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How Rural Hospitals and Health Systems Should Approach Succession Planning

Analysis  |  By Melanie Blackman  
   March 11, 2021

Rural healthcare organizations need to be proactive in succession planning efforts, whether that’s through mentoring internal candidates for the C-suite or identifying external talent that can adapt to a challenging set of circumstances.

Succession planning can be a tough ordeal in itself, but being a rural healthcare organization can make the search even harder.

Limited resources paired with lack of income due to the pandemic has had devastating impacts on rural health systems looking for executive leadership.

One organization undertaking this challenge is Cottage Hospital, a 25-bed facility located in Woodsville, New Hampshire. Maria Ryan, PhD, CEO of Cottage, is leaving her post at the end of the month, after more than a decade-long tenure at the hospital.

Ryan, a board-certified family nurse practitioner with a specialty in emergency medicine, joined Cottage in 2006 and has previously served as the hospital's CNO and COO. She has served as the hospital's CEO for the past decade, where she created around 150 jobs for the organization and increased the hospital's care offerings.

Related: Maria Ryan, NH hospital CEO linked to Giuliani, is leaving her post

Ryan, who has received the Louis Goran Award for outstanding achievement in rural healthcare from the National Rural Health Association, spoke with HealthLeaders about the hospital's succession planning effort and the challenges of finding the right leadership for rural organizations.

"I always describe Cottage as my professional love of my life. The values were just a great fit, and those values[are] to be the best we can be, and to share the value of excellence in integrity, and empathy, and compassion. That's what drives us in everything we do at Cottage," Ryan said.

MAKING IT OR BREAKING IT

Cottage is currently conducting a national search with an executive search firm to find the right fit for the rural hospital, which serves as a designated trauma center for New Hampshire and Vermont.

Holly McCormick, MSN, Cottage's CNO, will serve as the interim CEO until the position is permanently filled.

Through mentorship, Ryan said she was “able to elevate the people within [the] organization," citing her work with McCormick as well as Ann Duffy, MHA, the hospital’s CFO. This strategy is especially helpful in rural hospital succession planning as these organizations typically lack the bountiful resources found at other larger health systems.

Related: Cottage Hospital CEO Maria Ryan discusses pandemic impact

Additionally, leaders of rural hospitals must be quick on their feet, understand how to multi-task, and utilize the limited resources that are provided to them.

"A misnomer is if you've worked in a large hospital, you can lead a critical access hospital, and that's not always true," Ryan said. "Every decision you make can make or break the hospital; it's that dramatic."

"Every business deal or venture I get into; I have to be pretty darn confident it's going to be a solid decision. Otherwise, look at all the small hospitals that have closed," Ryan said.

Related: A Quarter of Rural Hospitals at 'High Risk' of Closure, COVID-19 Likely to Make it Worse

She continued, "Small rural hospitals are cash poor and [leaders] have to be so financially and business savvy. It's not for everybody. [For example,] an executive from a 400- to 800-bed hospital may not be able to survive in a small hospital because they don't have the resources in their use."

Succession planning is a team sport when it comes to rural healthcare leadership. The hospital board and search firm will not only have to sort through people who don't have the experience of leading a smaller organization, they will also have to ensure that the next leader and their family will be ready for rural living.

"It's all about what you're looking for, what your family is comfortable in," Ryan said. "There are people out there who enjoy a rural environment, but it does make the search a little bit harder."

AVOIDING RURAL HOSPITAL MANAGEMENT DOWNFALLS

Mark Toney, a senior managing director at ToneyKorf Partners, LLC, offered similar insights as Ryan, noting that the leadership styles found at rural hospitals are not always the same as those found at large health systems.

He detailed three management types that typically lead rural and community hospitals.

  1. Individuals who are early in their career; those looking to learn and grow into the next opportunity or position.
  2. Late-stage career individuals who have been at the organization for many years; they may have served in the C-suite and then become a CEO.
  3. Individuals who've made the lifestyle decisions to live in a small community.
     

"Regardless of which category they fall into, many people can lead effectively during stable and growth times. Unfortunately, in most of these three categories, the people are ill-equipped for the rough waters that we're facing in healthcare today." Toney added.

Toney added that making decisions in a rural hospital can be harder because it directly affects those the executive leaders know and love in the community, such as neighbors, friends, or family of a board member.

Related: 4 Strategies for Rural Hospitals and Health Systems Hit by the COVID-19 Pandemic

Toney explained that both the hospital leadership and board of directors need to work together to make sure the organization is being properly supported.

"The CEO needs to do an assessment of the board, and their management, to make sure they surround themselves with strength. But that board also has a responsibility to look at the CEO and do the reverse analysis to see what other sources or talents need to be added to the organization," he said.

However, in contrast to Ryan’s thoughts, Toney said that when it comes to leading rural organizations, he believes the required characteristics of an executive are the same as those at larger organizations.

"I philosophically believe that leadership characteristics are the same for a small, medium, or large organizations, and leadership is about focusing on the hospital team, and serving the community” he said. “It's not about oneself. All decisions should be made about what is best for the community and the employees, and not be made based upon the impact on the CEO position."

Rural hospital leaders should also be cognizant of what they don't know, according to Toney. If a leader doesn't have the answers, instead of moving ahead blindly, they should always ask for help.

Related: Many Rural Americans Face Long Haul to Access Care

"We're now operating in what I call a 'new environment’ and we are going to continue to see exponential change. Reimbursements are going to change, the use of technology is going to change, patients’ expectations and demands have changed and will continue to progress," he said. "The board and management should take a candid view of the long-term viability of the hospital or system as a standalone organization. If the potential is limited, or non-existent for a standalone basis, the leadership should begin immediately looking at strategic and operational affiliations, alliances, or partnerships."

'PROACTIVITY IS CRITICAL'

Being up to date with succession planning is a vital strategy for health systems and hospitals of all sizes, according to David Tyler, partner in healthcare advisory services at Grant Thornton LLP.

"It's important not just for boards, but for every level of an organization to have some idea towards succession planning," Tyler said. "The C-suite is such a critical success factor for organizations. The continuity that succession planning allows you to have is important."

"The reality is that every person is going to do one of two things: they're going to retire from the place they work for right now or they're going to leave either through their own choice or that of the organization,” he added. “It's almost a dereliction of duty not to be prepared to absorb that when the time comes."

Related: Rural Hospitals Remain Entrenched in COVID 'War' Even Amid Vaccine Rollout

A provider organization’s succession plan should be part of the overall business practice, Tyler explained, focusing on having both a “constant flow of candidates for mission critical positions” while also identifying talent and resources both “inside the organization and with whom you may have a relationship outside the organization."

He added that this business practice is "part of running a well and high performing organization." When it comes to succession planning, either for the C-suite, the board, or other levels, proactivity is critical.

"If you're proactive, as opposed to reactive, when someone leaves, it's not nearly as emergent of a situation,” Tyler said. “If you're proactive, you can also have a nod towards gender and racial diversity. If you can begin to groom your number twos and number threes to be number ones, and you do that with an eye towards diversity and inclusion, the organization will benefit from that sooner rather than later."

“A misnomer is if you've worked in a large hospital, you can lead a critical access hospital, and that's not always true. Every decision you make can make or break the hospital; it's that dramatic.”

Melanie Blackman is the strategy editor at HealthLeaders, an HCPro brand.


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