Archive for August, 2018

Final Thoughts


The Navy Career Advancement system is the one thing that is the most destructive problem. I have a top MBA and I’ve been in a Fortune 500 company for several years now and I am very successful there. I attribute a lot of my success to the things I’ve learned in the Navy. The business concepts I learned would make me way more impactful a leader in the Navy. But we don’t allow for many people to get any of that experience and knowledge and the few that do are relegated to low-impact jobs because you just got to have that boat tour.

I read an article a while back about the VP-5 Skipper (CDR Toraason) making some really interesting changes to the culture and organization of the squadron. I wasn’t close enough to know whether it made an impact or not. I don’t know if the squadron felt it was an improvement. I have no idea if the changes lasted beyond his tenure as a Skipper. I do know that he had the unique background to do this, I’d urge anyone reading this to think hard about the experiences he had and why that made him more successful than the standard VP Skipper.

Recently, I got an e-mail alerting me to some new comments. After seeing the comments, I thought they were really well thought out and it gave me the motivation to quickly finish the last three articles. I didn’t put in 100% on these – apologies if the quality isn’t that good. If anyone would like to take up the mantle of running this blog, feel free to send a note to p3reformer@gmail.com.

Retrospective on this Project

Critical learnings:

  1. Strategy: Why we need to be bad in order to be great
  2. Incentives are Important: Why our DUI prevention incentives don’t work but our mishap prevention incentives do
  3. Operations Management: The answer to “doing more with less”
  4. Talent Management: Allowing people to do what they enjoy and are good at leads to better outcomes for everyone
  5. A Strategy for Change: What are VP Navy’s unique strengths and how to leverage them
  6. Conclusion – The military is not a business: Why treating it like one can lead to failure
  7. Final Thoughts
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Conclusion: The military is not a business: Why treating it like one can lead to failure


In business, there are revenue centers (Sales) and cost centers (Manufacturing). Most businesses try to invest in the revenue generating side of the house and cut costs on the cost centers in order to maximize profits (Profit = Revenue – Cost). The investments on the revenue side are typically things that will make customers buy more of their product or pay more for it. Cost cutting is to offer the product cheaper. For this example, please do not go down the rabbit hole of thinking that revenue is government tax dollars. In my Navy-as-a-business model, the customer is the US Taxpayer, and tax dollars represent customer payments to the US Navy in return for their product.

The VP Navy would be traditionally considered a cost center. Everything we do is scrutinized by a budget, every activity tied to a monetary cost. Cost cutting efforts would be to cut back on maintenance, cut back on flight hours, reduce the number of people, make the operations more efficient. The amount of dollars we spend is a pretty easy thing to measure, and hence is easy for our leaders to show impressive results to save money that are explicitly stated.

A business leader might be able to showcase cost cutting efforts but would be held accountable if those cost cutting efforts reduced the revenue side more than the money they saved. A good example is to cut costs by reducing quality. But if the quality gets too low, people stop buying the product, or won’t be willing to pay as much. So if you have saved $1M but lost $2M in revenue = bad idea and that’s easy to know because you’re comparing dollars to dollars.

So if you treat the VP Navy like a cost-center, you’d come to two basic conclusions:

1)      We need to cut costs

2)      We need to get more for what we’re paying

The first conclusion is what happens most often. With every budgetary review, there is pressure to reduce flight hours, reduce personnel, reduce everything. Very infrequently is there ever a push to increase efficiency through process improvements (see the operations management article).

In executing the second conclusion, there is a problem. The Navy doesn’t have a great revenue metric analogous to one that a more traditional business would have. We don’t make any money. The product we offer is National Security and Force Projection. It’s very hard to put a dollar amount to that. How much is it worth to the US Taxpayer that we’re good at ASW? How does the US Taxpayer every feel like they’re getting value for their payments if we never use our ASW?

My belief is that decision makers have a strong incentive and are more likely to deploy force to show value and justify the cost. Or they may be more likely to approve missions or operations despite the fact that they seriously cost-cut and they’re not sure the mission will be successful. I think the two major ship collisions in the 7th fleet speak to this trend (and mind you those are the two incidents we know about, there are probably tons of close calls). We cut costs in training our people and our leaders are desperate to show that we can achieve the same results at a lower cost. In the aviation community, we only need to wait a couple of years for a major grounding due to safety issues stemming from cost savings.

The conclusion is that there are some things that the Navy could learn from business. But going too far and treating it exactly like a business is dangerous and foolish.

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A Strategy for Change: What are VP Navy’s unique strengths and how to leverage them?


