Business
5:09 am
Wed July 2, 2014

Reliance On Systems At P&G Could Help VA Nominee McDonald

Originally published on Wed July 2, 2014 7:53 am

Transcript

DAVID GREENE, HOST:

President Obama has nominated a former Army ranger to take over the troubled Department of Veterans Affairs. Robert McDonald is also the former CEO of Procter & Gamble. He spoke on Monday about the challenges he'll face if confirmed to head the VA.

ROBERT MCDONALD: At Procter & Gamble, we always focus on our customer. At the VA, the veteran is our customer. And we must all focus all day, every day on getting them the benefits and the care that they so earned.

GREENE: We wanted to learn a bit more about the nominee so we reached Fortune magazine's Jennifer Reingold, who has profiled McDonald several times.

JENNIFER REINGOLD: He has a very high standard for integrity. He took his job at Procter & Gamble very, very seriously. And I think on the base of it, he is a solid human being of character.

GREENE: A man of character running a company. Talk to me about whether that translated into being a good leader and good CEO.

REINGOLD: Well, that's where things get a little bit tricky. He was chosen by his predecessor, A.G. Lafley, who had possibly been the best-loved CEO of the modern era for the company. So it was a very big deal and very big shoes to fill. Now when he took over in 2009, the global financial crisis had just hit. Also, his predecessor had become very famous for selling more expensive, more luxurious types of products. Pantene, for example, and Olay had developed very high-end hair and skincare which was great when the economy was booming, not so great when the economy was not booming. He had two strikes against him in a way. He did struggle to manage and get his arms around this giant company. I mean, it's over $80 billion in sales. It's a huge behemoth. And he did get some criticism for basically trying to do everything at once. He wanted to go further into developing markets, at the same time wanted to keep the momentum going in developed markets. He told people to X, Y and Z but then was criticized for not really being as good at prioritizing.

GREENE: What you wrote about him - and there were a couple things you said that sort of struck me as at odds, and I wondered if you can clarify. You said that he was very good at process and efficiency but that he sometimes struggled to get into the nitty-gritty when there were problems. What do you mean by that?

REINGOLD: From a leadership perspective - and he is a huge military buff who has studied military leadership very, very closely. I think he saw himself as more of a five-star general, which, to be fair, is in many ways the job of the CEO. But there were - I've spoken to many, many former executives and the criticism of him was that he did not really dive down into the specific problems. He would say, you're supposed to be a leader. You lead. And the people below him felt confused by exactly what that meant. At the same time, he was very, very focused on process. He trained as an engineer and he very much believed in systems and the ability of systems to work - which, by the way, could be great for something like the VA which I think has a problem with process. P & G, though, is this combination of these crazy, creative ideas and innovations. And what was really suffering under McDonald, according to the people that I've spoken to, is that - the creative spark of innovation.

GREENE: Well, I'm hearing sort of different hints at what kind of leader he might be at VA. I mean, certainly it's an agency that it sounds like needs to focus on basic process because it's had so many problems just, you know, with waiting times to serve veterans. Maybe they don't need a ton of innovation right now. But they also, it sounds like, need a problem solver. And it sounds like that's not always his focus. So what kind leader would you expect him to be in a big agency like this?

REINGOLD: Well, I'm really not sure. Let's start with the fact that this is such an enormous problem. I mean, I think the words used were corrosive culture.

GREENE: By the White House, yeah.

REINGOLD: Yeah. So let's start with the fact that, can anyone fix the VA right now? OK before we get specifically to whether or not Bob is the right guy.

GREENE: Sure.

REINGOLD: I do know he will give his heart and soul to this job. He cares deeply about the military. He, himself, went to West Point. In fact, he tried to apply West Point at the age of 11, and was very kindly told by his congressman at the time, Donald Rumsfeld...

GREENE: Oh wow.

REINGOLD: ...That he needed to wait a little longer.

GREENE: Just a little longer, a little too young.

REINGOLD: So I think if there is a person who has great respect for the people who have fought for this country, I think you will not have a problem with Bob McDonald. Having said that, this is a much, much more, I mean, complicated group than even an 80-odd billion dollar company. I mean, the constituencies - there are veterans, there are doctors, there are politicians. This place needs a complete and total cultural overhaul. And in terms of doing the big, big, big think - that was not considered to be his strength. He would tinker here, do different process here, improve data there. So that's where I think I would feel a little bit concerned about the scope and the depth.

GREENE: Jennifer Reingold is senior editor at Fortune magazine. She has written extensively about Bob McDonald, who is President Obama's nominee to head the troubled Department of Veterans Affairs. Jennifer, thanks so much.

REINGOLD: Thank you. Transcript provided by NPR, Copyright NPR.