City of Paris

As the year draws to a close, and as news about fraud, bribery, excesses, misjudgments and lack of accountability flood the media, I couldn’t help but take note of the New York Times‘ detailed report on the Siemens bribery case and the Economist’s equally lively account, which includes how payments were authorized on removable sticky notes. What struck me was how ordinary, matter-of-fact and almost “innocent” Reinhard Siekaczek, the main implementer and holder of the $40 million to $50 million annual bribery budget from 2002 to 2006, appeared to be. I believe it when the New York Times article reported that Mr. Siekaczek apparently made no personal financial gain from the years of managing this budget. I wonder how many of these cases remain to be uncovered. I think about the choices that businesspeople have to make every day, in developing economies where bribery is often widely accepted practice and even here in the U.S. when lavish parties and corporate gifts can challenge our judgment. Most of all, I wonder about the local infrastructure and customs that make some of these aberrant practices difficult to circumvent. For example, the common but now diminishing practice of doctors taking cash tips (in red packets) from patients in China is driven at least in part by the inequitable compensation of Chinese doctors. (For a more detailed account of doctors in China please see my article.) And when does a tip to workers on the trade show floor in a convention hall become a bribe? I still remember the stacks of dollar bills that a trade show manager brought to Atlantic City every year to set up a gigantic exhibit booth for his employer, a Fortune 500 corporation. Needless to say, the exhibit booth he managed always received high-priority service from the exhibit hall labor, and he was always able to sneak away for a quick European vacation while the conference was in session.

All I know is, the next time I ride on Shanghai’s Maglev train, for which Siemens is a major contractor, I’ll probably think of Mr. Siekaczek.

Personalized medicine is like any other commercial product—its success depends on delivering returns to its investors. At least this is what our poll, “Personalized Medicine: So Close and Yet So Far,” seems to suggest. According to 47 percent of those polled, “reimbursement” is a roadblock to commercialization, followed by “availability of outcome data,” which received 35 percent of the votes.

All of this makes sense in a way. Reimbursement drives utilization and outcome drives reimbursement, at least in a rational world. Financial returns and the ability to invest in future offerings then follow. Related to this, our poll also identified “diagnostic company incentive” and “relevant markers available,” each of which was checked by 29 percent of those participating in the poll, as roadblocks to personalized medicine.

I was surprised to see that only 17 percent of the participants checked “resistance from clinicians,” in light of the tradition of slow adoption of new technologies. Randy Scott, CEO of Genomic Health, commented at the recent Burrill Personalized Medicine Conference that, despite compelling proof of clinical utility, only one third of breast cancer patients today receive the Oncotype Dx test. Rational businesspeople like us sometimes forget the “first do no harm” and in many ways risk-averse culture of the clinical community. And in the emerging world of preventive medicine, risk stratification and risk reduction, which calls for a new framework for financial incentives, clinicians will be at the center of this push toward rewards for wellness. Who will lead the charge to convince the clinical community of this need for change?

Another surprise to me was that just as few people (17 percent) identified pharma-diagnostic collaboration as a potential roadblock. Either this collaboration is so well in place that it is no longer a roadblock (unlikely), or we’re resigned to a more opportunistic partnership, which seems to be the case today, with pharmaceutical companies looking for a diagnostic company to provide biomarker assay(s) in a more advanced stage of development. I believe that this will change, as pharmaceutical and diagnostic industries will come together when companies realize the stakes are so high that the benefits of collaboration far outweigh the risk of an unproductive partnership. And one key ingredient is the change in mindset of the diagnostic industry to claim its place at the negotiating table—not as a vendor of biomarker assays but as a true partner in the advancement of medicine.

Last but not least, in the interest of good science, I should disclose that the data summarized above came from 17 participants casting a total of 35 votes (the maximum allowed was three) over the period from November 24 through December 14. Our sample is small, and all the typical market research disclaimers apply. However, I like to believe that our audience is an educated and experienced one, and the poll results offer insight if not answers. To everyone who took the time to complete the survey, thank you.

I love books and I enjoy giving books. If you are looking for something interesting for this holiday season, here are a few favorites. Some are a little off the beaten track, but all are, in my mind, timeless in their stories and messages.

Medicine and Philanthropy
Mountains Beyond Mountains: The Quest of Dr. Paul Farmer, a Man Who Would Cure the World by Tracy Kidder

Medicine and Politics
The Great Influenza: The Epic Story of the Deadliest Plague In History by John M. Barry

A Commotion in the Blood: Life, Death, and the Immune System by Stephen S. Hall

The Cutter Incident: How America’s First Polio Vaccine Led to the Growing Vaccine Crisis by Paul A. Offit

Up Against the Good Old Boys in Molecular Biology
Rosalind Franklin: The Dark Lady of DNA by Brenda Maddox

An Old-Fashioned Story About Advertising, Agencies and Clients
Where the Suckers Moon: The Life and Death of an Advertising Campaign by Randall Rothenberg

During a visit to Beijing, I picked up a book entitled Why Southerners Succeed in Business. Being a southerner myself (I come from the province of Fujian, directly across the strait from Taiwan), I was intrigued. It turned out to be a great book, filled with everyday tips and great lessons about life. Following is one of my favorite stories. For context, note that the north-south divide in China is somewhere around Shanghai. In this story, Shanghai represents the south and Beijing represents the north.

