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4
The Need for Top Leadership to Drive Change Across the Entire Navy
System
The Compelling Case for Major Change
Across the Navy
Current Navy infrastructure business initiatives (i.e.,
regionalization, Smart Base, competitive sourcing, and so on) are
good starts, but they have produced only a small fraction of the
funds needed to meet the Navy's modernization goals. The current
efforts, achieved largely by allocated budget reductions, have
taken about $0.75 billion per year out of the infrastructure, but a
reduction in the range of $3.5 billion to $5.0 billion per year is
needed to return the modernization budgets to the level deemed
appropriate by the Navy.
The budget reductions achieved to date appear to be arbitrary
and isolated, the result of tactical actions. The committee could
not identify an overall corporate Navy strategy to integrate,
prioritize, and allocate resources so as to achieve essential fleet
support at significantly less cost for the support elements of the
total navy system. Also, the compelling case for major change in
the way the Navy conducts its infrastructure business is not being
made by the senior leadership. Change is being led by isolated
support and staff elements who lack the directive and authority to
impact the total Navy system. No proven methodology for conducting
the evaluation of the current system and for implementing and
managing the corporate Navy change could be identified by the
committee.
Thus, much more dramatic change, including a major cultural
change that only the Chief of Naval Operations can lead, will be
needed if the Navy is to succeed in deriving sufficient
modernization funds out of its infrastructure. Failure to act
quickly and comprehensively to bring infrastructure costs down will
likely result in an inability to acquire some of the modern ships,
submarines,
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aircraft, and information systems that will keep the U.S. Navy
both at its current size and preeminent in quality in the
future.
The magnitude of the change required is very large and will be
difficult to achieve. The difficulty is compounded by the fact that
the Navy is a tradition-driven organization that has changed only
slowly over the years. The entire Navy organization will have to
reengineer itself to become more businesslike and cost-efficient.
This will require senior leadership to engage all elements
of the Office of the Chief of Naval Operations (OPNAV) and
second-echelon commands in the change process. Since the fleet
forces levy the requirements on the shore-based and support
organizations, all of these groups must engage in a
consensus-building change process that will establish the desired
balance between forces, modernization, and infrastructure. The
comprehensive change process must begin immediately.
Significant change, unfortunately, is not a natural process for
most people. Most people become very comfortable with the present
state that they have helped create. Their contributions have
established their sense of self-image and worth to the organization
and of their organization to the world. Even when situations and
conditions arise that demand rapid, responsive change, such as the
budget crises within the Navy, many people are reluctant to take
action because they (1) refuse to recognize the seriousness of the
threat, (2) are not sure what to do, (3) do not want to give up
what they currently possess, or (4) fear the unknown future state.
Change must be managed by senior leaders who have a compelling
reason to move to a new state, have a clear vision of that future
state, and have a plan to deal with the obstacles and impediments
that stand in the way of that future.
Fortunately, there are numerous examples of organizations that
have successfully managed major change in response to threats to
their existence. There are key elements for success that have been
derived from these cases. The processes or methodologies used by
successful leaders to bring about permanent, lasting change within
their organizations have also been identified.
Unfortunately, numerous examples of failure to change quickly
and decisively also exist. U.S. automakers in the 1980s failed to
recognize the serious threat from Japanese automakers and lost
significant worldwide market share that has not been recovered.
U.S. commercial shipbuilders failed to deal with the serious cost
threats from Japanese, Korean, and other shipbuilders and have
essentially become minor players in the world market. IBM failed to
recognize and deal with the threat that minicomputers brought to
the mainframe computer business and required many years to rebound.
Digital Equipment Corporation failed to recognize quickly enough
the impact that personal computers would have on the minicomputer
business. As a result, Digital Equipment Corporation has been
consumed by Compaq, a personal computer manufacturer. The
consequences of failure to act quickly can be significant.
In this chapter, the committee highlights the vital role of
leadership in mak-
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ing change happen. A set of key guides or elements to any
successful change is given in Appendix D. An example of a proven
methodology for taking large organizations through major change is
also provided. The senior leadership of the Navy should use one of
these proven step-by-step processes to rapidly move the
organization to the desired future state.
