U.S. President Barack Obama will soon announce his nomination of former Procter & Gamble executive and veteran Robert McDonald to head the much-maligned Department of Veterans Affairs. It’ll be a new stage for the agency, which is typically led by retired generals or politicians, but many say McDonald’s corporate experience will help the VA fix its multitude of problems.
Fred Wellman, CEO and founder of ScoutComms, Inc., a veterans advocacy firm in the Washington, D.C., area said McDonald’s corporate experience will help him succeed where former military staff and politicians failed.
“Many will note he is a West Point graduate and long time supporter of military causes, however, the salient experience that matters in my opinion is his time managing an international company with global business units as its structure,” Wellman said in a statement following the news.
He added that “generals are often stymied, and critics confused,” by the structure of the VA, which is more like a corporation than a military organization. “It’s much more like a company with subordinate and essentially independent business units.”
McDonald, now 61, graduated in the top two percent of his class at the U.S. Military Academy at West Point, N.Y., where he earned a Bachelor of Science in Engineering in 1975, the Washington Post reported. Later, he served five years in the Army before becoming a captain in the 82nd Airborne Division. He joined Procter & Gamble Co., the world’s largest consumer goods company, in 1980. He became CEO in 2009, then retired in 2013.
McDonald was “a very strong manager who came up through the ranks with an outstanding track record of dealing with challenges and delivering results,” American Express Co. CEO Ken Chenault, who was on the P&G board at the time, told the Christian Science Monitor. “He stays on top of the details.”
According to his company bio, McDonald started off as a brand manager for Tide detergent, and later moved to Toronto to head P&G's Canadian laundry department before moving to the Philippines as a general manager in 1991. He also headed the company’s Northeast Asia section in Japan. He later moved to Brussels as the president of Global Fabric Care and moved further up the ranks until he became CEO.
Even in the corporate world, McDonald was a stark contrast to his predecessor, A.G. Lafley, another veteran who worked his way up.
“He went in the Navy and worked in retail stores. I’m an airborne infantry ranger -- desert warfare, jungle warfare,” McDonald said in a 2010 interview with AdAge in which he remembered joking with Panama’s president Martinelli during his jungle-warfare school. He also spent nearly a year in the Philippines without electricity.
When Lafley first took the lead at P&G, it's stock tumbled 11 percent within a week, while McDonald saw a 20 percent jump in the few months after he started, as Forbes reported at the time.
In a few short years, however, he endured harsh criticism in 2012 from activist investor William Ackman, who put a $1.8 billion stake in the company and publicly criticized McDonald’s leadership, claiming he was too distracted by outside commitments, according to the New York Times.
McDonald “abruptly” retired in 2013 at the age of 59.
“The character of a leader is putting the needs of the organization above himself,” he said in a 2013 interview. “And that’s what I tried to be about.”
McDonald has served on the boards of Xerox Corp., the McKinsey Advisory Council and the Singapore International Advisory Council of the Economy Development Board.
If Obama's nomination goes through, McDonald will certainly have his work cut out for him.
The recent announcement comes just a month after former secretary Eric Shinseki resigned following a scandal around patient wait times. The White House also announced results of a new report that shows the agency requires a massive overhaul to start functioning correctly.
The VA is the largest healthcare organization in the U.S. overseeing 1,700 hospitals, clinics and other facilities, but it has a “corrosive culture” that has been blamed for personnel problems that have hurt the efficacy of healthcare. The agency also still operates on a pre-Internet record system from 1985.
“It is clear that there are significant and chronic systemic failures that must be addressed by the leadership at VA,” the report says, according to Reuters. The review found that a 14-day standard waiting period for veterans to see a doctor may have led to “inappropriate actions” by officials hoping to the meet the goal.
Supporters say McDonald could be the man to turn it around.
Boeing Co. Chairman Jim McNerney also praised McDonald’s leadership skills.
“Prior to retirement, he navigated Procter & Gamble through the difficult post-financial crisis years, where he expanded business in developing markets and made substantial progress improving the efficiency of the company’s internal operations,” he said.
Former VA Secretary Shinseki served two tours in the Vietnam War and moved up through the Army to become a general and finally Chief of Staff. After he retired in 2003, he served as director for corporations such as Honeywell International Inc. and Guardian Life Insurance Company of America, and eventually was nominated as Secretary of Veterans Affairs in 2008. He also has a bachelor of science degree and a Masters in English Literature.
A former P&G chairman and Navy veteran, John Pepper, who worked with McDonald told local news outlets that he was positive about the announcement.
“This was a brilliant appointment by the president,” he said. “His commitment to the military is deep and visceral. I feel good about the future of our veterans.”