Background

A Cabinet-level agency, VA’s mission is “to care for those who shall have borne the battle, and for their families and their survivors.”17 More concretely, the agency—which, with 365,000 employees, is the second largest department in the federal government—consists of three administrative divisions, which deliver a number of critical benefits:

• the Veterans Health Administration, which provides health care to veterans and serves as an incubator for nation-wide medical training, research, and innovation;
• the Veterans Benefits Administration, which manages an array of veteran services, including insurance, pensions, and vocational rehabilitation;
• and the National Cemetery Administration, which coordinates memorial services and burial benefits.

As of summer 2016, the agency was serving 22 million Americans and was operating with a budget of approximately $182.3 billion.

June 2014 – December 2014: Initiating Reform

Upon taking office in June 2014, McDonald recognized that the agency needed to refocus to realize its critical mission, “to care for those who shall have borne the battle.” However, he and other senior leaders also recognized that the challenges VA faced represented an opportunity to direct energy toward reform. As VA Deputy Secretary Sloan Gibson noted, Winston Churchill once said, “Never let a good crisis go to waste.” Hoping to maximize the growth opportunities from this challenging period, senior VA officials therefore sought to effect a rapid cultural and strategic shift that would contribute to a more veteran-centric focus and enable the agency to provide these critical services more effectively.

He began to initiate this change in one of his first meetings on his first day in office. His staff members kept referring to him by his formal title, Secretary McDonald. McDonald insisted that his colleagues call him “Bob” and emphasized that he was going to refer to his staff by their first names as well. McDonald later explained, “I used my first name because I wanted to create relationships, informal, not formal, so information would travel to me…. Good customer service organizations operate with informality and a flat organization where information travels.”19 The implication was that the agency needed to redirect its focus to the people it was serving. Scott Blackburn, the Executive Director of the MyVA Taskforce, elaborated:

He [McDonald] said, ‘This isn’t about us. Get over it. This is what got us in trouble. This is about the Veteran. So we’re flipping the pyramid around and at the top of the pyramid is Veterans and their families, and that’s why we exist, and that’s our guiding light. We’re going to do the right thing for Veterans and their families.’

In the ensuing months, McDonald and his leadership team endeavored to pair this veteran-centric focus—and the accompanying cultural shift that it necessitated—with the development of a concrete strategy for transforming the agency. The result was the announcement in November 2014 (on the eve of Veterans Day) of MyVA. The largest reorganization in department history, the strategy focuses on five core priorities: “improving the Veteran experience”; “improving the employee experience”; “improving internal support services”; “establishing a culture of continuous improvement”; and “enhancing strategic partnerships.” More broadly, the program, as McDonald explained, aims to make “both Veterans and employees…so proud of their association with VA that they refer to it as ‘MyVA.’"

Within months of taking office, McDonald had outlined a vision for change—a critical first step to transform the VA into an optimized enterprise with the customer-centric focus he desired.

2015: Implementation

While creating this strategy represented a significant turning point, McDonald needed to pair this new approach with a concrete implementation strategy. Thus, in 2015, he began to use an array of techniques to ensure that change would permeate the large, diffuse agency. One of the most important of these tactics was focusing his team on 12 breakthrough priorities, which highlighted some of the most critical veteran touch points (e.g., reducing homelessness) as well as key enablers for effecting change (e.g., staffing critical positions). McDonald also began to reorganize and retrain the VA workforce by creating cross-functional teams, quality review teams, and standardized training programs.22 This was a crucial priority because, as the VA’s Deputy Secretary Sloan Gibson explained, the agency had “silos within silos”—a byproduct of the significant divisions across and within VA’s three core administrations and multiple staff offices. Thus, McDonald sought to blend a focus on key veteran needs, with internal systems and staffing changes that could help ensure the timely delivery of those benefits.

At the same time, McDonald continued to take steps to accelerate cultural change. From the perspective of senior VA officials, one of the biggest problems with the agency was an aversion to risk-taking—a tendency, which, according to Gibson, reflected a lack of “psychological safety.”23 To counteract this problem, senior VA officials have encouraged staff to take ownership of problems when they arise. Gibson summarized the advice he often delivers to staff:

Where you find something getting in the way of caring for or serving one of your constituents (in our case it’s Veterans), own it even if it’s not within the scope of your responsibility or authority to change it. Own it. And you keep working that. Keep working it and raising the issue and don’t fall into this helplessness, hopelessness kind of vicious cycles. It’s the worst thing that could happen in any organization.

