pp. 81-94.
Sanders, TI 1998, Strategic thinking and the new science, Free Press, New York
Strebel, P 2004, “Why Do Employees Resist Change”, Harvard Business Review, vol. 74, pp. 86 -92.
Vaill, PB 2001, Managing as a Performing Art, Jossey – Bass Publishers, San Francisco
Use the order calculator below and get started! Contact our live support team for any assistance or inquiry.[order_calculator]