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Like the man who baited his mousetrap with a picture of a piece of cheese and woke up next morning to find he had caught a picture of a mouse, three successive CNOs had to settle for pictures of warships they wanted. Elmo Zumwalt never got his sea control ship; Jim Holloway lost the fight for his strike cruiser; and Tom Hayward finished his tour last month with his DDGX still on the drawing board.
4 4 r ■ Ihe Navy can’t get its act together,” is a statement that has characterized cas- 1 ual conversations of professionals associated with naval ship acquisition for the past several years. Its popular use reflects broad concern with a problem that has the alarming potential to slow or even turn the political tide that is now running in the Navy’s favor.
The apparent “act” which the Navy cannot get together is the creation of firm warship designs for proposed acquisition projects. This results in extended delays or even cancellations, with the consequent disruption of acquisition planning. The visible cause is the Navy’s failure to contain intense internal design conflicts which undermine Navy advocacy of ship projects in the Secretariats and Congress.
Corporate management of change is the real "act” involved, with future sea power composition, capabilities, and affordability being the real issues. The size and shape of the Navy are determined by delivery of new ships into the fleet. These changes have been predestined years earlier by contracting production of new ship classes. Corporate commitments to change, therefore, are represented by commitments to ship designs that are the bases for requests to Congress and—if approved—for production contracts to industry. Warships are the final determinats of all other sea power components: personnel, aircraft, weapons, and auxiliaries.
Getting the Navy headquarters bureaucracy, including its vast research and development (R&D) extensions, to be a responsive instrument of change is the challenge. In order to capitalize on traditional technical strengths, the Navy uses broad in-house participation in the design of warships. Before these strengths can be realized, however, the inherent negative attributes of bureaucracy must be offset. Navy practices no longer are sufficiently successful in coping effectively with contemporary circumstances of warship acquisition.
Specific means once existed for Navy management of change through ship acquisition. These were lost in the trauma of DoD management centralization in the 1960s, which imposed new management practices upon the Navy. Experience has proven that these adopted practices do not yield effective management of change. If the Navy “act” is to be gotten together, the application of old guidelines to modern circumstances is necessary. This paper is concerned with what the author calls, for lack of an accepted collective term, the “formulation” stages, i.e., through preliminary design.
The corporate challenge for internal Navy management of change is in achieving the corporate commitment to change illustrated in Figure 1. Starting the process, by defining a new warship class objective, is controlled by the Chief of Naval Operations. Implementation of the commitment, if achieved, occurs under legal controls of congressional authorization and appropriation. Therefore, the capacity of Navy officials to manage corporate change comes down to their control of headquarters in getting from the initial CNO-directed objective to a conclusive warship definition for acquisition.
Corporate steering is what is involved. The commitment to move a new ship class design to production amounts to a commitment to a new corporate heading in sea power terms. It also forecloses on alternate courses, for each acquisition decision always involves a choice among competing alternates representing differing views on sea power priorities. This competition runs deep between ship types, warfare areas, subsystems, and even basic technology. And the stakes are always huge in professional, organizational, and economic terms. These competitions have intensified over the last decade as budget limits delayed the needed general rebuilding of the Navy. Also, the stakes have escalated as ship acquisition has been concentrated within fewer projects (classes), with larger buys programmed for each.
Consider the large corporate heading changes involved in acquisition decisions for the FF-1052/1078, FFG-7, and DD-963 classes; these changes were intensely resisted before and during the fact and publicly decried afterwards (recall that the DD-963 additionally governed the Aegis implementation in the CG-47 class, as well as evolving into the DD-993 class). Heading changes that did not succeed during the same time frame (DDG), or fell far short of planned quantities (CGN-36 and -38 classes), have caused
Implementation Of Change As Committed
Figure I: Successive Corporate Objectives in Naval Ship Acquisition Corporate Commitment to Change
Formulate Conclusive Warship Definition, Establish Budgetary Cost Estimate For Production, Confirm Designability.
Confirm Production Basis And Prove Operational Utility
“Lead Ship” Construction
Research, Development, Test And Evaluation Appropriation (RDT&EN)
“Follow Ships” Construction
Shipbuilding And Conversion Appropriation (SCN)
the imminent deficiency of battle group-capable escorts that is now one of the Navy’s greatest concerns. The stakes are even greater in submarines, where class acquisitions are initiated at 10-15 year intervals.
There is another side to the issue of warship acquisition that is even more critical in the long run. Since the CVN-68 design in the mid-1960s, only one warship class acquisition decision of the CNO— the FFG-7 by Admiral E. R. Zumwalt—has come to fruition. Congress mandated the CGN-36; the DD-963 and CGN-38 were fiats of DoD in Admiral T. H. Moorer’s time. Zumwalt’s sea control ship, surface effect ship, and DG (Aegis) never made it. CG-47 was DoD's dictate over Admiral J. L. Holloway Ill’s strike cruiser.
