This Former CEO Was the Leader the VA Needed

Article originally published in the American City Business Journals on January 23, 2017

When it comes to serving customers and operational effectiveness, government agencies generally rank below that of for-profit companies in the private sector. When a government agency makes significant improvements, its journey needs to be shared as a story of success and a lesson for others.

This is the case with the United States Department of Veterans Affairs, which provides medical services to some 9 million of our country’s military veterans.

On Jan. 20, Bob McDonald stepped down as secretary of VA. He was appointed by President Obama and confirmed by the Senate on July 29, 2014 after serious ethical scandals and illegal practices rocked the VA.

In the two and a half years that McDonald served as secretary of the VA, transformational changes have occurred at the agency.

In an article published Aug. 4, 2014, “Bob McDonald – the right person to lead Veterans Affairs,” I wrote that wait times at VA hospitals were unacceptably long and records were falsified to hide delays in treatment. Some veterans died due to these delays.”

In that article, I wrote that a whistleblower reported that at one VA hospital, veterans who died were reported as still living in order to hide the number of deaths at the facility. The examples could go on and on. One can imagine the low morale of VA’s doctors, nurses and other staff members who came to work each day to properly serve their patients.

McDonald was the former chairman and CEO of Procter and Gamble, a highly regarded company in the consumer products business that places great importance on serving its customers. The VA is in the healthcare service business, which should place great importance on serving its patients. The VA did not have this mindset prior to McDonald’s arrival.

As I have written many times, tone at the top and organizational culture are major determinants of the long-term success of any organization. McDonald brought the right tone and culture to the VA.

Tone encompasses the ethics, honesty, integrity and values with which an organization operates. Culture encompasses a commitment to continuous improvement, empowering employees, and creating a leadership environment in which employees can develop a sense of ownership in what they do.

Government agencies have traditionally operated within a rules-based culture that was described as stifling within the VA. McDonald introduced a principles-based culture.

Quoting McDonald, “A principles-based culture is grounded in values, sound judgment and [from West Point’s Cadet’s Prayer], the courage to choose the ‘harder right instead of the easier wrong.’”

Successful private-sector companies want employees who will use their common sense and good critical judgment and not automatically follow the rules when the rules make no sense. This is a cultural norm that McDonald has brought to the VA.

Change in any organization is driven by the right people, and the VA is no exception. Under McDonald’s leadership, 14 new leaders have assumed responsibility within a senior leadership team of 17.

The VA can’t provide a great veteran experience unless its employees are properly trained and they feel that the VA values the work they do. Best practices are now being shared across hundreds of VA facilities throughout the U.S. The VA has some 340,000 employees, so the changes initiated under McDonald have been a massive effort and take time.

How do you measure the success of McDonald’s initiatives? A November 2016 report published by the VA states that a RAND study during the summer of 2016 “showed that the VA [had] performed better than the private sector in 96 percent (45 of 47) of outpatient measures, and … performed the same as the private sector in the other 4 percent of outpatient measures.”

According the VA’s internal measures, “82 percent of VA Medical Centers (120 out of 146) have made improvements in overall quality between the fourth quarter of fiscal year 2015 and the third quarter of fiscal year 2016.”

Another measure of McDonald’s success is that two dozen veterans groups asked President Trump to nominate him to continue as secretary of the VA in the Trump administration.

Quoting McDonald, “A leader’s job is to develop an inspiring vision, to constantly breathe life into it, build off the organization’s values, and with the help of employees, turn it into reality. For the VA – it’s to travel on a journey to become the top customer service organization in the Federal government.”

President Trump has chosen Dr. David Shulkin to be the next secretary of VA. Shulkin served as undersecretary for health at the VA working with McDonald. Pending Senate confirmation of Shulkin, hopefully the agency will continue to improve in its mission to provide a great customer experience to our veterans.

What are the lessons that can be learned from the VA’s journey? Even government agencies can improve the service they provide to the public.

What it takes is the type of leadership that McDonald brought to the VA, as well as the right tone at the top, culture, values and the right people in leadership positions to make it happen. These are universal lessons applicable to all government, for-profit and nonprofit organizations.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

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