- [Announcer] Ladies and gentlemen,
please welcome the 49th National President
of the Navy League of the United States, Mr. Alan Kaplan.
(applause)
- Good afternoon, everyone.
Welcome to our annual Sea-Air-Space.
General officers, industry executives,
and Navy League members.
Before I introduce the secretary,
I just wanted to give a quick shout out
to our Navy League Staff.
Today, I think we have close to 1,200 in attendance.
We've got a very agile and robust team,
and I'd like to just give our headquarters team
a round of applause.
Good job.
(applause)
Chaplain, thank you for the invocation.
Thank you for the kind words.
Appreciate it.
Thanks for being here today.
(applause)
So, today, I have the privilege and honor
of introducing our keynote speaker.
Assistant Secretary of the Navy for Research,
Development and Acquisitions, Secretary Geurts.
Secretary Geurts was sworn into office in December 2017.
As the Navy's acquisition executive,
Mr. Geurts has oversight of an annual budget
in excess of $100 billion.
He is responsible for equipping and supporting
the finest sailors and Marines in the world
with the best platforms, systems, and technology
as they operate around the globe in defense of our nation.
He previously served as the acquisition executive
for US Special Operations Command at MacDill Air Force Base
where he was responsible for all Special Operations
Forces Acquisition, Technology, and Logistics.
Secretary Geurts has over 30 years
of extensive joint acquisition experience,
and he has served in all levels of acquisition
and leadership positions.
Ladies and gentlemen, please welcome Secretary Geurts.
(applause)
- Excuse, you're about ready to get the hook.
Thanks for the opportunity.
How we doing, gang?
(mumbling)
Fired up?
All right.
Hey, thanks for the opportunity to get here.
Before I kinda go through some remarks,
I think Alan, this is your last conference here
as the chair, so I would like to applaud Alan
for all the great work.
(applause)
As we're going through a lot of change
in the Department of the Navy, it's great to see
the Navy League making similar kinda moves.
Taking some bold moves on not being caught
terribly in the past, thinking about the future.
And so, it's a great partnership here.
Great to see everybody here.
I'll talk for a little while.
Kinda give you an update of where I see things
in the Department of the Navy,
and then leave plenty of time for questions.
So, if you don't have 'em, I will have 'em for you.
I'll start with the front table here
if you don't have any, so please bring some up.
Been at the job now about 18 months.
Hard to believe.
Part of what I want to do today is I'll kinda go through
where I think the Navy is going, kinda follow up.
The CNO's remarks, the Under's remarks,
but really focus on the amazing things
that have occurred at least for me, in 18 months.
Sometimes, coming into the job,
oh, it's the Navy, unhampered by 250 years of progress.
Big, slow, all that kinda stuff.
But if you're not careful, you can kinda buy into that,
and you can kinda start using that as an excuse,
as opposed to thinking of it as an enabler
of the awesomeness that is the Department of the Navy.
Our industrial base, our partners, our allies.
If you're not careful, you can get focused on,
I'll call, scarcity thinking.
Worry about sequestration, worried about BCA,
worried about not getting a budget,
worried about not getting a contract,
worried about not, not, not, not,
as opposed to really looking hard at what do you have
and how are you gonna be relevant?
How are we gonna be relevant going into the future?
And I would say just as a bumper sticker,
I have been incredibly impressed
with how fast this organization can turn.
We talk about pivot speed.
Talked some of the special operations known for pivot speed.
It has been amazing how fast we have pivoted
on a lot of very important things.
For instance, in the last 2 1/2 years,
we have saved about $30 billion
by improved acquisition strategies.
$30 billion, that's a lot of money.
That's a lot of capability, right?
And it wasn't inventing some obtainium.
It was just a lot of hard work, working together as a team.
I'll talk about here as systems that we've accelerated
in 18 months by five and six years.
That's not 'cause of any big brain,
some super acquisition tool.
A bunch of O5s and their teams gettin' together
and go and working it out.
I'll talk about small industry building ships for us,
saving us three and $400 million
with just good, old ingenuity.
