When Admiral Vern Clark became Chief of Naval Operations in 2001, he inherited an enormous, diverse organization of over 900,000 people with a budget approaching $100 billion. It was also an organization jokingly known for “two hundred years of tradition, unhampered by progress.” The U.S. Navy was in fact many navies. There was an undersea Navy, a surface Navy, an aviation Navy, a Pacific Navy, and an Atlantic Navy. Each had its own culture, and each operated with great independence.

As the top guy in the Navy, Clark could sense enormous misalignment in his organization and recognized what it was costing the service in terms of performance and money. At any given time almost 40 percent of the Navy’s aircraft were nonoperational, ...

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