MGT 576 Wk 3 – Practice: Formative Assessment

Mayo Clinic’s Transformation and Adaptation

This short case details Mayo Clinic’s assessment of its external environment.

Read the case below and answer the questions that follow.

Very often when organizations project environmental trends into the future they see a bleak picture. Such “gloom and doom” scenarios, however, might actually be the result of a tendency to be selective about what we see or, even more often, our inability to see possible opportunities in what might seem like unrelated or peripheral developments.

Take the case of Mayo Clinic, the internationally known not-for-profit hospital based in Rochester, Minnesota. Back in the 1980s, when they undertook an analysis of the future, what they saw was a depressing picture with an aging population, decreasing Medicare and Medicaid reimbursements, and ever-increasing losses in their emergency room operations. Thus, both the economic and demographic trends looked bleak. However, Dan Burris, a consultant, discovered a number of significant hard trends occurring that many hospitals typically did not consider when making future plans. These technological trends included:

– Continuing declines in the prices of PCs

– Increasing speed and computing power of PCs

– Huge increases in the capacity to store, distribute, and search for information

– Increasing presence of PCs in virtually every home in the U.S. and outside

Being a leading research hospital, the Mayo Clinic had developed over the years an enormous amount of knowledge about how to diagnose, manage, and cure a variety of diseases and health conditions. Although this knowledge was developed primarily to treat patients, Dan Burris saw a huge opportunity for the Mayo Clinic to derive revenue from this knowledge by selling this information to a public that is hungry for reliable medical information written in an accessible fashion. The result was a CD that it sold to customers for $100. With this CD, the users could access information that would help them to determine, for example, whether their child’s rash or fever was something they could treat with an ibuprofen or something that needed an immediate trip to the emergency room. In the first year, 670,000 CDs were sold!

In addition to the extra revenue that the CD generated, Mayo’s entry into the knowledge market had many unanticipated positive benefits. For example, the popularity of the CDs established the Mayo brand as a leader in healthcare, a name millions around the world would instantly recognize. Second, it helped Mayo transform itself from just another organization that delivers on-site healthcare to a one-of-a-kind organization that delivers health-related knowledge and expertise all around the world.

Today, when one visits MayoClinic.com, they see their slogan “Tools for healthier lives,” which it claims draws on the expertise of more than 3,300 physicians, scientists, and researchers. The website lets one search for information on a wide variety of topics, including diseases and conditions, symptoms, drugs and supplements, and first aid. It also includes new and updated information on such topics as 2012 trends for cancer survivors, options for dealing with adversity, and how to spot and take action when experiencing job burnout.

When Mayo Clinic conducted its analysis during the 1980s, what two segments of the general environment did it initially focus on?