Sunday, 6 May 2012

Faslan- session 10

  1. 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.
  1. 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.
  1. How did their strategic leadership approach compare with Lynch’s model?
It compares with Lynch models in good communication and dealing with stakeholders.
  1. 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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