"Great leaders create the future of their organizations. That is a tall order for any company in the 21st century and quite challenging in health care." So say Leonard L. Berry, PhD, and Kent D. Seltman, PhD, in their book Management Lessons from Mayo Clinic: Inside One of the World's Most Admired Service Organizations. The Mayo Clinic is renowned for its unique culture of leadership development. Berry recommends that healthcare financial leaders learn all they can about health care. "Nobody in a leadership position in a hospital-whether it's financial leadership or any other kind of leadership function-can learn too much about the realities of taking care of hospitalized patients and of being a hospitalized patient," he says. Berry recently talked with hfm about leadership in health care.

Q. In your book Management Lessons from Mayo Clinic, you point out that one way Mayo Clinic fulfills its commitment to tomorrow is through a formal leadership development program. What key tools of leadership development can healthcare financial executives learn from Mayo Clinic's experience?

A. One of the most important tools is a nontool-informal mentoring. The culture of Mayo is to teach one another the Mayo way of doing things. Behind this informal mentoring is an assumption of career employees, as opposed to high-turnover employees. If you assume that most of the Mayo Clinic's employees will work there for years, you're more willing to make a personal investment to mentor them than would be the case if you see people leaving all the time.

Another tool is the variety of leadership development opportunities that potential leaders receive. Mayo will identify potential leaders and make sure they get opportunities to serve on committees or task forces that often are outside their comfort zone and background. This puts people into situations where they can not only learn from others about leadership, but also demonstrate their capability for leadership and promise for further investment in leadership training.

A third tool is Mayo's commitment to the physician leader-administrative leader partnership. Teaming a skilled, experienced administrator with a physician leader is crucial to how Mayo Clinic functions and how it has retained its culture for more than a century.

A fourth tool is management making rounds in a hospital. It's customary, of course, for physicians to do that. But I'm talking about nonclinical managers making rounds to get a better perspective of what really is going on and what needs attention. Nobody in a hospital leadership position-whether it's financial leadership or any other kind of leadership function-can learn too much about the realities of taking care of hospitalized patients and of being a hospitalized patient.

Q. Mayo Clinic is committed to cultivating internal talent to fill future leadership positions. The workplace today is diverse and includes multigenerations of employees. What should healthcare finance executives and other hospital executives do to ensure that their leadership development efforts include all of their diverse employees? How should they adapt to cultural differences among leaders?

A. It is important that healthcare leaders fully embrace the concept of diversity. Diversity is beneficial in every area except one-core values. You want everyone in the organization to have the same core values, because alignment between the organization's values and the individual employee's values encourages engagement in the work and commitment to the organization. When you have values alignment and when the values are the right values-values that are humane, generous, and inspiring-cultural diversity is not an issue, because values alignment minimizes any negative impacts of people being different.

Mayo Clinic's values bring people together despite the differences in their background, cultural or otherwise. The needs of the patients come first, which is Mayo Clinic's primary value. That value is relevant, appropriate, inspiring, and right for people of different backgrounds, different races, different everything. Teaching each other is another important value at Mayo. The value of team medicine is a core value that also brings people together literally in the formation of teams, as well as culturally or spiritually. That point wouldn't normally be made in a discussion of diversity.

Investing in all employees' personal development helps an organization gain the most from diversity. Three key principles are relevant.

The first principle is that everyone in a service organization is a decision maker. When you're a performer for a customer who is either inside the organization (a fellow employee) or outside (a patient or a family member, in the case of a hospital), you're a decision maker. If we think of every employee as a decision maker, we see the importance of investing in the continuing education of every employee.

The second principle is that everyone needs to continually develop their skills and knowledge, regardless of their position. Everybody needs to grow, because personal growth is motivating. Personal growth also encourages tolerance for different points of view; it opens minds.

The third principle is that everyone in the organization should have a personal development plan-a strategic plan of where they're going in the organization and what investments they are going to make and the organization is going to make on their behalf for their personal

Diversity is a sign of a healthy organization.

Q. HFMA research has found that a key leadership skill for financial executives is communication, especially with clinicians. How can healthcare financial executives develop this skill in themselves and in the next generation of healthcare finance leaders?

A. Most important, financial leaders should make sure they're spending sufficient time with clinicians, both physicians and nurses. To develop leadership skills and communication skills, especially with the physicians, I would start by spending time with physicians, talking to them, listening to them, watching them work, exchanging ideas.

I have some specific suggestions for improving communications with clinicians.

