The need to transform the military services has been widely recognized in a number of DOD policy papers, reports, and strategy documents. The national security strategy, the national military strategy, the Secretary of Defense’s guidance to the services, the 1997 Quadrennial Defense Review, and the Chairman of the Joint Chiefs of Staff’s Joint Vision statements (2010 and 2020) all cite the need to transform U.S. armed forces to maintain military dominance in the new security environment. Over the last several years, the Navy has undergone some reorganization, shifted its science and technology funding, and undertaken a wide range of experiments and innovation activities. A key organization for carrying out the Navy’s transformation has been the Navy Warfare Development Command, which was established in June 1998 to develop new operational and warfighting concepts to plan and coordinate experiments based on new concepts and to develop doctrine. The Command has been preparing a capstone concept based on network centric warfare that is to serve as a guide for future naval operations. The Command has also planned and coordinated a series of major experiments involving the fleets to evaluate many of the concepts and technologies associated with network centric warfare. Before it established the Command, the Navy did not have an organization dedicated to operational experimentation. The Command’s fiscal year 2000 and 2001 budgets are about $45.3 million and $44 million, respectively. In fiscal year 2002, the Command’s budget is projected to decline to about $41.7 million. Almost half of each annual budget is allocated to experimentation-related activities. Two other organizations important to transformation are the Naval War College and the Chief of Naval Operations’ Strategic Studies Group. The college conducts war games that test concepts and potential technologies.Its close working relationship with the Navy Warfare Development Command provides an avenue for new concepts to be further evaluated and integrated into experimentation efforts. The Strategic Studies Group, comprised of a small group of senior Navy, Marine Corps, and Coast Guard officers, generate and analyze innovative and revolutionary naval warfighting concepts and reports directly to the Chief of Naval Operations. Recent studies have centered on attacking land targets from the sea, future surface ship deployments, new crewing concepts, and multitiered sensor grids. In 1999 the Navy reorganized its science and technology resources into 12 future naval capabilities to focus more sharply on the capabilities needed over the next 10-15 years. Senior Navy and Marine Corps officials lead integrated product teams that prioritize individual efforts in the capability areas. The Navy’s science and technology budget has remained relatively static over the last decade and has decreased as a percentage of its total budget. The Navy currently allocates about 35 percent of its science and technology budget to support its future naval capabilities. The Navy plans further refinements to its science and technology structure, including the possibility of adding or subtracting individual future naval capabilities. Appendix I provides further information on the future naval capabilities. Since March 1997, the Navy has also conducted nine fleet battle experiments. The experiments are assessed to determine which new operational concepts, tactics, and technologies prove workable and what follow-on experimentation to pursue. The Navy Warfare Development Command is also coordinating with other military organizations to jointly lease one or more dual hulled high-speed ships for a broad range of experiments. For 18 months starting in September 2001, the Navy will conduct a series of experiments to explore potential uses for such vessels, including amphibious lift, armament configuration, and helicopter operations. Appendix II provides examples of issues explored in the fleet battle experiments. Finally, the Navy conducts a wide range of innovation activities. For example, the Third Fleet has set aside a portion of its command ship, the U.S.S. Coronado, to test innovations related to command, control, communications, computers, and intelligence concepts. Appendix III provides some examples of these innovation activities. The Navy is conducting a variety of transformation activities: it is experimenting with new technologies, it has made some organizational changes, it has introduced the new network centric warfare concept, and it is pursuing a wide range of innovations. However, the Navy has not developed an overarching, long-term strategy that integrates these activities or that clearly defines transformation goals, organizational roles and responsibilities, timetables for implementation, resources to be used to achieve its transformation goals, and ways to measure progress toward those goals. In other words, the Navy does not have a strategic plan and roadmap for its transformation that shows where it wants to go; how it proposes to get there; and how transformation will be managed, funded, implemented, or monitored. The lack of a plan and roadmap has contributed to confusion within the Navy and DOD about what constitutes the Navy’s transformation. The adoption of an evolutionary approach to transformation has so far not led the Navy toward careful and full consideration of all the strategic, budgetary, and operational elements of transformation. Additionally, the Navy’s progress has been adversely affected by insufficient support for new organizations responsible for leading transformation efforts, limited conduct of long-term experiments, and a variety of Navy-wide innovation activities that are not well