Review on Management Lessons from Mayo Clinic
The book ‘Management Lessons from Mayo Clinic’ by Leonard L. Berry and Kent D. Seltman tells about an exceptional service organization Mayo Clinic which excels in the art of service. Service business authority Leonard Berry and Mayo Clinic marketing administrator Kent Seltman explain how the Clinic implements and maintains its strategy, adheres to its management system, executes its care model, and embraces new knowledge. Dr. William Worrall Mayo and his sons Dr. William Mayo and Dr. Charles Mayo are the leaders of this health care organization. This health care organization started more than 140 years ago in Minnesota town of Rochester in the early 1990s. Till now it is one of the most influential and valuable service brands in the world. There is only a little amount of advertisement done on this brand and till 1986 there was no marketing staff also in this organization. It is known as Medical Mecca based on their contribution to the science of medicine and to innovative surgical techniques. The Mayo Clinic has been of interest to services marketing researchers due to the organization’s impeccable success, global brand reputation, and service excellence ever since it was founded by the Mayo bothers, Drs. William and Charles. Berry, a well-known services marketing researcher, and Seltman, a former president of marketing at the Mayo Clinic uncovered the clinic’s success and delivered into how it has achieved its legendary brand power and brand loyalty among global consumers. This clinic continues to live its values, execute its care model, adhere to its management system, and both create and embrace new medical knowledge despite the perils of time, growth, success and prestige. The success of Mayo Clinic is only because they are giving at most care to the interest of the patients and their needs and not for profits. The culture of the organization is patient centered culture. The strategic plans, all the significant strategic policies and all operational tactics revolve around ‘the need of patient comes first’. The patient centric approach is the driving force in the organization. This approach is prominent in the organization even though there is no course given to the employees regarding this topic. But this topic is emphasized in the new employee orientation program. Mayo Clinic has codified its values, culture and expectations in a document called Mayo Clinic Model of Care which it gives to all employees. In 1997 the board of governors appointed the Mayo Clinic Model of Care task force to codify the care model. The total number of employees at that time was 23,182 and 1,527 physicians. A week-long celebration is held in each October called ‘Mayo Clinic Heritage Days’ which focus on preserving the patient-first value. It has originated on the Rochester Campus as a way to reinforce the historic collaboration among Mayo Clinic, Saint Mary’s Hospital and Rochester Methodist Hospital, as those hospitals operated separately from Mayo Clinic until mid 1980s. The Heritage Hall which is now a museum was founded by two benefactors, loyal Mayo Clinic patients John and Lillian Mathews. In Mayo Clinic for improving the effective communication between the staff regarding the needs of the patient a program called pus-one was introduced. It says that broad employee empowerment is required to achieve a long term success like Mayo Clinic. This is been illustrated by several situations that happened in the hospital. In case of the charges that a patient has to pay for the service received there was no charge master as such rather the patients were charged according to their perceived ability to pay. But as of now this is not practiced because the law does not allow entering into a social contract in which the poor and rich will pay according to their means. But still they focus on the matter that everyone is getting care irrespective of their ability to pay. In the year 2007, Mayo Clinic has provided care valued at $55.6 to patients who were unable to pay. In the end of every year the net operating revenue is reinvested in medical research and medical education for the benefit of the future generations. Some traditional elements of Mayo Clinic which is not considered as patient centric by the modern customer like appointment calendar is been removed from the system by early 1990s. Another factor that makes mayo clinic distinctive is it serves the art of medicine within the art of architecture complemented with paintings, sculptures and music. This is identified as an important measure which makes the patient relieved from the pain or stress that they are going through. The Mayo Clinic by this approach specifies the whole patient care, to their body as well as to their minds. Mayo also provides the best Doctors and caregivers like others but what makes Mayo distinctive is the effective medical staff team work. Because of the wonderful support system there the doctors could perform even better in Mayo than in any other organization. Mayo’s culture leverages the inherent power of respect. They are aware of the fact that none of them could do the work that they are doing without others. Mayo practices an integrated medical record system and all the records are in electronic forms which helps the physicians to retrieve the data whenever necessary very easily. Collaborating, cooperation and coordination are the three dynamics supporting the practice of team medicine at Mayo Clinic. They practiced the destination medicine that is nothing undesired or unwanted is done to the patient. Only what is required is done in a prompt and efficient way. Mayo Clinic practices the centralization of appointments. This is an example of application of