Running head: STRATEGIC PLAN FOR THE MAYO CLINIC 1

Mayo Clinic: A Strategic Plan for the Cancer Center

Team 2: Laurence Weinreich, Alexandria Wilkinson, Tameka Wilson

A project submitted in partial fulfillment of the requirement for the degree Master of Arts

Siena Heights University

Southfield, Michigan

June 30, 2016

MAYO CLINIC 2

Mayo Clinic

History of the Mayo Clinic

The Mayo Clinic was founded in 1883 as a temporary hospital after a tornado hit

Rochester, Minnesota. Once the tornado was cleaned up, Dr. Moes asked Dr. W.W. Mayo if he

would like to open a hospital. On September 30, 1889, a hospital was opened under the name

Saint Mary’s Hospital. A group practice was formed in 1892 which consisted of Dr. Will Mayo,

Dr. Charlie Mayo, Dr. Graham, Dr. Henry Plummer, Dr. Millet, Dr. Judd, and Dr. Balfour. The

practice idea was created by Dr. Plummer, and is still in effect today (Mayo Clinic, Commitment

to the Community, para.1). The Mayo Clinic has become the largest not-for-profit hospital in

Rochester, Minnesota. This hospital system is “committed to clinical practice, education and

research, providing expert, whole-person care to everyone who needs healing” (Mayo Clinic,

About, para.1). The Mayo Clinic has been built on word-of-mouth because of its high quality of

care and patient first approach. The Mayo Clinic in Rochester, Minnesota has been ranked as one

of the top hospitals in the nation, this may be attributed to the fact that physicians are the leaders

of the hospital system.

Directional Strategies

Directional strategies, the mission, vision, values, and goals of an organization are how

an organization sets the tone for what type of organization they want to be and the direction they

want head. The mission is the purpose of the company. The vision is the future of the company.

The values are the principles that the company stands for in the eyes of its employees. And their

goals give them something to works towards. Together these form the road on which the

employees travel as the company moves along and grows. Directional strategies can also give the

employees a sense of purpose and worth, which will make them work harder for the company

(Duncan, Ginter & Swayne 2010). The Mayo Clinic is a nonprofit medical organization
MAYO CLINIC 3

committed to patient satisfaction, research, education, community, and healing. The following

highlights their mission, vision, values, and goals.

Mission

In its earliest days, one of Mayo Clinic's founders, Dr. William J. Mayo, stated, "the best

interest of the patient is the only interest to be considered…” (Mayo Clinic, The Mayo Clinic

Culture, para. 1). That primary value — the needs of the patient come first — has guided Mayo's

practice throughout its history. The Mayo Clinic, as a patient-centered entity, is committed to

providing the highest quality medical care and emulating that primary value during care and

treatment of the patient. The mission statement, “to inspire hope by contributing to health and

well-being by providing the best care to every patient through integrated clinical practice,

education, and research” (Mayo Clinic, Mission Statement, para. 1) reflects the value of the

patient.

Strategic thinking map: Mission statement. A strategic thinking map was utilized to

find key words in the current mission statement, and to determine additional words that embody

the mission statement. The new words were then used to create a new mission statement for the

organization.

Component:
Key Words Reflecting
Component
1. Target customers and clients: Every Communit Employees
“The individuals and groups we attempt to patient y
serve are…” Do not be limited to only the
obvious.

2. Principal services delivered: Health Well- Happiness

“The specific services or range of services being
we will provide to our customers are…”

3. Geographical domain of the service Minnesota United World

delivered: states
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“The geographical boundaries within

which we will deliver our services to our
customers are…”

4. Specific values: Respect Compassi Excellence

“Specific values that constitute our on
distinctiveness in the delivery of our
services to customers are…”

5. Explicit philosophy: The Their Founders:

“The explicit philosophy that makes us patient families the original
distinctive in our industry is…” Mayo
physicians
and the
Sisters of
Saint
Francis

6. Other important aspects of Teamwork Innovatio Healing the

distinctiveness: n whole
“Any other factors that makes us unique person
among competitors are…”
Source: Strategic Management of Health Care Organizations, Ginter, Swayne, and Duncan, page 186

Key words or phrases in the mission statement included: every patient, inspire, hope,

health, well-being, education, practice, and research. Other words that covey the essence of the

Mayo Clinic include: happiness, respect, compassion, excellence, teamwork, innovation, and

healing the whole person. A reworked mission statement to reflect all of these terms goes as

follows: To provide respect and compassion to every patient we treat, and their families, by using

teamwork, innovation, and by following the values set forth by our founders, the original Mayo

physicians and the Sisters of Saint Francis, in order to heal the whole patient.

Vision

The Mayo Clinic’s vision statement is “to provide an unparalleled experience as the most

trusted partner for health care” (Mayo Clinic, Vision Statement, para. 1).
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Strategic thinking map: Vision statement. A Strategic Thinking Map was utilized to

find key words in the current vision statement of the Mayo Clinic, and then was used to create a

new vision statement for the organization.

