31. December 2015

Yulin Wei
China needs its own health care industry model

(Text and Photo)

Yulin Wei with the Obermatt Gold Pin 2015

Yulin Wei is Sinopharm’s Chairman since November 2013, previously he was it’s President. As Chairman of an international company, he is aware of the different management styles around the world. The Visionary Pharmaceutical Distribution Leader of China, Yulin Wei, prefers his unique way to run his Group.

„How to utilize the strength of the whole team is my working focus.“

CEO of the year, what does this award mean to you, Mr. Yulin Wei?

I think the ranking award is not especially an honor for me. As a company grows larger, the ranking result from a mature and neutral ranking institution confirms the performance of the whole company and the whole management team.

How do you describe your management style?

Our company’s development couldn't rely on my strength only. How to utilize the strength of the whole team is my working focus. I mainly focus on the following three aspects. Firstly strategy guidance, secondly authorization - all my subordinators are authorized to make decisions in their field of responsibilities - and thirdly, support. I must support my management team members well, especially in such a rapidly developing period. I like to be their strong support.

What is in your eyes the cultural difference in management style between a Chinese, a European and an American?

In my opinion, American companies focus strongly on strategy, market positioning and brand building. They do quite well in it. American companies are very aggressive in strategy and capital management.
Chinese companies are on the other hand more diversified. Some entrepreneurs focus very much on details but do not follow a clearly defined strategy. We are still in the learning phase here in China. And we have to adapt the learnings into the Chinese environment.
European companies are mainly family owned. They are dedicated to their field and expertise. However, from my view, they are behaving a bit too conservative.
Overall, I prefer the American management style.

For over 30 years you work in the pharmaceutical and healthcare products industry. Have you never had the desire for a change?

After graduating from university, I started to work in this industry. I saw and experienced the transformation of this industry from a planned economy to a market economy. I grew my career from a front-line employee to the executive position I am now. Personally, I am very familiar with the industry. I never thought about leaving this industry. I just enjoy it so much.

How do you motivate yourself?

Through dreams and through responsibility! Firstly, I always have the dream that a company should never stop to grow to achieve a higher value. Once I work in the company, I started to feel a stronger responsibility because I have got so many people following me. It’s not my personal dream, it’s now the company’s dream. These two things encourage me to keep on working hard in my role.

What does your family mean to you?

Without my family’s support, I couldn't be as successful as I am. At the beginning of my career, my family paid a lot for me. I didn't have much time for my child, my wife, my mother and for all the other family things. However, my family is very important to me. With progressing age, I feel I need to spend more time with my family. I really care about my family.

What kind of hobbies do you have?

Every day I am fully occupied with many different tasks and issues. In my spare time, I read or I do exercises such as swimming and running. Travelling I like too. Occasionally, I spend some time for music and movies, mainly together with my family.

You mentioned the award. What does the title CEO of the Year mean to you?

This award is for Sika and for all of our 17,000 employees worldwide. We’ve communicated the award internally in order to congratulate our executives and to thank them for their dedication. They and all their employees have contributed to Sika’s success and, as a result, ultimately also to the CEO award. It’s not an individual success but a team success.

About what do you feel very proud?

Our company, amongst all the state-owned enterprises (SOE) and private companies, received many awards. We are the market leader. For myself, I have been honored for being a Model Worker of Shanghai, a Model Worker of SOEs and a Model Worker of Tianjin. All these honors well recognize our success. I feel very proud about it from my heart.

And what kind of incidents disappoint you?

In the past few years, we have acquired hundreds of companies. In some of them, we detected compliance problems, and even some illegal practices, which brought a bad impact on the image of my company. This made me very angry. As the Group grows, more and more people are joining us, and when someone abuses his/her power to get personal benefits at the cost of Sinopharm, really upsets and disappoints me. I keep insisting on the importance of internal compliance education. We do think a lot of our regulations and prestige and do not tolerate any illegal behaviors in our company.

