In a significant call for reform, Navy Secretary John Phelan has urged the U.S. Navy to cast aside its traditional risk-averse culture and adopt a new operational mindset centered on speed and wartime urgency. Addressing the Surface Navy Association, Phelan’s initiative is a direct response to the massive shipbuilding capacity of near-peer adversaries like China, demanding rapid innovation in acquisition and weapons development to maintain strategic competitiveness. He stressed that a performance-based approach, prioritizing accountability and rapid scaling of successful technologies, is essential to secure U.S. naval dominance.
Story Highlights
- Navy Secretary Phelan advocates for cultural reform, emphasizing wartime readiness.
- China’s shipbuilding capacity vastly outpaces the U.S., raising strategic concerns.
- Phelan criticizes the Navy’s lengthy acquisition timelines, calling for rapid innovation.
Call for a Cultural Shift in the Navy
On January 14, 2026, Navy Secretary John Phelan addressed the Surface Navy Association National Symposium in Arlington, Virginia, urging the U.S. Navy to adopt a new operational culture focused on speed and risk-taking. Phelan’s initiative aims to replace the existing “zero-defect mentality” with a performance-based approach that encourages rapid innovation, especially in shipbuilding and weapons development. This shift is essential to counter the massive shipbuilding capacity of China, which had approximately 1,800 ships under construction in 2022 compared to just five for the United States.
Phelan emphasized that the Navy must act as if the nation is at war, adapting quickly to new challenges and prioritizing accountability. He highlighted the need to move away from compliance-based structures that hinder progress. The strategic environment demands this shift, as the U.S. faces near-peer adversaries with growing naval capabilities. Phelan’s call for “radical transparency” and accountability reflects a broader strategic reassessment of U.S. naval power.
Challenges of the Current System
The traditional Navy culture, which prioritizes risk mitigation and compliance, has been identified as an impediment to rapid innovation. This approach has resulted in lengthy timelines for new acquisitions, with major programs often taking a decade to reach operational status. Phelan criticized this inefficiency, noting that modern weapons systems must be developed and deployed more swiftly to maintain strategic competitiveness. The current system’s resistance to change has created friction points that Phelan aims to address through his reform initiative.
The strategic disparity between U.S. and Chinese naval capabilities underscores the urgency of Phelan’s initiative. China’s shipbuilding prowess threatens to outpace the U.S., necessitating a shift in how the Navy operates and innovates. Phelan’s performance-based model seeks to accelerate decision-making processes, allowing the Navy to rapidly scale successful technologies while discontinuing underperforming systems.
Impact and Future Implications
Phelan’s initiative, if successfully implemented, could significantly enhance the Navy’s strategic competitiveness. The shift toward a performance-based culture may increase the Navy’s ability to develop, test, and deploy new capabilities quickly. However, this cultural transformation is not without challenges. It requires a fundamental change in institutional mindset and may encounter resistance from those accustomed to established procedures.
Defense contractors and shipyard operators must also adapt to new performance metrics and potentially variable compensation structures. Phelan’s approach signals a shift towards outcomes-based compensation rather than traditional cost-plus arrangements. This change could drive broader transformations in the U.S. defense industrial base, influencing how military services and defense agencies across the sector operate.
Watch the report: Secretary of the Navy John Phelan discusses importance of shipbuilding
Sources:
Navy Must Take Risks, Act Like the U.S. Is at War, Says Phelan
US Navy Seeks to hire 250,000 New Dockyard Workers in the Next 10 Years – Naval News