And so, as we think about everything we need to do,
and we've got lots of really, really hard problems,
we gotta also focus on what do we have?
Where are we making success?
How do we double down on that?
And use that as inspiration and guiding light,
not just focus on where we got dark corners.
I kinda put this slide up here on the front
because to me, it's another great example of the challenges
and opportunities we have, right?
On one hand, you got an old battleship.
Some of you were probably in the audience, right?
When we brought that thing back to war
and used it in Desert Storm.
So, when you go to war, you go to war with what you got,
and you figure out how to use it for what you need.
And then up in front, we got a pretty cool
little unmanned system that stranger did
from San Diego to Hawaii and back.
Perhaps the future.
Is it gonna do everything the battleship needs to do?
Do we need to design like a battleship?
Absolutely not.
Do we have to figure out how to get those systems
so it's not an either/or, but an either/and,
so we can leverage both of them
and get 'em in the hands of the war fighter?
Absolutely.
All right, and so I can't think of a better picture
to kinda set the stage for where we are today,
if you can go to the next slide for me.
My four kinda priorities for the Department of the Navy
have not changed.
I'm not that smart, I can only remember four things,
and if I change it every month, I can't remember, all right?
And fundamentally, I think this is our recipe for success.
Our not being just the military,
just the government, all of us.
I think if we continue to focus on these four areas,
you're gonna see us continue to accelerate.
All right, so my bumper sticker is vectors are all positive.
Now we've gotta scale and act at speed, right?
We've got the ship pointing the right direction,
now our collective challenge is to operate at speed.
And to pull from the Under's talk this morning,
with relevance, right?
And with some adaptability.
And to focus on the CNO's talk,
and not get fixated on just counting things,
but really focus on what adds power,
the power we need for the future.
And so, I'm gonna run through these a little bit
with just some examples of where I see things,
where we have opportunities.
If you go to the next slide, so first, right?
I talk about delivery.
I am a victim of being an acquisition guy
that believes in delivering for the war fighter.
And so, when we talk about delivering,
sometimes that converts into counting ships, right?
There is an element of delivery about stuff,
and we have to constantly deliver capacity to the fleet,
but we also have to think about the capability on there,
and not deliver capability maybe
at the same time as capacity, and all of that's irrelevant
if we're not making that available to the fleet.
So, a ship at the pier is doing nothing
for the fight, right?
And so, focusing on all those together are really important.
Kinda your top left corner there, JLTV.
Great partnership with the Army.
We're gonna deliver that ahead of our objective IOC date.
I look forward pretty soon here
to turning the first one over to an operational Marine unit.
Great partnership with the Army.
Work together, working great.
The Marines have been doing
an awesome job with that program.
In the middle, I think this year
we are gonna commission 12 ships.
I don't think we've commissioned 12 ships in a year
in like, since like the '80s.
In fact, my wife was asking who my new best friend
who's named Commission 'cause I'm gone every Saturday,
but that is awesome, right?
That is getting tools out in the fleet.
LCS, I think will have five ships delivered this year.
Last time we delivered five of any class,
I think '90s with DDGs, right?
So, that's capacity out in the fleet.
But again, if all we focus on is new technology
or new things, we're gonna fail.
Up in your left corner, these are folks
on our aviation maintenance side, right?
Without a whole lot of money,
without a whole lots of assets,
they've doubled output in their machine shop,
delivering critical spares to the fleet.
By all of us focusing together on what does it take
to get an 80% mission capable rate,
and driving in your individual workspaces,
these individuals cut in half their flow time, right?
And so, this idea of flow time and velocity
is really, really critical for us to always focus on.
Down there in the corner, right?
Cloud folks, right?
That's the new buzz.
A lot of things, you see a lot in the press.
Actually practically getting tools out there
and converting software, critically important.
Get us off these big machines.
In the center, Sampson.
We're really working hard on our ship maintenance.
We are not where we need to be on that,
but we have great examples of ships delivering early
out of availabilities.