Meanwhile, attack submarine proposals to follow the SSN-688 class, called mid-70s’ SSN and SSNX, never got beyond initial concepts. Early in Admiral Thomas B. Hayward’s term, another SSN was tried and postponed, apparently to the mid-1980s. His other objective (DDGX) dragged on throughout his term and is still being defined. Regardless of how readers judge each of these propositions, all must agree that if the CNO’s leadership is nullified, we are all in deep trouble.
In military environments, it is easy to confuse capacity to manage change with personal leadership: they are very different. To continue the steering analogy, the CNO has the corporate helm—without a rudder connected to it. Instead, the heading of the headquarters bureaucracy is determined by the composite force of numerous and tiny independent rudders (some have not been so little, notably that of the former nuclear power helmsman. Admiral H. G. Rickover.) Very few of these “rudders” are controlled by an initial programming decision to create a new ship acquisition project; even the ones that are have long time delays from inertia caused by programming and budgeting processes. Any acquisition decision by the CNO results in many more losers than winners: Under bureaucratic rules of engagement, all the losers keep control of their rudders—which makes predictable, timely corporate course changes virtually impossible.
For bureaucracy, substitute “large, human, functionally structured organization,” and this turns out to be a particular case of the modern universal problem of corporate management of change. The private sector does not appear to have any sure formula for this either. When change permits an isolated and independent thrust, the general response is to create a new unit for it; existing units are then free to go on as before, or attrite away as the case may be, but they cannot frustrate the new thrust.1
The private sector also has big troubles when it must turn an entire corporation: Witness the Big Three of the auto industry’s difficulties in down-
sizing their products over recent years.
Navy management of change through ship acquisition has always had to deal with the same basic causes of trouble as are at work today. It we look back prior to the mid-1960s, we can observe three corporate mechanisms that dealt with the same basic problems of warship acquisition that are at work today.
The first corporate mechanism was the Ships Characteristics Board (SCB). It exploited what now is called participative management. It involved all the first-line headquarters officers in a formal parliamentary process for “getting the Navy s act together.” Warship acquisition was started in each case by an initial CNO decision identifying a new ship objective, directing the SCB to preserve the CNO’s intention. Through a process that spanned as much as two years, the SCB was responsible for developing a complete “ships characteristics document for the CNO. A preliminary design was also completed, so the proposed characteristics were confirmed technically as being designable. In terms of management of change, the SCB did four essential things: It provided a forum for competing ideas, (achieving constructive debate in a competitive environment), obliged progressive resolution of technical alternatives (under the disciplining influence of the concurrent preliminary design), exacted formal commitments by all responsible agency heads to implement the proposed ships characteristics, and gave the CNO an implicit Navy-wide professional commitment on which to base his advocacy in the political arena. (The SCB also let the CNO know when his directed objectives were not feasible.)
Upon approval of the proposed ships characteristics by the CNO, each agency head was accountable for lining up all the “little rudders” in his piece of the bureaucracy. This included reprogramming actions, resource reallocations necessary to conform with the ordered corporate course, and the containment of residual dissent.
The second corporate mechanism was direct support for the SCB. The Ships Characteristics Division of OpNav was the SCB's dedicated and continuing working staff, making the Board a deliberative body capable of progressive decision making. Technical support was provided by a directly responsive design group, the Preliminary Design Branch of the Bureau of Ships (familiarly known as "420”). The Preliminary Design Branch put the progressive work of the SCB on a hard design basis, so that its final output could support a firm corporate commitment.
The third mechanism was discrete decision action on the SCB's output to accomplish the crossover from formulation to contract design, from achievement of commitment to its implementation. When the CNO signed the ships characteristics document, the project was transferred from OpNav’s lead to the near-absolute implementation authority of the Chief of the Bureau of Ships. Thus, control remained directly identified with the CNO's personal authority until he turned it over for implementation of production as—and only as—approved.
worst of all possible ways, except for everything else that has since been tried.
The above mechanisms were lost in the course of Navy management changes that resulted from DoD centralization of management for systems acquisitions in the 1960s. Not surprisingly, DoD criticisms of the Navy focused on those very mechanisms. Senior DoD officials involved, starting with Secretary of Defense Robert McNamara, understood the macro-management of change, and they were out to
By current accounts, the SCB was an ineffective tool for developing ships characteristics, and the Bureau of Ships was an excessive assignment of authority. On the other hand, none of these accounts—to the writer’s knowledge—judge those mechanisms in terms of their joint contributions to corporate management of change. To paraphrase Winston Churchill, they may have comprised the
do all the managing. During the 1970s, DoD gradually loosened its macro-management, but the Navy has not reset to a comprehensive corporate view of macro-issues in warship acquisition. (Service officials frequently complain about DoD’s micro-management; this draws them into the inherent contest between Navy and the Office of the Secretary of Defense (OSD) bureaucracies.)
