Freshly showered and cooling down after their squash game, Max Berndt drank iced tea with his board chairman, Paul Lefler. Max, a thoracic surgeon by training, was the CEO of Peachtree Healthcare. He’d occupied the post for nearly 12 years. In that time the company had grown—mainly by mergers—from a single teaching hospital into a regional network of 11 large and midsize institutions, supported by ancillary clinics, physician practices, trauma centers, rehabilitation facilities, and nursing homes.

A version of this article appeared in the July–August 2007 issue of Harvard Business Review.