The third article in a series discussing the upcoming China’s SME Challenge event  

By Matt Young 

Imagine you’re in the waiting room of a Chinese hospital.  

The chairman of the hospital company board, who is also the chief company investor, walks in with his Armani suit and glimmering diamond studded cufflinks, seemingly in anguish.  

He announces that he has broken his thumb, and starts screaming at the staff to help him.  

He goes bananas when they try to calm him down, jumping up and down at first, and then doing one-handed backflips. He begins walking quickly around the waiting room, raising his fist to keep any staffers away that start to chase after him. As he regains his composure, the hospital CFO enters the lobby.   

She immediately recognizes the chairman, and calls staff over to have him fixed up immediately.  

He backs away, looks at his watch, looks up, and says “Coo-coo.”  

Then he fires the CFO and sings “Wild Thing,” by Chip Taylor, before leaving.  

So which of the chairman’s actions might be considered most outrageous?  

To you or me, perhaps it would be the backflipping or singing. 

The company CEO, however, should find it preposterous that he has fired the CFO. Managing the CFO is the CEO’s job, after all.  

While this anecdote clearly is over-the-top, David Wood, president of The ChinaCare Group, suggests that Chinese investors and board members all too often want to micromanage healthcare settings, having the CFO report to them, for instance, which is wrong.  

“The concept that the CEO manages the organization is not accepted in principle by Chinese managers,” Mr. Wood said. “The directors get involved, and they get involved at inappropriately low levels.” 

Hence, managing your Chinese partner’s management expectations – a topic Mr. Wood will speak on at China’s SME Challenge, sponsored by AmCham-China – is critical. The event takes place Friday, January 25, at China Resources Hotel. 

Mr. Wood’s firm, which often agrees to manage healthcare providers, begins with a clear contract, making his firm the “exclusive operator and general manager [and the] client agrees not to interfere in day-to-day operation.”

If for any reason the healthcare provider balks, Mr. Wood walks away from the deal.  

One potential client and healthcare company board chairman, for instance, “wanted to come in, review expenditures for that month and change the budget for the next month, every month,” Mr. Wood said. “I said this is not acceptable.” 

Mr. Wood did, however sweeten the deal, by saying the he would take the budget results  every quarter to the board of directors, which could then make changes if they desired.  

The difference is, the CEO remains in charge day-to-day, without having to deal with unnecessarily traumatized CFOs.