Addressing Succession Gaps With Interim Executive Leadership

Adam Burns shares insights on using interim executive leadership for hospitals and health systems during the current talent pool shortage.

According to the Bureau of Labor Statistics and an article from WittKieffer, 11,000 people in the United States retire each day. Additionally, the Pew Research Center found in 2020 there was an increase in Baby Boomers (those born between 1946 and 1964) leaving the workforce and retiring. Turnover rates are also seeing a rise; it's estimated that people will change jobs more than a dozen times during their careers.

Those numbers are all increasing, which is creating challenges in filling hospital and health system leadership roles. Add a pandemic to the already dicey mix, which has caused increased burnout and has caused some CEOs to temporarily put off their retirement until now, and the landscape for hiring and maintaining C-suite roles is changing.

While succession planning for C-suite and upper management positions in hospitals and health systems is an important strategy that should constantly be refreshed, what if things don't go according to plan? With the candidate pool dwindling for CEO spots, there's another plan of action that organizations can take to secure temporary leadership if their succession plan falls through: interim leadership.

The Changing Landscape

Over the past 5 to 10 years, interim leadership has grown, Adam Burns, a principal in WittKieffer's Interim Leadership Practice, recently told HealthLeaders. In the past, it was primarily used at the director level and manager positions, but there has been a change in the landscape.

"Over the last three years, the demand for interim C-suite leaders has been increasing, that's a direct result as a lot of those folks who are baby boomers are exiting the workforce. And so, they're leaving, there's not an internal successor in place, they will typically look to us or another company or even maybe an independent consultant to fill that position on an interim basis," he said.

The healthcare industry is feeling the effect of the great resignation, Burns said. "For a lot of organizations, it is daunting that they're seeing so many leaders leave. Especially if you have a CEO leave, there's always a trickledown effect. But what we've tried to encourage our hospital and health system clients to see is while there's going to be change, and the access to leaders on a permanent basis might be a little bit more difficult, you also have the opportunity [to tap into] probably the biggest talent pool in history on an interim basis when you need it."

In the past, there was a slight stigma around interim leadership, he explained. But that also has changed. What the industry is seeing now is that experienced executives will retire, but then will be available for interim leadership work.

Interim work has given a lot more flexibility to retired executives who are not ready to fully leave the workforce and enables experienced CEOs to work on limited-term engagements while also freeing up time during the rest of the year.

Being an interim leader is also a new challenge, Burns said.

"There are also aspects, politically, in an organization that is different than when you come in as an interim," he said. "As an interim, you're a little bit more free to look at things objectively, and make recommendations without fear. The freedom to be able to contribute freely, serve as a change agent, is also something that is exciting to people who have spent the prior three decades of their career in a position long-term, where usually you're not given the same freedom to work like you would in an interim role."

Opportunities and Risks

Interim leadership gives organizations a leg up if there's a gap in their succession plan, and if there is a critical leadership position that they can't fill with in-house talent.

"Interim leaders offer a ready-now solution to come in and help, usually in less than two weeks' notice. It's an on-demand solution," Burns said.

Using interim leadership also allows organizations to tap into a larger talent pool to find someone who has experiences that they may not be able to get on a permanent basis, he added. This allows the organization to utilize a leader's experience or particular skillset for a finite period of time.

"If they have a specific project challenge or something that they need help with, it's a lot more feasible and can make more economic sense to bring someone in on an interim basis, instead of going out to market and spending many months trying to fill a permanent role," he added.

There are also risks associated with bringing in interim leadership to a hospital and health system. Burns suggests that organizations should be mindful if there will be any organizational resistance from staff. If there is, organizations "have to have a very particular interim leader with a specific leadership style and personality that can come in and make that work," Burns said.

"In summary, the main risk to be aware of is what's the internal reaction of the staff going to be. Also, just be mindful of how they are going to feel that there's someone who believes that they should be considered for that role, and they're getting passed up for someone outside of the organization," he said.

While it's typical that interim leadership stays a short-term solution, interim CEOs have also been made permanent leaders in the past. Just this past month, Flagler Health+ appointed their interim president and CEO, Carlton DeVooght, as their permanent leader only 20 days after naming him as a temporary leader.

"What I attribute to the increase in this conversion from interim to permanent happening is just the shortage of leaders right now in the market," Burns said. "[Then the organizations] bring in an interim to plug the gap, but when they find someone great, and they have that option there, they're making aggressive offers to keep them even if they know it might be a two-year employment stint because it's so difficult to find talent in the market right now."

This at least gives the organization a reasonable, short-term solution instead of having to wait and conduct a six-month search for a permanent leader.

Interim leadership as Plan "B"

Interim leadership should be a secondary option to succession planning, Burns said.

"In doing succession planning the right way, [organizations] should have candidates identified for their most critical roles. Maybe that's five, maybe that's six at the senior level that they've identified as the most critical. Ideally, they'll have folks internally that they're developing and they have targeted to fill one of those critical roles," he said.

"Often, that's not the case, or things change unexpectedly. Those leaders who are being prepared go elsewhere when they have an opportunity," he added.

This is where interim leadership comes in. If there is a gap in your organization's succession plan, or things don't go according to plan, it's a great way to access a talent pool that is able to temporarily fill in.

"Know who to call, know what your options are, and what the timeline would be to fill that position in the event that you need it and that your internal options have not worked out," he said.