VADM Shackleton.

In the past year I have endeavoured to send out monthly CN Sitreps on the Navy change process to keep all the Navy family informed of its progress.

This month, however, I had the pleasure of submitting my one-year report to the Minister of Defence and I would like to share that report, in a condensed form, with all of you.

When I assumed command of the RAN on July 3 1999 I set about identifying both the challenges and opportunities that lay in the future and reinvigorating the Navy. Navy people have been through an intense year of change meeting these challenges.

I have held four leadership conferences in the past 12 months attended by large cross-sections of the Navy and other invitees. I consider these conferences essential to the development of the new Navy across all ranks and to other stakeholders.

While the Navy is inevitably held accountable, at least in part, for all aspects of naval capability development, procurement, delivery and performance, it has lacked the ability to effectively control, and in some cases even participate in the whole-of-life, whole-of-capability continuum. This has been addressed in two fundamental ways:

On March 13 2000 the Navy was reorganised into Force Element Groups (FEGs) with a new Command established to coordinate cross FEG activity.

A Navy Plan (known as Plan Green) was developed and published on July 1 2000.

This plan articulates the resources, people and business activities required to manage current capability and allocates resources to meet agreed Defence priorities. It is intended for use by external and internal managers to ensure Navy and enabling executives meet our responsibilities to the Nation efficiently and effectively.

Actions have been taken over the last 12 months to attempt a turn around in both the areas of recruitment and retention. For the first time since 1994 specific Navy recruiting commercials have started screening on television. We are now working together with DPE towards better and more targeted recruiting practices. This will be an enduring goal and will need sharper focus during the next year.

The Personnel Action Team (PERSAT) was formed in January 2000. This team, spanning all ranks, has conducted presentations and focus group meetings at all fleet bases and most establishments to gain a better insight into the issues that are important to us, and are contributing to high rates of separation. Over 600 individual submissions have been received. Our people are demonstrably keen to become involved with improving the way business is done and, of course, the way conditions of service affect them.

Many issues raised by our sailors relate to activities not within Navy's direct control and are results of changes brought about by the Defence Reform Program and Commercial Support Program. I intend to establish much stronger relationships with the Enabling Executives so that within 12 months we have useable agreements in place, which will support the effective delivery of Navy's defence outputs.

Sailors and officers should now be in no doubt that their ideas for innovation and change will be listened to, and acted upon where appropriate.

Many of the initiatives in the PERSAT activity have been implemented after their suggestions. My policy of getting out and talking to our people has convinced me that, more than ever, Navy people will now tell me exactly what they think, and will provide me with realistic solutions to many issues.

My aim is that Navy will become a true values-based organisation. We have re-evaluated Navy's vision, purpose and values. The Directorate of Navy Change Management (DNCM) is actively engaged with the staff of the Secretary of the Department and our Navy values dovetail very neatly with those he recently announced. Our values' program will roll out to all Navy people a new openness of approach to managing ourselves.

The conduct of operations is one of the things Navy always does well. Overall this reflects the flexibility and commitment of Navy in responding at short notice, and our ability to operate within a multi-lateral force, from nations who may not normally work together.

Patrol Boat Operations. Navy continues to meet government's requirement to provide 1800 patrol days in support of civil surveillance operations, achieving 1796 in the last financial year. This is one of our highest profile, frontline activities.

Submarine Operations. This year sees the first and second deployments of Collins class submarines to Hawaii for bilateral exercises with the USN in Hawaiian waters. Another Collins submarine was deployed to SE Asia to take part in exercises and conduct several port visits.

East Timor. Navy's contribution to Australia's role in East Timor has been well reported. We continue contribution of two landing craft (LCH) which are providing outstanding service in support of East Timor operations.

Sydney Olympics. 469 Navy personnel are taking part in Operation Gold. The Mine Warfare and Clearance Diving Force Element Group (MCDFEG) is heavily involved with counter terrorists aspects of the operation. Other resources will be deployed if further support is required.

Bougainville. Navy continues to provide a vessel on station in support of the Peace Monitoring Group activities on Bougainville.

Solomon Islands. Navy's recent rapid response to deployment of platforms to the Solomon's to address a potential crisis situation in that region further demonstrates the flexibility of Navy to support regional contingency operations.

Plan Blue. The Navy Long-Range Plan is my plan for the 30-year time to year 2030. It proposes options to meet the Navy's commitments in terms of platforms, supporting infrastructure and people and integrates with the Defence Long Range Aspirations.

Public Discussion Paper (PDP). In line with direction from CDF and the Secretary a small team of Navy personnel is delivering the Defence PDP discussion briefings to Navy people around the country. We have included members of the other services who wished to attend these briefings. I am encouraged by the reception and engagement our briefing team is receiving by both service and civilian staff.

Joint Warfare Concepts. Navy is participating in the development of a Sea/Land/Air ADF Joint Warfighting Concepts Paper.

Class Basing. Part of the finding of the TNT showed that there might be potential for efficiencies were some form of ship class geographical basing to occur. The potential benefits include geographic stability for our people, focus for support services by both Defence and contractors, reduced training/re-training requirements and reduced costs for relocation of people. I have commissioned a working group to report to me on the benefits and implications of this concept to report back by October 2000.

Defence Materiel Organisation. Navy is actively engaged with the new Defence Materiel Organisation (DMO) to ensure a seamless transition to the new organisation. In the last 12 months we have forged some effective teaming arrangements for major projects. More work needs to be done, and I am determined that all Navy will support the new DMO and become a well-informed customer.