Component:
Key Words Reflecting
Component
7. Clear hope for the future: Excelling Using the Treating
“If everything went as we would like it to in newest the whole
go, what would our organization look like healthcar technolog patient,
five years from now? How would we be e y not just
different/better than today?” symptoms

8. Challenging and about excellence: Relaxing First rate Leaving a

“When stakeholders (patients, employees, environm care positive
owners) describe our organization, what ent footprint
terms would we like for them to use?”

9. Inspirational and emotional: Hope Happiness Well-being

“When we think about the kind of of the
organization we could be if we all individual
contributed our best, what terms would and our
describe our collective contributions?” employees

10.Empower employees first: Include Evaluatio Community

“How can we ensure that employees them in ns based service
understand and are committed to the decision on
vision? What needs to be done to get making mission
everyone’s buy in?” and vision
statement
s

11.Memorable and provides guidance: Inspiratio Teamwork Thoughtful

“What types of words should be included n ness
to ensure all organizational members
remember and behave in accordance with
the vision?”
Source: Strategic Management of Health Care Organizations, Ginter, Swayne, and Duncan, page 193

Key words or phrases in the current vision statement included: unparalleled experience,

trust, partner. Additional words or phrases that convey the vision for the future of the Mayo

Clinic include: excelling in healthcare, using the newest technology, treating the whole patient
MAYO CLINIC 6

(not just the symptoms), provide a relaxing environment, first rate care, leaving a positive

footprint on the community, focus on the well-being of the individual and our employees,

teamwork, thoughtfulness, and inspiration. A reworked vision statement to reflect all of these

terms is as follows: Our vision for the future is to continually strive for excellence, by utilizing

the most up-to-date medical technology, in a calm and relaxing environment to the patient. We

will use teamwork and community service to inspire hope, happiness, and the well-being of our

patients, employees, and the community.

Values

The values of the Mayo Clinic include: respect, compassion, integrity, healing, teamwork,

excellence, innovation, and stewardship. The values for the Mayo Clinic are based on its strong

desire to provide the best care possible to each and every patient that is seen. These values,

which guide Mayo Clinic's mission to this day, are an expression of the vision and intent of their

founders, the original Mayo physicians and the Sisters of Saint Francis.

 Respect; treat everyone in our diverse community, including patients, their

families and colleagues, with dignity.

 Compassion; provide the best care, treating patients and family members with

sensitivity and empathy. Integrity; to adhere to the highest standards of

professionalism, ethics and personal responsibility, worthy of the trust their

patients place in them.

 Healing; to inspire hope and nurture the well-being of the whole person,

respecting physical, emotional and spiritual needs.

 Teamwork; value the contributions of all, blending the skills of individual staff

members in unsurpassed collaboration in an environment that fosters teamwork.

 Excellence; to deliver the best possible outcomes and highest quality service

through the dedicated effort of every team member.

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 Innovation; to infuse and energize the organization, enhancing the lives of those

that they serve, through creative ideas and unique talents of each employee.
 Stewardship; to sustain and reinvest in their mission and extended communities

by wisely managing human, natural, and material resources (Mayo Clinic, Values,

n.d.).

Goals

Goals are important to an organization as they describe the organizations plans, provides

focus, motivates and inspires employees, and helps an organization evaluate its performance. The

goals of the Mayo Clinic are to understand human needs by focusing on the human experience in

order to identify these needs, design services, products, and business models. Another goal of

the Mayo Clinic is to provide innovative care that is easily accessible, affordable, and value

driven. The Mayo Clinic strives to foster open collaboration by enabling an environment of

innovation through internal and external collaboration. The last goal is to generate economic

value by demonstrating financial return from sustainable delivery models, services, and products

(Mayo Clinic, Mission, Vision, and Goals, n.d.).

External Environmental Analysis

General environmental analysis

External environment analysis includes the general environment, the industry

environment, and the service area of the organization. General environmental analysis is a way

of thinking, understanding, and planning for issues in the general environment which will effect

an organization. The general environment is constantly changing, which eventually will affect

all industries in some way, or other. Once the need for an external environmental analysis has

been established, goals must be set that identify sources to evaluate, classify the data found, and

a picture of issues that may affect the organization will begin to form (Swayne, Duncan, &
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Ginter, 2010). Categories of the general environment include (1) technological; (2)

legislative/political; (3) competitive; (4) regulatory; (5) social/demographic; and (6) economic.

A general environmental analysis of the Mayo Clinic was performed under the categories

‘social/demographic’ and ‘economic’.

Social/demographic. One aspect of the general environment under the

social/demographic category that can affect the Mayo Clinic includes the elderly and increased

lifespan of the aged. According to Chen (2014), the baby boomer generation is putting a strain

on Medicare. As more of the aging population move into retirement the numbers enrolling in

Medicare have increased significantly. In 2010, 47 million Americans enrolled in Medicare and

by 2020 that number is forecast to reach 61 million. The elderly require more frequent

healthcare visits, as well as more expensive medicines and treatments, than their younger

counterparts (Hosseini, 2015).

