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By Monica E. Oss

The always tricky topic of replacing key executives was the focus of the session, Succession Planning: The Key To Long-Term Leadership Success, at last month’s 2015 OPEN MINDS Executive Leadership Retreat. Stuart I. Meyers, Ed.D., President of The Meyers Group, discussed the art and the science of replacing key executives – and facilitated a fascinating set of case studies that illustrated how three different organizations managed a succession planning process, each with positive results.

Stuart I. Meyers, Ed.D., President of The Meyers Group

The traditional CEO succession planning when the outgoing CEO identifies his/her successor in advance – Peggy Chase, President and CEO of TERROS explained how she was supported to become the CEO while serving as the TERROS CFO at this Phoenix-based behavioral health organization. She had previously served as a financial consultant to the then-CEO, who recruited her to join the organization full time with a plan to move her to the “top spot” in a few years. Even with this well-developed plan, the TERROS Board felt it was their fiduciary responsibility to formally evaluate Ms. Chase prior to making the appointment, so they asked Dr. Meyers to take her through the same vetting process any external candidate would experience. The process was successful, and Ms. Chase has served successfully as the CEO for three years.

CEO succession by promoting from within – Robert D. Cartia, former Chief Executive Officer, Spectrum Healthcare and April Razo, Chief Executive Officer, Spectrum Healthcare, presented the Spectrum experience in CEO succession. Once Mr. Cartia announced his intention to retire from the Arizona-based organization, the Board engaged Dr. Meyers to conduct a national search for his successor. However, Mr. Cartia recognized the great potential Ms. Razo had shown as a program manager in the organization and he became aware of her ambition, to become a CEO at some point in her career. With Board consent, Ms. Razo was vetted in much the same way as Ms. Chase, and in what Ms. Razo described as a “grueling” vetting process…and she was eventually selected as the new CEO. Critical to the success of this approach was the development of a year-long intensive development plan to prepare Ms. Razo for her future role. One takeaway from this session for managers is the importance of thinking about your own career path and, if it includes a desire to be the CEO, making sure that your intentions are known and that your performance is exemplary. A second takeaway is a reminder for CEOs to be deliberate in their assessment of the talent within their organizations so that talented individuals can be identified and be supported in their own professional development.

Proactive recruiting from outside the organization – John M. Sheehan, Chief Executive Officer of Harbor Behavioral Health, described his path to that position. He was recruited through a national search in response to the resignation of then-CEO Dale Shreve (now the CEO of MHCA). Harbor, an Ohio-based non-profit behavioral health organization, used The Meyers Group to identify external candidates to present to the Board, which subsequently led to the appointment of Mr. Sheehan.

In addition to the case studies about these three very different CEO succession situations, Mr. Sheehan continued the discussion about succession planning with a discussion of moving to “proactive” development of new leadership in the organization, referred to by the Center of Creative Learning as the “maturity model.”  He said, “Great organizations ‘grow their own’ future leadership to reflect the culture and critical qualities they have defined for success. This process prepares future leaders for their next position by focusing on improved attributes, competencies and goals – beneficial to overall performance.” To illustrate the concept of internal leadership development, he presented the ProMedica leadership development program that develops leaders through a variety of learning experiences and activities, to move them through a “pipeline” that will find the best place for their leadership “type.”

promedica-leadership2

Whether you are a small organization that has a more informal training program for leadership development – or a larger organization with an official development process in place, your organization’s future depends on having a plan to replace key executives when needed. For more on how to build a succession plan for your organization, check out these resources from the OPEN MINDS Industry Library:

  1. Succession Planning – The Reality
  2. Succession Planning: The Key To Long-Term Leadership Success
  3. Planning To Retire? Take Some Advice From Four CEOs Who’ve Been There
  4. The Flight Of The CEO
  5. Succession Planning Process For Building A Leadership Pipeline
  6. Why It’s So Hard To Fill Those Executive Positions At Behavioral Health & Social Services Provider Organizations
  7. Hiring A New Exec? Promote From Within Or Go Outside?

For many organizations, implementing a comprehensive succession plan will be a challenge – but with the high number of retirements, mergers, and acquisitions in the industry, it isn’t a challenge that can be avoided. Succession planning needs to be part of a new strategic vision that manages performance and recruiting, retaining, and developing human assets. Dr. Meyers’ session drove home how imperative it is for Boards and CEOs to embrace their fiduciary responsibility to prepare their organizations for the future by insuring that leadership transitions at every level are managed smoothly and that staff throughout an organization have the opportunity to grow and develop. Dr. Meyers noted, “This requires a commitment of time and resources, but it almost always results in the retention of excellent staff that are grateful for the investment made in their professional careers.”

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