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Kennedy School Review

Topic / Education, Training and Labor

Ace in the Hole: Private Sector Innovations for Naval Reserve Talent Management

A Shifting Paradigm

After 19 years of war in the Middle East and a concentrated effort on the counterterror (CT) and counterinsurgency (COIN) mission, the United States has finally completed its so-called “Pivot to the Pacific.” Washington’s gaze is, finally, fixed squarely on China and Russia. In this article we argue that in order to pace the threats posed by Great Power Competition (GPC), America’s best weapon is not newer technology and innovative weapons. Instead, our competitive advantage lies in unleashing the potential of our people. Our success hinges on the modernization of our personnel, billeting, and manpower systems. By adapting the models of American private sector and small startup teams like those found in Silicon Valley, the United States Navy can better prepare to meet the unique whole-of-government challenges that renewed Great Power Competition poses. 

This tendency towards competition has only increased. China is rapidly modernizing its military and militarizing the South China Sea. Russia is newly belligerent with its neighbors and is using cyber warfare to antagonize the United States and its allies. The threats from these two countries represent a massive paradigm shift to which the U.S. must react. GPC necessitates a “whole-of-society” or  “whole-of-government” response similar to the Cold War. 

The renewed focus on the GPC is informing the decisions of all US Navy (USN) leaders. From the training scenarios for deploying crews, to basing, force posture, and partner nation agreements, the requirement is clear: to counter China and Russia, the Navy will need the right training, the right tools, the right partners, and above all else, the right people. 

The Ace in the Hole – People

In many cases, the right training can simply be the tactics, techniques, and procedures that a crew needs to be successful onstation. But to match a determined competitor like China, the USN needs to leverage its unique assets; we cannot hope to compete strictly on tactical prowess. 

Instead, we must optimize our manpower and personnel systems for easy off-ramps and on-ramps between service and civilian life. These systems could allow members to transfer to the private sector and academia, gain expertise in strategic thought, entrepreneurial decision making, and rigorous threat analysis, and then return to service with limited impact on their upward career mobility. GPC requires that the military think of creative ways to utilize its most important assets: its people.

The Navy has developed some of these systems; the Career Intermission Program (CIP) was designed for just this purpose. Even still, accessing CIP requires a 12-month lead time, during which many participants must defer upcoming promotions, and receive “non-observed” Fitness Reports (FITREPS) that blemish their record in future promotion boards. Attempts at flexible detailing like CIP are admirable, but their limited scope and the institutional discomfort towards those who utilize the program make these attempts unattractive to promising officers and enlisted. 

The Bureau of Naval Personnel must greatly expand programs like the Career Intermission Program and initiate additional, targeted on-ramp, off-ramp (OR-OR) programs. We have to allow our people to get smarter by interfacing with those outside of the traditional military if we want to leverage a “whole-of-society” response to the GPC. The United States is full of top-tier universities, innovative companies, and world-class think tanks. Programs that allow high-performers to learn from these groups and bring their knowledge back to the Navy will upgrade and enhance the navy’s human and intellectual capital. 

Talent Management is Warfighting Preparedness 

The Navy suffers from the loss of its top talent. The government undertakes great expense to fund an officer’s college education, then invests further in specialized warfare training, only to lose that contributor after a few (4-8) years. Consider the aviation labor force. Many of these officers have college paid for either through a service academy or ROTC scholarships. Then they must complete 18 months to two years of flight school. By the time an officer reaches the front lines, they may have up to six years of government-funded education and training. A study from the Government Accountability Office placed the price tag of training an aviator through basic flight training at over $1 million dollars and the cost to fully train an aviator with the requisite operational experience can exceed $10 million. Combining the costs of college with the training costs, a single aviator could cost the Navy over $11 million. This tradeoff is not financially viable.

