Week 10 Faslane

Faslane change was successful because the management team brought people who dealt with change before and helped them implement changes. It was successful because employees were involved, they were told that things have to changes and asked for their opinions. The management team was motivated to make changes because of the earning they will be making as a result of cost savings. One important thing that contributed to their success was that Babcock was a company from the private sector where thing are very different (more competitive, better structured, different stakeholders, different targets, etc.)  compared to the public sector where people were relaxed because of the notion of jobs for life, they never considered that one day the government will not have enough money to pay for their services.  Babcock came and restructured the organisation. They reduced the levels of management from 7 to 4, reduced about 400 full-time equivalent posts, which I believe made a significant contribution the cost reduction. They managed to reduced the review period from 56 days to only 6 days, a change which contributed a lot to the speed of the decision making process in the organisation. Employees understood that they had to come up with new ways and ideas of how to cut spending. They were asked to create their own team, their own departmental business plan. All these changes turned out to be very successful because Faslane would become the home base for the entire UK submarines fleet.  We can learn from the Faslane case study that change needs to be communicated, it needs to come from the employees as well as involve employees and ask for their opinions (the event in the tent). The management team which took charge of Faslane did a good job by letting people know that change was needed and it can no longer use the same structure, hence 98 people decided to give up their jobs. It was unethical to spend the tax payer's money for things that were not  necessary or which could have been much cheaper. The Babcock team managed to make a huge transformation form a leadership style which was highly transactional to a highly transformational (I believe it's a great thing to encourage people to work for a company in a more passionate way, to try and make things better, but it is probably quite hard to achieve that level of commitment from the employees).  The leadership approach used by the Babcock team can be compared to Lynch's model, in fact I believe they used "The five elements of successful and effective strategic leadership". 1. Developing and communicating the organisation's purpose - that is exactly what they did. Employees were told that the organisation can not function the it used to, things have to change. They were also asked to create their own teams so that they can increase productivity.  2. Setting ethical standards - that's the whole reason why they brought Babcock, to restructure the organisation so that they can spend less. It was unethical to spend the tax payers money. 3. Managing human resources and organisational decisions - again Babcock did a good job by reducing the number of employees, reducing the review period to 6 days (which contributed a lot to the decision making process) and asked employees to create their own teams and manage themselves.  4. Sustaining competitive advantage over time - if the costs were reduced and they continued to reduce them, over time these savings gave them a great competitive advantage (the entire UK submarine fleet was moved to Faslane). Faster decision making process, small teams of people working together, all these contributed to their competitive advantage. One great thing that babcock has managed to achieve was to transfer the culture of a private company to a publicly owned organisation which resulted in greater competitiveness between the employees themselves and other organisations. 5. Defining and delivering to stakeholders - this is the area where Babcock didn't do a good job, they did a great job by over delivering year on year! They managed to save much more then the given target. Stakeholders where truly satisfied. As a result of this great performance the entire fleet moved to Faslane.