Home » Budget Industry » SECNAV Spencer Wants Navy to Manage Risk, Not Avoid it

SECNAV Spencer Wants Navy to Manage Risk, Not Avoid it

Secretary of the Navy Richard V. Spencer speaks to sailors at Naval Support Activity Bahrain. on Dec. 18, 2018. US Navy Photo

WASHINGTON, D.C. — The Navy secretary wants to empower the workforce to fix problems and stretch their dollars further, even if it means taking on some risk, he said Tuesday.

Secretary Richard V. Spencer said the Pentagon has moved away from its past risk-management approach and instead prefers risk-amelioration or risk-avoidance, which isn’t serving the Navy well today.

“We’re not going to have more money; we’ve got to be smarter with what we have,” he said at the Center for a New American Security.
“The attitude I want to place with the United States Navy/Marine Corps team is, you’ve got to use every single dollar to its best advantage.”

Getting more for the dollar and getting work done faster means empowering sailors and the civilian workforce, he said, which is something he’s continuing to find new ways to do. Spencer said he looked into why surface ship maintenance availabilities take so long, and he found that a typical Naval Sea Systems Command employee overseeing an availability might only be able to spend $5,000 to fix a problem, and anything more expensive requires going up the chain of command, awaiting approval, moving paperwork around – all of which takes time and money. Spencer said he increased that authority to $25,000, and throughput increased by 25 percent. After seeing that success, he said he bumped up the dollar limit to $100,000.

“Yes, someone’s going to fall off the bike. Someone is going to go out and buy four cases of beer and pizza with all the best intentions in the world and violate a law; I understand that. But you know what, we’ve had a conversation with our overseers saying, if you want me to pedal fast, I’m going to come in front of you with some skinned knees. And you want me to do that, because if I’m not, I’m not pedaling fast enough,” Spencer said.

Some innovations may take time –seeing a return on investment in technologies like additive manufacturing and artificial intelligence, for example – but some learning and innovation can happen at the unit level today to address challenges and save money.

“Don’t bang your head against the wall trying to innovate. Look outside your cubicle, find a best practice or an innovation outside the building – it’s what we call R&D .. rip off and deploy it. Steal it – I say that legally; break glass, not laws,” the secretary joked.
“But that’s what we have to do in the immediate term. We can’t be innovators overnight, but you know what we do know? We know our problem set. And I will tell you that almost 90 percent of the problems, 95 percent of the problems, someone outside the building has either solved that problem or has an algorithm to solve the problem that you can apply yourself. We have to start looking outside the building.”

As an example of that, the Navy last year turned to a former Southwest Airlines maintenance expert to help overhaul naval aviation depot maintenance.

When the consultant first started working with the Navy, Spencer and other leaders went with him out to Naval Air Station Lemoore to look for ways to get planes through maintenance faster and keep more planes ready.

An F/A-18F attached to the “Flying Eagles” of Strike Fighter Squadron One Two Two (VFA-122), sits on the line at Naval Air Station (NAS) Lemoore, Calif., in December 2005. U.S. Navy photo.

They started in the hydraulics shop, Spencer said, where a single part there had a 90-day turn time and was responsible for keeping the majority of F-18s out of service.

“In a matter of a week and a half, he took 55 days off that part,” Spencer said. The consultant helped reorganize the shop and the flow of work within the shop, and after seeing success there he moved onto other shops in Lemoore. Already, Spencer said, throughput on F-18s has increased 35 percent.

As work there continues, Spencer said accountability will be key.

At one point, the consultant pointed to a Naval Air Systems Command organization chart and said, “is this really the org chart for NAVAIR? I looked at it and I went, it says so down at the bottom, I guess it is. He goes, this confirms to me – he never wore a uniform – he goes, this confirms to me the Navy is one of the most intelligent organizations in the world. This is an absolutely elegant obfuscation of accountability and responsibility. And he meant it more as, this is what we have to change.”

The consultant called for “one bellybutton,” which is now the commander of Naval Air Forces and resulted in some command and control changes to consolidate accountability and authority to the Air Boss instead of splitting it with NAVAIR.

Spencer noted that altering the command and control is “not to be taken lightly in the Navy, when you start moving cheese around and lines around – antennae go up and antibodies come out – but we all had everyone focused on the mission. So we got the C2 in order, and then they go, wait a minute, Secretary, to get the parts here the funding doesn’t work. Well, we’ve redone the way we fund the allocation for acquiring parts. Then they go, okay, wait a minute, the parts aren’t coming in; every single iteration, step we’d make would be a new problem, like peeling back an onion. But you just keep peeling it back, peeling it back, and you’re going to move some cheese, you’re going to change something. And we’re going to have to do some [legislative proposals], we’re getting to that point now, to really get the system to work.”

Spencer said he hoped to see more innovation throughout the Navy and Marine Corps – innovation in the sense of identifying everyday problems a unit faces, and solving those problems with the tools at the unit’s disposal. And where additional tools are required, Spencer said he wants to know.

Innovation is achieved “not just by beating people over the head, saying, save money, be safe, be efficient. It’s by giving business cases and examples of what they can do, and giving them the latitude,” he said.

“I’ve got to make sure that the whole system understands urgency,” he added.
“We have the dollars we, finally, need. We have the resources. Time is something that we can’t buy, and we have to have everyone focus on that.”

  • NavySubNuke

    Man all this common sense breaking out — next thing you know we will go more than 5 years without changing uniforms.

