High-ranking Naval Officers Go Back to School, MBA-style

These range from producing MBA graduates for hire to “re-tooling” corporate executives for more responsible positions. These services and their value are well understood in the corporate and business school arenas.

It is not so well known that a major non-profit, government entity would seek the services of a university business school to help them transform their organization into one that operates a lot more like a for-profit business and a lot less like a non-profit monopoly. This is exactly what is taking place at UNC’s Kenan-Flagler Business School. The U.S. Navy and UNC Executive Education have partnered in a huge endeavor to help the Navy modernize the way their executive staff works. Given the size and scope of the organization, the enormity of the challenge and the success that has been experienced to date, the Business School/Navy partnership is likely to grow significantly in the future.

The Background
During the Cold War, the military operated in a stable environment with a known enemy. Now, though, the war on terrorism pits the Navy and other service branches against a more elusive, hard-to-define foe, says Vice Adm. C.L. Munns, a three-star admiral from Norfolk, Va., one of several hundred naval officers and employees who have participated in the ten-day Navy Executive Education Program. "It's exactly what we need to be doing, The world has changed, the need for national security has not changed, but the way we meet that need has."

That kind of change demands adaptation, the Navy believes -- and that means men of war must learn to think like businessmen.

Retired Adm. Harry Quast, a Navy coordinator for higher education, notes that top naval officers typically have combat and technical experience, but little business expertise.

"They're very energetic, gifted, successful individuals," he said. "What they lack is the business acumen, because the organization has never demanded extensive work in that area. So we try to open their eyes."

The Business Challenge
Based on a presidential-level initiative, the Chief of Naval Operations mandated that all Navy flag officers (admirals) and high-ranking civil service personnel rapidly convert their mode of command operations from the historically traditional government model to a commercial based model with an understanding of basic business economics and full accountability for financial management, budgeting and logistics management.

Specifically, they wanted to bolster their leaders’ business management skills, including information technology, cost accounting and money management. After all, the Navy was just like any other multibillion-dollar enterprise facing a changing world. But instead of trying to increase profit in this shifting dynamic, they were charged with saving the taxpayers’ money, while simultaneously transforming into a leaner, faster-responding military organization.

Although the Defense Department already offered business courses for military officers, the former Chief of Naval Operations, Adm. Vern Clark, made specialized executive education mandatory for all flag officers earlier this decade. New Chief of Naval Operations Admiral Mike Mullen has continued to provide strong support for this initiative.

A primary goal is making senior naval officers more conscious of the need to be efficient when spending taxpayer money, Quast said. After all, with an annual budget of $130 billion, the Navy is a big business.

The UNC Solution:
Since 2003, Navy flag officers have been required to participate in an executive business course on how to adapt their skills to a changing military environment. The Kenan-Flagler Business School at the University of North Carolina-Chapel Hill is one of two sites in the nation that offers the Navy Executive Business Course. (The course is also offered by the Navy on the West Coast.)

Given that this is a highly unique program requiring intensive customization, Kenan-Flagler professionals steeped themselves in Navy culture, traveling to the Pentagon and Millington, Tennessee (home of the Navy’s human resource center) for intense sessions with top Navy personnel. This provided profound insight into the Navy’s challenges, their methodology and their language.

From this in-depth interaction, Kenan-Flagler customized an Executive Business Course that addresses the unique dynamic of the typical Naval officer–remarkable leadership skills with less experience in actual business.

UNC delivers the Executive Business Course to 30 or so flag officers and civilians several times annually. Participants are in-residence at UNC-Chapel Hill for an intense 10-day program with instruction often lasting up to 12+ hours a day. James W. Dean Jr., Kenan-Flagler's associate dean for executive education, said the business professors who teach the naval officers must also adapt their thinking, remembering that the Navy's top priority is not profit, but providing service while saving taxpayer money.

Among the topics on the syllabus are managing people within a military environment, leading organizational change; using information technology; cost accounting; and money management. Breakout sessions are used for participants to discuss issues and share knowledge in a secure environment. EBC faculty is hand-selected and briefed by the program’s Navy sponsors and remains tightly integrated with the sponsors to ensure consistency of delivery from session to session.

Once out of the classroom, the Navy requires course graduates to take on projects linked to the issues dealt with in the course and give feedback about how they completed the task, Quast said. High-ranking civilians in the Navy's Senior Executive Service also participate in the classes, which are typically offered to one- and two-star admirals.

The Results:
The Executive Business Course has led to improved operations at all levels of the Navy, and is now mandatory for all flag officers. It has support and participation from the highest echelons, including the Chief of Naval Operations.

The Chief of Naval Operations speaks at the course and often tours the commands from which the participants have come and surveys for the retention and application of knowledge gained during The Executive Business Course. Reports to the sponsors indicate that the knowledge is being retained and applied effectively and that the objectives of the program are clearly being met. Graduates of the Executive Business Course demonstrate increased capabilities in a number of specific areas. Examples include:

1. improving how their organization does business
2. critically assessing their organization’s mission, formulating a strategy to accomplish the mission in a changing environment and achieving enhanced effectiveness and improved efficiency in executing the strategy
3. analyzing costs to streamline operations and eliminate non-value-added activities
4. using metrics to pinpoint desired performance an improve performance management
5. leading transformation effectively.

The course has been so successful that two additional programs have been designed, the Corporate Business Course (CBC) and the Strategic Planning Seminar. The CBC is designed to give ascending personnel the tools and skills to seize opportunities and develop solutions at a speed these new challenges demand. Navy Captains and Commanders, as well as Civil Service members, develop their ability to think strategically and to analyze operations and cost structures against missions and strategic plans and assist flag officers and SES executives in transformational roles. The Strategic Planning Seminar is designed to help Navy executives think more strategically and to improve their ability to formulate and implement effective strategies.

At UNC, helping government executives develop business skills and perspectives is not confined just to U.S. Navy personnel. UNC Executive Education has worked with a number of government agencies over the past decade, including the United States Postal Service, the Environmental Protection Agency, and the Department of Defense. Developing more efficient ways of managing resources and leading change has greatly benefited these organizations. And when government works smarter, everybody wins.