27 Mar 2015

Bringing Private Practice into Public Service

Professor Rosabeth Moss Kanter and U.S. Secretary of Veterans Affairs Robert McDonald

Robert McDonald is a man driven by purpose.

It accounted for his decision as a young man to go to West Point and join the storied 82nd Airborne Division. It then accounted for his joining Procter & Gamble in 1980, where the company’s ethos of helping people matched McDonald’s own. Following a distinguished 30-year career there, during which he rose up the ranks to become chairman, president, and CEO and helped P&G grow its productivity by leaps and bounds, it was purpose that led McDonald back into the public sector in Washingon, DC, where last July the Senate unanimously confirmed his nomination as the nation’s eighth U.S. Secretary of Veterans Affairs.

McDonald touted the importance of that sense of purpose when he spoke to a full auditorium at Harvard Business School on Wednesday, March 25, following an introduction by host and Ernest L. Arbuckle Professor of Business Administration Rosabeth Moss Kanter.

“The one lesson I want to convey to the young people here is this— as you think about your life, don’t waste it,” McDonald said. “Don’t go through life reacting to things. Think about what your purpose is, what you want to stand for. Write it down. And follow it in all that you do. It will lead to a more worthwhile life, and when the phone rings and it’s the President of the United States asking you to come help fix the VA, you’ll be confident in answering the call.”

According to McDonald, the Department of Veterans Affairs he took over in 2014 was a great institution that had lost a sense of its direction. He pointed out that the department had won three Nobel prizes and was responsible for the invention of a host of crucial modern-day medical tools and treatments, including the nicotine patch, the first implantable pacemaker, the first set of electronic medical records, and the Shingles vaccine.

“Where would the U.S. medical system be without these kinds of inventions?” McDonald asked. “These are tools used all around the world, all based on medical research that no for-profit organization would have funded.”

About 70 percent of U.S. doctors have trained within the VA’s ranks, and it is the largest employer of nurses in the country. But McDonald also pointed out that in the midst of the organization’s handling 240,000 “episodes of care” each day, 90 million in total in 2013, it has been beset by inefficiency over the years. As an example, he cited the more than one hundred different 800-numbers and fourteen different websites (requiring fourteen different logins and passwords) that employees and patients of the VA must navigate. That inefficiency, he said, resulted from the organization and its leadership losing sight of the VA’s overall mission, something he is intent on restoring.

“If you’re leading an organization, you have to be constantly paying attention to productivity,” McDonald said. “There’s no such thing as a successful organization that’s not productive. And that means organizations must constantly be renewing themselves and never standing still. At the VA, we’re trying to figure out how we can become more productive. We’re asking for higher levels of spending from Congress, and we’ve got to prove that we’re doing good things with that.”

McDonald knows whereof he speaks. Since 1980 (and partly thanks to his leadership from 2009 to 2013), Procter & Gamble’s revenue grew from $10 billion to more than $80 billion. At the same time, the number of P&G employees grew from 60,000 to 120,000. McDonald cited that as an example of how a company can become exponentially more productive without needing to increase its resources and expenditures at the same rate. Best practices in efficiency and effective strategic implementation are the kind of private sector improvements McDonald is intent on bringing to bear in the public sector—practices he has already begun putting in place at the VA.

“Ineffective strategies, systems, and culture are the biggest barriers to an organization’s achievement,” he said. “The VA’s strategies, their purpose and values, were good when I came on board. But the question was why wasn’t anyone living them? I discovered those strategies were developed and then put straight into the dust drawer. So now we’re redeploying them, and the acid test we’re using for strategy deployment is: Does every employee have a work plan with behaviors that would roll back up to the mission of the organization?”

In less than a year in his position, McDonald has visited 117 different VA locations across the country to meet, talk with, and motivate his employees firsthand. He has also begun meeting regularly with union leaders (a first for the Secretary of Veteran Affairs), an important step in an organization that is 60 percent unionized.

As he visits with patients, families, doctors, nurses, and staff members, McDonald is eager to lead by example, a lesson he learned as an officer in the Army and that he is now excited to use to help his fellow servicemen and women.

“We have the best clients in the world,” he said. “And I’m trying to push positive change on their behalf.”

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