Two changes have been all-important for the management of change. The first has replaced the horizontal bureau organization with a vertical headquarters organization. On paper, this clearly defines lines of authority, but it really maximizes bureaucratic layering thus admitting more opposing rudders, and increases their net leverage. In most cases, the “rudders” producing this leverage do not have a clear picture of what higher officials are trying to do—do not even know they are involved. Each office simply continues to “do its own thing,” and has a net effect like that of Brownian motion.
Operating formally through a vertical organization precludes the direct coupling of key activities that made the corporate mechanisms of yesteryear workable. Now, the formulation activities of ship acquisition are so highly distributed vertically that the technical bases for high-level decision making cannot be reached by decision makers.2 Management of change simply cannot work by remote-control employment of multilayered paperwork.
The second change was adoption of modem project management dogma, but it looks better on paper than it works in reality. Ship Acquisition Project Managers (SHAPMs) are too far down in the bureaucracy to be effective. The reality of project management is that it is intended to short-circuit bureaucracy. To do that, it must be positioned at the seat of the power it employs and have direct access to that power. During warship design formulation, that means the right hand of the CNO.
Recall the earlier observation that the FFG-7 is the only modern instance of a CNO intention in warship acquisition that held up. It succeeded because the real project manager during the formulation stages was Vice Admiral Frank Price in OpNav. He did not have the title, but everyone understood that he was employing the full authority of Admiral Zumwalt. By concentrating on the FFG-7, Admiral Price found and preempted control of all the involved bureaucratic rudders. It worked. The FFG- 7 formulation survived essentially as originally directed by the CNO; whereas the DG (Aegis), sea control ship, and surface effect ship were left to lower level project managers and failed.
Since the bureau era, corporate management of change has been complicated by a fundamental alteration in warship-related R&D circumstances. The result has been that major R&D programming and technology selection issues are now coupled into the formulation stages of ship acquisition. This draws in another organizational dimension of R&D competitions. Thus, the modern “act” troubling the Navy must be recognized as operating on two levels, with control of the R&D “sub-act” being required to deal effectively with the warship “act.”
Warships are built from the R&D pipeline and designed from subsystems, weapons, technology, and materials options predicted from that pipeline. The only macro-variable in this is the timing relationship of R&D pipeline developments to warship design stages. Navy corporate practices are historically predicated upon the R&D pipeline serially preceding ship acquisition. Under this premise, R&D programming occurs far in advance of applicable warship acquisition, providing a well-defined range of options for warship definition and design data as needed for warship design. Nevertheless, the serial pipeline premise is inconsistent with basic DoD policy, and the OSD has exercised its R&D programming and budgetary authorities to cancel that premise by pipeline attrition.
Warships still must be built from the R&D pipeline, which must now be created ad hoc as the essential technical foundation of each warship acquisition. Further, its programming must lead and thus progressively enable warship design. In these circumstances, management of change has a high and critical content of R&D programming. This becomes an almost insuperable complication since R&D is a separate, functionally structured organizational domain extending to the three-star level of OpNav.’
The Navy's warship “act” has been driven to a visible level of frustration by the R&D sub-act. There are now two modes of management of change. One is the conventionally recognized mode of warship acquisition. The other is the parallel—but unstructured—R&D programming mode for simultaneous creation of the enabling R&D pipeline. These modes simply cannot be motivated and managed independently if they are to realize a common end— i.e., warship design formulation.
Warship acquisition is stepwise management of corporate change. It must happen in a controlled manner if U. S. sea power is to be sized and shaped predictably. Since warship acquisition is a recurring corporate imperative, specific corporate mechanisms and managerial forms are essential to make management of change successful. Three requisites must be satisfied.
The first requisite comprises procedures and practices specifically and solely for the management of change through warship formulation. This starts with a choice of either participative management, along the lines of the old SCB, or unequivocal and untemporizing implementation of project management. The SCB approach was enhanced by the horizontal bureau structure, making it nominally a body of organizational equals. Whether a similar approach would be workable in the current vertical organization is not clear. There are signs that the private sector is rediscovering the efficacy of participative management; the SCB concept deserves unbiased reconsideration.
Right-hand-of-the-CNO project management would combine the CNO's authority with the manager’s means to control the relevant rudders of the bureaucracy. He would act as the CNO's surrogate, and his authority would have to include the R&D “sub-act,” as well as the warship "act,” which would force the role to the CNO level.4 Since the role would be identified with the CNO's direct control needs, it would end after warship formulation—with a typical lifespan of two years. (Once formulation is completed, acquisition execution management could and should transfer to the professionally capable domain of Naval Sea Systems Command.)
