Most entrepreneurs plan for many worst-case scenarios – but a management buyout that ousts them from the company is not usually one of them. That was the extraordinary situation Dr Michael Tan found himself in on Sept 24, 2012.
Then barely 40 years old, the first-time entrepreneur – who set up Fullerton Healthcare in 2010 with friend and Parkway East Hospital colleague Dr Daniel Chan – was unexpectedly laid off as CEO for 137 days. “A family office invested in us when we started and it was a bit of a shock when they wanted to exit barely six months after, when it was meant to be a five-year commitment. They just wanted to cash out,” recounts Dr Tan of the drawn-out situation that culminated in his dismissal. The episode tested his confidence, and also his conviction in doing what he believed in: making high quality health care accessible and affordable.
This was the cause that had him step away from the well-paying job as the CEO of Parkway East Hospital, from promises of promotion and other lucrative offers, and the stability of being a paid employee. He and Dr Chan – both doctors who progressed from seeing patients to managing health-care facilities – had observed the industry for decades from different sides, and believed that they could fill a gap in a market where prices are constantly on the rise.
“We listened to our clients and saw that the health-care systems could be made more efficient and effective,” Dr Tan, 43, says of the motivation behind founding the corporate health-care provider.
With a small capital, two established medical groups were acquired, an IT platform to provide more efficient administration work was brought in, and Fullerton Healthcare was formed. “We took a risk, but it was one that was calculated. After all, we were already veterans of the industry by then, not opportunistic newbies,” says Dr Tan. And indeed so. During his tenure as CEO of Parkway East Hospital from 2008 to 2010, he was known for having turned the loss-making hospital to profitability within 28 months. To both internal hospital staff and external clients, Dr Tan has the reputation of always delivering on his promises.
Yet, even with his sterling reputation, clout and sharp-as-tack smarts, Dr Tan found himself in a situation where all anybody could give him were little words of encouragement – until private investment firm Sin Capital Group entered the scene unexpectedly as a new sponsor, allowing the buyback of the company, which was completed in February 2013.
Since then, Fullerton Healthcare has grown in leaps. Between 2012 and 2014, the organisation’s turnover more than quintupled from $32 million to $164 million. With a presence in Singapore, Australia, Indonesia, Hong Kong and Malaysia – and more territories in the Asia-Pacific in the pipeline – its current revenue stands at more than $200 million and corporate clients include organisations such as Marina Bay Sands, Standard Chartered Bank and Singapore Airlines.
“Sometimes, you have to go through valley experiences to become a better person.”
Dr Michael Tan
Yet for Dr Tan – the EY Entrepreneur of the Year who will go on to compete with more than 60 country winners this June – his motivation is not bigger profits or market share. “When Stage Four cancer patients are healed suddenly, they see life differently. That’s me now,” Dr Tan shares with a wry smile. “I was given a death sentence – the lawyers and advisers pretty much told me (during the buyout) that there was no hope for me. Now, I feel that every day I have is a blessing and is a day for me to make a difference in society.
“What appeared to be a setback was actually a set-up for a lot of blessings that have followed. If you come through fire, you will be refined to become like gold. Sometimes, you have to go through valley experiences to become a better person. It will make us more appreciative of what we have in life. We don’t complain as much. A man resurrected lives life with a renewed sense of purpose and vision.”
The Accidental Doctor
It is a cliche: People become doctors because they want to help others. Dr Tan, the middle child from an average double-income family (his mother sold royal jelly at Changi Airport to pay for his tuition fees “so that I could do decently in maths and physics”), certainly had that desire to help. As a teenager studying at St Joseph’s Institution which has strong Catholic roots, he was taught that the bigger purpose “is not to enrich yourself or conquer the world, but to serve mankind”. However, the youth had his sights on becoming an engineer.
“But while in officer cadet school, I learnt that all those applying for medical school could get a day off for the entrance interviews – and I wanted that day off!” he recalls with a chuckle. “I only began to appreciate and enjoy medicine in the fourth to fifth year of my studies, when I interacted with patients. You realise the power of medicine – you don’t just touch the lives of those you treat, but also those of their families, the people around them.”
Dealing with death is part of the job, and that has given him a different perspective of life. “It changes your priorities. Relationships are more important than pride or money,” he philosophises. So this CEO with an open door policy is also one who serves food to his staff at the company dinner and dance. He also encourages his staff to take their families along because he truly sees the company as
From Parkway staff who asked to join even when the company was just in its nascent stages to appreciative partners who are helping the company to challenge new frontiers today, the relationships Dr Tan has forged have brought Fullerton Healthcare to where it is today. And his rule to building relationships is simple: to be genuine, and to always deliver. “You often hear about people who talk about what they want to do, or will do. We don’t run ads. In fact, when David (Sin, of Sin Capital Group) came into our lives, he noticed that our website wasn’t very nice and remarked, ‘You guys could do yourself a service by finessing certain things!’ But we would rather have more substance than form,” says Dr Tan, who typically spends at least 14 hours at work.