The loss of talent is particularly painful when it comes to high performing individuals who leave the service to pursue other opportunities due to the lifestyle constraints imposed by the Navy. We can’t expect to keep everyone – the Navy will always lose some talent when contracts are finished. Instead, we see the ability to continue to capture value from reservists’ new private sector skills as a way to reduce our net loss of human capital and better support the active force. 

After departing active duty, reservists step into a private sector world that demands the development of different skills. Frequently, this period of adaptation involves the attainment of a new skill set needed to compete in the broad labor pool. Cultivating that alternative skillset is a hard-fought struggle which often requires years of additional training, work experience and education, all while reservists try to maintain their military qualifications. 

As an example, we will use a Naval Flight Officer who leaves for business school or private industry while joining a Reserve squadron. At first glance, it might appear that time away from the Naval Service would make the reservist less valuable to the Navy, as platform currency and familiarity fade. However, this time “out of the aircraft” is time invested pursuing unique competencies that the USNR may not already possess. While the Active Component trains and develops a largely standardized product which can be utilized according to the needs of the Navy, the reservist is constantly shaped by a multitude of forces in the private sector such that their skills quickly diverge from their active duty compatriots. They are being exposed to new ways of thinking, new challenges, and new frameworks for analysis from their new roles in civilian life.  

In order to maximize the value from its people, the USNR must tap the unique skills of its reservists and apply their distinct talents to Navy problems. The Naval Flight Officer from our example may be more useful as a strategist of finance than as a Mission Commander. Rather than asking the member to preserve aging and deteriorating knowledge and abilities from active service, the USNR must optimize its labor force, applying its members where they are most cogent to drive the change that GPC demands. 

Addressing the Shortcoming

Great Power Competition requires a whole of society contribution – one which reservists are well-positioned to make. Their most valuable involvement with the Navy may look decidedly similar to their private sector employment. Especially in fields like finance, management, and science and technology, maintaining an edge necessitates applying human capital to its best and highest use. Understanding reservists’ new skill sets and detailing them to creative and flexible roles is one way the U.S. can level-up our manpower and training initiatives. 

The current approach to reserve manning falls victim to a shortcoming described by legendary shooter and NBA coach Steven Kerr as “Rewarding A, While Hoping for B.” Kerr describes “reward systems that are fouled up in that behaviors which are rewarded are those which the rewarding is trying to discourage, while the behavior he desires is not being rewarded at all.” In his analysis, Kerr criticizes an organization “hoping for performance, while rewarding attendance. What it gets, of course, is attendance.” The root cause of this fallacy, according to Kerr, is an “Overemphasis on Highly Visible Behaviors.” The Reserve Force desires creativity, performance and readiness. What it incentivizes is attendance – simply “showing up.” 

Borrowing from Industry: The Special Reserves Group (SRG)

The USNR should establish a contingent of capable experts from various private sector fields to form a lithe internal consulting team. Drawing on their areas of individual expertise, this team could rapidly generate solutions using a private sector perspective to identify and address areas of concern. Utilizing a project sprint structure would produce quick options for USNR leadership to further evaluate and put into practice.

The USNR must adapt and create a pool of officers who, while trained in their given warfare specialty, are given additional billeting codes corresponding to their educational and professional experience. This group of reservists could serve as one component of our manning response to renewed Great Power Competition. A “Special Reserves Group” would be competitive and all volunteer, with a project slate oriented towards solving some of the Navy’s biggest problems and leveraging the member’s freshest skills. 

These SRG Officers and Enlisted would form a type of consulting group and complete work in four primary areas: Finance, Supply Chain, Strategy, and Innovation. The four functional areas of the Special Reserves Group reflect our assessment of the key components of GPC. 

The Finance Division: Reservists in the Finance Division would focus on fiscal efficiency and budget optimization. Drawing on our reservists who attend top-tier business schools and more experienced leaders with significant industry experience, this group can save the military massive amounts of money and help our force become more efficient. 

