May 2007



Navy Enterprise Transformation: Working for the Greater Good

In early 2007, Admiral John Nathman, CFFC and leader of the Fleet Readiness Enterprise (FRE), considered the progress that the Navy had made over the past several years improving readiness at reduced costs through the adoption of “enterprise” behavior. The enterprise approach empowered stakeholders across multiple commands to take a holistic view of objectives and processes and act cohesively to achieve required output with greater efficiency. It countered the numerous tendencies that encouraged consumption-oriented behaviors and that subverted people’s view of and ability to work toward the “greater good” of the Navy. The enterprise model involved cross-organization collaboration and decision-making, but it did not impinge on the sanctity of the chain of the command structure.

The enterprise approach emerged in the late 1990s in response to the declining state of Navy readiness, particularly in the Navy’s Air Forces. Propelled by CNO Vern Clark and led by Nathman, naval aviation first focused on improving readiness in the inter-deployment training cycle and then expanded to include deployed air units and air craft carriers. As the enterprise concept took hold, the term Naval Aviation Enterprise (NAE) was officially embraced in 2004. In 2005, the surface and sub-surface forces, both of which had been engaged in embryonic enterprise activities for many years, launched their own formal initiatives: Surface Warfare Enterprise (SWE) and UnderSea Enterprise (USE). These were followed in 2006 by the formation of two additional warfare enterprises: Naval Network Warfare/FORCEnet Enterprise (NNFE) and Navy Expeditionary Combat Command (NECC). In 2006, the Navy extended the enterprise framework into the fleet and corporate management tiers, creating the Fleet Readiness Enterprise (FRE) and the Navy Enterprise, and in early 2007 it added the Navy Provider Enterprise.

Admiral Nathman, who had been involved in the development of the enterprise concept since the late 1990s, was encouraged by the significant gains in readiness and the cost savings which the


**NB: This case study is based on interviews with participants in the various Navy Enterprises and on pubiished documents. It is intended as an educational tool to facilitate discussion and learning. Although every effort has been made to ensure the accuracy of the information, the case does not purport to be a definitive historical record. Any factual errors or misrepresentations of individuals’actions or words are solely the responsibility or the author.


Sam Perkins, Babson Executive Education, prepared this case under the direction of VADM Phil Quast and RADM Harry Quast.


Copyright © United States Navy and Babson Executive Education 2007. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means -electronic, mechanical, photocopying, recording, or otherwise - without the permission of copyright holders.


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