How a successful cross border venture is done

What I do is based on this concept. At the end of the day, two heads with complementing strengths can only further strengthen a venture’s chances of success.

What are the perils of partnering in developing markets?

Ten years ago Johns Hopkins Medicine International, where I’m the CEO, joined forces with Anadolu, a Turkish charitable foundation, to build and operate a state-of-the-art medical center in Istanbul. The project’s success would depend on putting the right executives in place. Hopkins was prepared to draw them from within its own ranks, but Turkish law prohibits non-citizens from running hospitals. And yet finding qualified Turkish executives proved impossible. How could we manage a large, complex project in a country whose laws prevented us from hiring the right people for key leadership roles?

As developing economies move up the industrialisation ladder, their need for sophisticated, high-value services rises, too. But usually few, if any, local business leaders have the expertise to provide the finance, media, information technology and other services required. That’s one reason why governments and enterprises in these countries increasingly seek to form joint ventures with top US and European organisations.

However, these partnerships can turn into nightmares, as Hopkins has learned. Having worked for 15 years on projects ranging from clinics to hospitals to major medical education and research centers in more than a dozen countries, we’ve seen several efforts run off the rails, or nearly do so, for many reasons. We’ve emerged from these early failures and challenges with a highly flexible model for collaboration that has led to significant successes. Here are some of the hurdles we encountered, along with the approaches that helped us clear them.

Filling the local talent gap

In the case of the Istanbul medical center, the mandate that the chief executive be a Turkish citizen left us without much control. And before long the hospital was plagued with quality problems: Patient safety procedures weren’t consistently followed, operating rooms were over- or under-booked, and some physicians failed to adopt accepted evidence-based diagnostic and treatment procedures.

But we’ve learnt that fighting to put in our own top managers at the outset rarely pays. Instead we seek to strengthen our consultative position, teaming our advisers with local executives and asking that they be given roles in which they can influence the process and culture.

Usually within a year or two, local partners recognise that their own managers can’t provide the needed push for innovation and culture change, and we can start taking on top management functions. In Istanbul, the foundation soon agreed to give one of our managers the number two role – and dissolved the top position, leaving our executive in charge while remaining in technical compliance with the law. The project is now thriving.

It’s important to note that we don’t seek to run overseas projects long-term. It’s difficult to find highly qualified US personnel who are willing to accept a post in a developing nation for even a few years, let alone permanently. And it’s almost impossible to find enough people to staff three or 10 or 20 projects at once, which presents a serious obstacle to growth.

The solution we’ve discovered is two-pronged. First, our field managers focus not only on improving operations but also on mentoring local managers, with the aim of preparing them to take over within two to five years. In many cases we bring key local managers and professionals to our Baltimore facilities to see how they run. We also push to establish local training programs in everything from nursing leadership to hospital financial management to human resources. Second, we’ve set up a strong recruitment pipeline in Baltimore to attract more top US talent to developmental health care and provide special training.

When best practices collide with culture

In most developed countries, nurses, junior physicians and other mid-level providers are now empowered to challenge the decisions of senior physicians when a patient’s health may be at risk, and that capacity has dramatically improved the quality of care. But in most of the countries where Hopkins has partnerships, the medical culture still clings to the old model, wherein no one ever questions a doctor’s judgment. We ran into this problem in Singapore (which, although not a developing country, is seeking to improve its health care delivery), in an oncology clinic we built and operated in partnership with the government.

The first thing we do when confronted with a culture clash is determine whether we really need to challenge the culture. Often we can find approaches that accomplish our goals within the cultural constraints. For example, after we discovered that male patients in some Persian Gulf hospitals were refusing to see female doctors, it was easy enough to inform patients of the doctor’s gender when scheduling appointments.

But we won’t compromise when patient health and safety are at stake. We solved the problem in the Singapore clinic by seeding the staff with professionals who could lead by example – nurses from countries where those providers have more autonomy. Their willingness to stand up to doctors initially shocked and even offended many staff members. However, as people saw that patient outcomes were steadily improving, they began to come around, and the culture of deference receded.

Mitigating risk

Lending the Hopkins name to a hospital that delivers unimpressive care could significantly damage our 135-year-old brand. How do we know when a project will be worth the risk?

Choosing the right partner and learning how to read signs from the up-front negotiations are critical. Partners who are looking for a fast return on investment or merely seeking to capitalise on the Hopkins “halo” are anathema to success. We’ve learnt how to pick up on the sometimes subtle signals that other parties’ goals aren’t aligned with ours. For example, in the first meeting a good potential partner will focus on sustainable quality and commitment, not financial returns. For this reason alone, more than a third of our initial conversations go no further.

When we do agree to a project, our contract specifies the goal of obtaining accreditation from the Joint Commission International or another organisation that sets a high bar. We’ve found that in the absence of such objective judgment, partners may shrug off our exhortations for faster and greater change.

We used to plug away on projects that were heading in the wrong direction, but no more. We’ve become better attuned to signs that a partner isn’t honouring its commitments, or that government officials are putting up too many obstacles, or that the local staff isn’t likely to step up. If we see those signs, we immediately bring in outsiders and rethink what we’re doing. So far we’ve never had to kill a project that was fully under way, but we’re prepared to if need be.

Make no mistake: For all the risks, partnering on complex projects in developing countries offers the potential of great rewards. When our projects prosper, our brand prospers, and new opportunities come our way.

Steven J. Thompson is the CEO of Johns Hopkins Medicine International.

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