One idea is for hospitals to start a book-reading club with carefully selected books that would be of interest to a diverse audience of both managers and clinicians. The club might meet every two months. You read a new book, and then you get together to discuss it. Ideally, the group would be a mix of clinical and nonclinical people. Getting people with different backgrounds in the same room, conversing about a book, and getting access to the other parties' ideas and views of the same material could lead to healthy discussion and increased credibility on the part of all the participants.

Another idea is to create management clinical grand rounds where both managerial leaders and clinical leaders are in the same room. Clinical and nonclinical leaders could alternate in leading these sessions, perhaps one session per month. It's another way of getting people communicating with each other, learning each other's language, developing a level of trust.

A third idea is to offer a formal communications curriculum for everyone in the organization. Short courses, ranging from a few hours to a full day, could be offered on topics such as persuasive communications, media training, or public speaking.

Q. Mayo Clinic has earned strong loyalty from both its physicians and its customers. This achievement is especially important today because of the competitive marketplace and the growth of consumerism. What steps can other healthcare organizations take to develop similar loyalties?

A. In terms of developing stronger staff loyalty, Mayo hires for values. By purposely looking for people who want to serve well, Mayo brings into the organization people who are most likely to find alignment between their personal values and the organization's values.

A related point is Mayo Clinic's mission of serving humanity, which is why a lot of people enter health care in the first place. It's not just about money at Mayo Clinic. I've learned in my years of service research that how an organization makes and spends money is crucial to the development of its culture. Employees see how an organization makes and spends money. If the organization doesn't make money in the right way and spend money in the right way, that is destructive to a healthy culture and breeds disloyalty and turnover.

A third way Mayo creates strong loyalties with the staff is by being one organization. Everybody works for the same organization and gets paid by the same employer. Everybody at Mayo is on salary. There is no incentive pay. The teamwork culture at Mayo inspires loyalty, because having teammates working in a collaborative culture is rewarding for many people. Most of us want to be on a team.

Finally, Mayo has a niche-picking philosophy. If you've gone through a long vetting process to get hired by Mayo but then struggle in your first job, Mayo Clinic's philosophy is to ask, "Is there a different kind of position in our institution where you would better use your skills and knowledge, be happier, and be a better fit?" Those are some of the ways that Mayo inspires staff loyalty.

Mayo inspires remarkable loyalty from its patients by putting the needs of the patient first. Patients experience a patient-first service delivery system and respectful, dignified, compassionate, caring treatment for themselves and their family. Their expectations are exceeded. Bring together great medical expertise, great efficiency and wonderful personal service, and you're going to have loyal patients.

Mayo Clinic is successful because it has created a high level of confidence on the part of patients and prospective patients. When you're in the service business, as all healthcare organizations are, you're selling a promise of performance. The patient's confidence in health care is paramount, because on the one hand they're buying a service that is hard to evaluate in advance. There are no tires to kick, so to speak, as in buying a car. On top of that, the service is of great personal importance to the patient, obviously. The quality of life or life itself is at stake. It's a very risky service. It's an intimate, highly personal service. So patients need to feel confident when they go for medical treatment, especially if they have a serious illness. If you're going to be in the healthcare business, you want to have the confidence of your customers and your prospective customers that you can get the job done and get it done well, because they have a lot at stake.

Q. If there were one thing you could tell hospital financial executives to do differently in their efforts to develop new leaders, what would it be? Why?

A. What hospital executives need to do differently is to be sure that they and those they are developing for higher leadership positions in the future learn as much as they can about health care, not just about healthcare finance. To do that, they need to invest a lot of time and energy on an ongoing basis to walking in the shoes of the clinician and the patient. In other words, they need to spend a lot of time outside of the office.

Let me summarize it this way. If I were a hospital CEO, I would want the CFO to be a healthcare leader who has special expertise in finance rather than a financial expert who works in a hospital.


Leonard L. Berry, PhD, is Distinguished Professor of Marketing, and holds the M.B. Zale Chair in Retailing and Marketing Leadership, in the Mays Business School at Texas A&M University. He is also Professor of Humanities in Medicine in the College of Medicine at The Texas A&M University System Health Science Center. He was one of two Texas A&M faculty members honored at the university's commencement ceremony in May 2008 by being named a Presidential Professor for Teaching Excellence. During the 2001-02 academic term, he served as a visiting scientist at Mayo Clinic studying healthcare service. He is the founder of Texas A&M's Center for Retailing Studies and served as its director from 1982 through June 2000. He is a former national president of the American Marketing Association.

Berry has written several books, including Management Lessons from Mayo Clinic, Discovering the Soul of Service, On Great Service, Marketing Services: Competing Through Quality, and Delivering Quality Service. He is a member of the board of directors of several major public companies and national not-for-profit organizations.

Publication Date: Thursday, January 01, 2009

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