Environmental harshness was measured for all academic medical centers (AMCs), and an expert panel judged six as dealing particularly successfully with the harsh environments. Structured interviews at these centers yielded information on their operations and characteristics. The lessons synthesized pertain to (1) entrepreneurship, (2) governance, (3) management of faculty-generated revenue, (4) tenure, (5) strategic use of resources, (6) the patient base, and (7) cost containment. Their common theme is that AMCs increasingly require effective coordinated action to cope effectively with current environmental challenges, whereas in the 1970s and early 1980s independent action by subunits was often well rewarded. The problem is to integrate decisionmaking and coordination without stifling the initiative, creativity, and responsibility of individuals, departments, and teaching hospitals, which are crucial to the education, research, and patient care functions of academic medicine.