Remarks of the Secretary of the Navy The Honorable Gordon R.
England at the Current Strategy Forum Naval War College, Newport, R.I., 12 June 2001

Admiral Cebrowski, thank you for your gracious hospitality.
Distinguished guests, faculty and students of the War College, ladies and gentleman, members of the media, thank you for the warm welcome.

A special thank you to the Naval War College Foundation for all you do for the college and for our men and women in uniform. It is terrific to be here today, especially as your Secretary of the Navy. Being the Secretary is truly a great honor and it is a privilege to serve our nation.

I will be forever grateful to President Bush for the nomination and to Secretary Rumsfeld for his support, and to the previous Navy Secretaries for their contributions.

It's only been 2 and 1/2 weeks, and I'm already deeply impressed with the men and women in uniform and the civilian staff. They are a group of dedicated professionals who take pride in their organization and exhibit a strong commitment to their country and, by the way, are unusually bright, congenial and engaging. It is a pleasure for me to join with them in this noble service to our nation. It's even a greater pleasure to join with Admiral Clark and General Jones in forming a close team to lead our Naval
Services.

My first days were rather exciting. Less than 24 hours after
taking the oath of office, I introduced President Bush at the Naval Academy graduation before a stadium packed with 15,000 excited and exuberant midshipmen, their families and friends. It was truly a wonderful day and it allowed an opportunity to spend time with the President and establish a personal relationship. My next working day began with breakfast at the White House and ceremonies with the President at Arlington National Cemetery to honor our men and women in uniform who made the ultimate sacrifice for freedom. After such a start I was excited to see what day 3 would bring!

At the end of day 3, my wife asked how things went. My response was that it reminded me of a story about a mother and her son. One morning the son would not get up to go to school. No matter how hard the mother tried, the son would not budge. Finally, the mother asked, "give me two reasons why you should not go to school,
" and he replied, "(1) the students don't like me and
(2)the teachers don't like me, and I am not going to school." He then asked his mother for two reasons why he should go to school. "First," she replied, "you are 63 years old.... and second, you're the principal - now get up and go to school!" I understand that the students here lovingly refer to this auditorium as the "blue bedroom". Hopefully you'll be able to get up and go back to school after this talk!

This is an ideal time for me to be changing course and taking on these new responsibilities. Being 63 years of age, I will be in my late 60s or hopefully early 70s when President Bush leaves office.

My only purpose is to pursue changes that will improve the lives of our people, and their ability to perform their mission.... in short, to make a difference. I know you're here for the same reason...to make a difference.

It would be nice this morning to relay the results of the various DoD review panels, the QDR, and the various budget exercises that are underway within the building. Frankly, however, it is too early to predict the final outcomes of these discussions. You'll need to invite me back.

I can, however, provide for you with some insights Regarding my intentions. In a broad sense, I will focus my energies on Combat Capability, Business Practices, People and Technology. Each of these is inter-related and therefore, they will be addressed in a comprehensive manner.

Before proceeding, let me first speak to a point of ethics very important to me.

My pledge to you is to be forthright, honest and direct in all my dealings. My expectation is that each of you will conduct your dealings in the same manner, with me, with each other and with our constituent groups. It is critically important as we go forward that we be forthright, honest and direct and establish mutual bonds of trust and respect with every individual and in every circumstance.

Allow me to address some of my early impressions of this
"military business" and make a few suggestions regarding issues that need to be addressed and solved as quickly as possible. The War College and this forum in particular can contribute to this process. Your ideas and the results of the panel discussions will provide a valuable input to me as we move forward.

The structure of the DoD is indeed unique. It is perhaps one of the last bastions of the Cold War's legacy of centralized planning and execution. Unfortunately, it is largely out of step with modern American management.

Step back and mentally picture a map of the United States...a vibrant, dynamic technology-based economy and, buried within that system, is a separate and distinct system surrounded by 5 walls consisting of a labyrinth of rules and regulations.

Rather than competitive market forces, the foundations of this separate economic system is the continued confidence and trust of each elected President, Senator, representative and, ultimately, the American people.

