Rover Group: Transformation and Learning Journey

1. ROVER GROUP

2. Learning Objectives • Understand how real life organizations manage change • Describe how attempted to change internal relationships and attitudes across functions and between hierarchical levels • Examine why and how the particular decisions relating to change were taken • Knowing the resultant implementation change programmes could be described as Planned or Emergent

3. Background • In 1970-1980, many of industrial companies have bad relations and serious financial problems, including Rover group • 1988, Rover was sold to British Aerospace for 150 millions pounds. • Between 1989-1994, Rover’s transformation continued apace with collaboration with Honda • In June 1999, BMW invest over 3 billion Pounds in its Rover plants. • But in 2000, BMW announced the dismember of Rover and sale of.

4. The Genesis of a Learning Business • Since 1978 – 1986, Rover was knowing as industrial militancy. Its priorities had been profit, products, procedures and people, in that order • 1986, with the appointment of Graham Day as chairman, Rover change priority, people came first, profits came later. • From 1986 onwards, a whole policies design to promote learning. In to facilitate this process and create a corporate learning environment, the company remove barriers which separate one employee to another.

5. This commitment was demonstrated in 1992, with the launch of “ Rover Tomorrow – The New Deal” : • a company undertaking not make compulsory redundancies • the harmonization of terms and conditions between white collar and blue collar staff • the coining of a new term -”associates”- to describe all Rover employees • The expectation that white collar should prepared to be redeployed onto assembly line work • All new graduate recruits had to spend their first three months on production lines • All Rover employees, even directors, should wear the same gray overalls

6. Rover Learning Business • Rover Learning Business (RLB) was launched on May 14 1990, with 30 millions Pound budget, and have following objectives : • To distinguish Rover group as the best in Europe for attracting, retaining and developing people • To emphasis the view that people are greatest asset • To gain recognition by its own employees that commitment to every individual had increased • To unlock and recognize employee talents • To improve the competitive edge of the company

7. Philosophy RLB which announced in open conference 1993 by Graham Day is : “Neither the corporate learning process nor the individual one is optional. If the company seeks to survive and prosper, it must learn. If the individual, at a minimum, seeks to remain employed, let alone progress, learning is essential” • In 6 years until its demise in 1996, RLB expanded its activities to car dealer and supplier. • RLB was supported by all Rover senior managers

8. RLB main focus was on internal activities and relations within Rover. Its core learning products are : • REAL (Rover Employee Assisted Learning) This programmed provided employees with money to spend on personal development • Personal Development Files (PDFs) A result of the inadequacies of traditional approach to appraisal and performance review. • GLEN (Group Learning Exchange Network) An extensive computer database of information and case studies to improve & develop the manner of their work • The Change Management Process The approach was based on teamwork, and stressed the need of seeking information and benchmarking, and to involve those most closely affected

9. The Demise of RLB • The beginning of the end for RLB seemed to coincide with the takeover by BMW • In 1996, six years after launch, RLB was closed and its staff transferred elsewhere within Rover • The official reason for RLB’s demise was it had served its purpose in energizing the learning process throughout the Rover Group

10. There are 3 explanations for its demise : • Failed to deliver the goods. It was excellent at publicizing itself, but in terms of instilling a learning culture that would provide competitive edge for Rover, it failed. • It lost the political power struggle within Rover. RLB had the support of key senior managers. By 1996, most of these had left. • Takeover by BMW and the separation of the link with Honda. BMW was skeptical with RLB, they wanted to see hard evidence for RLB’s effectiveness which its difficult to demonstrate !

11. The Outcome • The strategic development of Rover as learning organization emerged over time with specific needs as perceived by senior managers • The move to change management – worker relations was driven by commercial reality • In effect, Rover chose to compete on different grounds, to focus on different competences, to the opposition • Though driven by management, this strategy also required changes to management • Though this was an emergent process, it was neither ad hoc nor unplanned • The takeover by BMW, an end to the managerial and philosophical continuity at RLB.