When a senior executive retires, how can hospitals make sure a career's worth of knowledge doesn't walk out the door, too?
When a senior executive at Central Maine Healthcare system in Lewiston retires, a succession plan is already under way and the outgoing executive plays a big part in it.
That's not unusual at Central Maine Healthcare, which has made succession planning about not just replacing one person with another, but achieving a continuity of knowledge. Joyce McPhetres, vice president of human resources and organizational development at the three-hospital system, says the culture of some healthcare organizations discourages talk of retirement. "They're afraid to for fear that they would be considered lame ducks with one foot out the door," she says. "I love that that is not what we have here. We are actually creating an environment that is healthy and transparent, and where good things can happen as a result of that."
Mass retirements of senior leadership may not represent the frightening proposition they did a couple of years ago given the stock market's tumble; many of the 78.2 million or so baby boomers have seen their once robust 401(k) plans wither, and those financial losses will undoubtedly make many older Americans work longer. But boomers will eventually retire, regardless of whether their portfolios recover, and their sheer numbers will be hard to replace. A 2007 study by the Center on Aging & Workforce Flexibility at Boston College showed that boomers represented nearly 40% of the work force—many of them in senior positions. The U.S. Census Bureau reports that about 8,000 Americans turn 60 every day.
Many of those retiring executives will take with them decades of valuable institutional knowledge. "It's the history. It's the breadth of knowledge acquired over the years. It's the relationships," McPhetres says. "Senior leadership in a healthcare organization plays such a critical role with the skills they possess. But it's also the relationships with the board and other senior leaders and the trust that is established, the integrity and the track record. It is those things that are most difficult to retain."
Retaining that knowledge, McPhetres says, "means this organization accepts people saying they have a timeline for retirement and they're going to actively work in that timeline. They feel an obligation to the organization to announce that timeline and make sure that someone is in place to take over their job and move the organization forward."
CMH's transition plan is simple because it's more of a philosophy than a plan. There is no rigid pyramid chart with a list of 20 priorities that must be transferred. The details of each particular transition vary depending upon the skills and relationships that may be involved. One constant, however, is the interaction between retiring executives and their replacements. "One of the things this forces us to do is consider how a person leaves a critical position," McPhetres says. "Is there a way for us to negotiate a contract with them for some overlap for a period of time, for that additional transfer of knowledge? Could they act as a consultant for us, or be on site a couple of days a month for a period of time? We look at a number of possibilities."
The most critical component of the knowledge transfer is the cooperation and enthusiasm of the retiring executive. McPhetres expects any senior executive who's readying his or her own departure in the near future to feel a true commitment to CMH and be comfortable with the idea of leaving because he or she has been able to openly discuss it and plan for it. "If anything he is ramping up his efforts to ensure the transition will occur in good order," she says. "He wants to leave a legacy."