When we can partner between the industry,
the ship captain, and the ship sup,
whoever's supervising on the government side,
great example of us delivering things out to the fleet.
And then finally, you think of naval research lab
and building Apollo spaceships, and stuff.
They're doing some amazing things
with very practical output to the fleet.
New paints, less corrosion, more environmentally friendly.
Having an immediate impact on the fleet.
And so, folks are out there doing this.
What's really amazing to me?
Most of this occurred without any,
you know, wasn't like bright ideas from leadership.
This is all at the ground level kind of activity.
Really important for us.
Second piece is how do we get our pivot speed up?
Agility, right?
World's changing fast.
How do we change at the speed of agility?
And so, when you think about agility,
and go to the next slide for me, right?
There's some great examples
where we are building agility into a fleet.
Where's my F-18 URS Team?
I saw some of them out there.
They probably didn't want to pay for lunch.
Oh, they are in the corner.
These cats here teamed up with their squadron
made out there in the fleet.
Delivered IR system 4 1/2 years?
4 1/2 years early to the fleet. How much money did you get?
Did you get like a billion dollars to do that?
300,000 bucks.
All right?
Did I tell you to go do that?
No, they went and did it, and then (mumbling).
Some of you see me on LinkedIn.
I get this out of the blue LinkedIn message
from the XO of the squadron saying,
hey, your guys are doing great.
They're not afraid to fail.
They are making a difference for me and the fleet.
That's already shot at Top Gun, all right?
Awesome work done at the ground level.
Down in the corner, we have completely virtualized
the Aegis Combat System.
One of our biggest challenges to maintaining a fleet, right?
And modernizing the fleet is trying to get
all the new combat hardware in there,
to the point where that Aegis Combat System
now sits in a Pelican box about yay big.
So, imagine a future where on your ship
you've got your certified combat system,
you've got a digital twin of that system
with maybe the next test load,
so you don't have to take a fleet asset out to go run test.
It's doing all the testing for you.
Maybe you have the third load with all the weird NRL,
whatever, ONR, small business algorithms running on it,
all on that same asset to the point
where we've taken that digital twin.
I call it hot wired.
The Hudner bypassed all the compute
and shot a missile using the organic sensors.
All that done within a year
for relatively low dollar amount of things.
And so, this whole digital twin now
bringing a whole nother revolution to our agility.
We got agility champions.
Man at center is at Crane.
I knew him from the special ops world.
He's figured out how to leverage all the capability
in the warfare center for our special operators.
In the corner, a special operator
who's coded software himself
to help train folks to be JTACs.
And then at up top, our naval technology center.
70, 80, 90 technologies companies
all putting them in the hands of the operator.
Directly going from there to contracts.
So, as we get our pivot speed up,
we stop inefficient calorie burn.
That allows us to free up assets and move forward.
Next chart, please.
And where we still have work to go as a community
is driving affordability, right?
We cannot price ourselves out of relevance.
A lot of good work here.
Work to go.
In the corner, using kinda new tools
and technologies, right?
Awarding two aircraft carriers at once
saved the government about $4.3 billion, right?
F-18 multi-year.
Negotiated and put on contract
without ever sending out an RFP or getting a proposal.
Saved 15 months.
Anybody in industry want to know
how much you pay for a proposal on that?
Three, five million bucks, right?
Which we pay in overhead.
All that money now can be converted into
whatever you believe's the next thing
you want to chase in IR&D.
So again, when I talk affordability,
I'm not talking a percent off of a contract profit line.
I'm talking taking fundamental costs out of the system.
Down in the corner, going to small business,
opening up new shipyards for some of our smaller ships
had a really, really good small business competition.
Last year, the Department of the Navy
sent over $15 billion direct to small businesses as primes.
Awesome agility out of those.
Great affordability.
Saved a couple hundred million dollars out of that.
In the middle, we're looking at our shipyards
using digital twins to model our shipyards.
I saw a couple shipyard COs somewhere out here.
All right, I think some of our shipyards,
if you count all the steps the workers
take everyday to get to the workplace,
you could walk around the globe once, right?
