Sunday, January 19, 2014

Week 30


Case Study: Faslane


1.0 Introduction:

Faslane is a HM Naval Base Clyde in UK and is best known for the country's nuclear submarines armed with Trident missiles system. Previously, it was supervised by the Ministry Of Defense (MOD) and Royal Navy and later in 2002, it partnered with a private sector company, Babcock Marine. The main aim for such move was for cost/benefit approach, more effectiveness in the operation of the organization and improve the service standards.


In this report, the strategic analysis Faslane is done using various analytical tools. Firstly, Hope Hailey's Change Kaleidoscope is being used to analyze the strategic changes in Faslane and Lewin's Force Field Analysis is being done to evaluate the effectiveness of changes. Likewise, to identify the barriers to change and to examine Faslane's internal characteristics, MC Kinsey's 7's model and Kotter's 8 step process are being prepared. Furthermore, to compare the changes in strategic leadership style, Lynch Leadership Model has been applied.

2.0 Analysis

2.1 Faslane: An emergent strategy.

An emergent strategy is a pattern of action that develops over time in an organization in the absence of specific mission and goals, or despite a mission and goals. (planningskills.com)

In my point of view, the changes in the strategy of Faslane is an emergent strategy. The strategy is basically a strategy by discovery which takes place through daily basis decisions according to the circumstances and the environment. The unstructured strategy has a fifty-fifty chance for success or failure.

The actions of Faslane are mainly dependent on the unintended and unplanned decisions. The Babcock Company had a target that Faslane's cost saving will be £76 million within five years of time. However, the strategies for the cost saving approach and improvement in the operational effectiveness are highly influenced by the change in the ownership on the company. Thus, the cost saving decision was an unintended strategy.

Likewise, to reduce the cost, the company changed its organizational structure by cutting down the management hierarchy from 7 to 4 just to make the communication easy, effective and fast. Likewise, the number of employees were reduces to create more openness and better relationship among the workers. The bureaucratic burden were also decreased and employees  were motivated to join open discussion and idea sharing process.  They applied both top-down and bottom-up leadership styles and allowed workers to work as a team to grow their productivity. This strategy clearly helped in their cost saving of £14 million in the recent years. Thus, the mentioned strategy of Faslane is an emergent strategy which made them flexible and helped in cost savings.

2.2 Change Kaleidoscope Model

Change Kaleidoscope helps to identify the nature of change and assist in designing sensitive change process. The change Kaleidoscope contains an outer ring which is concerned with the features of change context that can either enable or constrain change and the inner ring that contains the menu of implementation options open to change agents. (Hope Hailey and Balogun 2002).

Faslane: Change Kaleidoscope




Time: Faslane has put up its target of cost saving of £76 million within five years. The time period is too short as per the cost saving amount. However, the organization was a smooth one without any kind of major chaos. Thus, there is no urgency for the company to change its strategy to meet the target.

Scope: The degree of change effects the organization entirely or partially. The management style of Faslane was changed and both top-down and bottom-up styles of management were applied. This helped to make the communication process better and sharing of ideas and information became easy. Likewise, several number of employees were reduced to minimize the cost.

Preservation: The asset, cultural practices and resources should be managed properly during change. Babcock Marine after having to co-work with the MOD and Naval Base commander, it understood the importance of it relationship with them. Hence, they took really good care of the relation with them and other stakeholders too by open communication mainly through meetings on a regular basis.

Diversity: At first, it was not so easy for Babcock to begin change. Later, the company became a 4 layers of management hierarchy from 7 with various teams. The groups might prefer change or oppose it. But the less number of employees make the work more easy and decisions can be made quickly.

Capability: Faslane was able to manage the workers throughout its revolution. At the time of MOD, people were not ready for change due to lack of experience. But, positive impression was created among the employees mentality regarding the company's objective. They were encouraged to participate in open discussions and share their ideas.

Capacity: The capacity includes available finance, time and human resource. According to Faslane's primary objective of cost reduction and increase the operational effectiveness, it reduced the management level from 7 to 4. After the change, the company gained the capacity to accomplish its target.

Readiness: At first, the employees of Faslane was confused. The company had various teams, who either prefer to stay as they are of who prefer change. The managers from was able to motivate them towards change and promised for personal development as well.