My initial concern is that this institution could, over time, lose that trust...unless it begins to tear down the walls and better integrate into America's economic fabric.

The DoD has responsibilities and constraints, different from any commercial business but not so different as to remove itself from the U.S. economic mainstream. Occasionally rules are modified, that is a brick or two is removed from the wall, in an effort to bring in new commercial companies or to improve the business environment for traditional defense contractors. But those efforts have mainly been unsuccessful or difficult at best.

Commercial companies have not crossed the walls....while
traditional defense companies have begun to diversify into other segments of the economy.

In my judgment, a workable solution is to remove some large
portions of these walls and provide an environment that is
conducive for all U.S. companies, both commercial and traditional defense industries, to participate, grow and prosper in meeting our needs. This means eliminating many of the unique rules and regulations that govern defense and inhibit efficiency.

Now for some specifics:

President Bush, in his remarks at the Naval Academy graduation, said "we must build forces that draw upon the revolutionary advances in the technology of war that will allow us to keep the peace by redefining war on our terms -- a force that is defined less by size and more by knowledge and swiftness... and that relies heavily on stealth, precision weaponry and information technologies." I fully support the President....and Naval forces inherently fit his vision. Modifications and adjustments, however, will still be needed to meet emerging threats. We must
also be mindful of our evolutionary shift in focus from
operations on the open seas to littoral threats, underscoring the requirement for improved data networking and battle management.

This shift in focus generates a need to both modernize our
equipment and enhance its capabilities across more stressful
missions...such as time-critical strike, theater air missile
defense, and intelligence, surveillance, and reconnaissance
(ISR).

Additionally, when you consider that the average age of our
aircraft is 17.9 years, approaching the average age of those that maintain these aircraft, modernization becomes an imperative. We have precious few new programs to re-capitalize our forces other than systems like DDG 51, F/A-18E/F, and USS RONALD REAGAN. In fact, projected replacement aircraft, such as the F/A-18 E/F and the Joint Strike Fighter will actually be replacing some of our
"newer" aircraft (the F/A-18 C/D, F-14 and AV-8B), while there are no replacements scheduled for our older aircraft such as the EA-6B, P-3, or E-2. The average age of these airplanes is 24.2 years. New funding will certainly be needed, but we must also rededicate ourselves to finding funds for modernization through efficiency and other means.

An inhibitor to modernization is our existing support
infrastructure. The Business Executives for National Security's Tail to Tooth Commission described our Cold War leftovers as "a voracious dinosaur consuming dollars that should be spent on the real mission." We need to free up funds in our tail to better fund our modernization. As you are well aware, we now spend more money on tail than we do on tooth and we need to reverse this trend. Supply chain management is an area of excellence in our
commercial economy, and it is essential that we be open and
receptive to new ideas and approaches such as this. We will.

One approach could be to emphasize sound fiscal management during senior officer and civilian promotions. Skilled war- fighters are needed but good leaders must also know how to control costs, find savings and apply these savings to develop Combat Capability. Our primary goals are to:

(1) Ensure timely delivery of core or mission essential networks, sensors, weapons to platforms

(2) Repairs and maintenance as least as good as any commercial warranty plan affords its customers, and

(3) Insertion of affordable upgrades when required as part of our spiral technology development.

It is not about protecting one's bureaucracy; it is about
returning assets to, and adding teeth to, our combat capability.

Another suggestion is to simply adopt the premise that the core competency of the U.S. military is to train for, deter and, if necessary, fight and win our nation's wars. Activities that do not directly support that objective should be carefully examined and outsourced, or eliminated, if appropriate.

A third suggestion is to replace A-76, the current mechanism for competing government services with the private sector. The effectiveness of A-76 is questioned by our employees, contractors, contracting personnel and even some of our Congressional Representatives. The fundamental issue with A-76 is the focus on manpower costs rather than on total costs and the complete value chain. Our objectives should be on lower total cost and a lighter logistics tail, for instance, by utilizing near-just-in-time delivery of spare parts and equipment.

Correcting the tooth-to-tail ratio can allow us to focus on our primary mission -- readiness, modernization and combat
capability. These are my objectives, and we will be aggressive in developing alternatives to current processes. That brings me to another subject: It is interesting that in just 2 and 1/2 weeks I have heard criticism of our Planning, Programming, Budget System (PPBS).