That doesn't add value to product.
That's just inefficiency, right?
Driving that cost out.
And following the corner is an award winner.
One I think out of 300 entries picked for transitioning
government technology into industry.
So, as we continue to drive this affordability piece,
then we can continue to flow assets into the fleet.
Next.
And then finally, our most important,
both opportunity and challenge is our talent,
and I call it our talent.
It's not just in the government,
it's not just in industry, it's our combined talent.
We have an awesome team.
We've gotta continue to grow and season that team up.
Whether it's in the corner, Nav SAP folks
getting a great STEM Award 'cause they're engaging our youth
and getting them interested in the business,
whether it's the NavalX folks creating a marketplace
where we can work quickly, share ideas,
and attract new people here,
in the middle, the Marine Corps using prize challenges
to tackle helmet retention issues.
In the other corner, in the shipyards, right?
Over 50% of our shipyard workers
have less than five years experience.
We can wait 20 years 'til they get 25 years experience,
or do what they're doing now.
Leveraging technology out there to rapidly accelerate
that training and learning.
All this together is enabling us
to kinda create that talent we're gonna need,
'cause if you don't think we are
in a head-to-head competition, right?
If you think we're kinda where we were just five years,
we are in a match, right?
Where we are not guaranteed the outcome we want.
That is not something I'm comfortable with.
It's gonna take our collective ability
to attract, grow, retain talent,
create multitudes of tools
so we can get things into fleet quickly,
and then work together to take out some of the costs
we've got that is burdening these programs, right?
If we're gonna compete and win
in the challenges that are facing us as a nation
and as a group of countries here.
That's where we're headin'.
Again, I would be remiss to say it's anything
being done at the leadership level.
I'm just a big guy with a big neck, right?
I just kinda make holes.
I'm really proud of the way everybody's
working here together, but vectors are positive.
Now we need to scale, right?
And do it at speed.
And so, as I think about being here next year, right?
I want to see an exponential growth in this.
I think we've got all the right core material,
but if we don't stay focused on this,
leveraging each other's strengths, right?
Tackling all the waste we've got in the system,
then we're not gonna have the success
that I want to deliver here for the nation
that I think we need to deliver for the nation.
And so, my challenge to all of you here is, right?
Learn.
Back to I think the Under's comments
about relevant learning, right?
There is a challenge in our collective system.
We all want to be the inventors.
We all want to be the first innovators.
We all want to be the R and D, rip off and deploy, right?
If somebody's the fastest way to get (mumbling)
thought I was a smart guy.
It's like, no, I just knew how to steal really well, right?
And so, we've gotta have enough hubris
and enough humility that we reward bold action,
but we also reward quickly taking
what we already have and getting it in the fleet, right?
Not being afraid to have something that isn't perfect,
and putting it in the hands of our war fighters
so we can figure out what's really important.
And so, as we think of this agility and speed,
that's gotta be the focus.
How quick can we get the F-18 guys something good enough
in the hands of the operator so that they can both
use it now and help us better hone
where we need to put the next set of resources?
My job for you out in industry
is to give you pathways to do that.
My job, if you're not in industry,
but in the government spaces, is to clear out the processes
to enable you to do that.
That's what I'm focused on.
That's where I think we need to roll.
So, with that as kind of a state of the current union,
I'd be happy to open up to questions,
or if you want to take me out with anything, bring it on.
Or we can finish right now.
Sir!
- Hey, Mr. Secretary.
Thanks so much for your inspirational comments.
I spent some quality time with you
at HACKtheMACHINE in Seattle.
Kurt Hammel from Esri.
At the time, you gave some really good direction
to a small group of people about some valuable exercises,
teaming up industry with government.
One of them was about a cooperative
research and development agreement.
Can you reiterate that?
I thought that was very valuable.
It's something that many companies, certainly mine,
values as that no-cost way of interacting
with our Navy customer.
- Yeah, I've been, again, I kind of alluded
to the front of this scarcity thinking
versus abundance thinking.