    • DaSaint


    • Curtis Conway

      You actually have to tell the modern sailor (O or E) ‘you need to work smarter, not harder’?!

      • NavySubNuke

        Not at all — what you need to do is give our modern sailors permission to use their brain and actually work harder rather than suffocating them in mountains of meaningless administrivia and forcing them to be slaves to procedures they know are stupid and a waste of time and money.
        In our risk averse Navy common sense and using your brain is punished rather than encouraged.

        • Curtis Conway

          On Belknap first, then on Tico second, we had some of the first personal computers aboard ship to assist with the increasing administrative burden. On Tico we used the IMB 860’s paper punch so we could put butterfly(s) of the original message traffic for each message. Some of the Division Officers saw the boys from Combat doing this, so we had the DCA/EO/Navigator using my Kaypro 10 in Combat making their messages for several months. Then they bought each department a computer. Of course today message traffic is a whole different deal.

  • thebard3

    If this methodology works, look for someone to quickly change it to something else that doesn’t.

  • Rik van Hemmen

    Very sensible words. Also, success breeds success. Keep dragging things that work out into the open. As a commercial guy who occasionally interacts with the Navy, I am continually astonished at the level of risk aversion by a fighting force. While there may be non fighting tasks in the Navy during relative peacetime, it does not mean that the Navy does not have to consist of mariners. Mariners know how to face random adversity. Mariners are highly trained individuals who learn how to manage risk. If you are not allowed to take risks, you never learn how to manage risks. Today it feels like too many people in the Navy do not know how to take risks and succeed by taking risks.

  • M Yates

    If they are peeling back layers to improve work flow and accountability I would expect the number of jobs to be reduced.

    • Centaurus

      No,no…the key to efficiency is to get more people to do the same task, less efficiently.

  • Duane

    Good stuff, SecNav … the key is managing risk, not avoiding or eliminating risk. Any competent project or program manager understands the concept. Stuff happens, but if the work process has been properly analyzed, then that’s when the risk mitigation kicks in … otherwise known as “work arounds”.

    Peace time military forces always gather rust and dust, and need to be subjected to cleaning on a regular basis. We’ve essentially been a peace time military ever since the Iraq Surge was concluded in 2009. The sense of urgency went away, as it always does in peacetime. Sure we’ve still got some folks in harm’s way today, but nothing like the post-9.11.01 mobilization of a decade and a half ago. We’ve effectively demobilized and are still suffering a hangover.

    We need to be seriously prepping for the war with China – it is coming … just as virtually everybody in the military, at least, knew that war with Japan was coming throughout the 1930s right up through 12.7.41. A sense of urgency is urgently needed, because war with China is going to be vastly worse and more threatening to our nation than the piddly little jihadists ever were.

    • Centaurus

      He sez,”Antennae go up and antibodies come out ” It sounds like people acquire a sense that someone has to answer to someone, and they do. If we get caught with our pants down again, it won’t be pretty. We’re supposed to catch the “other guy” with their pants down and then make them die. Yes ?

  • DaSaint

    Common sense applications of commercial practices. What’s the NAVY coming to?

  • Curtis Conway

    Interesting this article is coming out as other outlets are announcing the near future Arctic Transit by the US Navy, and THAT will be a Calculated Risk.

    Units from 2nd, 3rd, and 7th Fleets should participate. Arctic Operations Instructions must be pulled, and reviewed. They will all be updated upon completion of this evolution. Get your CASREPS out now so everyone one of those participating units are as close to 100% readiness rate as they can be for the transit. Extremely Cold Weather (ECW) equipment and clothing must be procured, and stored for availability, and a lot training should be conducted wearing same. All qualifications for Deck and Navigation operations must be up to speed, well rehearsed, and the crew on its best behavior during this transit. ‘Safe stay time’ in these waters is measured in single digit minutes before you are dead. Sea & Anchor and Navigation teams must be up to speed and really on their toes for much of the transit, particularly if they use the Northwest Passage. Aviation units/detachments are going to have to be on their toes because mistakes in this environment can be final.

    Anyone rotating back to the East Coast anytime soon like an LHA/LHD, submarine, or other amphibious ship? This is where the Destroyer/Cruiser will NOT lead the way.

  • Secundius

    Brigadier General Montgomery Meigs, Quartermaster General of the Union Army, claimed that a Soldier could fight a battle and win with only 60-rounds of ammunition. Colonel Lawrence Chamberlain proved him (i.e. Meigs) wrong at the Battle of Little Round Top at Gettysburg in 2 July 1863…

  • PolicyWonk

    “The attitude I want to place with the United States Navy/Marine Corps team is, you’ve got to use every single dollar to its best advantage.”
    Quick – someone tell PEO USC!

  • old guy

    Inanity, ridiculous, pointless, childish. I hope that SECNAV has a deeper understanding of the problems than he displays here.

  • Retired EDO

    I have been impressed by this SECNAV. The comment about the overhaul length struck a chord with me. My second tour was as a ship superintendent at Norfolk Naval Shipyard from 1979-82. During that time we did complex overhauls on JFK and America in 11 months including drydocking, major repairs to boilers, catapults, etc. and alts including NATO Seasparrow and CIWS. I’ve wondered why overhauls like the current LHD 6 Docking Phases Maintenance Availability is scheduled for 15 months. The authority level for changes may be the answer.