Every hospital will eventually face CEO transition; the challenge to hospitals is to be prepared to make the transition well and to implement long-term succession planning to ensure sound leadership for the future. Cook Children’s Health Care System CEO Rick Merrill shared about his own recent transition to Cook Children’s as a case study for succession planning. Two experts from Witt/Kieffer who helped with the process shared broader strategies for talent management and succession planning and offered specific advice for hospital boards, outgoing CEOs and executives interested in becoming children’s hospital CEOs to help all three parties understand what they need to keep in mind to prepare for leadership transitions.
The American College of Healthcare Executives has maintained data on hospital CEO turnover (all hospitals, not children’s hospital specific) since 1981, and for the last seven years, annual turnover has remained relatively stable at 14 – 16 percent, an average tenure of 6.7 years for hospital CEOs. In the close community of children’s hospitals, many institutions have been blessed with long-time CEOs who’ve devoted 20, 30 or even more years of their life to growing and realizing the vision of their hospital. The wisdom and leadership of these executives is cherished, but there will come a time when every hospital must transition to new leadership, and with proactive succession planning the vision and experience of the incumbents can be passed on.
Dan Fairley, executive transition and succession practice leader for Witt/Kieffer, stressed the most important competency considerations for preserving leadership continuity in hiring a new CEO. The incoming CEO must have strong communication, skills and effectiveness with stakeholders; must be effective in conflict management, persuasion and discipline; and must be an active, uplifting questioner. The questions a person chooses to ask gives you immense insight into their thinking and their character, and helps reveal whether they are likely to mesh well with the organization.
Succession planning dynamics are conducted by executives and shared with the board. It is essential to plan for job rotation, special assignments and job sharing during the transition process. In contrast, transition planning is conducted by the board with executive assistance, are requires well-crafted communications to outside stakeholders.
Marvene Eastham, senior vice president with Witt/Kieffer, was actively involved in the transition that brought Merrill to Cook Children’s, and emphasized some of the elements that made the transition run smoothly. Succession planning at organization is an opportunity for the board to tweak the hospitals direction; they must start from a well-defined organizational assessment and engage in a focused, efficient search for a new leader. Planning must address incumbent compensation and retirement issues as well as comprehensive compensation considerations for the incoming CEO.
Merrill shared the primary questions he asked himself when considering the move:
- Is this the right time to leave my current employer?
- Is the organization I am considering the right fit for me … am I the right fit for that organization?
- Is this the right move for my family?
- Am I running “from” or running “to”?
He also took into consideration the vision of Cook Children’s that was already in place, to see if it was a vision that he could buy into. He looked at the governing body of the hospital to make sure they provided effective governance; the financial consideration of the organization; the hospital’s clinical reputation; and a wide variety of other factors as part of his final decision making process.
After the decision to move is made, Merrill stressed the importance of honoring existing commitments to make a graceful, honorable exit from his former role; and working to listen and understand the new organization before making sweeping changes. He made a point of asking staff across all levels of the organization two questions:
- What is going well that I shouldn’t mess up?
- What isn’t working well that I can help fix?
Two questions all leaders – present and future – would be wise to keep in mind.
Questions for feedback:
- Does your hospital have a succession plan in place?
- Do you have a plan in place to nurture internal candidates for executive positions?
- What other transition challenges are being faced by your organization?