And I've been proud to say the Navy is,
when I looked at the cooperative R and D stats,
pretty proactive, and the number's growing.
What I like about cooperative R and D agreements
is we can bring the best of both to a place.
So, for instance, if you've got an algorithm
that you want us to put on a combat system,
if I've got a digital twin, hand me the algorithm.
I'll go put it on a weapons system if you've got a weapon.
So, if we can start creating these relationships
where the barriers to your entry into the market,
or to get it into test, or to get it in front of operators,
if I can reduce that barrier, then you can get
your products to me faster, and more cheaply.
And so, a cooperative R and D agreement,
we think of it too often in a pure S and T role.
It actually can play a great role in a lot of the products.
And so, I would ask you, continue to look
at the ANTXs, or our Naval Technology Exercises,
'cause that's another tool we use here to quickly go.
We got a robot here.
Interesting.
We'll see where he goes.
All right, lieutenant.
- Good afternoon, sir.
Lieutenant Rich Rodriguez from Naval Post Graduate School,
and I'm wondering, sir, how do you see us getting ready,
or audit ready, and how long do you think
that would take us?
- Yeah, so audit's an interesting thing,
and I think sometimes we think of audit too much
in a pure financial term.
And I would guess Secretary Modly
probably talk about it some this morning.
Where I think audit adds value to us
is really looking at processes and where do we have,
back to this affordability,
where do we have waste in the system?
So, if I have 35 different accounts,
is that right right number, Mike, for the E2 program?
I think we looked at the E2 program
and we have something like 30 different funding accounts,
whether it's spares or instrumentation,
for a program manager to try and synchronize,
and in some way to manage, that's probably,
and it's hurting our head from an audit standpoint,
that's probably an indicator of where we have opportunity
from a process standpoint to clarify roles and missions.
So, I think as long as we stay focused on that
and don't get too overly focused on accounting,
I mean, there's an accounting element of it,
I look at it much more from the, hey,
if it's really hard for me to figure out
what's really going on, that's probably not the process
that we need going into the future.
And so, that's where I think the audit's
really gonna pay a benefit.
- [Rich] Thank you.
- All right, so the robot just asked me a question.
This is Scooby, by the way.
Everybody met Scooby from NAVSUP?
Wants to know how to overcome the fear of technology
taking away things from the workforce.
(laughing)
Good question.
So again, kinda back to CRADA, we were talking about CRADA
and I don't know who makes tags for Tag Surveyor
makes this product, right?
So, here's a product I'm sure being used
in the commercial world.
Right now, we probably have humans
doing inventory in warehouses.
I would much rather have those humans do what humans do.
Really good job thinking about something,
inventing something, making hard decisions.
Not going and checking boxes.
And so, our trade is, right?
How do we use technology
where technology makes sense, right?
And don't look at it as a threat,
but look at it as an opportunity to free up rig.
I go back to this abundance thing.
Free up resources to go tackle the hard problems we have.
And so, it's tough, all right?
The only person that likes change
is a baby with a wet diaper, right?
Everybody likes to be the changer,
and not the changee, right?
So, it's very easy for me to say,
hey, let's change, and get rid, no.
I mean, again, there's a human element to it.
But I think as we think about technology,
there's no reason I need to put an RFP out
for a custom inventory RFP or FID reader, right?
So, we shouldn't burn calories on that.
We gotta figure out, do a CRADA, do a quick discovery.
If it exists, put it in the warehouse,
try it out on a pilot, if it works,
repurpose those individuals for something else.
That's where we've gotta get to as a community,
and do that quickly.
So, there is a element of, you'll hear the secretary
talk about urgency, I talk about iteration speed, right?
How fast can we cycle at?
Because we waste a lot of money in flow.
Back to that, one of the biggest things we found
in looking at the Navy readiness,
we were spending tremendous amounts of resources,
and dollars, and people in things in flow
where things coulda been done much faster, right?
For $5,000 we could put a new wireless box in
so that reception's 10 times as good,
and folks wouldn't sit there
and wait for their machine, right?
