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Dr. Graham Sher, CEO of Canadian Blood Services, is looking to private financing for an umbilical-cord blood bank.Dave Chan/The Globe and Mail

Canadian Blood Services was established to take over the country's blood donation system in the wake of the traumatic tainted blood scandal of the 1990s. It regained public confidence and is now a billion-dollar organization with 4,700 employees, forming a crucial part of Canada's medical system. Chief executive officer Graham Sher has broadened the organization's work into organ and tissue donation, and is looking for corporate financing to help set up an umbilical-cord blood bank that will be an important source of stem cells for transplant therapy.

Do you run your organization like a large corporation?

I very much view our operation as a business, and we apply best business practices in pretty much everything we do. At our core, we are a manufacturing organization. The products we are responsible for are very complex biological drugs. So our business is no different than a vaccine manufacturer, or a complex drug manufacturer.

As a not-for-profit organization, is your motivation different from a for-profit firm?

Our primary driver is not shareholder value, as measured in return on the bottom line. Our primary value proposition is ensuring we both earn and retain the trust of the public and the many stakeholders we serve. [But] we have many business metrics in terms of turnaround time, delivery to the marketplace, sufficiency of supply, and quality and safety. But the ultimate measure of value is trust and confidence.

Who are the stakeholders?

We have our funding governments – the provincial and territorial ministries of health. We have our regulator, the federal government through Health Canada. We have donors, on whom we depend to collect our raw material – blood or stem cells or plasma. We have the patients who depend on our product. Hospitals are a major customer and therefore a major stakeholder. And generally, the public at large.

What can companies learn from the way the blood donor system reacted and rebuilt after the tainted-blood scandal?

There are lessons for both the public sector and the for-profit sector. First, we committed vigorously to restoring safety and security of supply, so there was investment in the system. Any organization that emerges from a crisis must acknowledge the legacy, and then begin to restore the systems very quickly. [Often] organizations don't singularly focus on how to regain lost trust and confidence.

One example where the private sector did extremely well was at Maple Leaf Foods. After the listeria outbreak, under Michael McCain's leadership, they took an exemplary approach to acknowledging what went wrong, and very quickly restoring trust and confidence.

How important is it to get corporate support for the health-care sector, the way you are fundraising for the umbilical-cord blood bank?

It is very important for us to urge the business community to make blood, stem cell, and organ and tissue donation part of their corporate social responsibility agenda. But there is a pattern emerging in Canada, as it has around the rest of the world, where philanthropy is an increasingly large part of health care. We are very new to this. Until this capital campaign for the umbilical-cord blood bank, we had not been very big in the philanthropic space.

But it is common practice in health care. I don't think there is a single hospital that has built a new cardiac wing or emergency department or cancer wing without philanthropic support.

Why is there such dependence on private financing?

It is driven to a large extent by the financial pressures that governments face. We are entering a protracted period where capital and innovation are going to be increasingly dependent upon the philanthropic sector.

Is this the right way for the health care system to operate – counting on charitable support?

I believe it is inevitable, but we need to find the right balance. We need to know that governments, through our tax dollars, are providing the core delivery of programs and services. I don't think philanthropy should be used to deliver core services; that is a very slippery slope away from a publicly insured system. However I think it is acceptable, and justifiable, to use philanthropy to initiate key capital-intensive program, provided there is the ability for them to be supported through the publicly insured system.

You have said Canada should look at some national health-care programs, using the blood service as a model. How would that work?

A pan-Canadian solution doesn't mean we give up [provincial] autonomy, but it does require a degree of collaboration to share best practices, avoid duplication, and achieve economies of scale. Canadian Blood Services is a very important model. We are one of the only organizations that delivers health care in a truly pan-Canadian fashion. We are accountable to all the provinces and territories [except Quebec], yet we meet the needs of every one of them individually.

As a manager, do you miss practising medicine and doing research?

I began my career as a practising physician and a scientist and a teacher. The part I miss the most is teaching at the university and post-graduate medical school level. I don't always miss the patients and the challenges of clinical life. I have tremendous admiration for physicians who dedicate themselves to clinical care, but I have found my passion more on the business side.