system engineering in Mayo Clinic. The CAD (central appointment desk) was implemented which assumed responsibility of scheduling the laboratory tests and the physician consultation. Mayo adopted this system from Pullman Company which operated sleeper cars on the railways. But because of the complexity of the system it was later replaced by the new system called genetic algorithm which is web-based and intuitive for anyone who uses the internet. The current system not only optimizes the appointments but it also provides the management with best appointment analytics. The current analytics identify prospective demand. With several years of data inside, the system analysts create models of future demand based on current information. They started using process improvement tools like ‘Lean; and ‘Six Sigma’ when they were facing problem in the radiology department where the size of the department was not synchronized with the internal and external demand which resulted in huge bottleneck. Because of the integrated system there is no delay at all in the system. When a patient is discharged within five minutes, all the reports are updated in EMR. Laboratory and radiology also show a rapid turnaround. Mayo Clinic is a ‘system seller’ competing with a connected and coordinated service. The scheduling and service operations system has created a differentiated product, destination medicine. It is successful in the destination medicine concept only because it is a physician-led organization. It emphasize on teamwork which helps Mayo Clinic to translate the patient-first value into patient experience. In Mayo Clinic every element of the care continuum is integrated into a single organization. All decisions in Mayo is taken in groups no individual decisions are taken. The concept of succession planning was started well in advance thus even when the Mayo brothers retired from service there was no chaos in the system. Mayo Clinic was best in the market place for its human resource. The hiring process in Mayo is a deliberate and thorough process which takes a lot of time. It is not that easy to get hired in May Clinic. This is how they maintain the core value throughout the organization. The panel interviews are the standard criteria for selection, even CEOs for that matter. In panel interviews a standard set of behavioral questions is created based on the values one needs to be successful at Mayo Clinic. They realized the importance of hiring the right person and also the orientation that have to be given to them to make them into long term contributors to the organization. Enculturation is done for the first three to five years of employment which creates the workforce that earns high satisfaction scores from Mayo Clinic patients and career long employees. The personal committees in all the three campuses were more aggressive in addressing the issue of physicians who are not living the Mayo Clinic values or exhibiting respectful, collegial behavior to all team members. Some physicians have been suspended without pay or terminated. Mayo also invests significantly in in-service training programs. These programs are run by HR as well as numerous other departments like nursing, finance, radiology, safety, information technology and clinical laboratory. Another important measure that Mayo has taken to improve the talents and careers of employees is the professional development assistance program. Mayo is a relational employer. It hires people for their career than for jobs. All employees in Mayo represent an investment of thousands of dollars for recruitment and training costs. Employees who found that they are fit well in the organization are resources that can often be reinvested in other promising positions in the organization. This helps Mayo’s low employee turnover rates as well as the large number of employees who chose to make career at Mayo Clinic. The main factor for the success of Mayo clinic is its people and the clinics time consuming, collaborative hiring process is the cornerstone of its enduring success. Mayo’s core values and strategies of patient first, collaborative, destination medicine have clearly contributed to its presentation of strong functional clues. The team service model gives patients the sense that the Clinic is coordinating resources to provide the best practice possible. Mayo Clinic’s facilities design philosophy centers on helping to relieve the patient from the stress using the buildings-patients, family and other visitors and staff. Human clues are also important for the patients to feel that they are attended well and effectively. Mayo shows the humanic clue is through the dressing code. The customers will come to know about the services an organization is providing from the clues they receive from there. The manager’s function is to make sure that the clues are providing the customers the right story. Mayo Clinic is successful in doing that. Mayo Clinic was able to create the brand image in the minds of people as it is the place where the patient’s need would be considered with atmost care. This image was created by its sincere employees. The brand was created by the physicians and administrative staff and hundreds of support staff members dedicated to the humane delivery of clinical service. No marketing activities were done in the creation of the brand. Till this date it uses only a little media advertising to promote the clinical care. This is an exception to the commonly held assumption that great brand require great advertising. The brand equity is created for Mayo Clinic by the customer experience with the organization. By this external brand communications are formed and by this it creates the brand awareness and brand meaning which creates