One question presents itself in regards to the increase in number of elderly patients that

could affect the Mayo Clinic; who is going to treat this influx of patients? Dall, et al. (2013)

estimates that the increase in numbers of the elderly demographic, in combination with increased

medical coverage under the Affordable Care Act, will lead to an increase in need of medical

providers and specialists. It’s estimated that by 2030 there will need to be a ratio of 2.3 providers

per every Medicare patient (Chen, 2014). Common health issues that afflict the elderly include

hypertension, coronary heart disease, heart failure, diabetes, Parkinson’s disease, Alzheimer’s

disease, and cancer. Primary providers aid in prevention and treatment of the elderly, but

specialists play an especially important role in diagnosing, treating, and monitoring elderly

patients with these and other afflictions. If the Mayo Clinic failed to hire and train enough

specialists to treat this population would result in long wait times for appointments, reduced
MAYO CLINIC 9

access to care, and reduced quality of life. In addition to the social/demographic effects of the

Affordable Care Act on the Mayo Clinic, the Affordable Care Act also has economic issues that

affect the Mayo Clinic.

Economic. The Affordable Care Act’s increase in Medicare and Medicaid coverage

presents an economic challenge for the Mayo Clinic; the environmental analysis leads the

question of “fiscal sustainability” (Chen, 2014, p.65). Both programs have low reimbursement

rates for hospitals, which results in healthcare organizations making shorter appointment and

treatment times, to try to make up financially for the low reimbursement rates. There is a 90-day

grace period for services rendered which leaves hospitals waiting for funds, along with fears the

patient will not pay at all (Crocker & Kahla, 2015). Based off of the findings from the general

environment analysis, the Mayo Clinic may try to save money in other ways: Wage freezes, lack

of raises, and/or reducing the workforce. It has already been discussed why a reduction in

workforce would not be a viable solution, so the focus will be on wages and income of

employees.

Hypothetically, if the Mayo Clinic tried to increase revenue by shorting their employees,

employees would lose morale, which would result in tardiness or not showing up to work at all.

The strain of being short-staffed would be on the employees that do show up, and patient care

would suffer. Eventually employees would look for work elsewhere. New hires would have to

be rushed through training and current employees would work double-duty as they train the new

hires (Crocker & Kahla, 2015). As a result of trying to save money, the Mayo Clinic would lose

money, as well as take a blow to their reputation.

Industry-Specific Environmental Analysis

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Within the healthcare industry, an environmental analysis can identify potential new

technologies or medical advances, social/demographic issues, legislative/political changes that

may affect healthcare, monitor competitors, and any changes in healthcare economy (Swayne,

Duncan, & Ginter, 2010). The focus for the industry-specific environmental analysis will be

‘competition’ and ‘technological’.

Competition. The Mayo Clinic is a leader in the healthcare industry and one of the

nation’s top ranked medical facilities. Even though they are one of the top facilities they still

face competition. Competition is anything that can take away the market share of the

organization. An area to highlight under competition is self-diagnosis.

If patients are self-diagnosing through websites such as webmd.com, they may feel that

they don’t need to see a doctor, or that they can treat themselves at home. Luger, Houston, and

Suls (2014) found that searching online to interpret symptoms and misdiagnosis is becoming

increasingly prevalent. More specifically, the elderly are at the greatest at risk for misdiagnosis

due to their complex health histories and needs. If each of these patients thought that they could

treat their conditions or illness at home, and forgo the doctor’s office, that could potentially take

away from a lot of the Mayo Clinic’s revenue. Besides self-diagnosis, another area to perform an

industry specific environmental analysis is technology.

Technology. The Mayo Clinic strives to give the best possible care and treatment to

patients, and one way they are able to deliver on this goal is to use the newest technologies and

medical advances. While smaller hospitals may not be able to afford such technologies, the

Mayo Clinic can. An industry environmental analysis of technologies can reveal multiple

advances that will benefit the Mayo Clinic, its staff, and its patients. One such technology that

the analysis could identify is the use of telemedicine and telehealth.

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Telemedicine is the use of technology to assess, diagnose, treat, consult, monitor, inform,

and educate patients remotely; telehealth applies these technologies to aid patients in taking an

active part in their health (Kvedar, Coye, & Everett, 2014). One aspect of telemedicine that the

Mayo Clinic has already used is eReferrals. An eReferral is a service model for reduced waiting

times for referrals and consultations. Since the Mayo Clinic has implemented the use of

eReferrals, they have been able to reduce the number of in-person specialty visits, be better

prepared to treat patients, and have increased primary provider satisfaction of the interactions

with specialists (Kvedar, Coye, & Everett, 2014). The Mayo Clinic has already used this aspect

of telemedicine, but an industry specific environmental analysis yields so much more potential.

