An $80 billion dollar revolution Featured

9:46am EDT July 22, 2002

When Jerry M. Hultin was named Under Secretary of the Navy in 1997, he brought a no-nonsense business background that helped him quickly realize the military is not a perfect model of business efficiency.

In fact, the Navy’s business practices seemed to be drifting ever further from how executives in the private sector keep their organizations healthy.

Buoyed by an $80 billion annual budget, however, the cracks in the system were not immediately apparent. Hultin initially had a difficult time convincing military brass that it was time for change.

“When I walked in with the plan, all the admirals said, ‘It isn’t broke, why do you want to fix it?’” Hultin recently told a lunchtime crowd at The City Club of Cleveland.

Nevertheless, he kept plugging away and ultimately drafted a plan titled “Revolution in Business Affairs: Department of the Navy Business Vision and Goals,” which won the endorsement of Secretary of the Navy Richard Danzig, as well as Adm. Jay L. Johnson, Chief of Naval Operations. Inside of 24 months, Hultin has instituted sweeping changes on the business side of running a fighting force that he believes will lead to a more efficient Navy for the United States to take into the 21st century.

Here are a few tips on how Hultin set his revolution in motion:

Streamline your operation

One of the first problems Hultin noticed was inefficiency in the staffing of Navy destroyers. The ships routinely held a crew of 300 — about three times the necessary size — while most of the men and women on board spent their days completing menial tasks.

“They were chipping paint and peeling potatoes when we’ve spent $100,000 training them to be fire control technicians,” says Hultin. “They are professional young men and women and we ought to treat them that way.”

Now, new Navy destroyers are built for streamlined crews of 100, Hultin says, which provides enlisted personnel with actual quarters in which to live, rather than the traditional bunk and locker way of life.

Give your employees a voice

What would you do with a blank piece of paper, 30 days to think and $80 billion? Thanks to Hultin’s influence, the Navy now asks its newest recruits how they would spend its massive budget to build a better fighting force.

The idea behind the exercise is to breed innovation, and ultimately, improve the Navy’s business process as new ideas are suggested.

“I tell them to build the Navy they think we should take into the 21st century, not the one they have been given,” explains Hultin. “I may not adopt every idea, but I’ll learn a lot from them.”

Don’t overextend your resources.

Since the fall of the Berlin Wall, Navy missions have increased 500 percent, a figure that Hultin finds very disturbing in an age in which the Cold War exists only in history books.

“We’re trying to cram too many missions into what looks like an enormous amount of money,” he says. “But here we are trying to keep up with all we used to do and all the new. It doesn’t work.”

Hultin says it comes down to deciding to strategically invest time, resources and money where it will have the biggest impact. For him, that means a future in which the Navy will try to settle disputes before they mushroom into full-blown conflicts, which always costs more money, time and resources.

“We must learn to shape the world before the conflict occurs,” he says. “When conflict results, we have many times failed.”

Sell your vision to others

As the Clinton administration enters its final stretch, Hultin realizes he may be out of work once a new administration takes up residence at the White House. He realized this long ago, however, and devised a plan to get others on board so his overhaul of the Navy’s business practices would be carried on long after he left.

“I invested the time to go to the admirals who are there and say, ‘We need this.’ It’s now being run by a committee of admirals and generals, not me. That means it will persist when I’m gone.”

How to reach: Department of the Navy,

Jim Vickers ( is an associate editor at SBN.