The second requisite is corporate recognition that OpNav is highly design-dependent for definitive warship formulation, cost reconciliation, and advocacy. As indicated in Figure 1, these corporate functions are actually the purposes of the first three stages of design. OpNav's design dependency cannot be satisfied by formal paper flow through many vertical organizational layers. Direct and continuous coupling is essential.5
Emphasis on design for defining the commitment to change, and for enabling the CNO's control of the process, may be the most questionable aspect of such a proposal. Experience over the last 15 years shows that neither systems analyses nor “requirements” documents—no matter how voluminous— can make OpNav independent in either respect.
The third requisite applies to the R&D “sub-act.” It must be integrated into the warship “act”—operationally and managerially, if not organizationally.6 Getting around the contrary corporate mindset would be greatly facilitated by recognition that ship acquisition comprises two markedly different levels of undertakings: warships and all other ship types. Warship acquisition is geared to the R&D pipeline at least through lead-ship construction, and the initial stages of warship design are operationally dependent upon it. Until these dependencies are subject to direct control by warship acquisition management, the tail will continue to wag the dog.
Concentration on restoring a strictly internal Navy “act” as the corporate means for legitimate and indispensable exercise of the CNO's authority is essential. Since the mid-1960s. Navy practices have been little more than extensions of DoD's procedural directives for major system acquisitions. The effect has been to submerge Navy objectives in OSD criteria and to focus Navy actions on OSD "milestones”—thereby masking the CNO’s vital role. The CNO represents naval professionalism and this must become once again a distinct and concerted force in shaping U. S. sea power.
This paper has concentrated on basic principles.
to the exclusion of people motivations in high stakes conflict situations. Nevertheless, a valid synonym for corporate management of change at the level being considered would be “the highest-stakes power brokering in the land.” Power brokering extends beyond the Navy, involving national politics and huge defense industry competitions. To assume that such brokering can operate on the bases of human objectivity and paper management concepts is nonsense—it takes autocratic control and brute force management.
It appears, in retrospect, that the overall effect of Navy adaptation to the DoD management revolution of the '60s was to concede by omission the management of change to DoD. Since then, the Secretaries of Defense have gradually backed away from the activist role in this regard, but the Navy hasn’t readapted. The Administration is revising DoD directives to restore the burden of initiative to the services to a degree that few knowledgeable professionals ever expected to see. Not only is the need critical, but the Navy has much greater latitude to restore corporate control of its “act” than at any time in the past 20 years. Whether it does so, and how effectively it focuses on corporate macro-issues—to the exclusion of bureaucratic micro-issues—will have a profound effect on the future of U. S. sea power.
1 The Strategic Systems Project (PM-1) is a partial analogy to the typical private sector approach. From its Polaris beginning, PM-1 has been an organizational cell with unique command and budgetary channels.
2 In the bureau days, the military and civilian heads of “420" were well known to all senior officers in OpNav and the bureaus. Involving them in facc-to-face discussions—up to the CNO—was the usual way of resolving tough design issues, and the SCB was a large part of their professional lives. Now. it is unlikely that any admiral outside the Naval Sea Systems Command knows anything about the equivalent group or who its key professionals are.
5 The Director, Office of Research, Development, Test, and Evaluation (OP-098) controls the critically relevant phases of R&D. titled Advanced Systems Development and Engineering Development.
4 This argument applies only to warships and advanced ship types of high/ new technology content. Other ship types, because of their much-reduced tie-in to the R&D pipeline, could be managed within NavSea.
41 If and when a direct OpNav design coupling is reestablished, as in the old SCB ”420" days, it will be found that conventional design criteria for the first three stages no longer adequately support OpNav's needs. Among other reasons, they do not provide the means for OpNav to come to grips with the warship affordability issue. The only effective answer to this dilemma lies in the use of warship design to elevate the Navy's net R&D investment objectives from functional subsystems and weapons to warships.
hSome readers may be puzzled by the fact that Figure I indicates that ship acquisition is funded under RDT&EN through contract design, which implies that R&D is already integrated. Funding ship design under RDT&EN is a budgetary requirement of DoD, first imposed in 1967. Common funding is as far as it goes, however. The Navy still holds that ship acquisition is not development and has sustained the separation described herein.
Captain Eckhart is chief scientist at the autonetics marine systems division of Rockwell International. He is a 1945 graduate of the U. S. Naval Academy and holds B. S. and M. S. degrees in electrical engineering. He served as head of the electrical/ electronics design branch. Bureau of Ships, and director of the ship concept design division at the Naval Ship Engineering Center.