Circling back to the Affordable Care Act and the problem of not enough providers,

telemedicine is a cost effective way for providers to deliver quality care to more patients.

Telemedicine comes in many forms, from live interactive videos, to the transfer of information.

Medical information is easily exchanged to multiple sites, and for a hospital with multiple

facilities across the U.S. like the Mayo Clinic, the use of telemedicine would be a valuable asset.

Telemedicine would greatly increase access to care to those living in rural areas and/or semi-

isolated regions, as well as patients who are chronically ill and bedridden. Patients can see their

doctors from the comfort of their homes.

The general and industry specific environmental analyses allow the Mayo Clinic to

systematically think, understand, and plan for potential issues with may affect the organization.

The general environmental analysis aids an organization to form a picture of the future

improvements and challenges so they are prepared to deal with them, instead of being surprised.

Within the healthcare industry, it’s important for the Mayo Clinic to identify potential new

technologies/advances, social/demographic issues, legislative/political changes, competitors, and

MAYO CLINIC 12

any changes in healthcare economy that will affect the organization so they can stay at the

forefront of patient care.

Service Area and Competitor Analysis

Service Area

The clinic’s multidisciplinary approach to care attracts more than a million patients a year

from around the world. The world traveling patients come for medical tourism which has been a

part of the local economy for years. The service area for the Mayo Clinic in Rochester,

Minnesota covers the entire state of Minnesota. A hospital with a reputation such as the Mayo

Clinic has a worldwide service area. The service area analysis will focus on the Rochester,

Minnesota area (Mayo Clinic, n.d.).

Population and demographics. The population in Rochester, Minnesota was 108,992 in

2012. This consists of 99% urban populations and 1% rural. There are 51.2% females and 48.8%

males in this demographic, the median age is a young 35.0 years. In 2012 the median household

income was $61,741 and the median house value was $160,300. Healthcare and social assistance

accounts for 27% of jobs, which is the biggest percentage of jobs in the county. The 8.9% of

residents are living in poverty. This means that close to 10% of the city will receive Medicare

and Medicaid Services at the Mayo Clinic. Following all of the Affordable Care Act rules, the

Mayo Clinic is considered a top priority and therefore receives full reimbursement from the

Medicare and Medicaid programs.

Demographics of the city of Rochester is as follows:

 79.2 % White

 6.8 % Asian

 6.2 % Black
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 5.2 % Hispanic

The top ancestries are:

 28.8 % German

 12.6 % Norwegian

 8.9 % Irish

 6.3 % English

 4.0 % Swedish

 2.5 % Sub-Saharan African

The marital status for those 15 and older are:

 52.0 % Now Married

 31.1 % Never Married

 11.3 % Divorced

 3.8 % Widowed

 1.7 % Separated

The education level for Rochester, (ages 25 and older) is:

 93.7 % High school or higher

 41.5 % Bachelor’s degree or higher

 16.1 % Graduate or professional degree (City Data, 2016).

Competitor Analysis

In the city of Rochester, Minnesota there are two hospitals which can be considered

competitors, Olmsted Medical Center, and Rochester Methodist Hospital. The world-renowned
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Mayo Clinic in Rochester contains laboratories, education areas, and research laboratories. The

hospital also operates a hospice and a sports medicine clinic.

Olmsted Medical Center. According to Medicare.gov (2016), Olmsted Medical Center

is an acute care hospital which provides emergency services. The ten question survey of patients’

experience shows that Olmsted exceeds the Minnesota and national averages in five out of ten

surveyed areas; however, it is below average in two of the ten areas surveyed. Olmsted ranked

high in the amount of patients who would recommend the hospital to others. They were weak in

having quiet rooms at night. Olmsted Medical Center did not have enough data under timely and

effective care for heart attack care. They were below average in pneumonia care, and below

average in all areas of surgical care. In emergency care Olmsted has a higher wait time, 266

minutes, then the state average of 199 minutes, but did have a lower wait time than the national

average of 274 minutes. There was not enough data to compare stroke care. Readmissions,

complications, and deaths were no different than U.S. national rate (Medicare, 2016).

Mayo Clinic Methodist Hospital. As printed on the U.S. Government’s Medicare

website (2016), the Mayo Clinic Methodist Hospital, once called the Rochester Methodist

Hospital, is an acute care hospital which provides emergency services. The survey of patient’s

experiences shows that Mayo Methodist exceeded the Minnesota and national averages in nine

of ten surveyed areas; but was below average in one of ten surveyed areas. Methodist’s, like

Olmsted, also ranked high in patient recommending the hospital to others. They ranked low in

room and bathroom cleanliness.

Under timely and effective care, Methodist Hospital did not enough data in heart attack

care, pneumonia care, emergency wait times, and timely stroke care. Methodist Hospital ranked

at or above the state average in timely surgical care. There was not enough data to compare four
MAYO CLINIC 15

of eight measures on readmissions, complications, and deaths, but for those areas they were no

different than U.S. national rate (Medicare, 2016).