The Supply Chain Division would apply the lessons learned in civilian-side logistics and supply operations on to the depot and I-level maintenance operations performed within the fleet. If the situation with China ever escalates, their expertise will be vital in keeping manpower and materiel flowing. 

The Strategy Division will be composed of experts in ideation, corporate strategy, political strategy, and military strategy. This section could be filled with military members who have attended The War College, studied at schools like the Harvard Kennedy School, Johns Hopkins SAIS, or Georgetown’s School of Foreign Service. The division would focus on aligning the Navy’s strategy with other parts of the military and governmental strategy. 

Lastly, the Innovation Division. Perhaps most critical, the Innovation Division will capture the spirit of Silicon Valley and apply its speed, developmental agility, and design-based thinking to Navy  problems. This unit would be tasked with long-term problem solving questions like, how to differentiate between whales and submarines more quickly, how to design new travel card software, and sourcing innovative private sector technology for integration into various platforms. This group must also solve more readily addressable pain points to make data digestible for Commanding Officers and unlock new decision making capabilities. 

While this concept may have been attempted previously at the higher levels (two star) of command, we see tremendous opportunity to implement the SRG at more foundational points of execution. Smaller units facing idiosyncratic challenges could apply for SRG assistance, yielding rapid, tangible results at the ground level. This kind of move is not without precedent at DoD, as some Air Force squadrons have already seen results from pushing innovation decisions down to the squadron level. 

Together, the Special Reserves Group will function like a consulting arm of the Navy. This unit serves multiple purposes. First, it takes advantage of some of our reservists’ “freshest” competencies. Second, it provides hard-working, intellectually-thoughtful reservists somewhere to apply their civilian skills in support of our nation. Third, it serves as a stopgap for talent – something we drastically need during the era of GPC. Fourth, it signals a commitment to innovation and a willingness to try new things to both the Reserve and Active Duty components. People like to see their employer trying innovative approaches to their problems. Designing the SRG the right way could serve as a model for a program across the Department of Defense. 

Conclusion: The Strategic Talent Utilization Mandate

Great Power Competition has arrived and the United States Navy must adapt to the shifting strategic environment. If we are to be an effective part of the United States’ whole-of-government response to the Chinese and Russian military advancements, leaders should be willing to try out new ideas and force structures to meet the threat. Our proposals seek to be efficient by leveraging the intellectual capital within the Navy and improving its useful life. We seek to be innovative, borrowing the skills and practices of both Corporate America and Silicon Valley. And lastly, we hope to be aggressive. We must pace and exceed the threat through this type of program to best utilize our most precious resource: our human capital. 

Fair Winds and Following Seas 

LCDR Matthew White is a Master’s of Public Policy Candidate at The Harvard Kennedy School of Government and an MBA candidate at The MIT Sloan School of Management.  Since leaving the military he has worked with numerous defense-focused technology startups. During his nine-year active duty career he served as an EP-3E ARIES Mission Commander at VQ-1 stationed in Oak Harbor, Washington and P-8A Poseidon Instructor at VP-30 in Jacksonville, FL. Now in the reserves, Matt is a member of the Patrol Squadron Thirty Squadron Augmentation Unit. 

LT J.J. Rutherford is an MBA candidate at The Wharton School. In the summer of 2020, he interned at Vanguard, the world’s second largest asset manager, focusing on Corporate Strategy and Competitive Intelligence. During his nine-year active duty career, he was a part of the first P-8A deployment with VP-16 and an Instructor Naval Flight Officer at VP-30 in Jacksonville, FL. As a reservist, he serves as a member of the Patrol Squadron Thirty Squadron Augment Unit.



Navy Career Intermission Program.

GAO: “Assets Needed to Better Define Pilot Requirements and Promote Retention”.

Steve Kerr’s “On the Folly of Rewarding A, While Hoping for B” – Academy of Management Journal, Vol. 18.

Photo credit: JJ Rutherford.