So, those are things we've just gotta go off and do,
and not think too hard about.
We do have a little tendency to nuke things
here in the Navy.
All right, next question.
Thanks, Scooby.
- Mr. Secretary, Rick Easton.
I actually have a two-prong question.
- [James] Uh-oh, I got a small brain.
- Yes, sir.
I think you can handle both of these, though.
First of all, fundamental cost.
If you just scratch the surface,
how much fundamental cost is there out there?
And the second question is we've done
several things in the past.
It's certainly not on the scale
I think you're doing them now
to acquire things more rapidly.
In the '90s we tied up a couple of cruisers.
So, my question is, is do you have any concern
about we move so fast that we end up
hurting combat capability?
Are you putting any things in place to make sure
that as we move this quickly we still in fact,
get particularly on large programs,
things that require a lot of interoperability,
the systems that we do in fact need to fight?
Yeah, so good question.
That's where I kinda like iteration speed, right?
And so, what tended to happen in the big services,
again, looking from afar and when I was in the Air Force,
if you're not careful on these big programs,
they're very transactional.
The requirements guys go in a room somewhere
and they work for five years,
and they come up with a glorious requirements document.
And then that gets walked across a hallway
and that's given to the acquisition guys,
and they work for five years,
and they create a glorious solution,
which then gets walked back to a different set
of requirements guys and the worlds change,
and then we go test it, and then finally,
it gets into the fleet sometimes later.
So, the first thing I would say is,
and like you're seeing us do on M225 and frigate,
driving a informed requirements discussion
to include industry, to include critical
government technology if we're bringing it in there,
is absolutely crucial, right?
And then getting that spinning as fast as you can.
That doesn't mean reckless, right?
So, that's where I kinda go back.
I like velocity, not speed, right?
'Cause you can rush off and go
in a completely wrong direction
without enough checks and balances in the system.
It is hard with big programs
'cause they're like a big fly wheel.
They get inertia, and then they're hard to stop and move on.
But we also need to think about how new technology
can solve old problems.
So, I kinda like the Eisenhower quote, right?
If you can't solve a problem, make it harder, right?
And so, it's really hard to update an old cruiser,
so we can either keep recognizing,
it's hard to say, okay, good.
You only have two weeks to go do it, how would you do it?
Maybe you're gonna use a digital twin
and you're gonna hot wire a bunch of stuff.
Or maybe you're gonna say, we just don't need that anymore
and have that kinda deliberate discussion.
The second piece is I spent a lot of time on big programs
with trying to understand the fundamental assumptions,
'cause where I found most big programs go south
is the fundamental assumption change
and somebody didn't detect it.
And so, having kinda that revisit is really important,
and then finally I would say on a sustainment side
where we have a lot of costs in sustainment.
We have a lot of costs in sustainment.
And where we apply lots of, say, $30 billion
by applying lots of great acquisition tools,
block buys, and economic order quantity buys,
and two carrier buys, on the front end,
we don't employ the same level of thinking
and applying tool sets on the back end of programs.
And so, we've actually, Mike Moran and I,
we've changed, we're gonna do gate seven reviews, right?
So, a gate review is where the CNO and I
look at a program on a periodic basis
to make sure the requirements are still relevant,
and the solution.
So, we're gonna start looking at programs
that are in sustainment, i.e. cruiser, right?
'Cause once we kinda, if you're not careful,
we kinda throw it over the fence where 70% of the cost sits,
and then okay, it's a fleet problem.
We're not gonna deal with it anymore.
I think that's a failure on the acquisition part.
And so, the other piece we're gonna see is program teams
owning a program for the life of the program,
and getting away from throwing it over the fence.
Because the really smart teams can employ a bunch of tools
if I have a sustainment issue and a new capability.
I can get twofers if I've got those coupled the right way.
And that's where you in industry can help, right?
Either by architectures or by new solutions.
And then the last element, we're doing a lot more thinking
about I'll say putting catcher's mitts in programs.
Because right now, if a new technology
comes out of ONR, or through cyber, or something else,
we're like, okay, great.