Mayo Clinic. The Mayo Clinic uses a new approach, “a creative, problem-solving

approach that the center uses to revolutionize the experience and delivery of health care by going

beyond process analysis and quality improvement” (Mayo Clinic, What We Do, para 1, 2016).

This design has several areas the Mayo looks at:

 What is our product?

 Are we delivering it in a way that makes the consumer feel good about the

experience?

 Are we providing a service that won’t become obsolete?

This new way of thinking helps to push the Mayo Clinic ahead of its competitors.

Internal Environmental Analysis

Service Delivery

The Mayo Clinic in Rochester, Minnesota is a nonprofit organization committed to

clinical practice, education and research, providing expert, whole-person care to everyone who

needs healing (Mayo Clinic, n.d.). The Mayo Clinic offers an array of services from full service

healthcare options to local neighborhood, ranging from primary to highly specialized care. For

specialized care people from all over the country travel to the Mayo Clinic to receive care and

treatment.

Strengths. There are several strengths associated with the Mayo Clinic’s point of service.

To start the Mayo Clinic has an egalitarian culture, all the Mayo doctors collaborate their

knowledge and efforts, and all of the Mayo Clinic doctors, no matter the specialty, are engaged in

some form of research (Mayo Clinic, n.d.). Furthermore, after the first five years of
MAYO CLINIC 16

employment, all physicians in the same department are paid the same salary. Some of the other

strengths are Mayo Clinic’s dedication to research, innovation, and their state of the art facilities.

The Mayo Clinic has specialized in cutting edge research and technology since 1889 (Mayo

Clinic, n.d.). Research at Mayo Clinic involves thousands of medical professionals who are all

searching for answers to complex medical problems in order to improve quality of life for

millions. At the Mayo Clinic physicians and healthcare practitioners combine their skills and

experience in team fashion to help solve medical problems in a way that puts the patient first

(IDEO, 2004). The Mayo Clinic offers patient-centered care that is focused and organized around

the healthcare needs and expectations of the patient.

The Mayo Clinic has a healthy living program that is unlike any other. The state of the art

facility offers spa services, certified health coaches, state of the art gym equipment, and a vast

majority of healthy living classes and events (Mayo Clinic, n.d.). Another strength of delivery are

the innovations in education, which help inform all appropriate parties of new information with a

focus on improving clinical care. According to Olsen and Dacy (2014), Mayo Clinic has taken a

strong stance nationally that medical reimbursements should pay for value, not volume.

Assessing and improving value is taken seriously and is defined by outcomes, quality, safety, and

service divided by costs. Lastly, Mayo offers the most advanced, innovative diagnostic and

therapeutic technology and techniques.

Weaknesses. One weakness of the Mayo Clinic is that it does not participate with

Medicare Part B (Mayo Clinic, n.d.). This fact is a big deal in and of itself as Minnesota is filled

with baby boomers. The baby boomers— 1.5 million strong in Minnesota—will lead the way.

The 65 and over population is currently the fastest growing age group (Minnesota Department of
MAYO CLINIC 17

Health, n.d.). Fortunately for the Mayo Clinic, but unfortunately for the purposes of this section,

there are not many published weaknesses associated with the Mayo Clinic.

The following weaknesses will be strictly based on hypothesis. There were reviews on

various forums where patients were not satisfied with the level of service or care that they

received. Those patients seem to have had very high expectations of the Mayo Clinic and the

Clinic did not meet their expectations. This can be viewed as a weakness as the reputation of the

Mayo Clinic can precedes itself. Another weakness can be location, Minnesota may be difficult

for some people to travel to for treatment, additionally Minnesota has harsh winters and short

summers.

Point of Service
Strengths Weaknesses
Facilities Reputation
Research Programs Climate
Health Living Program Does not participate with Medicare Part B
Dedication to Patient Care None
Technology and Innovation None

The resources of the Mayo Clinic are of high value, in 1864 the Rochester Mayo Clinic

started the first and largest integrated nonprofit medical group practice in the world. Today, as a

nonprofit the Mayo Clinic owns and operates two other facilities in Florida and Arizona, along

with medical, graduate, and health science schools. However impressive, the resources of the

facility are rare. Mayo Clinic's operating income rose 55 percent from $395.4 million in fiscal

year 2012 to $612.1 million in 2013. It saw total revenue of $9.42 billion last year (Becker
MAYO CLINIC 18

Hospital Review, 2014). Given the Mayo’s Clinics long history and dedication to research and

high quality, the services provided by Mayo Clinic are not easy to imitate.

