The Nimrod Review - Official Documents

13.103
13.104
Chapter 13 – Cuts, Change, Dilution and Distraction (1998-2006)
The first option, and duty, was to assess the situation and challenges which he had inherited very carefully
and to question whether it was feasible, realistic and sensible to enforce the remainder of the 20% Strategic
Goal at the pace and within the timescale envisaged, given the marked difficulties already encountered and
the challenges ahead of supporting the greater operational tempo (see above). If he took the view that,
in all the circumstances, it was necessary, sensible or desirable to act more cautiously and incrementally in
enforcing the goals, he should have raised this and argued the case vociferously. There should, at least, have
been pause for thought.
The second option, and duty, was to consider what special measures needed to be taken in the meanwhile,
in any event, to ensure that fundamental values such as safety and airworthiness were preserved in the face
of the serious challenges potentially posed by: (a) the size of the ‘economies’ required (a 14-15% reduction
in output costs in two to three years plus the 3% efficiencies etc); (b) the huge amount of change that this
would involve; (c) the substantial organisational changes already in train in the DLO; (d) the lack of a clear
or coherent ‘plan’ as to how the Strategic Goal was to be achieved in the first place; (e) the evidence that
the organisation was already finding it difficult to cope and deliver the cuts and change required; and (f) the
growing operational challenges to be faced in the near future.
Option chosen – to acceleration pace of cuts and change
13.105
13.106
There is no evidence that Sir Malcolm Pledger considered either of the above options. He chose instead to
accelerate the pace of cuts and change in order, in appears, to carry out his ‘task’ as he saw it and catch up
with the Strategic Goal. In my view, these are matters which are open to criticism. Good and responsible
leadership required a more measured and reflective approach in all the circumstances.
His attitude was ‘Can do, will do’ and he applied himself to the task with vigour as he quickly fashioned and
implemented what was, in effect, a second phase of the DLO Change programme which he called the DLO
‘Transformation’ programme. He told the Review that selected the word “Transforming” in order “to show
the enormity of the task we faced”.
13.107 His DLO Strategic Plan, which was widely disseminated amongst the IPTs, set out the following uncompromising
“Key Targets”:
13.108
13.109
6 “Reduce net Total Operating Costs £1225M (14%) against the STP-2 baseline by Mar 06.
...
All IPTs and logistic service providers to baseline their total Cost of Ownership by Mar 03; and subsequently
to reduce it by 10% by Mar 04; a further 10% by Mar 05; and identify means of reducing it by a total
of 30% before Mar 07.” (emphasis added)
As set out above, during the period 2002-2004, Sir Malcolm Pledger presided over the implementation of:
(1) McKinsey’s paper ‘Re-energising’ the DLO Change Programme which recommended a more “radical
programme” of change; (2) the New DLO ‘Change’ Programme comprising existing initiatives, McKinsey
‘workstreams’, and transformational activity from the Strategic plan and the move from “a predominantly
Provider role to one of an intelligent Decider”; (3) McKinsey’s recommendation for a 20-40% reduction in
manpower; (4) the Defence Logistics ‘Transformation’ Programme; (5) the ‘Streamlining End to End’ Review;
(6) the ‘Leaning’ programme. McKinsey described its recommendations in its July 2003 paper37 in the following
terms:“Our recommendations cut across the whole of Defence and are likely to require the most complex
restructuring of MOD activities since the Strategic Defence Review.”
It is small wonder that IPTs and IPTLs felt increasingly pre-occupied with delivering costs reductions and
‘efficiencies’ during the period 2002 to 2004 and with coping with ‘change’.
37 Streamlining End to End Air and Land Logistics, 1 July 2003, McKinsey.
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