And he means business. Instead of doling PR spiel, he cuts to the chase and sticks to what he knows best – facts. Even though his minder has prepared a script for him, he rarely refers to it, preferring to speak his mind.
Some 7.8 million lives benefit from Fullerton’s health-care services per year, and the group continues to work with insurance companies, MNCs and large national organisations to push affordable health care to an even wider audience.
His standards for quality health care are high. Last month, Fullerton Healthcare became the first in the Asia-Pacific to use the latest MRI and CT scan machines which produce clearer images and more accurate diagnoses. The new equipment cost the group $10 million, but it is maintaining old prices. “Even the doctors are dumbfounded,” Dr Tan says with a chortle.
“But this is how we walk the talk. We could make less of a profit. Also, we have brought in new technology to reduce backend costs, which allows us to pass our savings to our clients.” It might sound like common sense, but such behaviour is not so common in an opportunistic marketplace.
Outside of office hours, he is helping to make health care accessible to the needy. Through a series of free pop-up clinics, 300 needy residents of Jurong received some $202,000 worth of medicine last year. That was Project Big Heart, an initiative by the Fullerton Healthcare Foundation set up last year to help those with no access to health care.
The ripple effect of this first attempt is wide – the group’s overseas offices are looking to start social initiatives in their territories.
“To use this company to bless the underprivileged has always been our greatest desire.”
Dr Michael Tan
“To use this company to bless the underprivileged has always been our deepest desire,” shares Dr Tan, who regards his Christian faith as his well of strength and source of inspiration. By involving both staff and external parties – Project Big Heart partnered Jurong Central CCC and Loving Heart Multi-Service Centre – he hopes that the culture of helping and giving back to society can be taken beyond the group.
Together with his wife, he has also set up The Grace Foundation by Dr Michael and Peggy Tan last October, with the objective of setting up free medical centres. “We’re looking at funding medical centres – financing the building, the infrastructure. This is a long-term project and we want these facilities to be around for the next 10 years. We are talking to people who are more experienced to make sure it is done properly and in a sustainable manner. “We know every problem in the health-care value chain, so we are in the best position to improve it. If you want to touch the world, reach out to the masses.”
Two Good Dudes
They speak Singlish, tell cheesy jokes and have pow-wow sessions at the kopitiam. Stripped down, Drs Daniel Chan and Michael Tan are your quintessential boys’ school lads who just enjoy a good trash-talking session. The two men – who spend more time with each other than they do with their families – talk about what makes them tick.
Chan: We first met as colleagues in 2004. We have vastly different personalities but the fact that we are different makes us better partners. We don’t agree 110 per cent of the time but two heads are better than one. We were in the right place and at the right time, and the relationship grew and stood the test of time – you see who your true friends are only during times of trouble. He jokes that he spends more time with me than his wife! Coincidentally his son – who he had before we met – is also called Daniel. That is pure coincidence!
Tan: If you do a Disc (Dominance, Influence, Steadiness, Compliance) personality test on us, he would be more of a DI and I a DC. The “C” of me gets things done – I am the task-oriented person. I stick to the meeting agenda and get to where we need to be. I wield the rod if I need to. The “I” of him brings people together. Daniel is a people person – I have yet to meet someone who dislikes him. Within the company, we call him the warm, fuzzy teddy bear. We are very strong in our expression or opinions and I can be very inflammatory and say something to provoke him to thinking. But we don’t take these personally. Our egos don’t get in the way.
Chan: Even while grooming the next generation of managers, we tell them not to agree with us all the time. We have round-table sessions so that even the silent ones have to speak up, because you never know who might have a great idea.
Tan: I can be a bit impatient… I think that is a problem when there are so many things happening in my day, and I try to squeeze 30-minute meetings in 20 minutes – and, clearly, two-hour interviews into one! We take turns to play different roles at different times. We are not fixated on our titles – those are just formalities necessary for performing certain functions at work, such as having certain meetings.
Chan: A similarity we share is that we are open books with nothing to hide. This is also the corporate policy: Don’t fear the truth. There are maybe a handful of people in your life who make a difference: your parents, your siblings, and people whom you can trust and do business with. Rarely do you have partnerships that go beyond a certain number of years – for us, it has been 11 years and we’ve had our fair share of disagreements as most married couples do – not that I would know as a bachelor, though! We have a healthy respect for each other.