MANAGING CHANGE AT FASLANE

(A case study submitted to fulfill the requirement to pass Leadership and Change Management)

Unit: Leadership and Change Management PGD in Business Management Awarding Body: ABP Lecturer: Mr. Olusegun Vincent North West College London

Submitted by A. B. M. Golam Kibria Bhuiyan Student ID-NWC4047 North West College London

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Question 1: What type of strategic change is being pursued at Faslane? Use Julia Balogun and Veronica Hope Hailey as guide.
Answer to the question no 1 To best understand the strategic change being implemented at Faslane, both Julia Balogun and Veronica Hope Hailey will be used as a guide. Julia Balogun and Veronica Hope Hailey assert that there are predominately four types of strategic change that might take place in an organization. These are: Adaption, reconstruction, evolution, and revolution are the four pillars that form the strategic change foundation. During adaption, the changes rely on several influences that range from incremental changes while maintaining current culture or rapid changes that might involve a good deal of upheaval. Unlike Adaption, Evolution is a strategy that requires gradual change to culture within the organization for it to be effective. This is easier to implement in most cases, notwithstanding the cost elements that are attached to it. Reconstruction is the change that may occur rapidly where an organization involves a good deal of upheaval, but here organization does not fundamentally change its culture. It could be a turnaround situation where there is need for major structural changes or a major cost cutting program to deal with a decline in financial performance or change market conditions. Revolution occurs when change is rapid within an organization not only with strategy but culture as well. This could happen in circumstances where the strategy has been so bounded by the existing culture that, even when environmental pressures might require fundamental change, but the organization has failed to respond. In my opinion, the change instituted at Faslane was revolution. The Managing Director at Faslane John Howie changed the organizational strategy and culture through trying to reengineer typical government sector office culture and management structure (brought down from seven layers to four layers) within a shorter period of time. Before taking decision he analyzed various companies, found that they tried for transformational change with existing team, got two or three years into it, realized it wasnt working and then changed the structure therefore he directly went for revolution.

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Question 2: Identify the change agent in Faslane and critically analyze the change style of John Howie.
Answer to the question no 2 A change agent is the individual or group that helps effect strategic change in an organization. The change agent can be either external or internal to the organization. In the case of Faslane, I believe John Howie plays the role of change agent, and works alongside Babcock, who had the required experience and had been through similar changes. Since the nature of work made it impossible for the work force to have experience of working at the naval base the Ministry of Defence provided workers that were experienced in the field. Faslane, Babcock Naval Services (BNS) has used outsider as a change agent they brought people from Babcock international who had lived through similar changes. Here most of the change agents are managers, team of 12 but they are expecting that within 12 to 18 they can make a change agents team of 125. They are also appointing senior managers, who have enough knowledge of change in other environments, to deal with the change challenge. Jown Howie instituted changes to the management team reducing the size from 250 to 125. He needed to make all 125 change agents, which was a challenge as not all would welcome the changes. He made allies with the Naval Base Commander as their successes were entwined. This would also work in his favour when it came to containing the political situation. His ultimate goal was to deliver a better service and needed to get everyone participating in order to succeed.

Question 3: What levers for change are being used? What others might be used? By considering theory E and theory O propounded by Michael Beer and Nitin Nohria.
Answer to the question no 3 According to Michael Beer and Nohria, there are two levers (motivating factors) for embarking on strategic change. They include: Theory E is a change based on the pursuit of economic value. Here organization emphasis on changes of structures and system, financial incentives often associated with portfolio changes, downsizing and consequent job layoffs. Theory O is change based on the development of organizational capability. The emphasis here is on culture change, learning and participation in change programs and experimentation.

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The main reason for instituting change at Faslane was economic. Because by 2000 the Ministry of Defense (MOD) decided to reduce costs and improve operational effectiveness of naval base therefore they decided to establish a partnership with BNS for change which saved $ 136 m to the MOD. But to implement the strategy of cost reduction BNS had to layoff employees that reduced about 400 fulltime posts and changed the management structure. They also used Theory O like culture change (impose private organizations culture), participation in change program. There are several levers of change that used by BNS in order to implement meaningful and constructive change. They could use a proactive approach were they are able to identify issues early on and are able to deal with them. This usually avoids resistance and allows for dialogue in the process. More so, they could also have clear communication, that leads to employees being aware of the intend process, and where possible options on development and training are offered so that employees are not just informed but are able to develop relevant skills that allows them to be flexible hence more receptive to change. Top level managers have a responsibility to drive these processes forward in an orderly manner that leads to success in implementing the change

