Secretary Robert McDonald and the Transformation of the VA

How do you change the culture of your organization, whether it is a 30-person small business, or the largest Department in the U.S. government? If you were to take over an organization of over 300,000 people with a bureaucratic culture that lost sight of its true purpose to serve, how would you be able to change the direction the battleship is sailing? Changing a culture is not easy, yet it must start someplace, and that place is with the senior person in charge, driven by that leader’s character, which is defined by the values the leader embraces.

The transition of the Department of Veterans Affairs (VA) under Secretary Robert McDonald leadership was a transition from a rules-based to a principle-based organization. In 2015, an elderly veteran broke his foot and drove himself to the Puget Sound Veteran’s Affairs (VA) campus emergency room in Seattle. While driving his foot swelled so badly, that when he arrived, he was unable to get out of his car and walk into the emergency room, which was only ten feet from where he parked.

Thinking the emergency room attendants could assist him, he called them on his cell phone requesting assistance to transit the ten feet from his car to the Emergency Room. Unfortunately, the person in the VA who answered the phone refused to assist him and instructed him to call 911 and get the first responders to transport him. So sure enough, the fire department arrived and carried the veteran ten feet from his car to the Emergency Room door.

When the story went viral in the public media, the VA defended their actions quoting regulations that stated they were only allowed to treat a veteran once they were inside the medical center’s building. Clearly, this bureaucratic rules-based culture caused this organization to fail to not only treat this veteran but to fail in its trust with the entire veteran community, not to mention the untold embarrassment it brought upon itself.

President Obama knew that the VA had to transform itself and change how they cared for their veteran patients. In order to lead this transformation, the President selected Robert McDonald who was the retired Chairman, President and CEO of Procter & Gamble (P&G). McDonald was a West Point graduate, served in the Army for five years, and then served 33 years at P&G culminating as the CEO and Chairman of the Board. His career included leading P&G businesses across North American, Asia, and Europe, and he also led several major corporate transformation efforts.[1]

The Deputy Secretary went to Sloan Gibson, a former Vice Chairman and Chief Financial Officer of AmSouthBancorporation, and former CEO of the United Services Organizations (USO). Also, a West Point graduate and classmate of Bob McDonald, Sloan had a reputation of fixing broken organizations. He certainly had his work cut out for him stepping into this.

Secretary McDonald’s intellectual character had an immediate impact when he employed a “High Performance Organization Model”, that was designed to frame the VA’s issues and focus on transforming the organization. “It starts with purpose, values, and principles, which, to me, is the bedrock of every organization,” McDonald said. “What happened in 2014 was a violation of purpose, values, and principles.”[2]

Once in charge, Secretary McDonald and his senior leaders immediately traveled across the VA to meet with veterans, Veteran Service Organizations, the VA workforce, Congressional members, and their staffs in order to study the entire organization and to see it from all perspectives, but principally from the veteran’s perspective. They also made an effort to visit with VA critics in order to understand their concerns and issues. What they found in their initial assessment was a department in disarray that needed quick, forceful, and ethical leadership in order to build the trust between the institution and its veterans, and between the institution and its employees and stakeholders.

One immediate and effective initiative McDonald put in place was the MyVA Initiative, run by a MyVA Task Force, with the purpose of empowering employees to deliver excellent customer service to improve the Veteran experience.[3] The initiative had some immediate successes, but more importantly, it began the process of rebuilding trust.

McDonald also realized that lasting transformation required buy-in from the entire Department and to connect VA employees at all levels. To help connect employees, McDonald introduced an internal training program called Leaders Developing Leaders (LDL). It was an ambitious program that also had an immediate impact. The overall objective was to have every employee identify with the VA’s vision and mission – even the custodian cleaning the floors at night knowing his or her work will enable the VA to provide the service needed for every veteran who uses their facilities, and that will enable the VA to become the #1 customer service organization in the federal government.[4]

Bob McDonald is a leader who lives and exemplifies character in everything he does. Character is the foundation of how he leads, how he engages with people, and how he drives the principles of any organization he is a part of.