Power: When Babcock joined hands with MOD to manage Faslane, they had the power to restructure the strategy and management styles of the company. However Babcock did not have the full authority to take decision.

2.3 Lewin's Force Field Analysis:

Kurt Lewin's Force Field Analysis is a powerful strategic tool used to understand what is needed for change in both corporate and personal environments. (change-management-coach.com) It helps to take the best decision  by evaluating the forces against the changes. The tool outline the problems and its main factors and maintain the changes in preferred track. It has two sodes, Driving factors, which helps to promote and support change, Restraining factors, which makes the change difficult.

Faslane: Force Field Analysis



Table 1: Faslane: Force Field Analysis


2.4 McKinsey's Seven S Model

McKinsey's 7S model is an analytical tool which helps an organization to evaluate  and monitor changes internally. The 7S is defines by 3 hard S: Strategy, Structure and System  and 4 soft S; Shared values, Skills, Style and Staff.

The model involves seven interdependent factors which are categorized as either "hard" or "soft" elements:

"Hard" elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems.

"Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful. (mindtools.com)


McKinsey's Seven S model of Faslane, 2001.

Seven Models
Strength
Weakness

The Hard Elements
Strategy
Focus on customer and infrastructure.
Time consuming, more budget needed and slow in decision making.
Structure
Managerial level chain of command.
Unclear about the roles and responsibilities.
System
Improvement in Management system.
More time needed for change which created problems while handling the customer.                         

The Soft Elements
Skills
Experienced Navy base staffs.
Inexperienced regarding change.
Style
Highly experienced Navy Leaders.
Beneficial for only few bureaucrats.
Staff
More than 1700 civil service employees.
Focus less on the employees and their mentality of fear for change.
Shared Values
Offer quality service to Navy.
Not enthusiastic to adopt change.

Table 2: McKinsey's Seven S model of Faslane , 2001


McKinsey's Seven S model of Faslane, 2002 to 2010

Seven Models
Strength
Weakness
The Hard Elements
Strategy
Cost reduction without effecting
the service towards Navy.
Poor service quality to the customers due to main focus on the strategy of cost reduction.
Structure
Practical structure with specialized
employees.

Clear roles and responsibilities and encouraged team work.

Reduction on the level of management from 7 to 4.
 Access freedom and teamwork sometimes hampers the organizational hierarchy. 




Problems regarding loss of jobs.
System

Excellent management team.
Inexperienced in the Naval base operational field.
The Soft Elements
Skills
Employees already practiced the change process.
Some employees still unknown about change with no idea about Naval base operation.
Style
Leaders capable to handle the change.
Change is always considered risky.
Staff
More than 2000 civil service employees.
Job loss due to reduction in management level.
Shared Values
Reduce cost and improve operational effectiveness.
Babcock Marine, being a private company, may seek more profit.

Table 3: McKinsey's Seven S model of Faslane , 2002 to 2010

From the analysis above, Babcock faced many problems while managing Faslane. They were not experienced on the Naval base field which was a huge difficulty for them. Later, they brought change in the management style. They applied both top-bottom and bottom -top management system which made every employees participative. Likewise, the management level was cut down to 4 from 7 and this resulted in higher level of open communication. Leadership was decentralized among teams. These changes brought 20% reduction in the annual cost on Faslane.

However, such flexibility brought some serious problems too. Employees were unwilling to change which reduced their productivity during the change process. Likewise, many staffs lost their jobs due to reduction in the management level.

2.5 Kotter's 8 Steps Process for Leading Change:

Kotter developed a list of factors that he believes lead to successful changes, and those that lead to failure. He has devised an 8 step method where the first four steps focus on de-freezing the organization, the next three steps make the change happen, and the last step re-freezes the organization with a new culture. When people need to make big changes significantly and effectively, he says that this goes best if the 8 steps happen in order. (Pat N, merticationmatters.com)


Step 1: Establishing a Sense of Urgency:

A sense of urgency for change in an organization is created by this step. Urgency for change in Faslane began after the competitive position and financial operation was analyzed. The changes were about to be performed after co-working with Babcock marines. Firstly, they set an objective to reduce the cost of £76 million within five years, to improve the operation and to improve the service quality. Various changes in the managerial level, organizational structure and leadership styles were needed. The employees were given high level of motivation and frequent communication was done during the change process.