Submarine Capability. Taking steps to achieve a fully operational and sustainable submarine capability has been a high priority for me during this first year. Overall, I am encouraged by progress with the Collins' class and see a good future for our submarine capability. More funds will needed to be committed to the submarine project and I am committed to the enormous effort required to get us to where we want to be by 2006.

Patrol Boat Capability. Navy has also been actively assisting the DMO to refine the tender documentation for the proposed new patrol boat. Our joint aim has been to ensure our tender specifications match our functional specifications as closely as possible.

Embarked Helicopter Capability. The SH2-G(A) Super Seasprite Project is progressing according to schedule. The new capability management responsibilities of the Force Element Group Commander has led to closer, more integrated work between NHQ and the DMO in managing the software development challenges of this project.

Benchmarking. By benchmarking in Australia and overseas, and in both military and civilian organisations, I am assured that we are putting into action a sustainable transformation of the RAN. Our plans are in place, our people are engaged, a vision and purpose is clearly mapped out. We know the risks, will measure our performance, and continue to compare our progress.

My top priorities for the next 12 months are:

Navy's People

Human Resources. Publish and enact a Navy HR Policy and develop a strategic workforce plan for the management of the Navy with a PNF workforce of fewer than 13,000 until at least 2004-05.

Retention. Address Navy's retention of our people by identifying and solving issues and factors that cause people to leave the Navy prematurely.

Recruiting. Develop better recruiting processes and attract more potential Navy people who want to serve in the RAN. Analyse costs and benefits of recent recruiting initiatives and propose appropriate alternate strategies attracting more people who want to serve in the Navy and fill recruiting target vacancies.

Training. Review current curricula for all Navy training courses and education programs.

Reinvigorate Navy's culture, values and traditions. Engage our people in values and leadership development programs, ensuring we include our stakeholders and that we are aligned with Defence values.

Best Business Practice

Governance. Refine Navy's corporate governance framework to ensure accountability, responsibility and authority are both aligned and cascade to appropriate levels.

Risk Management. Mitigate and manage risk throughout Navy using Australian Standards for Risk Management, including an improved safety management organisation.

Measure our Performance. Performance measurement both for internal best practice and for Navy's deliverables to Government.

Change Plan. Plan and implement changes to organisation and business practices to deliver efficient and effective capability.

Non-Navy Support. Implement agreements with enabling executives so that Navy achieves benefit by becoming an informed customer.

Capability Management

Cost of Ownership. Identify total cost of ownership of capability through Force Element Groups by adopting a whole-of-life, whole-of-capability approach to delivery and management of capability.

Plan Green. Develop and execute a Navy short-term (FYDP) capability delivery and business plan.

Capability Priorities. Prioritise Navy's Defence capabilities by using a similar process to that used by service deputy chiefs in prioritising Defence capabilities.

Acquisition/Materiel. Inform and take an active role in capital investment acquisition processes eg. Collins class submarines, LPAs, Seasprite helicopters, new surface combatant options, the new patrol boat and improvements to current platforms.

Operations and Preparedness

Operational Focus. Meet all Government requirements and missions that derive from world circumstances, as well as meet the requirements of CDF's Preparedness Directive.

Operational Performance. Continue our operations supporting the Defence Mission within the limits of available resources and monitor Navy's operational performance.

Navy Doctrine. Publish a Navy doctrine that recognises and meets Australia's strategic maritime circumstances.

Deliver Capability. Deliver capability through Force Element Groups to meet the Maritime Commander's requirements.

Shape Our Future

Future Defence Planning. Shape Navy's long term contribution to the defence of Australia by inputting to strategic reviews and Government policies when required.

Navy Long-range Planning. Develop a long range Navy Plan (Plan Blue) to the year 2030.

Benchmarking. Compare Navy's structure, performance and processes within Australia and overseas, in both military and civilian organisations, to establish best practices.

Promote The Navy

Navy Image. Promote the Navy both internally and externally as an employer of choice and deliverer of capabilities necessary for Australia's security.

Reputation. Manage Navy's reputation through effective management of issues and risks; education and training for Navy people; and relationship management with internal and external influencers.

Community Relations. Provide direct first-hand experience of Navy to generate positive attitudes towards it, by coordinating such things as ship visits with recruiting, career and community information activities.

Industry, Influencers and Partners Program. Showcase Navy achievements through symposia and other engagement programs that involve external stakeholders and other parties interested in Navy activities.

Conclusion

As the first year of my watch closes Navy can be proud of its performance in the operational environment as well as the successes of the reinvigoration program. We must, however, address two key problems. Firstly, we still need to find ways to arrest the attrition rate of qualified people and improve Navy's image amongst those considering joining. Secondly, we must address the implications for Navy should increased funding not be forthcoming for current capability, or should adequate surface warfare capabilities not be provided in the future. By finding our own solutions to these critical challenges to our future we will continue to deliver on our own responsibilities to ourselves and the Australian people.

To those people attending my leadership conference at the end of this month, I look forward to talking with you on a range of subjects and I am interested to hear your thoughts and ideas not only on the Navy change process but also on a range of topics. For those of you who cannot attend the seminar highlights will be published in Navy News, Seatalk and Scuttlebutt. The presentations will be published on the Navy Internet site at the close of the conference.

D J SHACKLETON
VADM, RAN
CHIEF OF NAVY