If you haven’t thought about your own succession plan (or the succession plans for some of your long-standing executive team members), consider some statistics brought to my attention earlier this week at The 2019 OPEN MINDS Executive Leadership Retreat.
- A total of 1,452 health care CEOs left their posts in 2018, marking the highest number of departures since 2008
- Hospital CEO turnover rate is 18% percent, according to a 2019 report by the American College of Healthcare Executives
- Nearly 50% of executive leadership at non-profit human service provider organizations are 55 years or older
- And according to our recently released Trends In Specialty Health & Human Services Executive Compensation & Retention: The OPEN MINDS 2019 Survey Executive Summary, 31% of behavioral health executives are considering leaving their post this year, along with 23% of child and family service executives, 28% of LTSS and I/DD executives, and 22% of primary care executives.
These statistics illustrate why succession planning—and ensuring that the institutional knowledge of your team doesn’t simply walk out the door with your departing executives—is a key strategic issue. How to ensure that knowledge is transferred to a new crop of leadership talent was the focus of the session, Succession Planning: Positioning Your Leadership Team For Future Success. In the session, Robert Kreider, J.D., President Emeritus and Carl E. Clark, II, President & Chief Executive Officer, Devereux Advanced Behavioral Health, provided a first-hand look at succession planning. Both agreed that succession planning is a linear and extremely complicated process for recruiting a new executive that is likely to produce a lot of stress and tension in both an organization and its board of directors.
The reality of the succession planning process isn’t as straight forward as you might think. And, the executives that “think” they know how to conduct a search are often missing some key information. As the saying goes, “we don’t know what we don’t know.” Mr. Kreider shared three things he “wished they’d told him” when he started the process to hire Mr. Clark.
The search committee might not be overly interested in your opinion—Mr. Kreider was not a member of the search committee, nor did he have a role in the board deliberations, serving only as a consultant to the process. If he have understood this clearly up front, he would have urged the board to use a recently retired senior executive (one who knew the organization and tactical goals) to be a member of the search committee, and to bring that perspective to the process. The point—the board members, even for a board as strong as Devereux’s, are volunteers and do not have the same depth of understanding of the culture of the organization.
There will be team tension, possibly more than you’ve ever seen—Any search for a new executive leader will often include great internal candidates, as well as great external candidates, some of whom may be convinced the job “should” be theirs. This scenario is very tense, very difficult, and as Mr. Kreider noted, may produce the most team conflict many executives have ever experienced. As the outgoing executive, you will be in a situation where you “half know” many things, but maybe not be at liberty to share with the team. The solution—do your planning as well as you can and stick to that schedule as best as you can.
The incoming executive will always have a different skillset than the outgoing executive— Mr. Kreider noted that, in his experience, the board was very pleasant about explaining they weren’t looking for “another him.” And this is good. His background is primarily finance, and strategy has been important for the organization, but, going forward, the ability to drive an organization to “the next level” (think advances in operations, clinical, human resources, market collaborations, etc.). The trick—spend enough time thinking about a way to transition the previous excellence and knowledge to someone with a very different skillset.
This issue of succession planning is an increasingly important one for the future of executives, executive teams, board members, and the future strategic health of an organization. Many executive team, however, simply aren’t prepared for the challenges of transitioning to a new executive, with new skills, and a new vision—and doing it all while faced with the challenges of a competitive, value-based health and human service field. The need for understanding the process—and keep one eye on what you know, and another looking for what you don’t know—will be key for search committees and executives everywhere.
For more on succession planning, here is a look at a few great resources in The OPEN MINDS Industry Library:
- Succession Planning: The Key To Long-Term Leadership Success
- Planning To Retire? Take Some Advice From Four CEOs Who’ve Been There
- The Flight Of The CEO
- Succession Planning Process For Building A Leadership Pipeline
- When The Competition Succeeds At Pay-For-Performance, What Will You Do?
- What’s Your Leadership Strategy?
- Keeping Pace In The Race To Change: Workforce Development In The New Health & Human Services Landscape
- Succession Planning – The Reality
- Mergers As A Succession Planning Strategy
- The Art & Science Of Replacing Key Executives
For more on how to successfully lead your organization, stay tuned over the next few days as we discuss leadership in the context of value-based reimbursement, changing regulations, and organizational challenges. You can follow us on twitter @openmindscircle #OMLeadership.