Perhaps that criticism is justified. Frankly, I don't know. What I do know, except for some specific cases, is that we lack a corresponding Activity Based Costing/Management System. Whatever the criticisms of PPBS, we do at least, have a system in place to allocate and distribute funds. The Naval Services lack a department-wide system that gives us good visibility into how those funds are spent and the actual costs of activities within the department.

Without an activity-based costing system, it is not possible to manage resources effectively. Therefore, as one way of determining our cost of doing business, we will explore, and where applicable, implement the use of activity-based costing systems throughout the Department of Navy.

Our management team should be process-oriented, working on ways to improve "how we do business" rather than concentrating only on specific programs and products. Making the process efficient leads to effective results and solutions that are affordable. Improving our processes simultaneously improves all of our programs and products.

To do that, we need to know where we are and where we're going. Measures and metrics provide that ability and as such, will be a vital element of our process oriented management strategy. Also, instead of a few formal nodes of communications, we'll foster thousands of nodes of informal communications so our people can make informed decisions at all levels. Our objective is to create an environment for all our people to excel.

That brings me to my very highest priority; namely, our men and women in uniform, their families and our civilian workforce. During confirmation hearings, I commented that any capital asset purchased by the Department of the Navy, such as an aircraft carrier, has no asset value to the nation until it is manned by highly motivated and trained people. Therefore, people are indeed our most important resource and as we plan for the future we need to first be sure that our personnel policies will provide us the
people and skills we require for our future systems.

Products without trained and motivated people are without value. In this regard, we will closely examine how we train people, incentivize them and maintain future systems. While it is true that our very aged systems, some 20 to 40 years old, do provide comfortable time lines for training people, those timelines will not support short acquisition times. If we are successful in incorporating technology quickly then we also need to change our training and maintenance practices. This is crucial as training is a major differentiator for U.S. forces.

We will also strengthen our people relationships. In the
Department of the Navy no one as an individual will be more or less important than anyone else. We have a hierarchy of rank and responsibilities but not of people. We will treat everyone equally with dignity and respect.

We will also strengthen relationships between people through
teamwork and jointness. Our motto is "One Team-One Fight" within he Naval Service and with our sister services. Time is limited this morning so I'll make just a few additional observations.

Let me comment on our investment in science and technology; that is, S&T. If we are to prepare for the future, it is essential that we have a robust S&T program. Dr. Pete Aldridge has testified that our objective should be an S&T budget in the range of 2 1/2 to 3% of the total DoD budget. I support that goal with several additions.

One... Ensure that the S&T dollars are truly being spent to
develop future capability and not simply for the "here and now."

Two... Streamline processes so that the majority of funds are spent by engineers and scientists and not consumed by overhead.

Three... Recognize and reward innovation and accept failure as a necessary step toward success. We want people to take risk in research....to reach beyond their grasp.

Four... Fund deep experimentation labs for advances in technology and doctrine.

The following is a quick summary of some additional areas we
should examine: Maximize:
- Net basing
- De-layering
- De-centralizing
- Stealth
- Simulating
- Smart (i.e. for ships, processes, munitions...) And
- Question ...Everything!

This is a rare opportunity in time to dramatically improve our institution, and I am committed to fundamental change. Hopefully, the few subjects mentioned this morning give you a sense of the general direction I'll pursue as the new Secretary of the Navy. I expect you to sign on with me and lead our Naval Services into the future.

In closing, I want you to know that while the military's mission is to prepare for and if necessary, fight and win our nation's wars, our efforts serve another essential purpose for our nation. The U.S. military contributes to a stable global environment allowing our economy and our citizens to prosper along with other nations and peoples throughout the world. The stabilizing benefits of American military strength are vital to our national interests and the well being of the international community. The
investment by our nation for this prosperity is sound and
necessary.

Thank you for the opportunity to speak with you today. I value your input and advice and look forward to working with each of you in this noble task of serving our nation.

God bless our Sailors, Marines and their families. God bless our President and the United States of America.

-USN-