- Why was the Faslane change successful? What did they do (or not do) that helped them to succeed?
John Howie and his team of Bapcok knew very well
the purpose why they were there to achieve change of reducing cost and
improving operational effectiveness as they executed very effectively. They knew
that the change would be about the people as they did not own any assets in
Faslane. Therefore as part of their agreement with MOD they set a target of 76
M savings without affecting the service provided to the Navy hence they had
clear goal which is solidified by the scenario that their profit is correlated by
the savings they make ‘no saving no profit’ was the bottom-line and this worked
not only for them but also for workers because part of the reduction would be
given to employees as profit ‘great motive’.
Changing people requires legitimacy being seen as ‘charismatic’
winning hearts and minds which they understood very well. The first challenge was
to reintroduce the purpose of Faslane as to who is the customer rather than then
keeping the status quo thinking of the faslane workers in which they thought
they were there longer and focused on infrastructure in the expense of
providing service to the Navy who is paying their salaries. In other words the
culture of Faslane was that they were run as government department and needed
to convert to private sector environment. Therefore Babcok shifted focus and importance
from infrastructure to Navy.
Another great observation was identifying the
underlying factors why the public sector managers had no interest in reducing
costs which was rather destructive reward system in place as they had large
budget in the first place and if they had not spent it all they would face cuts
next year. Howie’s team saw this as problem precipitated by the way the system
in place groomed them ‘ they way they were brought up’ had nothing in common
with the mission of saving or efficiency achieving the goal with the minimum spending
possible, the issue was ‘mindset’ which means culture.
The existing structure of Faslane had to be retuned
in order to empower the officials to make speedy decisions to enhance efficiency;
there were very steep vertical seven layers of organizational procedure which
compromised the officials autonomy as government elected representatives could
question every decision made by the in-house officials, this created attitude
of avoiding ‘political accountability’ hence was ‘handle turning’ exercise ie
they had to prioritise to explain why they made a decision rather making proper
decision itself the very essence of management.
There was reluctance to change and complacency from
the employee’s point of view that Faslane is the manufacturer of nuclear deterrent
for the nation, as a result there is no need to change, no need to save hence
they were ‘ring fenced’ however these perceptions were rather cosmetic fear, the
genuine underlying fear was the uncertainties associated with change, they were
even more concerned with when the change is strange and radical as MOD brought
private company to enforce it.
However Mr Howie and his team dealt with this challenge
‘fear’ in pull style rhetoric similar approach to that of Mr Robinson of the NHS
except it was one step further as they brought in their old employees of
Babcock who went through similar situations to be a model to Faslane in order to ease the
transition, where they lacked experience such as running a naval base they
sought assistance from MOD who provided the expertise but Bapcock brought different
way of management ‘innovative’ management just like IDEO had different
processing systmen.
They also achieved efficiency without sacrificing
the core operation of the firm by carefully examining the way money is spent
via focusing on things that are important to the Navy. For instance they
reduced the time spent on the documentation of change as officials had a period
of 14 days to do review which they reduced to two days. However they asked what
to be done and built legitimate consensus rather than appearing to be embossing
unlike David of Energix who by passed the culture of the organization this is
the important lesson.
Consequently it became clear that the number of review
points were not adding value except adding more delays to the already exacerbating
bureaucratic process, because they functioned on basis of ‘I am letting it
through you because you may be interested in’ this had remarkably reduced what
was 56 days work into just six days a simple ‘process reengineering’.
By including
people to contribute the process of their own change what they called ‘removing
the shackles’ enabled them to receive interesting ideas although it posed limitations
of people avoiding anything that might fire their colleagues.
They ultimately reduced the seven layers to three ,
reappointed jobs, consulted with companies that had significant changes before
and as a result learned that unless the structure was changed the people ‘transformational’
would not be changed, hence prioritised in
that order. Their philosophy had been start with low level changes and work
your way up which earned them saving of £14M first year against target of £3M a
remarkable accomplishment.
After that they focused on transformational changes
of the work force, which were more complex matter, however already slashing 250
managers onto half that were not adding value, they made sure that the various
stake holders were on the same page with them. They knew who they needed to be
allied with such as Base commander and other important players including their
parent company and the local council.
The fundamental
factors of success are included the fact they were honest and authentic in
their process of transformational, they never communicated with baseless
soothsaying style to the workers as they told good and bad news in their holding
dialog in ‘event in tent’ style which is far from the leaders of Nasa in the
challenger case which led to the employees accept the decisions because they
knew why and more importantly they were part of it.
The
management of Faslane identified their
purpose which was reduction of expenses and synergised management models
such as 7s model to reach their goal as it has been applied to every sect of
the organization as well other models have also been applied ie Kottery 8 step
, lynch and transcendent model.
- What can we learn about effective strategic leadership from the Faslane case study?
What we can learn is having good
communication system include people to make their own change, approach the
issues that are easier first such as structure, rather the workforce, be
honest, authentic and fair do not lean to one side only. Make sure the stake
holders are on board.
- How did their strategic leadership approach compare with Lynch’s model?
It
compares with Lynch models in good communication and dealing with stakeholders.
- How was their strategic leadership approach different or similar to other case studies? e.g. Carrefour, NHS, Madonna, Challenger, IDEO, Energix
They
succeeded where Carrefour failed which is dealing with the stakeholders,
surpassed where NHS pointed out possibility of achieving change, levelled with
Madonna’s self leadership, did not compromise any safety where challenger came short,
had innovative management engineering just like IDEO and did not make plans
before including people the process where David failed in Energix.
failed in Energix.
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