H ESSELBEIN & C OMPAN Y

Enduring
Leadership:
Lessons from
the Mayo
Clinic
by K en t D. S e l tm an a n d L e o n a r d L . B e r ry

I
n a recent Berkshire Hathaway shareholder letter, Warren Buffett wrote, “If a business
requires a superstar to produce great results, the business itself cannot be deemed great.
A medical partnership led by your area’s premier brain surgeon may enjoy outsized
and growing earnings, but that tells little about its future. The partnership’s moat will
go when the surgeon goes. You can count, though, on the moat of the Mayo Clinic to
endure, even though you can’t name its CEO.” Indeed, for more than a century Mayo
Clinic has operated continuously at the premier level of health care providers through the
terms of 11 CEOs, all physicians and all coming to leadership through a distinguished
clinical career at the clinic. At Mayo Clinic, both physician and administrative leaders are,
with rare exceptions, cultivated from within.
As we describe in detail in our book Management Lessons from Mayo Clinic, Mayo’s found-
ers, Drs. William J. and Charles H. Mayo, got so much so right a century ago that the task
of leaders who came later has primarily been to preserve the institution’s core values and
strategies for health care delivery while adapting to the ever-changing science and business
of medicine. One of the things the Mayo brothers got right is the practice of developing
new leaders from those who are steeped in the culture and have a deep appreciation for
the “Mayo way.”

Giving Away the Family Business

The Mayo Clinic story could easily have been very different. Mayo Clinic was initially
a family-owned medical practice that might well have withered away when the super-

8 leader to leader
star Mayo brothers died. However, before that could
happen, the brothers donated most of their personal
wealth to create the nonprofit corporation that oper-
ates as Mayo Clinic today. Their gift in 1919—worth The brothers realized at
more than $50 million in today’s dollars—included
all the buildings and equipment, along with the secu-
rities and accounts receivable. The brothers realized the height of their careers
at the height of their careers that Mayo Clinic was
more than just their own achievement and deserved
to outlive them. Their act of generosity flowed from
that Mayo Clinic was
their values. Dr. William J. Mayo explained in an
interview (published in the February 13, 1931, issue more than just their own
of the Free Methodist):
By 1894 my brother and I had paid for our
homes. Our clinic was on its feet. Patients kept
achievement and deserved
coming. Our theories seemed to be working out.
The mortality rate among our cases was satisfy-
ingly low. Money began to pile up. To us it
to outlive them.
seemed to be more money than any two men had
any right to have.
We talked it over a lot, that year of 1894. Then
we came to a decision. That year we put aside half leadership development at Mayo Clinic, and gener-
of our income. We couldn’t touch a cent of that osity is still today the fundamental quality for lead-
half for ourselves. I know it may sound mawkish, ers who are selected to be captains of a team rather
it may sound like egotism and arrogance, when than anointed as superstars.
it was none of those things—but that money
seemed, somehow, like holy money to us. Learning to Lead in Pairs
From 1894 onward we have never used more than
Mayo Clinic is a doctors’ organization. Physician-led,
half of our incomes on ourselves and our families.
it provides a place where doctors can practice their pro-
. . . My brother and I have both put ourselves on
fession in an environment that is as close to the ideal as
salaries now. The salaries are far less than half our
they can make it. This means, however, that the doc-
incomes. We live within them.
tors need professional administrators who are as bright
That holy money, as we call it, had to go back into and well-trained as they are to ensure that administra-
the service of the humanity that had paid it to us. tive operations achieve a level of excellence comparable
to the clinical excellence that they pursue.
During the early 1920s, the brothers created a par-
ticipatory system of corporate governance—a board This model, like so much else at Mayo Clinic, was
of governors—that moved the organization away forged during the tenure of the Mayo brothers. In 1908
from their control. After they stepped away from they hired Harry Harwick, a 21-year-old bank clerk,
the administrative affairs of the clinic in 1932, the to oversee business operations. He worked closely with
transition to the next generation of leaders was the brothers to develop a leadership model in which the
seamless—as has been the case with each succeeding doctors were clearly the CEOs but where the admin-
CEO. Service to humanity is the guiding beacon of istrators were indispensable collaborators in everything

