The U.S. Navy is intentionally deepening its relationships with early-stage companies. This internal effort, called the Innovations Lab, is focused on accelerating the adoption of promising, emerging tech into our operations. As part of this initiative, the Navy is shifting its focus from traditional defense contractors to innovative solutions offered by smaller companies. This amendment is part of a larger effort to focus on solving urgent problems by working together, instead of dictating cookie-cutter solutions from on high.
Rear Admiral John Fanelli is heading this initiative. He stressed that the Navy today invests just single-digit percentages of its budget into emerging or commercial technology. The Navy has every incentive to reallocate resources. This collaborative practice improvement effort aims to foster and maintain the type of partnerships that drive rapid, meaningful results.
In its collaborative focus, the Navy is most interested in finding challenges or problems before looking for out-of-the-box solutions that a startup could provide. As Fanelli explained, “Rather than dictating the solution requiring the same approach we’ve always taken, we just lay out the challenge. Then we say, who’s going to solve this challenge and what are their solutions to solving it?” This new methodology has opened up wider lines of discussion with prospective partners, encouraging flexibility and innovative thinking.
To measure the effectiveness of these partnerships, the Navy employs five key metrics: time saved, operational resilience, cost per user, adaptability, and user experience. The following criteria serve to measure the impact of pilot programs and gauge the programs’ scalability across the Navy’s wide-ranging logistics and operations.
At this point, Fanelli has a wealth of success stories from these collaborations. One innovator addressed a two-year backlog of invoices using robotic process automation. They set out to fix the whole problem within two weeks! The Navy’s first win was that they saved 5,000 sailor hours in the first month alone. They did so through very smartly networked upgrades on a flattop.
Most remarkably, the Navy fast-tracked its joint venture with Via, a cybersecurity startup. The partnership moved from RFP to pilot deployment in less than six months. Via specializes in helping large organizations protect sensitive data and digital identities through decentralization, aligning with the Navy’s increasing focus on cybersecurity.
To Fanelli, the drive to modernize the Navy’s technological infrastructure is much deeper than boosting innovation in the Navy’s technology stack. He understands that encouraging innovation is essential not only to do more with less, but to ensure our national security. The current emphasis on domestic manufacturing aligns well with the Navy’s “resilience” goals, which include initiatives such as digital twins, additive manufacturing, and on-site production capabilities.
The Navy’s Innovation Adoption Kit addresses that challenge, often referred to as the “Valley of Death.” This term refers to the valley of death stage, or the challenging period when promising technologies have a hard time progressing from prototype to production. One of the goals of this new initiative, Fanelli said, is to get more of those startups to work with the Navy directly.
For instance, the Defense Innovation Unit (DIU) just recently got close to 100 responses from different companies for a precision-targeted cybersecurity challenge. For many of these organizations, this is their first time working with the U.S. Department of Defense (DoD). This newfound fascination marks the beginning of a paradigm shift in which more startups are open to collaboration with military entities.
Fanelli emphasized the Navy’s openness to new partnerships: “We’re more open for business and partnerships than we’ve ever been before.” He highlighted an important shift in mindset: “We’re humble and listening more than before, and we recognize that if an organization shows us how we can do business differently, we want that to be a partnership.”
The Navy has made it easier for startups to engage by de-risking the process. Fanelli, who noted that historically, entering into these sorts of partnership agreements was like running an obstacle course. “Your granddaddy’s government didn’t have a spaghetti chart for how to get in,” he said. Today, the process looks more like a funnel in which the Navy proactively identifies innovators who can prove results with measurable impacts.
As Fanelli looks ahead, he encourages startups to collaborate with the Navy: “I would invite anyone who wants to serve the greater mission from a solution perspective to lean in and to join us in this journey.” His vision is indicative of a larger commitment to foster innovative approaches within the Navy, while tackling our national security challenges at a crucial moment in history.
