Inadvertently, by reporting its suggestions on China's medical reform, the business consulting firm McKinsey & Co might have made itself a perfect case study of how badly an international company can adapt to the local environment.
On January 19, the company released its study of the key dilemma of the nation's public health development, proposing that the government should, as reflected in most headlines in the Chinese media, "relinquish (the management of) urban workers' medical insurance to the market."
Like in many countries, the medical insurance system is first of all a political issue and anyone proposing a change of it will have to take tremendous political risk; in other words the risk of causing public denunciation.
This, unfortunately, was exactly what the company achieved not perhaps by the words in its study, but in the way of reporting it. It is a failure on three levels.
On the first level it was a communication failure. All the reports in the Chinese press about the study, which one may reasonably assume to have been based on some company handouts prepared in advance, as the practice is everywhere in the world, were written in unclear and at times odd ways.
Little explanation was provided to back up sayings such as that the government should withdraw from the "mature urban workers' medical insurance system" and that nearly 85 per cent of respondents had seen "certain marked improvement" in China's medical and public health system over the last five years. What is the definition of a mature system? How could so many people have spoken so highly of a system even the government itself admitted to be problematic?
Small wonder the McKinsey & Co report immediately aroused protests from the Chinese Internet, from bulletin boards to independent blogs. On Saturday evening, a blog piece, which got widely reprinted, even went so far as to call McKinsey & Co's Chinese partner a "criminal of one thousand years."
In fact, as it seems to me, the report was not really urging the Chinese Government to abandon the urban workers. Instead, it just said what some reform planners might have thought about to divide the medical system into a double-tier one one tier for the wage earners and the other for the rich and choosy and in one way or another, let the second tier subsidize the first tier.
If the report, or the handout of the report, is written with a headline saying rich people should pay for the finance of the workers' medical insurance, it would have attracted nationwide applause. But the message simply didn't get across.
On the second level, there was a failure in the management of timing. When the Chinese New Year, or Spring Festival, is round the corner, people tend to be most sensitive to any sign suggesting uncertainty in their lives, particularly their welfare and social rights. That is why this period of time has traditionally been called "nian guan," meaning virtually the year-end crisis.
In the middle of 2005, the central government openly admitted that the past medical and public health reform had not been successful, with implications that a new plan would be structured for future changes. Since then, Chinese people, urban and those who desire to become urban, have all been paying attention to what new ideas and changes may be proposed in this field.
They would feel betrayed when they get the impression that the government is being advised to abandon them by a big American company whose top executives are all highly paid in US dollars and cannot care less about the well-being of the 1.3 billion population of distant China, according to descriptions offered by Chinese Internet writers.
The failure on the third level is the company's foolhardiness in advising China on the subject, even though it claimed to have collected 1,500 questionnaires. The medical and public health reform is a political issue and will have no smaller impact on Chinese society than a change of the government.
Treating it as a simple economic issue is amateurish. And talking about it in public in such careless and ill-prepared ways is certainly not helping China. One may wonder how anyone can expect to advance his or her career as a professional consultant by being so insensitive to potential clients?
Of course, it is not a crime for China, as some domestic Internet critics exaggerated (as they always do), for whether to listen to that advice or not is still up to Beijing's decision-makers. But on the part of McKinsey & Co, to call it a managerial blunder is not far-fetched.
Email: younuo@chinadaily.com.cn
(China Daily 01/23/2006 page4)
