CEO succession planning: Recruiting hospital leaders for the future

Every day, FierceHealthcare could fill its daily newsletter with announcements about CEO resignations and retirements. Just this week, I've read reports that Basil Ariglio has stepped down as president and CEO of Rome Memorial Hospital in New York due to personal reasons; Stephen Pitts will leave the struggling Morehouse General Hospital in Bastrop, Louisiana; and Jim Horton, administrator and CEO of Pecos County Memorial Hospital in Fort Stockton, Texas, has resigned effective Sept.15.

Last year, CEO turnover was 18 percent, one of the highest rates in 15 years, according to the American College of Healthcare Executives. And that high turnover rate likely will continue as hospitals consolidate and merge, leaving the position of CEO in particular risk. But even if one CEO is let go after two hospitals merge, the newly formed organization must look ahead and its board members must consider what skills they want their future senior leaders to possess.

As a result of this revolving door of healthcare CEOs, there has been a fundamental shift in executive recruitment strategies at hospitals and health networks. To learn more about how organizations--and their current CEOs--now recruit their future executives, I spoke to Chris Corwin, a consultant at the executive search firm Witt/Kieffer.

"In today's environment, what I notice most is that executives are recruiting a legacy team," she told me during an exclusive interview. "It's not about them. It's what they are leaving behind and the people they are leaving behind."

This means that as executives move into new organizations, they must realize that their CEO and their hiring manager might not be there very long. The new leaders must "buy in" to the notion of the organization, its values and mission--its promise for the future--and not join the team because of the existing CEO or management.

"The new leaders coming in must be more flexible, courageous and have a broader way of thinking about healthcare delivery," Corwin said.

This new generation of healthcare leaders will be more educated and creative thinkers, according to Corwin. Organizations want these executives to serve in strategic positions and seek individuals who are visionaries and can act as internal consultants to the board. Many will look for leaders with expertise in information technology; others want leaders with clinical experience. As a result, she predicts chief information officers will have a more strategic voice at the C-suite table, as the impact of technology in the healthcare environment will continue to evolve.  And as more organizations become integrated, she says many will develop physicians to be administrative leaders.

Succession planning for all members of senior management is vital, Corwin said. She predicts that in the next three to five years, more hospitals will look throughout their systems to see where employees fit within the organization, in nursing, HR, finance, marketing, as well as the C-suite. "As the CEO looks to put together a legacy team, they will look where these employees are going to be in the long haul," she said.

So what strategies should organizations adopt to best understand their future possibilities in order to recruit the right executives?

Corwin suggests hospitals conduct an internal evaluation to identify leaders and champions within the organization. Although it's ideal for a person to be both a leader and champion, that's not always the case, she said. Then if they need to recruit outside candidates, the board will better understand what leadership skills and experience they need to complement their internal leaders. - Ilene (@FierceHealth)

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