Question 4: Describe and evaluate the change model that may best fit into the structure of the company.
Answer to the question no 4 The appropriate change model that would suit the company is Kotters 8 steps to managing change. Kotter Change model is appropriate as it provides the frame work that is most suitable to address the changes required. Each stage acknowledges key principles to change that relates to peoples responses and approach to change. It is vital for change to be successful for a number of employees to want it. Create Urgency John Kotter suggests that for change to be successful, 75% of a company's management needs to support the change. There was a sense that change had to be implemented in order to reduce costs that had been on the increase, and the fact that most workers had no sense of cost reduction since they were civil servants under the MOD. The shift from 2000 to 2002 when they established a five year contract to deliver 76m (Euro110m;$136) of cost savings without affecting the service to the navy. Form a guiding coalition. Managing change is not enough and change has to be led. The inclusion of the Babcock people that had the experience of going through similar changes was essential and vital. It was also vital to create a coalition of willing parties that would help and assist drive the changes forward. This is evidenced by creating of allies with the naval base

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commander Commodre Carolyn Stiat as she had a wider group of stakes holders in the MOD to build relationships with for the change to succeed. Develop a vision and strategy. A drive for change without a clear focus will rapidly fizzle out unless you develop a clear vision of the future that is accompanied with a clear description about how things will be different in the future. The strategy of incorporating the Babcock employees, as well as starting the restructuring process from the bottom allowed for a clear strategy. The ability to draw time frames was also essential. Communicating the vision. Communication is everything, and Kotter maintains that as change leader you need to use every means at your disposal to constantly communicate the new vision and key strategies that support that vision. But it goes further than talking, you and the coalition have to walk the talk visibly and at all times be available and accessible to your people. Here the wider stakeholders like the community around the naval base, the wider MOD have to be aware through appropriate and clear communication, but also through visible actions Enabling action and removal of obstacles. This is the stage where your change initiative moves beyond the planning and the talking, and into practical action your change initiative moves beyond the planning and the talking, and into practical action as you put supportive structures in place and empower and encourage your people to take risks in pursuit of the vision. This is where you, as change leader, identify and remove obstacles and obstructions to change. These may arise in processes or structures that are getting in the way. This may also involve addressing resistant individuals and/or groups and helping them to reorient themselves to the requirements of the new realities Generating short-term wins. Success breeds success. Kotter advises that an early taste of victory in the change process gives people a clear sight of what the realised vision will be like. This is important as a counter to critics and negative influencers who may otherwise impede the progress of your initiative as change leader you need to be looking for and creating opportunities for these early wins. Hold the gains and build on change. Kotter argues that many change initiatives fail because victory is declared too early. An early win is not enough. This is the time to increase the activity, and change all systems and structures and processes that dont fit with the change initiative, and bring new blood into the coalition. Anchor changes in the culture John Kotter says that for any change to be sustained, it needs to become embedded in the new way we do things around here that is the culture. As change leader, this is all about your continuous efforts to ensure that the change is seen in every aspect of your organisation.

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Question 5: What problems of change may occur in the future?

Answer to the question no 5 During change management there are several problems that might occur, however most change management leaders try and mitigate these by anticipating risks and problems and instituting mechanism to address this. As the changes continue problems with stakeholders and in particular the local community may arise. The base represents 9.5% of all employment in the Dunbartonshire area and the reduction of 400 full time jobs would have adverse effects in the long run to the area. As changes continue to be implemented, challenges to changes that are more complex in nature and not mechanistic will arise. Examples can be drawn from impending changes to the 24 hour shifts to the day shifts. Here resistance to the change will come in form of unions that would be representing the workforce. More so there are problems with the management team that is not well equipped with skills to implement the changes. From a total number of the 125 in the management team, only 12 had the required experience and skills to deal with the changes. Within the team there are still a number of people who want the existing conditions to remain.

Question 6: Critically assess the effectiveness of the change program.

Answer to the question no 6 The change programs effectiveness can be quantified by analysing the data of performance against targets set. The target in year 1 was 3 million and they managed to deliver 14 million. This was an over achievement of 11milion. Year 2, had a target of 12 million, and 16 million was achieved. By the end of year 5, they had the target of 76 million but delivered around 100 million. Therefore they had managed to achieve and deliver over 20% reduction by year 5. By year 10, they forecast a saving of 280 million, which equates to a 38.2% reduction in annual running costs. Page 6 of 7

There were some other un fore seen challenges, were BNS, noticed that the changes are going to take longer than expected as there were aspects of resistance through out the process, however they managed to reduce waste and create efficiency that lead to the delivery of performance above set targets.

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