Step2: Creating the Guiding Coalition:

The change process needs to be guided properly. For this, the manager must allocate the influential people to motivate and encourage others. Babcock employed team of skilled personals who had the ability to handle change and the participated employees during change.

Step 3: Developing a Change Vision:

The vision of an organization must be simple and clear and must be understood by the employees and all the stakeholders. When a vision is clear, the employees and stakeholders will have a clear understanding of what changes are required to achieve it. Thus, a clear vision will make everyone ready to face the change.

Step 4: Communicating the Vision:

Communication of the vision of an organization must be frequently done. Babcock marine encouraged open and participative communication among the management and employees. They used to put up an event like 'the event in the tent' where the objectives of the company was comprehended and also, employees were allowed to the ideas and values.

Step 5: Remove Obstacles:

Obstacles must be removed to make the vision and objective clear and understandable. John Howie was able to identify the obstacles and barriers in the structure of the management on Faslane. It was the complexity  of seven level of management which he later reduced into four and it was a good decision. The company had a slow decision making process because of the lengthy review of 56 days which also he decreased to 6 days.

Step 6: Generate Short-term Goals:

Short-term goals must be developed to uphold the working environment of an organization and also to keep everyone focused and enthusiastic. In the first year, Babcock's short term goal was to achieve £3 million cost saving and it was able to accomplish £4 million. Likewise, in year two, £16 million cost reduction was done against the target of just £12 million. This made the employees motivated for change.

Step 7: Build on the Change:

The objectives and goals must be build up to maintain the gains from   the changes made. This includes the actions taken by Faslane to restructure the management levels, encourage participation  and open communication, reducing the bureaucratic trouble etc. Due to this, continuous achievements were gained by the organization.

Step 8: Incorporate Change into the Culture:

The value of the vision of an organization  is replicated by the corporate culture. Culture of sense of belongingness was created within the organization. Service  towards the Navy was improved. In 2009, joint business with the customer was performed. Thus, Faslane became home base for the entire UK submarines in 2010.


2.6 Faslane: Strategic Leadership Style (2002-2010)

Strategic leadership is the way of applying well considered plans and the ability to influence people around you to willingly participate in decision making process and make a joint effort to achieve long term goal of the organization. Implementing this strategy leads and organization to achieve its long term goal, deliver high value over time and change within the organizational structure.

In 2002, after Faslane was managed by the MOD and Babcock, John Howie was selected as the managing director. His focus was mainly on the internal part of the organization including the management style, structure of the organization , changing responsibilities, cost savings and maintain good relationship with the customers.

In 2012, Craig Lockward became the Managing Director of Faslane and his focus was mainly on the operational improvement and quality service. He had low concern on the organizational structure and relationship with the stakeholders. We can compare the company with:

2.6.1 The Lynch Five Elements of Successful and Effective Strategic Model.

           i.            Developing and communication the organizations' purpose:

The main purpose of Faslane to improve the operational effectiveness and cost saving was clearly defined properly comprehended to all the employees of the company. They developed and communicated the organization's purpose by keeping an open
discussions, changing infrastructure and changing the move towards customers.

         ii.            Sustaining competitive advantage overtime:

 Babcock recruited the employees who have already experienced the change process. This was one of their main competitive advantages which became very helpful for other employees while undergoing the change process.

       iii.            Setting ethical standards:

The tax received by Faslane was spend unethically to receive budget. Later, it was spent on the CSR and improved quality service to the customers. They also minimized their spending by restructuring the organization. Moreover, they always supported their employees while in their difficulties during change.

       iv.            Defining and delivering to Stakeholders:

Leaders need to maintain good relation with stakeholders. (Lynch). Faslane always took care of its stakeholders and was able to maintain a good relationship with them.

         v.            Managing human resource and organizational decisions:

The entire Faslane human  resource experienced the change process brought by Babcock. More than half jobs were cut down, organizational structure became a flat one and staffs were encouraged to work on teams. 

2.6.2 The Transcendent Leadership Model

This model focuses on:



Conclusion

To sum up, the above done analysis have made it clear that Faslane has been successful in executing change. The changes on Faslane included the organizational system, employees, and other stakeholders. They were also able to maintain the continuous changes in their system and had clear focus on achieving the long-term as well as short-term goals. The change process made the company more flexible, effective and was considered as evolutionary transformation of public sector into private sector.