The Mayo Clinic, over the last one hundred and fifty years has proven its sustainability

by being ranked one of the top nonprofit facilities in the country several years in a row. Their

longevity and presence in Minnesota speaks to the sustainability. The Mayo Clinic is also

expanding their research facility. The expansion would add 30,000 jobs and double Rochester's

100,000 population (Davis, 2016). Collectively, the skills and knowledge possessed by

employees of the Mayo Clinic are high; the Mayo Clinic is one of the largest and best teaching

hospitals in the country. Because of the Mayo’s dedication to research, education and

innovation, as well as the large volume of patients with both rare and common diseases the

Mayo’s physicians’ diagnostic and treatment skills continuously improve. Due to the experience

with common diseases with unusual variations makes many of the employee’s skill set at the

Mayo rare.

Point of Service
Resources Competencies Capabilities
Value (High or Low) High High High
Rare (Yes or No) Yes Yes Yes
Imitability (Difficult Easy Difficult Easy

or Easy)
Sustainability (Yes or Yes No Yes

No)

Organizational Structure
MAYO CLINIC 19

The Mayo Clinic’s organizational priorities are aimed at ensuring that patient-centered

focus permeates the entire organization, in every department at every location (Mayo Clinic,

n.d.). The Board of Trustees is the governing body of Mayo Clinic. It has responsibility over all

charitable causes, clinical practices, scientific and educational aspects, and the mission and

purpose of Mayo Clinic as set forth in its Articles of Incorporation and Bylaws (Mayo Clinic,

n.d.).

The organizational structure of the Mayo Clinic is a physician led governance, promoting

a patient-centered culture. The resources related to the organizational structure and learning

environment are high. The resources of Mayo are rare because the employees use information

technology and systems engineering to learn from each other and improve care in tandem with

clinical practice (McCarthy, Mueller, & Wrenn, 2009).

Strengths. The strengths of Mayo’s organizational structure involve patient-centered

care. To drive integration, Mayo Clinic restructured reporting relationships so that all nurses—

regardless of setting—report directly up to the senior-most nurse leader (Mayo Clinic, n.d.).

Mayo’s model of integrated care is one of multidisciplinary practice with salary-based

compensation that fosters team-oriented patient care and peer accountability, a supportive

infrastructure allowing physicians and other caregivers to excel at clinical work, and a physician-

led governance structure promoting a patient-centered culture (McCarthy, Mueller, & Wrenn,

2009). Review and teamwork for high-value care providers (including nurses and other members

of care teams), both within and across settings, provide accountability where they review each

other’s work, and collaborate to deliver high-quality, high-value care (McCarthy, Mueller, &

Wrenn, 2009).
MAYO CLINIC 20

Weaknesses. The organizational structure lacks weaknesses, as the Mayo Clinic made

changes to their organizational structure in 2012. Before the reorganization a weakness was that

ambulatory nurses at Mayo Clinic reported through operational, non-nursing leaders. Still feeling

the effects today, this structure created two challenges for Mayo Clinic. First, it contributed to

nursing practice variation in the ambulatory setting. Second, inpatient and outpatient nursing

lacked clear communication channels, which could affect the level of care provided to its

ambulatory patients (Mayo Clinic, n.d.).

Organizational Structure

TYPE: Physician-Led Governance

Strengths Weaknesses
Physician Led Governance None
Patient Centered None
Integrated Care None

When evaluating the competitive relevance of the Mayo’s organizational structure, the

resources of the organizational structure are of high value and rare. The value is high because of

the physician led structure, designed with patient care in mind, and the clinics reorganization of

their structure. The structure is rare because most organizations are governed by a board of

directors. When evaluating the imitability of the structure, for a new facility it would be easy.

For an already established facility with an organizational structure in place it would be difficult.

The organizational structures sustainability is low because of the previous need of restructure.
MAYO CLINIC 21

Organizational Structure

TYPE: Physician Led Governance

Resources Competencies Capabilities
Value (High or Low) High High High
Rare (Yes or No) Yes Yes Yes
Imitability (Difficult Difficult Difficult Easy

or Easy)
Sustainability (Yes or Yes Yes Yes

No)

Strategy Formulation and Evaluation

Overview

The Mayo Clinic in Rochester, Minnesota has a renowned Cancer Center that uses multi-

specialty cancer teams and cutting-edge research. The oncologists treat virtually every type of

cancer, from the most common, to the rarest forms. The Mayo Clinic has been known for state

of the art cancer treatments and clinical trial, where the patient is cared for by a team of experts.

Currently the Mayo Clinic’s Cancer Center in Rochester has 10 major cancer research programs.

Discoveries in cancer research, therapies, and treatments include the areas of “cancer

immunology and immunotherapy, cancer prevention and control, cell biology, developmental

therapeutics, gastrointestinal cancer, gene and virus therapy, genetic epidemiology and risk

assessment, hematologic malignancies, neuro-oncology, and women's cancer” (National Cancer

Institute, 2015, para 3). Personalized care is aimed at diagnosis, pain reduction, and healing.