The Leader's Crucial Role in Changing
the Organization
The leader of any major organization plays a pivotal role in
creating the successful future state. For the U.S. Navy this leader
must be the Chief of Naval Operations (CNO) with the support of the
Secretary of the Navy (SECNAV). This role cannot be delegated
downward if the entire organization is to change. Only the CNO has
the authority to bring the fleet elements and the support naval
units to the change process and to demand that results happen. Only
the SECNAV has the authority to bring all of the stakeholders in
the Department of the Navy to the change process and to demand that
results happen. Change will occur below this level if led by the
leader of a subordinate organization, but it will be confined
largely to that organization and fragmented for the Navy as a
whole. In studies of organizations that have made significant and
lasting change, the leader of the organization has been observed to
display some specific characteristics described in the sections
below.
Be the Champion for Change
The leader must be the champion for change within the
organization. This role cannot be relegated to direct reports or to
staff personnel. The reasons and urgency for change must be
communicated clearly and often. The reasons must be compelling to
the people in the organization, and the negative impacts of not
making the required changes must be put forth. The leader must
demand that direct reports follow his or her example in driving the
change down through the organization. All personnel within the
organization must clearly recognize the importance and high
priority that the leader places on the need to change. The leader
may designate other champions within the organization to reinforce,
facilitate, and implement change, but there is no substitute for
the top leader being perceived as the driving force behind the
change process.
Create the Vision of the Future
State
The leader must develop the vision of the future state of the
organization. For the operational Navy, this must be the CNO in
conjunction with senior leaders. This must be a clear and
consistent vision that is communicated to all within the
organization. It must be a future state (e.g., 5 years) that is
more
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desirable than the present and one that members of the
organization deem desirable. The CNO must convince others that the
future state is achievable through hard work and smart decisions.
For example, this future state could be a smaller but more capable
and ready Navy in which global connectivity provides information
superiority and is coupled with smart weapons to provide dominance
in naval warfare.
In essence, when a clear vision of the future state 5 years down
the road is communicated, it becomes the “stake in the
ground” from which planning backwards to the present state
can be accomplished. Although many in the Navy have a vision of the
future, only the CNO has the authority and resources to make the
change to a future state happen for the entire Navy organization.
With a clearly stated and communicated vision from the top, other
visions within the organization can be aligned and made consistent
with the overall vision of the Navy. Efforts to create and align
visions and change at lower levels in the absence of this unifying,
overarching vision and action will at best be fragmented and
frustrating for the individuals involved.
Set Strategic Goals
The CNO with senior leaders, and with the concurrence of the
SECNAV, must set the strategic goals of the operational Navy. The
goals must be of the highest importance to the future direction of
the Navy. For example, a strategic goal might be that the Navy will
be capable of engaging in and winning two wars simultaneously
anywhere on the globe. Strategic goals must be clear and
measurable. They should be “stretch” goals, that is,
ones that can be accomplished only through sustained hard work.
They might be expressed in terms of numbers of ships, submarines,
and aircraft in existence in 5 years in order to conduct two wars
simultaneously. They might be expressed in terms of the budget
available for specific modernization through reductions in other
areas. For example, a strategic goal might be that over the next 2
years the Navy will reduce total infrastructure costs by 20 percent
through process changes and competition, with those savings being
allocated to the funding of DD-21, IT-21 initiatives, and the joint
strike fighter (JSF).
These strategic goals will set in place the tactical plans and
actions that will lead to accomplishment of the desired results.
When the strategic goals are accomplished, the organizational
vision will be realized. When goals are vague, such as
“achieve cost reductions without sacrificing
performance,” success cannot be measured and the results will
not equate to the vision.
Involve All the Stakeholders
The leader is the only person who has the authority to involve
all the stake-holders in the change process. In any organization
involving multiple, depen-
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dent functions, the leader must bring together and engage all of
the participants. For the operational Navy, the CNO must be the
person to engage all of the stakeholders in the change process.
