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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
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-