Monday, April 4, 2011

Blog 3 - Capabilities and Mayo Clinic

I found the article “Capitalizing on Capabilities” very interesting because it provides a tool to objectively measure intangible assets within organizations. This tool is particularly applicable to hospitals where intangible assets – talent, shared mind-set, learning, customer-connectivity, etc. – have huge impacts on organizational performance.

Mayo Clinic, one of the most prestigious clinics in the world, illustrates this point. Just looking at tangible assets does not fully reveal how influential this clinic is among healthcare providers. There are several health systems that have more facilities and better financial performance than Mayo Clinic. Rather, its world renowned reputation is based on its intangible assets – skilled physicians, values, and strong customer/patient base. Among the intangible assets Mayo Clinic has developed over the years, Mayo Clinic’s shared values seem to be a great asset because the rest of capabilities stem from the values. For example, the vision of “The needs of the patient always come first1” well shared among the organization, which helps the Clinic to hire and retain highly motivated physicians although the Clinic pays a fix salary and does not give any financial incentives to physicians. It is also clear from the fact that Mayo Clinic has been on Fortune magazine's “100 Best Companies to Work For” in America list for eight years in a row.2 Talents acquired through the shared mind-set result in high quality of care, helping the organization to develop customer connectivity. As mentioned in the article, it is obvious that these capabilities are interdependent.

Although Mayo Clinic’s capabilities seem to start from its value as an intangible asset, building some capabilities may require tangible assets. Let’s say a hospital plans to develop capabilities of speed and collaboration, and it requires electronic medical records. However, the hospital may not have sufficient financial resources to purchase the cutting edge technology. So, my question is “How are tangible and intangible assets related? Is an organization with ample tangible resources in a better position when developing intangible assets?”


1: Mayo Clinic,

2: Wikipedia “Mayo Clinic”

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