Learn how UNC Executive Development’s program for the U.S. Navy has provided insights and strategies that have resulted in substantial savings.
In 2010, as Assistant Secretary of the Navy Sean Stackley started the second year of a nine-year run leading the Office of Research, Development and Acquisition, he called on Kenan-Flagler Business School and UNC Executive Development for help.
Senior Navy officers in the RDA office were responsible for negotiating the best deals they could get for everything from aircraft to ships to submarines. But there was a problem. Early on, Stackley realized his team was competing on an uneven playing field tilted in favor of the defense industry.
To get help leveling it, Stackley turned to the people he knew at UNC Kenan-Flagler Business School, said Kirk Lawrence, a retired U.S. Army colonel who has directed UNC Executive Development’s government and defense sector programs since 2012.
Soon afterward, Robert A. Connolly, an associate professor at Kenan-Flagler Business School whose research interests include financial markets and real estate development, was asked to develop a program to meet the Navy’s needs. Connolly worked with retired Navy Admiral Harry Quast to create a unique program for a select group of participants called “Understanding the Business-Acquisition Relationship Executive Seminar.”
As part of the foundational work, Connolly spent days poring over Navy and Congressional Research Service reports that provided detailed analysis of Navy acquisition programs and government acquisition rules. “I read everything to be found on ship classes, radar systems, and all the rest,” Connolly said.
A Record of Results
Since their inception in 2011, more than 600 senior leaders have participated in the programs, said Allison Stiller, the former principal civilian deputy of the RDA Office. Participants include all functional areas in a program office such as contract specialists, program managers, and logisticians.
For these participants, the goal was not to get good grades or collect credits toward a degree. Their sole objective was to develop a business strategy to get a better deal for weapons systems they were about to buy where billions of dollars would be at stake.
And they have done it. To date, Navy officials state, the insights and strategies gleaned from the program have contributed over $6.8 billion in taxpayer savings across many Department of Navy programs.
“Seminars such as these allow the student to look at their program with a different lens, and having that perspective yields a new way of approaching a procurement,” Stiller said. “Working with UNC over these past six years, we have embraced student feedback so that no two courses have been the same.”
Program participant David Jenkins describes the program as, “Fantastic. It provided valuable insight into what motivates contractors to pursue and perform federal contracts. The staff was extremely professional and knowledgeable. The retired industry executives were especially insightful and provided invaluable insight based on firsthand experience.”
Each week-long program kicks off with an assembly at the Rizzo Center in which top-level Navy officials join with leaders of the program to lay out the challenge — and opportunity — at hand. When the assistant secretary of the Navy is behind the initiative and expresses his support at the start of each program, it sends a message to senior staff that he expects this to work, Connolly said.
One unique dimension to the partnership between the Navy and UNC Executive Development are the “deep dives” where Kenan-Flagler Business School faculty join with Navy executives to develop the foundations for an acquisition strategy for a specific weapon system the Navy is about to buy — and for dealing with the corporations they will be buying them from. The aim is to devise a detailed negotiating strategy to drive down costs. These sessions are outside of the week-long programs and are focused on a specific acquisition program.
One of the reasons the week-long program has worked so well, Connolly said, is because Stackley understood, at a deep and profound level, the myriad challenges his office had to overcome. “The first challenge was simply knowing what things should cost,” he said.
According to Lawrence, another daunting challenge that the program has addressed is closing the gap between what defense industry executives know about how military and government systems operate compared to what government procurement officers know about the world of finance. It is standard practice for defense companies to hire away the most experienced government civilians and military acquisition professionals who know how “the system” works, then leverage that information to maintain a competitive advantage to maximize their profits. In contrast, most acquisition professionals serve their entire careers with the government and so are not familiar with what motivates defense industry executives to behave, posture, and negotiate in a profit-and-loss world.
“The problem is that government acquisition professionals, as a group, do not understand where the leverage comes from dealing with a private-sector firm,” Connolly said. “What we are telling them is, ‘If you want the upper hand in a negotiation, this is the place to look.’”
The defense industry also contributes to these programs by sending executives to participate in panel discussions and offer industry perspectives, Lawrence added. Participants include Raytheon, BAE, Huntington Ingalls, Leidos, Boeing Defense, General Dynamics, and Lockheed Martin.
Since 2014, Rob Lippert has served as the lead faculty, along with Noah Eisenkraft in support. Lippert holds a doctorate in finance and has served as chief rinancial officer of a publically traded Fortune 500 company. His academic background, combined with his real-world experience, made him a natural to step in and move the program forward. Eisenkraft holds a doctorate in organizational behavior; his research focuses on industry behaviour and contract incentive structure. “The combination of these two,” Lawrence said, “has been critical to the substantial growth of the program, which now supports the acquisition organizations of not only the Navy, but also the Army, Air Force, Defense Logistics Agency, Defense Contracting Management Agency, NASA, and the Department of Health and Human Services. We take great pride in the impact UNC Executive Development is having on the acquisition communities across the Depart of Defense and other federal agencies. No one, to our knowledge, is offering a program of this type that is so specifically tailored to the needs of the organizations we are educating. At the end of the day, we are proud of our contribution to improve acquisition and business practices that result in real savings to the government and, ultimately, the United States taxpayer.”
Learn more about our government and defense sector offerings here.
Adapted from: Gary Moss. “Leveling the Playing Field.” University Gazette, Monday, November 19th, 2028, https://www.unc.edu/discover/leveling-the-playing-field/.