This one should be pretty quick. It’s building on the previous blog post about what a good strategy is, which is leveraging an organization’s sustainable competitive advantage to create value better than others. So what are our sustainable competitive advantages? Let’s first break down the word sustainable:

Sustainable means that it’s a long lasting advantage and isn’t easily lost. Apple’s iPhone technology package was revolutionary, but wasn’t a sustainable advantage. Samsung caught up pretty quickly. Modern datacenters use up a lot of space and energy. Hence, datacenters in areas with cheap real estate and hydroelectric (cheap) power have a distinct advantage.

Competitive means that there is an inherent comparison to another organization. Who do we compete with? For the sake of this article, I am going to ignore who we compete against – it’s very unclear and at the end of the day it doesn’t matter – we want to be the best we can be.

I think our two biggest advantages are:

1)      Our people’s intrinsic motivation

2)      Heavy Rules-based culture

I created a survey a couple years back testing whether people try hard or do not. I was surprised by the results in that, on a blog that was designed to attract people complaining about the VP Navy, most of the participants stated that they try very hard despite the numerous incentives not to. For-Profit Corporations would kill to have that kind of dedication.

People follow Navy instructions very closely. This is good and bad. The bad thing is that it doesn’t allow for much innovation outside those instructions. It can also teach people to be unable to make decisions without instructions to tell them how to think. The good thing about it is that you can make a change instantaneously with a word document and a signature.

My recommendation is the implement some instructions that govern innovation, incentives and rewards, role placement, process improvement, and change management. Any skipper can, overnight, create an innovation cell to do all of these things, and I know there would be dozens of people that would love to be part of that effort. The bottom line: use the rules-based culture to frequently make incremental improvements.

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Talent Management: Allowing people to do what they enjoy and are good at leads to better outcomes for everyone


Different people excel at different things. There are some tasks that some people will never ever be good at, regardless of how much training they have or effort they put in to it. Consider someone who has a really difficult time with attention to detail – they’re probably not the best person to release message traffic nor will they be a very good admin officer. Some people are terrible at relating to others and make terrible leaders, yet we force them to assume leadership roles. Hate doing paperwork? NATOPS probably isn’t a good fit, even though it’s generally reserved for the best aviators.

There’s two things at play here:

1)      The Navy’s career advancement program requires a breadth of roles for all people, focusing and rewarding more for different experiences rather than high performance in one area of focus.

2)      There’s zero effort to identify people’s true strengths, zero effort to explicitly state what strengths people need for different roles, and zero discussion with people before being placed in a role.

This isn’t a good system. Some people will excel in many different roles, or just get lucky and get the roles that they’d naturally have been good at. Many people, however, will find themselves in a position they’re not very capable at. They will respond in two ways: work hard to overcome their deficiencies and be marginally successful in the role, or do terrible in the role and their career never really recovers. This happens all over the place and at different times – I recall a JO Comsec Officer who had difficulty understanding process and paying attention to details. He was fired and that was that. One year into this person’s career, it was over – he could never recover from failing at a job he would never have been successful at anyways. That’s an example of what’s bad for our people.

We see this also at the O-4 level, where the career funnel almost mandates you take your turn as the MO or Ops O. What percentage of O-4s do you think were really good at those roles? It’s less than half. This is an example of what’s bad for the Navy. Another example are those roles to PMA-XXX where somebody would influence long-term strategy, tactics, and procurement. There’s virtually no screening for ability before those roles and they have the potential to be hugely impactful for the entire community – bad for the Navy.

Leaders that have been successful through this system will argue that it’s a testing platform to figure out who’s the most adaptable, and it’s also is a great learning opportunity when you fail. That’s true. But if the penalty for failure is a derailed career, I’d argue that failure isn’t celebrated as a learning opportunity but is something to avoid at all cost.

There’s a much better way to do this. When people get roles they’re going to be good at and like doing, it’s really good for the Navy. It’s also really good for the person, because they’ll get high performance marks. It’s also really good for management because they don’t have to have as much oversight. Everyone wins.

A VP skipper can implement this within the squadron. The only thing he/she would have to change is the evaluation system. You’d have to eliminate the “X JOB” = #1 ranking philosophy and you’d have to ensure the person behind you that will eventually write the final fitreps is onboard with this philosophy too. And each XO could be very transparent about the skills needed for people to be successful at follow-on orders and try to place people accordingly.

There’s tons of people that agree the career progression in the Navy needs to be revamped. There was an 80+ page paper written by some ex-Army officers at Harvard. No company in the world manages their talent the way we do. I remember speaking to a VP O-6 about this. I was really disappointed that he generally agreed with me but he said, “I don’t think there’s a better way to do it.” Knowing what I know now, he was blind to his own bias. He considered himself very successful, and automatically attributes it to the system of career progression. But consider how many skippers are getting fired and how broken our senior ranks seems to be.

There’s one really easy way to make this better – make PERS more transparent. Have job postings. Have some writeups about what the job entails and what kind of skills you’d need in that role. This isn’t that difficult to do.

Highly skilled people leave the VP Navy because of this broken system.

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