We'll see you in five years
once we get it in the budget, right?
So, the getting through to the program of record
is a really hard leap, and so a lot of work
we're doing right now is to get the (mumbling) mismatch down
so these new programs can absorb technology
from wherever it comes much more quickly
and much more affordably.
'Cause we can't scale up the old way of doing business
to operate in the new world.
There's no way.
Doesn't matter how fast.
You can't get there.
So, that's where we're kinda doing
some fundamental replumbing to get after it.
All right, sir.
- Hey, sir.
Don Kline, former Navy guy. I got a question for you
about Other Transaction Authorities, OTAs.
So, corporately, we're pretty all in on it,
and have leveraged quite a few.
There's some rumblings here in DC
that Congress is not as enamored of OTAs
maybe as the services and industry is.
So, question is, 18 months to two years from now,
do you think OTAs are still gonna be around,
or is there gonna be a stake driven through,
maybe through some external influences?
- Yeah, so the question is, kinda what's the future of OTAs?
I think like any tool, a tool is good for a job.
Our responsibility is finding the right way
to apply that tool a job.
The knock, I would say in a lot of cases,
we are doing it, it looks like a FAR Part 15 contract,
calling it an OTA and declaring victory, right?
Or we're running around telling everybody
we're gonna do an OTA so nobody can protest it, right?
So, we're using it, so the cases where I'm seeing OTA used
for the right purpose, hey, we want to have consortium.
We've got a team right now looking at
how do I do a cyber award under an OTA
that can carry me all the way
through low rate initial production
on that same contract vehicle?
So, my sense with the Hill is when we think critically
about a tool, use it thoughtfully,
we might pilot a bunch of different ways to do it,
and scale it in a thoughtful manner,
whether it's OTAs, or 804, or all that,
I got all the support in the world we need.
If we kinda just, okay, let's everybody
search and replace something with OTA,
or use it recklessly, then that's where I think
we're rightly concerned.
I think we'll be okay with the Hill
as long as we're communicating
and using it in the proper way.
- [Don] Thanks a lot, sir.
- Thanks.
Other questions?
Sir.
I can repeat it if they can't hear you.
- [Frank] Frank Thomas (mumbling).
Of Navy acquisitions (mumbling).
- All right, the dreaded frozen middle question, right?
So, everybody who thinks they're at the bottom
worried about the frozen middle?
Write down what you hate about the frozen middle,
put it in an envelope, and when you get promoted,
open it up and see how many you're doing, right?
(laughing)
Yeah, so now I mean, everybody hates
your higher headquarters.
That's just kinda the way of life.
Here's what I would say on the frozen, right?
I think we oversell that sometimes.
We need to have coherence through all of the ranks.
The way I'm attacking it, all my direct reports
you've probably heard, but first thing I rate them on
is they have to have a major initiative
that's got a 50% chance of failing.
Now, judgment's encouraged, so I'm not,
like don't pick the law, right?
Don't pick ethics.
Maybe not the mission we're doing tonight,
but I have found if we don't challenge ourself
in that manner, and if I don't challenge folks,
if I don't rate them on their ability
to try and take bold moves, then I'm doing what I'm saying.
I think our corporate challenge,
the middle layer, well they gotta deliver every day.
So, we're trying to build a culture that says
create enough bandwidth where you can deliver today
and try new things.
But if you're at the deck plate level out there,
don't give your leadership that much power.
I'm a little bit serious about that, right?
What bold moves are you taking up,
and have you thought through 'em
and are you fighin' for 'em, right?
My job is to create the culture
where those can fight their way through,
but your job at your level, keep pressing, right?
Keep pressin' ahead.
And again, if we can't differentiate the work
and figure out what work do we have to do
with high confidence of return on a certain schedule,
where do we want to take risk and move boldly, right?
We're not doing our job.
And where I want us to create between us,
industry, everybody, acquisition programs
are the ones that have all those blends.
There's some elements, when I'm building a submarine
that's gonna last 50 years, I'm probably gonna take
a little time on the hull and nuclear plant.
