The New VA Secretary, Bob McDonald
Taking control of a political office or large corporation requires a specific type of individual. Any large employer—public or private-sector—has a culture that may be difficult to change. Nowhere is this more common than in bureaucratic agencies. In recent years, the VA is the prime example of a large federal agency with a culture problem.
As we have written before, many Veterans lost their lives waiting for a medical appointment or treatment. The Veterans Health Administration facilities manipulated schedules and wait times to benefit from more funding. More than a year ago, whistle blowers from VA facilities across the country started sharing their story with the American people. The VA Secretary at the time, Eric Shinseki, resigned, clearing the way for a new secretary to clean up the Veteran Health Administration.
In the summer of 2014, President Obama nominated Robert McDonald, former CEO of Proctor & Gamble. McDonald’s experience is vastly different from previous VA secretaries as most of his experience comes from managing a for-profit corporation.
Bob McDonald’s Resume and “Track-Record”
McDonald’s private sector resume spans nearly 30 years at Proctor & Gamble, according to his VA biography. He led various departments for Proctor & Gamble in the Philippines, Japan, and was Vice Chairman of Global Operations before becoming President of the company in 2010.
The VA biography claims that Proctor & Gamble is a financially solid and business and running better than ever because of McDonald. He helped steer the company’s stock price up 60%, from around $50 a stock to over $80, according to McDonald’s Proctor & Gamble biography. According to one source “…his role was to restructure and streamline the conglomerate with 120,000 employees, 25 brands, and $1 billion in revenue.”
Surprisingly, McDonald only served in the military for five years after graduating from West Point in the 1970s, but he brings a wealth of business acumen. The Proctor & Gamble biography also mentions he is on the board of large companies like Xerox, United States Steel, and other large corporations and trade groups.
McDonald’s time as President of Proctor & Gamble also brought leaderships awards. Proctor & Gamble came in first for the “10 Best Companies for Leaders” in 2012 by Chief Executive Magazine.
McDonald’s Approach to VA Challenges Could Mirror Proctor & Gamble
McDonald took a cost cutting approach to reduce staff, change the business culture, and refocus some of the many brands sold by Proctor & Gamble. His approach transformed training management at the company so much so that Chief Executive Magazine called Proctor & Gamble executives “the Navy Seals of management.”
According to the magazine, McDonald even started a management training “college” for executives and trained many managers himself. Bob McDonald was quoted as saying, “It’s the most valuable resource this company has.”
McDonald’s experience and philosophy make it clear why he was nominated and confirmed to take over the VA. The VA’s Veteran Health Administration is essentially broken, and the VA is becoming the next poster-child of bureaucratic inefficiency and waste.
With McDonald’s long history in the private sector and his focus on building leadership from within, it’s no secret that he will seek to streamline the VA and run the federal department more like a competitive corporation.
Roadblocks, Success, and Vision
McDonald is barely a year into his tenure at the VA, and it is obvious that change will come slowly to the department. Due to the number of employees (upwards of 280,000) and a massive operating budget (around $150 billion) it may take years or even decade to notice any substantial difference at the VA.
CBS quoted McDonald citing that around 1,000 employees could be fired from the VA. According to CBS, firing a government manager is difficult because an administrative judge has to sign off on it. McDonald also said in the interview that the VA needs to fill a backlog of around 28,000 doctors, nurses, and medical professionals to be fully-staffed.
Despite these glaring issues, McDonald is finding ways to bring more medical professionals into the VA. At the Institute of Medicine Annual Meeting in October 2014, McDonald said “one of the biggest challenges we face is the shortage of clinicians and other medical healthcare professionals. It was an underlying reason for the problems that occurred in Phoenix and elsewhere.”
McDonald went on to mention in his remarks that the he personally visited leading medical and nursing schools to sell the next generation of health professionals on working at the VA. Also, the VA increased doctor and nursing salaries, and improved debt forgiveness to be more competitive with the private sector.
Going forward, McDonald and his staff are pushing the issue that the VA should be a leader for the Veteran community. Much of his professional career catered to producing results in the private sector, and the VA can be just as successful. While there may be additional hurdles, it looks like McDonald is building the foundation for improvements at the VA.
As he said in his remarks at the Institute of Medicine Annual Meeting, the “VA’s rank and file all understand the need for immediate reforms to achieve three non-negotiable goals…” These goals include: “Rebuild trust with Veterans and stakeholders. Improve service delivery, focusing on Veteran outcomes. And set a course for long-term excellence and reform.”
With this vision in place, McDonald can hopefully rebuild the VA and make it worthy to serve America’s Veterans and heroes.
Profile on VA Secretary Bob McDonald
Who is he?
- West Point Graduate (1975), BS in Engineering
- 5-year-veteran of the 82nd Airborne, retired as a Captain
- MBA from the University of Utah in 1978
- Worked for PG&E for 33 years
- Brand Manager for Tide, 1984–86
- P&G Canadian Laundry Business, 1989
- P&G Philippines General Manager, 1991
- VP, P&G Laundry and Cleaning Products Asia, 1995
- President, P&G Japan Operations, 1996
- President, P&G Northeast Asia, 1999
- President, P&G Global Fabric & Home Care, 2001
- Vice Chairman, P&G Global Operations, 2004
- COO, P&G Global Operations, 2007
- President and Chief Executive, P&G, 2010
- Retired in 2013
- P&G growth, value under McDonald
- Stock price rose from $51.10 to $78.80 during McDonald’s three years as CEO
- Top 15 Most Valuable Companies in the world
- Sales grew by 3%
- Progress with the VA/changes
- Raise salaries for doctors and nurses – one of the first major decisions. Make VA competitive with private medical practices
- “Employer of choice”
- McDonald toured medical schools to recruit doctors and medical professionals to the VA
- As of June 2015, VA had added 12,000 more health professionals
- 1,000 physicians, 2,700 nurses, 4,600 select critical occupations
- MyVA initiative: “promote and provide Veterans with a seamless, integrated, and responsive customer service experience.”
- Created the MyVA Advisory Committee, made up of skilled experts from nonprofits, government, and private sector that advise the Secretary on improving the VA
- West LA Homeless Plan: West Los Angeles Veterans Campus will serve Veterans in need, plan specifically focuses on serving homeless Veterans, female Veterans, aging Veterans, and severely disabled Veterans. Coordinate with local non-profits, faith-based agencies, and law enforcement to try and end Veteran homelessness in Los Angeles.
- VA-wide customer service organization, single regional framework, Community Veterans Advisory Councils