Either event would have crushed many men and many organizations. But the Cleveland Clinic’s founders, George Crile and Ed Lower, ages 66 and 63 respectively at the time, rebuilt their gutted clinic building and began construction of a new three-story one, placing it on a foundation designed to support nine more stories. To finance the clinic’s future, Crile and Lower put up the value of all they had left — their personal life insurance policies. Then they, and every employee of the clinic, took a 35 percent salary cut. It was an optimism reminiscent of Ferdinand Foch who, at the pivotal Battle of the Marne in World War I said, “Hard pressed on my right. My center is yielding. Impossible to maneuver. Situation excellent. I am attacking.”
But just as important as the founders’ optimism was the ability of the clinic’s future leaders to keep their legacy of optimism alive. With the leadership of the late Floyd (Fred) Loop and then that of Delos (Toby) Cosgrove, both cardiothoracic surgeons with international reputations, the clinic transformed its neighborhood and catalyzed an economic turnaround for northern Ohio. Both Loop and Cosgrove drew insight from diverse experiences. Loop had been shaped by visiting farms in rural Indiana with his father, a country doctor who made house calls. He grew orchids and insights in a carefully balanced greenhouse environment.
Some things can be fit to their environments while some things have to be protected. The clinic’s long tradition of irrepressible optimism, like orchids, fits into the second category. It was an ever-optimistic Loop, more than any other leader, who helped lift Cuyahoga County out of its downward spiral. He recruited world-class physicians. He grew the clinic’s workforce. He added seven hospitals to the clinic’s health system. He ringed Cleveland with ambulatory care centers. He lured Intercontinental Hotels to build a hotel on the clinic’s campus. He launched aggressive marketing efforts.
Early in his career, Cosgrove raced on one of New England’s iconic America’s Cup sailboats. On the water, he got priceless insights on strategy and teamwork. As a flight surgeon in Vietnam, he gained deeper perspectives on uncertainty and resistance. He and another doctor evacuated 22,000 sick and injured. He flew combat missions on his days off and was awarded a Bronze Star. When he got to the Cleveland Clinic, he spent a lot of time in the operating room as well as in his garage. Cosgrove became a prolific inventor of medical devices and has helped to establish national recognition for Cleveland as a leader in medical innovation. He is also dyslexic. And like many dyslexics, he deals with the impairment by making sense of words based on their context.
What Cosgrove has and every CEO needs is a practiced ability to squint at a complex situation and see its big patterns, structure and dynamics. Such strategic squinting blurs out extraneous details and keeps attention focused on what’s most important to the organization’s future. Dyslexia builds a uniquely powerful kind of strategic muscle. Cosgrove has made the Cleveland Clinic one of the few health systems that can consistently demonstrate its value with outcomes data. He has used the clinic’s integrated practice model to do something few health systems can do — offer next-day appointments.
By the time Tom Zenty was named CEO of Cleveland Clinic’s troubled competitor, University Hospitals, the clinic had carved out what appeared to many to be an unassailable position. When he was 14, Zenty had started driving a tractor on a dairy farm. A dairy farm is very much a purpose-driven enterprise. Everything is shaped for milk production. Work days start early and end late. Dairy barns are large to accommodate milking and protect the cows against weather. Dairy cows are bred not only for volume but also for content. A single-season fall in milk prices can wipe out scores of dairy farms. A Midwestern small dairy farmer who can’t keep his children on the farm faces a serious labor and cost problem, particularly when confronted by competition from factorylike production facilities.
As Zenty describes it, “You milked the cows twice a day whether you wanted to or not. But you learn a lot when you work in an environment like that. You learn about responsibility, you learn about commitment, you learn to be self‑sufficient. You learn that you have to work your way out of problems because there aren’t many people around to ask for help. And you learn that you have to be very thoughtful about everything that you do in an environment like that because it is hazardous — it’s hard work. You also learn to figure out how to fix things, do things that you might not otherwise do. There was always something breaking on the farm, whether it was a bailing machine, conveyor belts, milking machines, whatever it was. It was a good education.”
Zenty continued his education. By the time he arrived in Cleveland, he was carrying well-worn copies of Sun Tzu’s The Art of War and Machiavelli’s The Prince. He soon demonstrated his own brand of optimism by launching a strategic planning process that included $750 million in strategic investment. As part of that investment, University Hospitals built a new hospital right in the middle of the clinic’s most lucrative market. And at last, Cleveland Clinic had a competitor with enough strategic muscle to present a serious challenge. As University Hospitals drove new facilities into the region, its strategy of making the community an active stakeholder emerged and became foundational.
I consulted for Cleveland Clinic when Loop was its CEO, and I remember talking to him as the board was beginning the selection process that would name Cosgrove as his successor. He slid a piece of paper across the desk with a list of characteristics he considered essential in a superior candidate. It provides a useful checklist for assessing the tone of strategic muscle:
· the ability to take charge, execute, motivate and hold everyone, including the candidate, accountable;
· the ability to articulate and implement a clear vision — a leading-edge thinker who provides ideas and serves as a catalyst;
· the capacity to absorb and integrate information from many sources;
· evidence of intellectual depth, intuition and decisiveness;
· confidence as a chief strategist who enjoys developing plans, methods and resources for achieving goals and objectives;
· fundamental knowledge of business principles;
· willingness to challenge the status quo;
· courage to take measured risks (not just solve problems), and look for potential and implement it;
· devotion to academic superiority and the need for clinical excellence;
· the ability to write, speak and communicate;
· constancy of purpose and great persistence;
· a habit of reading two hours each day.
In addition, Loop later wrote of things to be wary of in a CEO: “The warning signs of a flawed chief executive have to be recognized before disaster hits. This is one of the jobs of governance, including trusteeship. Look for these signals: an overt zeal for prestige, power and wealth; shameless self‑promotion; a proclivity for developing grandiose strategies with little thought toward implementation; lack of consensus-building; impulsive style; a penchant for inconsiderate acts; poor listening skills; contempt for the ideas of others; energy without objective; a career marked by numerous misunderstandings; and chronic rationalization of misdeeds. Of all these signs, the most important, in my estimation, would be the lack of strategic thinking and inability to execute.”
In my experience, CEO searches too seldom identify candidates with well-developed strategic muscle. If an organization has a strong chief operating officer, the last thing it usually needs is another operating executive. And it doesn’t need a different angle on a chief medical officer or a chief financial officer. It needs something beyond all of that. A CEO’s primary role is to orchestrate diverse capabilities, talent and perspectives toward sustained relevance in a changing and uncertain environment — an environment which, when pushed, is likely to push back.
Dan Beckham is the president of The Beckham Co., a strategic consulting firm based in Bluffton, S.C. He is also a regular contributor to H&HN Daily.