the brand equity. Branding plays a special role in service organization because strong brands increase the customers’ trust of intangible performance. A service brand is essentially a promise of future satisfaction. It is a blend of what the organization says the brand is what others say about it, and how well the organization actually performs the service. Mayo Clinic is able to create a good brand image among the people which increases the patient satisfaction. Mayo Clinic through the years has well understood importance of employees in creating a brand. They have understood that the staff members performing the service are the ‘living brand’. So they are stressing on that aspect to increase the brand awareness. Mayo’s brand is a trusted brand and it leadership views the trust of the patients and the referring physician as a priceless resource to be protected at all costs. The institution clearly articulates the brand management guidelines and a band team to enforce them. Another strategy that Mayo Clinic is using to build the brand is to make the customers the marketers of the brand. This is helping them in creating the brand awareness even if they are not using the marketing tactics. Mayo’s patients are only doing the marketing for the brand. According to Mayo’s experience the brand heroes are those industrial engineers and other leaders who design the service processes and the line employees who perform their individualized service one patient at a time. The discipline at Mayo Clinic reveals an organization fueled by internal power of teamwork and focused simultaneously on the customers’ needs and on the financial outcomes required for future generations of patients. Integration was another initiative taken by the management for bringing every resource they could to each individual patient. By integration it ensured that every patient will receive the same quality of service, diagnosis and treatment regardless of which campus they use. This approach makes it clear that all the employees are equally responsible for the treatment of all the three campuses and not only one. It also leads to the integration of the information system that they use now they use single software for the three campuses. This reflects in case of capital investment decisions also. Decisions are taken considering the benefit of the overall organization and not a single campus. They made the system more transparent to improve the quality by sharing the performance outcome of each procedure in the intranet. They also had two more additional strategies focusing on individualized medicine and the science of health care delivery. For implementing the health care delivery strategy, they came up with an electronic means for moving one of the doctors, Dr. Ackerman’s (who identified the medication which should and should not be used in the case of a particular syndrome which will cause fatal cardiac arrhythmia in children) knowledge. This was initiated with the donation gave by the parents of the deceased children because of this syndrome. By this transfer of knowledge of the physicians to all other physicians in the campuses Mayo Clinic was able to create a standard treatment protocol which the doctors called as ‘cookbook medicine’. Mayo Clinic also considers the high-value care as the best metrics to identify the high-quality, cost-effective medical care. Mayo Clinic professionals also understand the current practice of the head-to-toe examination may become obsolete in the coming years and they are also considering the chances of changes in the mind set of the people about the curative medical care to preventive and predictive health care. Especially in the case of cancer which can be predicted from the genetic pattern of a person, Mayo Clinic in such cases is planning to go for a virtual consultation of doctor and patient by using the technological advancement which also reduces the patient’s reluctance to come down all the way to Rochester for consultation. As discussed before Mayo is very particular about cultivating tomorrow’s leaders, this shows its commitment to find internal talents to sustain the values, culture and the clinical model and to deliberately cultivate the physicians and high-level administrative leaders. For identifying such internal talents they are going for career and leadership program in the organization. Mayo Clinic was built from three big ideas, first was to place the interests of patients above all, second was to pool the talent-to create a union of forces and the third was to deliver clinical care with time condensed efficiency. Mayo is teaching a lesson that only big ideas are not enough but more important for a service organization to excel is the execution of the ideas. Mayo’s strategies are its value. The combination Mayo’s culture and the environment that it is providing encourage people’s best efforts. Its rotational administrative assignments foster personal growth and the pairing of physician with the administrative staff. One of the important factors that distinguishes Mayo Clinic from any other health care providers and exemplifies it is its people. Thus Mayo Clinic story is all about realizing the human potential; it is about exceptional people doing exceptional work. Mayo is attracting such an exceptional workforce because of its core values. The difference between Mayo and many other organizations are here money does not drive the bus. Mayo’s core value is a culture of respect that contributes to the quality of work life. Thus Mayo clinic is a story about people- with skills, values and vision- who is committed towards their work for creating and sustaining an organization in order to deliver an excellent service for the benefit of the people.