spring 2009 9
nonclinical, from strategy to daily operations. Harwick
participated as a peer with the brothers as they planned
a long-term future for Mayo Clinic. Harwick remained
in place as the chief administrative officer of Mayo Both physician and
Clinic until he retired in 1952. The transition to new
CEOs has been seamless in part because only half of
the leadership team changes at a time. administrative leaders at
Today, hundreds of physician/administrator teams
oversee virtually every aspect of campus operations Mayo Clinic must be team
including operating the hospitals and outpatient clin-
ics, clinical departments, new building design and
construction, marketing, supply chain management, players.
research operations, education administration, travel
policy, and more.
In clinical operations the pattern is the same. So, for
instance, the chair of cardiology, a cardiologist, is Learning Leadership by Participation
paired with an administrator. The chair is respon-
Mayo Clinic’s Board of Governors, composed of a
sible for the vision and strategic direction of the
dozen members—ten physicians and two administra-
practice as well as the clinical practice for outpatient
tors—is the prototype for dozens of other committees
and inpatient cardiology services. The chair is also
that set policy and oversee almost every facet of the
responsible for the individual cardiologists—hir-
organization. It is rare that major decisions at Mayo are
ing, career development, practice and research, and
made without counsel from colleagues. Like democ-
performance reviews. The administrator is respon-
racy, committees are a messy way to govern and man-
sible for the day-to-day operation of the cardiol-
age, but two benefits emerge. First, implementation
ogy practice. Supervisors in desk operations and in
can proceed rapidly once a decision is made because an
cardiology’s diagnostic laboratories report to the
organizational consensus has been achieved. Second,
administrator. Together, however, the physician and
participants in committees develop business and man-
administrative leaders formulate the strategic and
agement knowledge and skills, and this is particularly
operational plans for the service.
valuable in cultivating physician leaders.
Teaming physician leaders with administrative leaders
The first task for young physicians at Mayo Clinic is to
brings both clinical acumen and business and man-
establish their reputation as superb physicians; clinical
agement acumen to the leadership table. However,
excellence is the currency of respect at Mayo Clinic. In
the physician perspective wins out when there is a tie
addition, most will seek to earn distinction as educators
vote—Mayo Clinic exists to deliver health care services,
or researchers. Young physicians with leadership po-
not accumulate wealth.
tential typically will also begin serving on committees
Both physician and administrative leaders at Mayo within their home department or division—a clinical
Clinic must be team players. Respectful, trust-based, practice, research, or education committee. Those who
peer-to-peer collaboration is required among all leaders perform well are often recommended for other com-
in the organization. Those leaders of generous spirit— mittee memberships. Senior leaders of the organization
those who can share in leadership, share with the team monitor and discretely manage the committee work
both the credit and the blame—have the bedrock value of promising young prospects who show aptitude and
on which a successful leadership career can be built at interest in leadership positions. One physician who
Mayo. went on to become a campus CEO served on 20 cam-

10 leader to leader
puswide committees in the span of a few years as he was
being groomed for a major leadership position.
Members who do not take their committee work seri-
ously find their career path in leadership is very short.
The same is true for a committee chair who speaks too
much or does not entertain all points of view. Commit-
tee chairs are almost always physicians, and committee
secretaries are apt to be the administrators responsible
for the departments most affected by the committee.
Chairs who do not work well with their committee sec-
retaries or vice versa are unlikely to advance as leaders.
This process of mentoring and managing for leadership
creates a talent pool of administrators and physicians
who are experienced and proven leaders. For most major
appointments, several solid candidates can be presented
to selection committees. Campus CEOs are most often
selected from current membership of an executive board,
as are new members of the board of governors. Skills
have been assessed, but even more important the charac-
ter and values of the candidates are revealed by the long
process of leadership development.
Key Lessons
Promote from within to sustain a winning organization.
Mayo Clinic’s sustained performance has been fueled
in part by sticking with a leadership strategy that works.
By deliberately cultivating future leaders over a period of
years, the organization is rarely surprised by a new leader’s
performance. This is practiced not just at the highest levels
of leadership but deep into the organization to the level of
supervisors. Promoting from within is not a rigid rule but
rather a strong cultural bias. In some instances, external
candidates are hired after internal candidates decline offers
from a search committee. Occasionally the organization
looks externally to find a leader who will stimulate needed
change in a specific work group that is not functioning to
Mayo’s standard. In some high-level technical and busi-
ness functions, an external candidate is needed to bring
in new expertise. Still, Mayo Clinic has sustained a long
run of success by finding within the organization not only
the people with the technical skills for leadership but also
those whose values, work ethic, and commitment to Mayo
Clinic, both its culture and its patients, are strong.
Character and values are
revealed by the long process
of leadership development.
Appreciate the power of generosity. An important com-
ponent of Mayo Clinic’s legacy reads like a moral tale:
Once upon a time two extremely powerful men who had
earned fabulous wealth gave away both their power and
their money so the citizens of the little town they owned
could live happily ever after while doing good for others.
The End.
Of course, the reality is not as simple as the tale, but the
generous Mayo legacy remains alive a century later in
an organization with 43,000 employees who are often
referred to and treated as “family.” Mayo Clinic is not
a comfortable place for those leaders who are egocen-
tric, proud, or selfish. The Mayo brothers built Mayo
Clinic with firm but benevolent power and control.
Then they first gave away most of their wealth in 1919
and over the decade of the 1920s they surrendered their
power to their successors. The moves were as deliberate
and measured as the medical skills they had developed
decades earlier.
Make teamwork a reality. There is a natural progression
in the Mayo brothers’ decision to move from gover-
nance vested in two—“my brother and I”—to gov-
ernance vested in a team. The value of teamwork in
clinical medicine that they committed to early in their
careers was expanded to include teamwork in adminis-
trative management and governance in the end. Unlike
individual leaders, teams never need die. New members
of the Board of Governors come and go but never all
at the same time. Those leading Mayo Clinic today are
linked to the legacy of the founders. The chain has not
been broken.
spring 2009 11
Kent D. Seltman and Leonard L. Berry are co-
authors of “Management Lessons from Mayo
Clinic.” Seltman served as director of marketing
at Mayo Clinic from 1992 through 2006 and has
more than 25 years of experience in health care
marketing. He writes and lectures frequently on
marketing and branding, and has served as editor
of Marketing Health Services, published by the
American Marketing Association.
12 leader to leader
Leonard L. Berry 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. In
2001–2002 he served as a visiting scientist at
Mayo Clinic, studying health care service. He is
the founder of Texas A&M’s Center for Retail-
ing Studies and served as its director from 1982
through June 2000. He is a former national presi-
dent of the American Marketing Association.