Medical professionals from all over are able to refer and follow patient’s progress (Mayo Clinic,

n.d.).
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The strategic plan of the Mayo Clinic’s Cancer Center will go as follows: first the

adaptive strategy will be identified, then market entry strategy will decide how the adaptive

strategy will be implemented, and lastly the competitive strategy will determine how and will

define how the market entry strategy will be carried out (Swayne, Duncan, & Ginter, 2010).

Adaptive Strategy

It has been decided that the best adaptive strategy for the Mayo Clinic is to maintain the

current scope of the Cancer Center. The decision to maintain the current scope of the Cancer

Center at the Mayo Clinic will impact the market entry strategy, and competitive strategy. After

the adaptive strategy is discussed and evaluated, the other strategies will be discussed, evaluated,

and analyzed in regards to maintenance.

The adaptive strategy, maintenance, was picked for the Cancer Center because it is

believed that past strategies have been working well and little changes are needed. The

maintenance scope of this adaptive strategy will focus on enhancement. The Cancer Center at

the Mayo Clinic is doing well in achieving and embodying its directive strategies and goals, but

there is always room for improvements. Enhancements that can be made include quality

programs, such as Continuous Quality Improvements (CQI) or Total Quality Management

(TQM). These programs are aimed at efficiency through cost reduction or improving processes

(Swayne, Duncan, & Ginter, 2010). One process that can be improved upon, due to the research

aspect of the Cancer Center, is to improve the way that clinical results are evaluated. We decided

not to expand because we felt if the Cancer Center got even bigger we wouldn’t be able to staff

the facility with enough people and still be able to provide our patients with personal care. We

chose not to contract because we want to be able to continue treating the amount of patients we

currently see, so patients from all over the world will still be able to receive first rate care. The
MAYO CLINIC 23

adaptive strategy was evaluated using the Strategic Position and Action Evaluation (SPACE), and

the TOWS (threats, opportunities, weaknesses, strengths) matrix.

Strategic Position and Action Evaluation. The Strategic Position and Action

Evaluation (SPACE), was used to evaluate the adaptive strategy maintenance, to see if

enhancement is a good fit for the Cancer Center. The following shows the results of the SPACE

matrix for the Mayo Clinic’s Cancer Center:

MAYO CLINIC 24

The Cancer Center has a Competitive profile, due to the strong service category strength,

financial and environmental stabilities. An organization with a competitive profile should use an

enhancement adaptive strategy (Swayne, Duncan, & Ginter, 2010).

TOWS. The TOWS matrix was also used to evaluate to evaluate the adaptive strategy

maintenance, to see if enhancement is a good fit for the Cancer Center. The results of the TOWS

matrix are as follows:

The TOWS matrix shows that enhancement is a good choice for the Cancer Center. Even though

the adaptive strategy maintenance through enhancement was chosen, the Cancer Center could

also use the adaptive strategy of expansion if they decided they need more room to treat higher

numbers of patients.

Market Entry Strategy

The adaptive strategy selected for the Mayo Clinic is to maintain the scope. According to

Duncan, Ginter, & Swayne (2010), often organizations pursue maintenance of scope strategies

when management believes the past strategy has been appropriate and few changes are required.
MAYO CLINIC 25

Maintenance of scope does not necessarily mean that the organization does nothing; rather,

management believes the organization is progressing appropriately. This adaptive strategy was

selected based on the limited amount of weaknesses in the areas of service delivery and

organizational structure which proves that past and current strategies have been successful.

Although maintaining the scope has been the chosen direction, enhancements will be performed

to improve upon the products and services offered by the Mayo Clinic. The following will

highlight the major enhancement selected for the Mayo Clinic based on information gathered on

the strengths and weaknesses of the Mayo Clinic.

The Mayo Clinic’s primary value is “the needs of the patient comes first (Mayo Clinic,

n.d.). The hospital is currently recognized for its education, research, innovation, and dedication

to patient care. The Mayo Clinic will focus on enhancement, which according to Duncan, Ginter,

and Swayne (2010), enhancement is when an organization is progressing towards its vision and

goals but need to do things better. Typically, enhancement is all about taking steps to improve on

aspects like quality, efficiency, and customer service.

The Mayo Clinic can enhance their service delivery by focusing on the needs of the

patient. This enhancement will place the focus on patient scheduling by reducing the length of

time one patient has to wait for an appointment, and by reducing the wait times in the patient

waiting rooms. The Mayo Clinic can achieve this by hiring more staff, cross-training employees,

and developing a new scheduling system.

In an effort to evaluate the fit of the market entry strategy maintenance of scope,

enhancing the needs of the patients, Kotter’s 8 Step Change Model was utilized. Kotter’s 8 Step

Model was chosen because it provided the steps and structure needed to lead the Mayo Clinic to

accomplish its enhancement. Furthermore, Kotter’s 8 Step has all the steps needed to address the
MAYO CLINIC 26

enhancement to patient service. According to Alexander (2001), the Burke-Litwin model is

designed to serve as a guide to plan and manage organizational changes based on the 8 steps and

could also prove to be a successful model.

