Teaching at Harvard Business School

It was my honor to teach again at Harvard Business School on November 29.  I  joined my friend Professor Ryan Buell in class 27 (of 28) of his Managing Service Operations Course.  In 2016 Ryan and his colleagues Robert Huckman and Sam Travers studied the transformation we led at the Department of Veterans Affairs and wrote a Harvard Business School Case Study (9-617-012) called Improving Access at VA.  Ryan wrote an update to the case study in 2020.  Ryan uses this as the capstone class to his course, bringing together his teaching points from throughout the entire course.  He tells me it is one of his most popular classes.  He usually hosts many guests.  Since he published the case I have joined him (sometimes by Zoom) to help present insights and answer questions.

Harvard Business School

Improving Customer Service and Culture

Yesterday as always Ryan did an outstanding job of drawing out all of the important teaching points—how to improve customer service, how to change a culture from rule-based to principle-based, how to measure service improvement, steps of leading change, and more.  I tried based on the discussion in class to draw out principles of leadership from my experience in the military, private sector at The Procter & Gamble Company, and public sector at the Department of Veterans Affairs (VA).  Here are some of those principles:

1.   There are times a leader must publicly criticize a behavior in an organization to demonstrate to the organization what the standard is.  There was much debate in class about whether or not Deputy Secretary Sloan Gibson should have sent the email about the rules-based treatment of Veteran Donald Siefken at the Puget Sound VA.  This was an opportunity to set a new standard of care.  When I was a young leader I was often told “praise in public, criticize in private.”  Yet I found some leaders who worked for me receiving feedback from their subordinates that they were accepting of low standards because they did not see the public criticism of off-standard behavior.  There are times when a leader must criticize publicly to let the organization know what standard of behavior is acceptable.  Further, sharing Mr. Siefken’s story will make it more memorable to the organization than simply reminding them of putting Veterans first.  People remember stories more so than rationale.

Bob McDonald at HBS

2.   I told the group I have never seen a great customer-service organization which is rules-based.  Why?  Because any service organization delivers that service through its people, and we need employees to take initiative to delight customers.  That means we need to invest in employees (that was why it was our second MyVA strategy right behind “better caring for Veterans.”  VA has no hope of better caring for Veterans if we don’t better care for employees.  I was criticized by some members of Congress for spending money on training, yet training is how we improve service.  Similarly, what delights consumers today will be expected tomorrow, so we need employees to take initiative to discover new ways of delighting consumers.  When I was young automatic windows on a car or central air conditioning in a home were a luxury.  Today they are an expectation.

3.   The leader must provide psychological safety, borrowing from Dr. Amy Edmundson of Harvard, for their organization if they want employees to take initiative.  Taking initiative involves risk.  One of the reasons many organizations are rules-based is the culture provides safety, take no risk, less chance of error.  If we want employees to take the initiative, innovate, and delight customers; we have to make sure that if they take risk, well-intended risk, and fail; that we as leaders reward them for the initiative and not punish them for the failure.  Otherwise the organization will stay mired in its rule-based culture.

Bob McDonald HBS Case Study

4.   The willingness and ability to learn new things is what differentiates those individuals and those organizations that succeed versus those that fail.  Charles Darwin didn’t write about survival of the fittest.  He wrote about survival of the most adaptable.  As we age it is harder and harder to learn new things.  Yet both individuals and organizations need to be purposeful to identify the unknown, and learn about it.  I recall reading In Search of Excellence in the 1980’s, which talked about managing by walking around.  In 1992 I became responsible for P&G Asia Hair Care, whose geographic reach was Australia to Korea, and Japan to India.  I couldn’t possibly manage by walking around.  I had to be intentional about leading in a different way.  Similarly, when covid occurred and we were all tethered to our homes, we had to adapt again.  Adapting and turning that into a competitive advantage is key.

5.   I stressed the importance of models to the students.  I told them a big part of the value of their education was to learn and apply models.  Professor Buell presented several models during class, including my High Performance Organization Model, which I created and adapted since 1991.  Moving to lead a P&G organization in a new country as I did or moving from the private sector to the public sector, these models give us frameworks by which to analyze our current situation and begin hypothesizing how to improve.  The HPO model, Exhibit 7 in the case study, is the evaluative model I used to analyze and suggest to President Obama what steps we needed to take to improve VA care of Veterans.

Bob McDonald Business Models

6.   Leaders need to “run to the gunfire.”  Many students wondered why my first trip as Secretary was to the epicenter of the crisis, Phoenix.  My military, business, and government careers have all shown the value of the leader facing reality, running to the gunfire, and working to solve the problem at its source.  I recall when I became Secretary some homeless Veterans in Los Angeles were suing the VA, and I was told not to go to Los Angeles.  I thought that was absurd since LA was the where the greatest number of homeless Veterans existed.  I worked to find who was behind lawsuit, I travelled to LA, we worked together on a holistic plan to use our LA campus to better care for Veterans, and we got beyond the lawsuit.  You can’t resolve conflict nor understand context by long distance.

7.   Leaders must create hope.  Immediately, when I was confirmed by the Senate, we began working on a 90-Day Plan of improvement called the Road to Veterans Day.  Veterans Day coincided with 90-days after my swearing-in.  The plan had three strategies—rebuild trust, improve effectiveness of care, and put together the transformational plans of the future.  While certainly we changed items in the plan over time, it was important to get out early with a plan which gave constituents hope that we could get beyond the crisis and improve care for Veterans.

8.   If you want someone to learn something, ask them to teach it.  I learned this from Dr. Stephen Covey when I took Seven Habits of Highly Effective People from him at P&G in the 1980’s.  This was the essence of our Leaders Developing Leaders program at VA.  We wanted our leaders to learn certain skills—like giving performance appraisals, human centered design, and more.  The best way we felt to do this was to have the top team teach the next level, and then equip that level to teach the next level, and continue like this cascading the program to the bottom of the organization.  Each time the participant would need to create a personal improvement project for their area of responsibility.  This got all employees engaged and contributing.

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