New challenges in healthcare call for the right leaders at the right time to find innovative solutions. The uncertainty created by outside disruptors and new players in the market, demographic shifts, technological advances, retirements, regulations, new payment models, consumerism, workforce shortages, and unexpected crises requires a high-performing team throughout the organization. Leadership is the critical element to navigate the terrain and achieve organizational goals. How do hospitals and health systems prepare to fill key positions to deal with an uncertain future? Developing a succession plan integrated with the strategic planning process is necessary to ensure that potential leaders will be ready for their new roles, but how many organizations have a plan and implement it?
A succession plan involves more than the CEO or C-suite. Although traditionally it is the board’s responsibility to select the CEO and possibly other executives, monumental shifts in healthcare have prompted the development of organizational structures with new roles and talents while grooming people for existing positions. Delving deep into the organization to identify, evaluate, and develop future leaders is essential. Who has the potential to be the next board chair, senior executive, vice president, director, or other leader? If an internal assessment of the talent pipeline does not yield promise, external recruitment may be necessary. Developing high performers for future roles is the next step in succession.
Succession planning may not be a comfortable topic to discuss. It may even face resistance. Nevertheless, it is required for an organization to survive and thrive. To identify the positions and expertise that will be needed, a vision of the organization’s future and strategic initiatives is essential; therefore, a succession plan must be an integral part of the organization’s strategic, operational, and financial plans. Without these plans in place, instability may lead to poor performance and results, stress, and burnout. Engaging people at all levels of the organization in planning is fundamental to ensure that succession is not threatening. Many succession models and development programs exist. Preparing leaders, learning from other organizations, and using best practices can jump-start the process.
The workforce of the future must be envisioned today to face the plethora of challenges in healthcare and manage new models of care delivery. If organizations do not have the right people groomed for new positions and ready to find solutions to these challenges and improve performance, what will happen to operational functioning—including safety, quality, and financial results? Succession planning is a foundational element to galvanize a high-performing group of people for the future, and the authors in this issue of Frontiers of Health Services Management draw from their experiences and expertise to address this topic.
In their feature article, Tim Lancaster, LFACHE; Scott Hibbs; and Brad Holland, FACHE, convey their valuable succession planning perspectives as former president and CEO, chair of the board of trustees, and current president and CEO, respectively. They relate the elements of a successful leadership transition at Hendrick Health System in Texas. Each author contributes his unique experiences in the process, from setting the plan in motion, finding and hiring a new CEO, and bringing the new CEO on board. “The carefully considered approach taken by all participants here can work for other organizations, too,” they observe. “When everyone’s best interests come together to create a good fit, the succession can be successful.”
In their feature article, Terrence B. Akin, FACHE, and Mandy C. Eaton share what transpired at Cone Health in North Carolina that led to the development of their succession planning program, Leader Legacy Building. They describe its comprehensive approach, plan of action, required competencies, coaching culture, diversity strategy, and costs. “Continuity of leadership is essential to guide the course and directions of the organization, and it is a fundamental requirement for success,” they write. “Leaving a legacy of top talent will make a positive impact on performance outcomes, reduce the cost of external recruitment, and allow for faster adaptation to ongoing pressures from the external environment.”
Feature article author Nancy M. Schlichting, FACHE(R), presents astute insights into succession planning that are drawn from her career experiences as CEO of Henry Ford Health System in Michigan. She describes the building blocks for a succession plan and the factors that can help maintain its success. Schlichting addresses the question, why is succession planning important? “The clearest answer is that leadership really matters. Organizations either thrive or do not because of the quality of their leadership,” she explains.
Commentator Annette M. Walker of City of Hope Orange County recommends taking the following steps for succession planning: honor diversity and inclusion, remove implicit bias, adopt a millennial mentality, think sponsorship, assist outgoing leaders, plan for succession as you would a strategic plan, put structure around implementation, build a pipeline, think personalization, put a premium on wellness, and honor your culture and values. “Succession planning is not something to be dreaded because it signals the end of an era,” Walker assures us. “When we focus on succession, we acknowledge that our mission merits living past our own tenure.”
In their commentary, Tom Giella and Christine A. Rivers of Korn Ferry address the importance of succession planning in the changing healthcare landscape by citing case examples and describing the key roles of board members and best practices for boards. The management consultants review the dos and don’ts and legacy issues of succession planning, and they identify the critical element of leadership development. “Given leadership needs in an era of disruptive change, the boards of healthcare organizations should continuously prepare for their next CEO. . . . Selecting the right CEO is arguably the primary responsibility of a healthcare organization’s board,” Giella and Rivers add.