The Worth of a Leader
With a change of leadership at the Department of Veterans Affairs, we will have a test of how much difference a top leader makes in how well a large organization functions. Will Robert McDonald get the department to have better reviews than it did under Eric Shinseki? Maybe, but my guess is that if this happens, it will have more to do with the natural ebb and flow of recriminations in Washington than with anything having to do with the leadership skills or acumen of the person at the top. There is ample reason to believe that the principal fundamental cause of problems in the department is under-funding related to insufficient recognition of the total, long-term costs of overseas wars. Those costs include, thanks partly to modern body armor, the long-term care of warriors who in earlier wars would have been killed but in recent ones have survived and are maimed. Shinseki's departure, moreover, bore all the markings of the Washington habit of head-rolling as a supposed solution to stubborn problems, when it really is more a sort of political catharsis.
McDonald's appointment provides an opportunity for a related test. Any mention of the worth of a leader raises the question of the sky-high compensation that has become the norm among corporate CEOs, and of whether most of them could possibly be worth that much to an organization. McDonald's annual compensation as CEO of Procter & Gamble was about $16 million. The salary of a cabinet secretary is about $200,000. If there were a correspondence between compensation and worth, then we taxpayers ought to be gleeful about the steal of a deal we are getting. We're hiring a leader who is 80 times as good as those who have never risen to fill anything more than the sort of U.S. cabinet position that McDonald is about to fill. Talk about someone being overqualified...
Before we get too excited about this deal, we might note the questions that have been raised about McDonald's performance at Procter & Gamble. It's not a good sign when the chief he replaced has been brought back to replace him. We might also note, if the size of an organization has anything to do with value of experience, that the Department of Veterans Affairs with its 300,000 employees is over twice as large as P&G with its 120,000.
Maybe taxpayers should be grateful to Mr. McDonald for taking a job that entails a 98.75 percent pay cut from his last position. That's almost like doing the job pro bono. But I don't think we're really getting a $16 million dollar man to do a $200,000 job. The numbers reflect the absurdly different cultures involved in self-referential corporate boardrooms, on one hand, and political attitudes toward public service, on the other.
There's still that matter of underfunding the care of wounded warriors. There is a lot to be said for the idea of requiring that funding be provided for the future medical care of veterans as part of any decision to go to war. That not only might help the maimed veterans we already have but will encourage long, hard thinking before creating more of them.