The ceremony that marks a change in command on a U.S. Navy fighting ship unfolds with all the pomp and circumstance you'd expect from a formal military affair. As crew members in dress uniform stand in formation along the gleaming deck, well wishers fete the outgoing commander to the accompaniment of a Navy band. A fighter squadron of naval aviators does the obligatory "fly by." Following the precisely scripted ceremony, a large reception is staged on the flight deck, which culminates when the outgoing commander leaves the ship.

For Captain D.Michael Abrashoff, the day he took command of the U.S.S. Benfold in June 1997 should have been his moment of glory. At 36, he was one of the youngest officers in the U.S. Navy's history to take the helm of a warship. But as the ceremony ended, events took an ugly turn. When the ship's public address system announced that the outgoing commander was no longer on board, loud cheers erupted. Embarrassed by the display, Abrashoff resolved on the spot to avoid the same fate.

Determined to improve morale and regain the crew's respect, Abrashoff began with a step that sounds more like something out of a business management text than a military manual. He pored over "exit interviews" of sailors who'd recently left the Navy to learn more about the source of their discontent. What he found surprised him. "I expected that low pay would be the top reason," he explains,"but in fact, it was fifth." The major complaints (which might sound familiar to land-bound managers): Sailors weren't treated with respect; they weren't given an opportunity to make an impact on the organization; they felt they weren't being listened to; and stellar performance wasn't rewarded with more responsibility. "Talk about an eye-opener!" he says.

Abrashoff didn't have the option of upping the sailors' pay, so he focused on their other gripes. He met with every crew member to find out what each one liked and didn't like about the Benfold and what they'd change if they could. "To be a successful skipper," he explains, "you have to see the ship through the eyes of the crew. Only then can you find out what's really wrong and empower the sailors to fix it."

That approach entailed some risk. Empowerment has no place in the military vocabulary. The Navy expects commanders to be micromanagers and holds them responsible for the smallest detail. But Abrashoff knew that a command and control structure would never foster individual initiative. And individual initiative was what he wanted. He didn't want a crew of order takers; he wanted a crew of 310 problem solvers, each of whom was committed to turning the Benfold into the best damn ship in the Navy.

Abrashoff began the transformation by making it clear to everyone—from his second in command to the sailor who washed the glasses in the mess hall—that he believed there was a better way to do anything and everything that happens aboard a ship. And he solicited ideas from the people who knew the processes the best—the crew. "We spent several months analyzing every single process on the ships," he explains. "I asked every single crew member whether they thought there was a better way to do what they did every day. Time after time, the answer was yes, and many of the answers were revelations to me."

When someone from the ship's kitchen suggested that they could improve the food and save money by buying groceries from a regular supermarket, he told them to do it. When a sailor pointed out that they could avoid endless hours of scraping and painting if they got rid of the rustprone iron hardware, Abrashoff sent his crew off to a hardware store to replace the offending items with stainless steel.

Eager to prove that their ideas would work, crew members responded with outstanding performance. In just 20 months' time, Abrashoff and his crew turned the U.S.S. Benfold into the most combat-ready ship in the Navy. It didn't take money. It didn't take threats. All the young naval commander had to do was be willing to listen.