On the algorithm and the sonar,
that oughta be changing every 18 months.
And so, the programs that I see of the future
are the ones that can blend both of those, right?
They're ambidextrous.
They can both have some things that are a longer cycle time
that deliver with credibility,
if you're a structure, or something,
and then inside you've got it churning like tomorrow.
And if we can reduce the iteration cost,
the iteration speed, get that up,
then you can afford to do both.
If all of our explorations
take as long as building the whole ship,
we're never gonna be able to afford
to be able to explore things outside doing the ship, right?
And so I need teams that are thinkin'
on both of those levels, and then we've gotta create
business and technical architectures
that allow that to happen.
All right?
Good question.
Anything else?
Once, twice.
Oh, one more.
All right.
(mumbling)
Yeah, so the question was, how do you create incentives?
I think we have the ultimate incentive of
if we want to stay around, we gotta figure this out.
That won't get through all the middle plate right away.
I think part of the incentive,
and if you're on the operational side,
I've talked a lot about acquisition.
I think the Unders talked about learning, right?
We've gotta think about it all the way
to the O5 that's got a ship,
and he or she, if they aren't motivated to be exploring,
if they aren't pulling from the system, right?
I've done it.
I've got the acquisition system humming,
and then you don't have the absorption rate, right?
To get that out in the field.
And so, if you're in industry,
or even on the government side,
we very much undervalue simplicity.
We love complex stuff.
The problem with complex stuff is it's got
a huge absorption rate issue in the fleet, right?
And if we're not careful, it takes so long to build
because it's very complex, and it takes so long to turn,
then nobody can maintain it, and then it dies of its own.
And so, where we've gotta continue to,
I would say, compress the distance
between supplier and user,
some would call it design thinking, some would call them,
and you go, that's a different buzzword,
and you can again, compress the cycle time
so you can move faster, right?
Then when folks see what they're doing is relevant,
I mean, I look in the back corner here, right?
The folks there are fired up 'cause the fleet trusts them
to deliver something quickly that may not work perfectly.
They trust the fleet that they're not gonna call 911,
and everybody, the acquisition failed
'cause the thing they did
in two weeks didn't work perfectly.
When you get that trust working,
and you get that give and take,
then we can do incredible things.
You talk unmanned systems, and somebody asks,
well, how do you know exactly how it's run?
I have no idea how exactly it's gonna work.
I just know if I can get them into the hands
of sailors faster, they will tell me
how they think it might work or how we need it to work,
and then we can do a much more thoughtful iteration step.
If I wait for 15 years to figure out perfectly
how we think it's gonna work,
and then wait 'til then to deliver them a product,
I'll guarantee you it's not right.
And so, that's how I think you incentivize folks.
When we're mission-focused, and everybody sees
a system that's got trust in outcome,
then we can do great things,
and that goes for industry, right?
I would rather us build a prototype and go fly 'em,
as you spend $10 million on a piece of paper proposal.
A proposal tends to not add any value into the system.
And so, that's why we're exploring all these different tools
to figure out how do we do that?
NavalX, a lot of that whole effort
is really to mobilize tools, right?
So that you don't have to teach the frozen middle
how to do a prize challenge.
They just need to know, hey, here's my prize challenge.
Call these guys, they'll do it for your, right?
And get out of this everybody's gotta learn it,
and get comfortable with it, and invent it.
Now, somebody needs to be really good at price challenges,
and whoever's got one where they're in the fleet,
or you're in a program office, they know who to go.
They'll go execute it quickly.
That's another way to break down this frozen middle
of learning from each other.
That's why I love CRADAs.
That's why I love experimentation venues,
'cause the cost to get together to learn something
is really low, so that means you could do a lot of it
on rapid iteration speed.
And then if we can back it up with the acquisition system
to buy what we need at the point with the fleet
that will take it and experiment with it,
that's how we get our collective speed up.
All right, any other questions?
All right, thank you very much for your time.
Hope you have a great conference.
(applause)