Navy Under Secretary Thomas Modly is using a reorganization of the service’s business operations as an opportunity to take a few small steps toward a more interconnected relationship between the private and public sectors.

“I am building out an office of the chief management officer here as part of the congressional mandate to have a business transformation office, and I’m looking at people from industry to come into that,” he said. “So I’m going to do my part here in my little corner of the world, but we’re going to look at this more broadly.”

According to a memo signed by Modly on March 20, the deputy under secretary of the Navy for management position is being eliminated and replaced by the office of the CMO, which will report directly to Modly as he assumes responsibilities as the CMO. Modly is also assuming responsibilities as chief information officer of the Department of the Navy, though the memo said he will delegate most responsibilities of the office to the respective deputy CIOs of the Navy and Marine Corps.

The function of the new office of the CMO will be to prioritize and accelerate business transformation. It will accomplish this by focusing on four priorities:

• Improvement of audit outcomes and financial accountability,
• Business systems rationalization and modernization,
• Data strategy for improved business operations, and
• Business reform across the Navy and Defense Department enterprises.

The memo says the team will be staffed with “highly skilled experts.” Modly has previously advocated for more freedom of movement within what he refers to as a “national security ecosystem,” including both the DoD and defense contractors.

One of the benefits of such a program would be the creation of a much larger and stronger network between the public and private sectors, fostering greater understanding and cooperation between the two. It also creates a deep well of goodwill that both sides can draw from.

“I think that we should be more actively utilizing some of the levers that Congress has given us with respect to bringing in people, highly qualified experts, from industry,” he said. “When I look at the business mission area of the department, a lot of our challenges are related to technology, and business process reengineering. I think if we could infuse the department with more people from the outside, who understand how these different areas of business operations are evolving in the private sector, we could really change a lot, or really transform our business operations.”

He said there’s a case to be made for looking at this kind of arrangement for the uniformed side of the service as well, but he’s focused on civilian employees for the moment.

Right now, he said, the Navy needs to be more creative and look more broadly at allowing people to move back and forth between the public and private sectors. That’s one way the service could find more people with agile and adaptable skills to supplement its workforce.

But there may be challenges in implementing a system like this. For one thing, there’s an ongoing tension in motivations, between the mission of the public sector versus the money of the private sector. But Modly said mission may be a stronger motivator than some might think.

“I think the mission is always a motivator,” he said. “For people to have the opportunity to come in, serve the country, and are willing to put aside the financial side of it for a couple of years, to come in and work on a very important project and deliver that, there’s an incredible psychic benefit to that that I think is irreplaceable. And frankly, the people who are able to make that trade-off are the people we want anyways.”

In his experience, there’s no shortage of individuals in the private sector who are willing to make that trade-off for a couple of years. The bigger challenge, he said, is convincing industry to let go of those people, even for a little while. He said time and money spent recruiting, training and retaining employees could make companies hesitant to let them go. But he believes the benefits will outweigh any potential drawbacks.

There aren’t yet any concrete plans to do this on a large scale, and Modly said he’s going to need more than the roughly 100 days he’s been in office to get to that point.

Meanwhile, he’s looking at ways to improve agility within the uniformed side of the service as well. He said the Navy could benefit from stricter recruitment standards regarding education and physical fitness.

“We don’t want to change our standards, we want to keep our standards high, and in fact maybe even increase our standards going forward because the challenges of the future force are going to be much more difficult and dynamic, so we need really, really sharp people to be able to handle those challenges,” he said in an interview with Federal News Radio.

This comes as the military is having a harder time finding new recruits for the armed services. Estimates are roughly 30 percent of the current U.S. population is eligible for service, due to any number of factors including obesity and other health issues. Coupled with that is the fact that in an improving economy, fewer young people are looking to the military to provide a steady paycheck and stable career path.

Modly also attributed the challenges to some cultural changes.

“There is a growing disconnect between the general population and people who are serving in the armed forces or have served in the armed forces,” he said. “In 1995, 40 percent of youths in the age of 16 to 24 had parents or a parent who had served in the military. Now that number is around 15 percent. And that was one of our great recruiting things. It was family legacy, and an understanding of what service met.”

In an effort to increase their potential recruiting pools, some of the services have recently toned down, or at least discussed toning down, their recruitment standards. The Air Force has discussed the possibility of changing physical fitness standards for certain jobs, like cybersecurity. In addition, prior usage of marijuana no longer disqualifies a potential Air Force recruit.

Meanwhile, the Navy itself recently loosened its restrictions on things like visible tattoos. But Modly said that’s a cultural issue, while he’s focused on readiness and capability of the force.

“Things like tattoos and hair have more to do with disciplinary things,” he said. “Tattoos are now a part of the culture, and those don’t necessarily impact how a person can handle the types of jobs that we want them to do. So there’s been some determinations that perhaps we can be more lenient on things like that.”

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