They first implemented the management structure of the organization. It helped them to gain 14 million pound cost saving within five years of time. Management team was reduced to half. Over 20% of annual reduction was done by the end of five years.

Lastly, Faslane implemented effective leadership strategies, clear communication process, kept good relationship with the stakeholders and was able to maintain successful human resource and because of this, it became able to meet its objective and proved itself as the  base home for submarines fleet in the entire UK.


References:

Anon., n.d Naval Basis [Online] Available at:  http://www.royalnavy.mod.uk/The-Fleet/Naval-Bases/Clyde [Accessed 10 January 14]

Anon., n.d. Force Field Analysis - Kurt Lewin. [Online] Available at: http://www.change-management-coach.com/force-field-analysis.html [Accessed 12 January 2014].

Babcock International. 2011. Marine & Technology Division Clyde Operational efficiency in a mission critical environment. [Online] Available at: http://www.babcockinternational.com/media/205608/glb168368_-_case_study_-_partnering_-_print_file.pdf. [Accessed 10 January 14].

G. Johnson and K. Scholes (eds), Exploring Techniques of Analysis and Evaluation inStrategic Management, Prentice Hall, 1998.

Johnson, G. Whittington, R. & Scholes. K. (2011) “Exploring Strategy”, 9thedition, Prentice Hall.

J. Kotter, ‘What leaders really do’, Harvard Business Review, December (2001), pp. 85–96.

Kotter International The 8-step Process for Leading Change. [Online] Available at: http://www.kotterinternational.com/our-principles/changesteps [Acessed 12 January 2014]

Mind Tools., n.d. The McKinsey 7s Framework. [Online] Available at: http://www.mindtools.com/pages/article/newSTR_91.htm [Accessed 12 January 2014]


Pat Naughtin. Leading change by John P Kotter. [Online] Available at: http://www.metricationmatters.com/docs/LeadingChangeKotter.pdf [Accessed 12 January 2014]


Planning Skills. 2014.Emergent strategy. [Online] Available at: http://planningskills.com/glossary/154.php [Accessed 11 January 14]







Wednesday, January 8, 2014

Week 27



LADY GAGA


1.Why has Lady Gaga been so successful? What strategy has she followed?



Lady Gaga is one of the most popular personalities in the world. She is well known pop artist with 23 million album sales and a five times Garmmy winner. She is famous for her famous voice and her over the top wardrobe.

Lady Gaga’s success didn’t solely come from her talent, it came from her loyal fan base and her engagement with her fans by building a community around them.
Her strategy was based on customer loyalty. She focused on her fans and quickly adapt to their needs and the changing environment. She also focused on various marketing tactics. She made use of the social media to advertise herself and create a brand image. The major reasons for her success are:
  • Focus on her superfans and build her own community around them (littlemonsters)
  • Stand up for issues that she believes in and share them
  • She understood her audience very well
  • Making herself flexible and changing radically with the vast changing music industry
  • Creating her own brand with her outrageous fashion
  • Making her music simple and easily adaptable by any one around the world

2.If you were advising her on her future strategy – what analysis would you undertake? What models or theories would you use?

Though she is loved my many people many other artist and critics criticize as being a mimic rather than an original artist. She simply focus on her image being a rebellion when she is none of that. Therefore, in future if she focused more on her music and creativity she can achieve greater success.
An internal analysis can be done to analyze her strategy.

Visibility:
She sold about 10 million copies of her first album fame. She has many other skills like piano and writing songs. She should use her talent to the stage performances. She sold about 10 million copies of her first album fame.

Credibility:
She is passionate about her fans. She maintains loyalty and shares her values with them. She should remain true to her current fan base.

Expertise:
She has a great knowledge about the industry she is competing in. She should always try to do new to attract the audience towards her and strategies it with the needs of the customer.

Power:
She is one of the most influential people on earth. She has been able to continuously change her style and fashion along with time. She also focus on music genres which are highly in trend. She also took a great advantage of the social media to market herself. 

References:

Bailey, F., 19 May 2011. BBC.co.uk. [Online] Available at: http://www.bbc.co.uk/news/entertainment-arts-13458791 [Accessed 7 January 2014].

Jamie Anderson, J.R.a.M.K., 2013. London Business School. [Online] Available at: http://bsr.london.edu/lbs-article/724/index.html [Accessed 7 January, 2014].