In a paper he authored titled “What I Believe In”, McDonald lists 10 principles which “drive my behavior everyday”. His first principle is “Living a life driven by purpose is more meaningful and rewarding than meandering through life without direction”, where he says his life’s purpose “is to improve lives”. Another of his principles is “Character is the most important trait of a leader”. He defines character as “always putting the needs of the organization above your own”. There are numerous definitions of character out there, but this definition is simple and goes to the heart of why character in a leader is so important. He demonstrated this his entire career, regardless of what he did for work. As a Captain in the Army, he always ate after the Soldiers in his command. At Procter and Gamble, he ensured every leader would always take personal responsibility for the results of their organization. As a freshman at West Point, he was only allowed to respond with four answers: yes, no, no excuse, and I do not understand”. These four answers put him as a soon to be leader in a position that is perfectly in line with his definition of character – to put the needs of others above your own. There is no equivocation or excuse in these answers; there is no “but”. He also learned at West Point to “choose the harder right over the easier wrong”. This powerful line comes form the West Point Cadet Prayer. As McDonald says in his set of principles, “A leader who lives by his or her word can be counted on to do the unpopular thing when it is right. To always follow “the harder right,” a leader must truly believe that a life directed by moral guidelines promises deeper and richer satisfaction than a self-serving, self-absorbed life. Living up to this ideal of character requires courage, determination, integrity, and self-discipline. You must live by your word and actions and know that is the most powerful demonstration of leadership”.

Bob McDonald also demonstrated the intellectual need to understand the cultures he was doing business with in Asia. For example, he could not do business in Japan like he did in Belgium. He tells the story of trying to rationalize P&G’s distribution system in Japan by closing warehouses. In implementing this business decision, he planned to go to his warehouse suppliers and apologize, telling them P&G would stop doing business with them. Yet, his Japanese advisor mentored him not to approach the closure that way. Instead, he suggested that he request closing a critical mass of the warehouses and then allow the suppliers to come forward asking to close the rest apologetically. It was the outcome he wanted, but it was achieved with greater cultural sensitivity.

There is another McDonald story of understanding one’s cultural and how that impacts your business. The Japanese word “omoshiroi”, in English means “interesting”. But omoshiroi is composed of two Chinese characters – “omo” means face and “shiroi” means white. Geishas, who are female Japanese entertainers skilled in music, dancing and poetry, will paint their face white. They do so because white skin is a symbol of beauty. Centuries ago, those who labored in the rice paddies were outside working in the sun and inevitably got dark skin. The emperors, on the other hand, living up in the palaces, had white skin. As a result, in this culture, white skin became a symbol of wealth, power, and beauty. The reason this was so important to P&G was that their top selling skin care product in Japan whitens skin.

Knowing how important it was to understand the culture, P&G paid for language lessons for their employees working in foreign countries. Not that they would become fluent but learning the language of the country you are working in not only helps in understanding cultures but creates bridges and builds trust between us and the people we’re engaging with on a regular basis.

Bob McDonald described character as putting the needs of others before himself. Being sensitive to their culture and to his client’s personal self-esteem, Bob McDonald intellectually found ways to achieve his business objectives, and to do so within the cultural norms of the environment he was working in.

Perhaps the best accolade I can offer in acknowledging Secretary McDonald’s work in transforming the VA, is that with all the options I have for my personal medical care, and as a 43 year Army veteran, I’ve selected the VA as my primary medical provider. They are remarkable, and I trust them unequivocally.

If you need an example of a leader of character who leads not only from the heart and the gut, but from the strengths of the head, Bob McDonald is a good place to start.

[1] The Procter & Gamble Company, “Bob McDonald Biography,” The Procter & Gamble Company Web site, https://www.pg.com/en_US/downloads/company/executive_team/bios/pg_executive_bio_bob_mcdonald.pdf , accessed September 2016.

[2] HBS interview with Sect’y McDonald, July 27, 2016

[3] http://www.va.gov/opa/pressrel/pressrelease.cfm?id=2672

[4] Action Learning Associates, Leaders Developing Leaders: 2-Day Cascade Workshop, Department of Veterans Affairs training material (Washington, D.C., 2016), p. i.