Two peasants from the countryside decided to venture into the big cities to make a better living. One was heading to Shanghai; the other had a ticket to Beijing. In the waiting room at the train station, the two peasants overheard a conversation.

“The Shanghai people look for every opportunity to make money. Sometimes you even get charged a fee for asking a passerby for directions,” one man lamented.

“Well, Beijing people are very generous. If they see that you have no money, they will offer you food; sometimes they’ll even give you their old clothes,” said the other.

The peasant heading toward Shanghai thought to himself, “I think I’d be better off going to Beijing. That way, even if I don’t make any money, I won’t starve.”

The other peasant, who had planned to go to Beijing, reflected on the conversation and came to the opposite conclusion: “If people in Shanghai can make money just giving directions to strangers asking the way, think how many other ways there must be to make a living!”

At the ticket exchange booth, the two peasants met, exchanged tickets and got on the trains. The fellow who went to Beijing found everything exactly as he had imagined. During his first month in the city, he enjoyed himself, did nothing, but never went hungry. By just picking up loose change here and there, he even managed to send small amounts of money home.

The other peasant arrived in Shanghai and, sure enough, began making a living right away. He started by standing at the train station waiting to give people directions. He also learned to park himself in front of public toilets to collect a fee, and he earned extra money bringing people water to wash their faces. Eventually, he came up with a business idea. Noting how people in Shanghai loved indoor plants, he went to the countryside, collected ten bags of dirt, and brought it into the city to sell as “potting soil.” To his astonishment, the ten bags sold right away. That same day, he made six trips to net a fifty-dollar profit. Before too long, he opened a store. Soon he had an entire franchise of stores, employing hundreds of people, from Shanghai to Nanjing to Hangzhou, even north to Beijing.

Three years later, the peasant-turned-businessman was on a routine tour of his stores. As his train pulled into Beijing, a man came up to him and asked for his empty beer bottle. As the two men made eye contact, they immediately recognized each other and remembered the day they swapped train tickets back in their hometown in the countryside.

Do you have favorite stories about good businesspeople you’d like to share? Please post a comment.

For as long as I can remember, ad agencies have used freelancers to handle the ebbs and flows in the workload and sometimes as a way to bring in high-profile and high-priced talent that we cannot afford to keep on staff. But the use of freelancers has always been a more or less well-kept secret. Agencies generally don’t offer to identify freelancers as such to clients. Most of the time freelancers work behind the scenes. Twenty-plus years ago, I was working as a freelancer for a New York healthcare agency while negotiations for a permanent position with the same agency dragged out. I got my break when the client arrived early for a meeting one day and bumped into me signing in, as a visitor, at the front desk. Everything happened quickly after that.

Even today, agencies are reticent about the freelance status of their staff. Sometimes this stems from agency management wanting to look “bigger” to clients. Agency management may worry that clients will be concerned that the agency does not have sufficient internal resources (“bandwidth”) to get the job done. Or, clients may have the perception that they will get more time and more dedication from full-time, permanent staff. But, as outsourcing becomes a global phenomenon and spreads to more and more industries, especially in healthcare, I think ad agencies should be proud of having led the way in this viable operating model long before it became trendy.

Two years ago, with the encouragement of a potential client, I built an all-freelancer agency team of twelve people handling creative services, media relations and medical publications. For a while I called the team that I had built a virtual agency, but recently it dawned on me that what I have is a real agency. We have all the functionalities of a full-service agency. The difference is that our team members are all entrepreneurs and business owners in their own rights. We communicate, most of the time, via Internet and conference calls, although we meet in person occasionally. We enjoy the same camaraderie—though we do miss gossiping by the drinking fountain and other rituals peculiar to our business as described in Then we came to the end  by Joshua Ferris (excellent book by the way).

The client who encouraged me to build this all-freelancer agency team benefited, as intended, from a more cost-efficient structure. Intuitively, one would expect that lower cost is due to not having to pay employment benefits, but that is only part of the picture. The savings is in not having to pay for idle time, which is expensive as well as demoralizing to staff, but almost unavoidable because of the cyclical nature of the business and the fact that fewer clients are willing to put agencies on retainers. (In fact I don’t believe in retainers myself, but that’s another subject.)

I think the benefits of the freelance agency team go far beyond cost. As an agency owner, I like the flexibility of putting together exactly the right team for the assignment. And I like the entrepreneurial thinking of my freelance colleagues. As business owners, they are called upon to solve problems every day—not that agency staff people do not, but the fact that your next assignment depends on how well you complete the current one is incentive for going that extra mile. For their part, my freelance colleagues tell me that they enjoy the variety in working with different teams, different assignments.

So what are the pitfalls? I find that a little more up-front planning, organization and coordination is necessary to bring the right combination of talent on board. Developing the chemistry and synchronizing a team among people who don’t see each other every day is a different challenge. And, by keeping the same core team for each client, each brand, the all-freelancer team can offer the level of continuity and consistency clients deserve. Once in a while, I have to work a little harder to juggle meeting schedules, but I think this is a win-win proposition for clients, freelancers and integrators like me.