Which personal characteristics of employees are the most important for you?

I choose employees with passion and ambition. I prefer those talents who have their focus and dedication on it. In our industry, each employee maintains our clients. They are our brand’s ambassadors. If they don't have these two characteristics, sooner or later they may bring damage to the company.

Sinopharm has a talent development strategy. Please tell us more about this strategy.

Our number of employees grew from 10,000 in 2003 to 50,000 now. They have come to us from SOEs, from other private Chinese companies, and from foreign companies. Their background in education and culture and their personal vision is very diverse. In our company, I require the people to be tolerant, reverencing, respecting and obedient. I always encourage our people to grow themselves by benchmarking with others and learning from others. Moreover, our Sinopharm University provides, for example, organizational education for our employees at the headquarter. Our GMs and senior managers are also given the opportunity to study business administration or to attend other useful courses. We hope that after all the training efforts we could establish shared internal values and dreams. With this, our company and our employees could be re-invented.

How would you describe Sinopharm’s globalization strategy? What foreign markets are your favorites?

Our strategy has got three steps. The first step is to import management methodologies from overseas, i.e.from targeted companies in Europe, America, and Japan and adapt them to China. The second step is about the importation of products through joint ventures and cooperation partners. For example, we are cooperating with the largest Japanese distributor in our field. Regarding the retail business, we are in discussions with a large international player for a cooperation. Through this prospective cooperation, we aim to cover product management, sales, and branding. The third step is the building of our future by globalization. We may undertake some acquisition and mergers globally once we have reached a certain level of market power and own sufficient own resources.

What is your view of proper structure for China in terms of the healthcare system? How do you compare it with America, Europe, and Japan?

China is quite different (from Western advanced economies) as it is still in a developing stage. 30 years ago our healthcare system was quite well established in terms of population coverage, even in remote areas. Later, by adopting foreign healthcare system elements, the situation has changed. The resources allocation has led to an imbalance between big cities and countryside. There are too few doctors and medical supplies available in the countryside. Now, the government has decided to correct this by focusing on a broad population coverage. However, in China exists another problem: it’s the doctor’s low income level. Nowadays, there are many new policies on medical reforms coming up. In my opinion, we are on the right track. We should not just copy European health care systems as they have been developed for high welfare countries. If we implemented the same philosophy in China, the cost would exceed our country’s financial resources by far.
China should learn from Europe to introduce commercial insurance. As you know, almost everyone in China is covered by our national healthcare system which is fully on the government’s balance sheet. Today, social capital is getting increasingly utilized in the healthcare sector.

There are three major changes on the way to our health care system. Firstly, commercial healthcare insurance shall be promoted for wealthy people to get a premium service. Secondly, the primary medical institutions shall be encouraged to offer more financial opportunities for doctors, such as a higher reimbursement compared with hospitals. This could attract more doctors to move to the lower tier health care system. Thirdly, the “mobile hospital” concept shall be implemented. What we are doing now is the restructuring of our national healthcare system. However, this should be executed step by step, learning by doing. I do believe our model will become one for all developing countries, although it will take time. The US and European models have their own characteristics well suited for developed countries, but it’s not appropriate to copy them for us in the near future.

And what is your vision for Sinopharm?

I have two visions for Sinopharm. One is to become China’s best supply chain solution provider in pharmaceutical products distribution. The other is to become the best service provider in China’s health industry. Healthcare becomes more and more important in the country’s strategy. China’s healthcare market size might reach 8 trillion RMB in the very near future, and become possibly our biggest industry sector in the future.
Healthcare products are an extension of medical services. Besides pharmaceuticals distribution, we would like to expand into the healthcare industry overall. Beyond the role of a distributor, we could offer outsourced services and enhancing customer experience. In retail (pharmacies), we could also extend the online (web-based) pharmacy business. In summary, we are dedicated to provide more health care products and to expand our services.