Senior VA officials were also concerned about a counterproductive dynamic in which agency staff adhered closely to policies or protocols, even if they were clearly detrimental to the veterans they were serving. With hopes of developing a narrative focused on risk taking and transformation, senior VA officials therefore started disseminating to staff “a MyVA Story of the Week.” One of the first of these anecdotes focused on a patient who had not shown up for an appointment at a VA clinic near White River Junction, Vermont. Although there was no protocol that required follow-up, the VA nurse and VA police officer, sensing that something was wrong, reached out to local authorities, who checked on the elderly patient. The veteran had fallen in his home alone and clearly would have died had it not been for the follow-up.

The implication—and a point that has been reinforced by several hundred comparable anecdotes—is that embracing a customer-centric philosophy requires risk taking. More concretely, staff must employ a principles-based approach that recognizes that every veteran is a human being and, as Blackburn emphasized, revolves around “doing the right thing,” even if it occasionally departs from protocol.

Finally, the agency is making extensive use of innovative technology and human-centered design. A case in point is the re-launch of the agency’s web-based platforms. When McDonald became the VA Secretary, the agency had 975 external facing websites. Now, VA is in the process of creating a “secure, cloud-based, single-platform website…[that] strives to be a single, one-stop shop for information and self-service features for Veterans and those who care for them.” The agency is completing the re-launch in partnership with the U.S. Digital Service; it has also created a panel of approximately 130 veterans who provide feedback on different versions and facets of the site that are developed iteratively, with new functionality being added every week. This is emblematic of how the agency is leveraging human-centered design throughout the reform process. Other examples include the VA’s creation of “journey maps” that help the agency understand veterans’ paths and needs; the establishment of ten personas that approximate the most common veteran experiences; and the use of design thinking and lean processes to make hiring of the best talent more efficient.24 In short, agency leaders are not only talking about the need for change; they are pursuing concrete, cutting-edge strategies to help the agency effect reform—another key ingredient for transforming the VA into an optimized enterprise.

2016: Progress and The Path Ahead

Approximately two-and-a-half years into McDonald’s tenure, MyVA has led to significant progress. In FY 2015, the agency, as McDonald reported in a recent speech in Denver, was able “to complete nearly 57 million appointments inside VA and over 21 million in communities—nearly two million more than FY 2014…. More than 97 percent of the appointments were inside 30 days of the clinically indicated or Veteran’s preferred date—1.4 million more than FY 2014.” At the same time, the agency has seen a significant uptick in metrics of veteran satisfaction (for example, 74 percent of veterans said that they were pleased with the VA’s effectiveness). Finally, the agency has begun to realize significant savings of over $100 million through improvements in supply chain management and the replacement of paper-based processes with more technologically savvy solutions.

Nonetheless, the agency has a long way to go to fulfill the MyVA Vision. Thus, the agency’s leaders are continuing to advocate for greater fiscal support; striving to simplify the appeals process; and attempting to reinforce a culture that prizes customer-centricity, psychological safety, collaboration, and communication. Above all, McDonald and his team are sustaining a sense of urgency because, while they know that the complete reform process could take over a decade, they also realize that with a Presidential transition on the horizon, their window to contribute to reform is narrowing. “It’s a relay race,” said Blackburn. “We have to charge as fast as we possibly can, and we have to hand the baton off to the next administration.”

Blackburn’s observation—and the metaphor of a relay race—points to a broader lesson about what it takes to become an optimized enterprise and thrive in the outer quadrants of the Uptake and Edge Matrix. An agency and its leaders need to combine a long-term view (and the recognition that the effort to complete that transformation process will likely extend beyond their tenure) with an intense focus on incremental progress in the near-term. In other words, becoming a fully optimized enterprise is a lengthy endeavor that requires extensive collaboration and numerous perspectives, but the process will never be completed unless an agency begins it, as VA has: by attacking the challenge with a strategy, a dynamic culture, and a commitment to continuous improvement.