The enhancement to the Mayo Clinic is supported by the earlier findings of the Mayo’s

external conditions, internal resources, competencies and capabilities, and organizational goals

that make the facility what it is today. Based off of earlier findings, there was not a need to

expand or contract; additionally, the other option for maintenance, status quo, does not seem like

a good fit for the Mayo Clinic as it is known for innovation. According to Duncan, Ginter, and

Swayne (2010), status quo is often based of the assumption that the market has matured and

periods of high growth are over. For this reason, enhancement through status quo would never be

a good fit for the Mayo Clinic.

Competitive Strategy

Strategic posture. The strategic posture of the Mayo Clinic in Rochester, Minnesota’s

renowned Cancer Center is to use the Prospector posture. The Mayo Clinic already treats every

type of cancer, at this time it was decided that would be best to concentrate on what the clinic

does best, treat patients. We have decided to pursue a prospector because we are cutting edge in

our scope strategy for the Cancer Center. This type of strategy is used when an organization uses

bold approaches and innovation; as prospectors’ major capability is finding the newest products

and opportunities (Duncan, Ginter, & Swayne 2008).

Strategic posture evaluation. The evaluation of the strategic posture includes an external

conditions evaluation, an internal conditions evaluation, and a competencies and capabilities

evaluation:
MAYO CLINIC 27

External conditions evaluation. The strategic posture of the Mayo Clinic, prospector,

works well in our present external conditions of the ever changing Affordable Care Act. The

Affordable Care Act affords the necessary political and economic change combined with low

competitive rivalry locally, which fits well with the prospector posture (Duncan, Ginter, &

Swayne, 2008).

Internal conditions evaluation. Internally, the Mayo Clinic has the ability purchase,

develop, and use new technologies. Combine that with marketing, research, and development

experience results in the Mayo Clinic to remain successful using the prospector posture.

Competencies and capabilities evaluation. The differentiation strategies work well with

the prospector posture. This strategy is known for its marketing abilities, reputation for quality,

strong research capabilities, and long tenure, all of which are needed to move the Mayo Clinic

forward posture (Duncan, Ginter, & Swayne, 2008). When looking at the organizational

capabilities, this strategy has the prestige to attract highly intelligent, skillful employees

Strategic position. The decision to follow the prospector strategy also follows with a

differentiation strategy. This is because the market is unique and we can remain cutting edge

status as a leader in cancer care. This is a high tech image which gives us growth opportunities as

we have had in the past (Duncan, Ginter, & Swayne, 2008). According to Duncan, Ginter, and

Swayne (2008) a differentiation strategy is used to make the product or service different or better

from competitors’ products or services, or at least appear so to the consumer. Differentiation was

picked for the Cancer Center at the Mayo Clinic because they are considered unique by

consumer, which can be used as an advantage over the market. The Mayo Clinic already has a

high level of service and a reputation which makes it unique to the consumer with brand loyalty.

Summary and Conclusion

MAYO CLINIC 28

The Mayo Clinic in Rochester, Minnesota is a world renown healthcare facility. From it’s

very first days the primary value of the organization has been focused on patient-centered care,

innovation, research, and education. The directional strategies of the Mayo Clinic set the tone

for the organization. In order to ensure continued success a strategic plan of the Mayo Clinic’s

Cancer Center. An external environmental analysis, service area competitor analysis, and

internal environmental analysis was done in order to outline and understand any potential issues

that may affect the Mayo Clinic, as well as plan for the future.

The analyses lead to the adaptive strategy maintenance of scope through the process of

enhancement for the Cancer Center at the Mayo Clinic. A SPACE and TOWS evaluation were

performed to see if this strategy was a good fit for the Cancer Center. The SPACE evaluation

places the Cancer Center in a competitive profile, which rightfully fits with enhancement. The

TOWS evaluation further concurred maintenance of scope through enhancement.

A market-entry strategy was decided to enhance service delivery of the Mayo Clinic by

focusing on the needs of the patient. To evaluate the fit of the market-entry strategy Kotter’s 8

Step Change Model was used. The findings conclude that enhancement to the Mayo Clinic is

supported by the Mayo’s external conditions, internal resources, competencies and capabilities,

and organizational goals.

The competitive strategies of the Mayo Clinic align with maintenance of scope. The

strategic posture picked is the prospector posture, and the strategic position is differentiation. A

Strategic Posture Evaluation was completed. The External Conditions Evaluation, Internal

Conditions Evaluation, and Competencies and Capabilities Evaluation all found that the posture

of prospector works well in the present external conditions of the Mayo Clinic.
MAYO CLINIC 29

The Mayo Clinic should continually monitor and update all of the aforementioned

analyses in order to aid in giving the organization direction in choosing a strategy. Periodically

the chosen strategy should be reevaluated and updated as needed. If the Mayo Clinic continues

to follow the above mentioned methodology, they will continue to thrive, and patients of all

kinds can continue seeking quality care at the facility.

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