coordinated and tracked. There is no clear consensus on the precise definition, scope, or direction of Navy transformation. In discussions with Navy and DOD officials and outside defense experts, we found there was some confusion about what constitutes transformation and about the role of the network centric warfare concept, which is the centerpiece of the Navy’s transformation efforts. The Navy has not developed a plan that clearly identifies what transformation is and what its goals or components are. For example, although network centric warfare is clearly a fundamental concept for the Navy’s future operations, the Navy still has not made it clear how the concept fits in with its many ongoing transformation activities or with its overall transformation efforts, what effects the concept will have on the types and composition of forces, or how the concept’s many components will be integrated with each other or with those of the other services. The Navy plans to soon publish a capstone concept document for its future force. The concept document is expected to apply the tenets of network centric operations to the Navy’s vision statements and identify some of the capabilities required to implement these tenets. Navy Warfare Development Command officials believe the concept document is critical to the success of the Navy’s transformation, and they expect the concept document to be approved by the Chief of Naval Operations in the near future. Good management practices and the advice of defense experts both inside and outside the Navy suggest that a clear strategy is central to the success of transformation efforts. DOD and Navy officials and outside defense experts identified a number of benefits that can be obtained from strategic planning. Navy officials at headquarters and several commands stated that establishing an agreed-upon definition of transformation would be vital for explaining what constitutes transformation. Most Navy officials we spoke with believe that a strategic plan and roadmap would bring greater coherence to the Navy’s transformation efforts. A strategic plan and roadmap would also provide the Congress with a means to evaluate and make optimal decisions on the Navy’s transformation. The need for a strategic plan when attempting major organizational and operational changes, such as those the Navy is undertaking, has also been long recognized in the private sector as a best business practice. We discussed the need for a strategic plan and roadmap with a wide range of DOD and Navy officials and with outside defense experts, many of whom have been directly involved in advising DOD on military transformation. These individuals agreed that such a plan should clearly articulate the Navy’s transformation goals and objectives, priorities, specific responsibilities, and linkages with other organizations, as well as the scope of activities and the resources necessary to carry them out. These management tools should also identify the challenges and obstacles that need to be addressed and should include understandable, simple, and reasonable metrics to provide ways to gauge progress, provide information to decisionmakers, and make necessary changes. Some Navy officials expressed caution that such a plan should not dictate a particular force structure but rather provide the elements of the process to guide the transformation efforts. Appendix IV provides additional information on the key factors for successful transformation planning and management. The same officials and experts said that further complicating Navy transformation planning efforts is the absence of clearly articulated transformation guidance from the Secretary of Defense and the Chairman of the Joint Chiefs of Staff to the military services. The Secretary and the Chairman have provided only broad guidance on the direction and progress of military transformation and on the types of future capabilities required for transforming the military. The responsibility for clearly identifying priorities and developing an implementation plan for their transformations has been left to the individual services. However, it is widely recognized that the success of future joint operations requires careful joint planning and integration. Various organizations, including the Defense Science Board, have cited the need for the Secretary of Defense to provide clear guidance on transformation. In 1999, the Board called for an explicit strategy, or a master plan; a roadmap; and outcome-related metrics to assess progress. In its annual performance plan, issued pursuant to the Government Performance and Results Act of 1993, DOD identified the transformation of U.S. forces among its performance goals. The act requires federal agencies to clearly define their missions, set goals, link activities and resources to goals, prepare annual performance plans, measure performance, and report on accomplishments. However, we recently reported that two of the transformation’s three underlying metrics— procurement spending and defense technology objectives—do not provide a direct link toward reaching that performance goal. Without such metrics, DOD cannot adequately assess its progress toward transforming its forces for the 21st century. The Navy would be expected to provide input to such a DOD effort and should therefore have its own clearly articulated transformation plan. The Navy has adopted what it calls an evolutionary approach to transformation, meaning that its effort is more about incremental changes in its force posture than in its force structure. The Navy believes that this is an appropriate path to follow since it already is an expeditionary, self- sustaining, and mobile force with worldwide reach.