This involves the fleet commanders, the infrastructure commanders,
the systems commanders, and the CNO staff.
At the next level of the Navy, fleet operations involving the
surface, submarine, and aircraft elements, and the shore-based
elements, including the systems commands, form a closed system. The
warfighting elements place requirements on technology, weapons,
logistics, shore housing, job rotation, and so on provided by the
support elements. These requirements must always be prioritized and
traded to realize the strategic goals. With reduced budgets, these
trade-offs are even more critical. The fleet commanders must engage
the heads of all of these elements in the change process. It
is natural that not all participants will want to engage in change
equally. It is the role of the fleet commander in this case to
demand participation from all parties critical to achieving the
future state of the organization.
Establish the Framework and Process
for Involving All the Stakeholders
The leader at any level must establish the framework that will
be used to manage the change process. Meetings should be scheduled
at regular intervals. Attendance by all of the stakeholders must be
mandatory. The leader must be in attendance and guide the
discussions. Unless a high priority is placed on these meetings and
the leader is in attendance, the chances of achieving difficult
change in which compromises and concessions are necessary are
slim.
Employing a proven end-to-end process for managing change will
greatly facilitate these meetings. Fortunately, there are many
proven processes available. The elements of one such successful
process are described in Guide 7 in Appendix D.
Allow Mistakes
As the members of the organization undertake change, mistakes
will be made. In an organization such as the U.S. Navy in which
following procedures has been sacred, departures from the norm and
mistakes have been viewed as unacceptable. As a result, members of
the organization are reluctant to take risks. In order to encourage
innovation and change, the leader must make it clear that mistakes
are an opportunity to learn and to start again along the path to
permanent change.
Demand Results on a Timetable
The leader must demand results on a timetable commensurate with
achieving the goals and vision. Change is difficult, and it is
unnatural for humans to
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give up authority, control, budgets, and so on for the greater
good of the organization. Unless the leader demands that specific
goals be achieved on a timetable and provides the tools to make the
changes, procrastination and only minor accomplishments will be
realized. Visible rewards for those who meet and exceed goals will
reinforce the change.
Communicate
The leader must constantly communicate the vision and strategic
goals to all members of the organization and present a compelling
case for why everyone in the organization needs to buy in and
become part of the change process. Forums, broadcasts, newspapers,
and luncheons are all mechanisms for spreading the word and
developing understanding, cooperation, and participation. Changing
a culture is difficult and takes a long time to accomplish. The
leader must be the great communicator in convincing people to join
in the path to a brighter future.
Finding
The committee recognizes that many cost reduction initiatives
are underway, but the compelling case for major change in the way
the Navy conducts its business is not being made by the senior
leadership. Change is being led by isolated support and staff
elements who lack the directive and authority to impact the total
Navy system.
Major Recommendation
To achieve its recapitalization funding goal, the Navy should
develop and implement a corporate-wide strategy to improve the
business operations of the entire Navy infrastructure. The senior
leadership of the Navy, led by the Secretary of the Navy and the
Chief of Naval Operations, should establish a clear vision and a
corporate-wide strategy for conducting the future operations of the
entire naval system within the budget constraints projected. The
strategy must be clear on what is to be achieved, in concrete
terms, how it is to be achieved, with what means it is to be
achieved, and when it is to be achieved. The strategy, of
necessity, must address all portions of the Navy infrastructure,
not just a few isolated portions thereof. A compelling case for
major change in the way business is conducted must be made by the
CNO and communicated to all elements of the Navy. Responsibilities
and authorities to implement change must be made clear and issued
by the CNO.
Recommendation
The CNO should make participation in the change process
mandatory for
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all elements of the Navy. Target reductions, implementation
calendars, and progress monitoring should be established. Results
should be demanded and organizations and individuals made
accountable. Innovative ways of conducting business should be
encouraged, supported as appropriate, and rewarded based on
measurable results.
Representative terms from entire chapter:
future state