Leadership Succession Planning: Three Key Areas You Must Address

Mark Madden, September 23, 2019

As the health care market continues to innovate to meet patient demands for quality and value, the need grows for talented leaders to pave the way. Learn the three areas you must address to develop a program that will meet your long-term objectives.

In today’s fast-changing health care industry, succession planning has never been more important for hospitals and health systems who hope to not only compete, but to win over both leaders and patients.

As the health care market continues to innovate to meet patient demands for quality and value, the need grows for talented leaders to pave the way. However, increasing turnover rates and a decreasing active workforce are creating a more competitive environment for organizations searching for new, highly qualified leaders.

Organizations with a ‘revolving door’ approach to filling leadership positions face serious risks, including a loss of bench strength, the erosion of organizational culture and the high financial cost of recruiting and replacing leaders. The health care organizations that are successful in the competition for talent -- and that avoid the costly practice of replacing lost leaders -- are the ones who have a solid plan in place for their internal talent.

Succession planning as a practice began as a simple effort to identify which employees could move into which leadership roles, if needed. The practice has grown and evolved over time to include training and growing of talent, with progressive organizations already realizing benefits to their culture, their business and their daily operations.

As you begin to develop a succession program of your own, there are three key areas to address: culture, operations/finance and people. In order to address each of these aspects, you must understand how each fit into a meaningful succession program, and how to successfully incorporate each into the program as a whole.

Culture.
Culture plays a large role in succession planning. It is the responsibility of organizational leadership to drive the mission, vision and values – the key components of company culture. If there is no plan in place to transition to new leadership when the need arises, the scramble to fill those roles can be costly, and without an established strategy for moving new leaders into vacant roles, there is no way to ensure the company’s culture will endure. To make succession planning a part of your culture, keep these things in mind:

  • Establish shared values and talk frequently about the benefits of the program
  • Be transparent with changes
  • Attach succession planning explicitly to leadership development and strategic planning

Finance/Operations.
For many Boards, the concept of investing in recruitment is easy to understand, but the costs go much deeper than professional fees. Today, the cost of replacing a CEO for a mid-size hospital can reach up to $300,000. At any leadership level, the true cost of replacing employees can be twice their base salaries (depending on total compensation, role and experience).

Facing these financial risks, it makes sense to establish a program that supports and nurtures your top talent and eliminates the revolving door of costly recruitments. To demonstrate the need for a succession program to your Board, consider taking these steps:

  • Create a succession plan that encompasses all levels of leadership
  • Build in checkpoints, goals and ways to demonstrate return on investment
  • Clearly establish that the program will take time to bring results

People.
According to a 2018 Gallup Poll, 85 percent of employees are unhappy at work. Investing in employees is the best way to position your organization for success not only today, but in the future. A succession plan creates a story you can tell your employees – a story where they are valued, supported and developed throughout their career. Forward-thinking organizations recognize that building a program based on shared values allows you to invest in your team and to create a path to future success. The focus then shifts from filling open positions to acquiring the talent to bolster your organization’s vision, goals and values.

When creating a plan to support your people, remember these points:

  • Establish a clear guide for advancement to give team members a career path
  • Communicate the reason for the succession plan prevents fear of the unknown
  • Discuss the succession program during recruitment to build loyalty and encourage new team members to plan for internal growth

In this challenging time of healthcare reform and a shrinking skilled workforce, planning for the future is more critical than ever – a good succession plan will save you time, money and talent, all valuable commodities in this increasingly competitive environment.

To read more succession planning advice from Mark Madden, a thought leader in the area of healthcare executive search, mentoring and succession planning, view the entire article on the Cejka Search website.

Unconscious Bias: Bridging the Gap Between Desire and Achievement in Healthcare Leadership Diversity

Mark Madden, March 19, 2015

In today’s healthcare industry, there still exists a gap between the desire to make change and the achievement of change in leadership diversity. How can organizations overcome this gap and build more inclusive leadership teams?

Since the widely cited research article, “The Case for Diversity in the Health Care Workforce,” (Cohen, Jordan J., et al., 2002) was published nearly 20 years ago - outlining the need for a more inclusive workforce in order to expand health care access and provide equitable care to the underserved - healthcare organizations have widely embraced the notion that a diverse workforce generates value.

Yet, progress in achieving diversity and inclusion in the leadership ranks has lagged. One major factor, the issue of unconscious bias and the impact it has on selecting and appointing healthcare leaders at the helm of organizational change, continues to significantly impact equity, diversity and inclusion achievements.

In today’s healthcare industry, there still exists a gap between the desire to make change and the achievement of change in leadership diversity. During a recent survey of healthcare leaders conducted by Cejka Search and the Center for Creative Leadership, we found that organizational culture plays a pivotal role in this disparity. Nearly half of executives described their organization’s attitudes towards inclusive leadership selection as a topic of discussion but with no significant practices in place.

Additionally, one out of seven said challenging hiring biases, especially up the organizational hierarchy, was culturally unacceptable. Nearly all executives said cultural fit or a person’s likability, which are linked to unconscious biases, often tips the scale in favor of a candidate.  

On an operational level, less than half of executives reported having a formal diversity initiative in place, with or without a dedicated leadership role or executive sponsor. The highest percentage cited training but nothing formal beyond that, and one out of seven had no initiative at all.

Even among those whose organizations had a dedicated leadership role or executive sponsor, actionable policies aimed at reducing unconscious biases in the leadership selection process were often missing.  This data suggests that organizations wishing to make progress are still lacking a meaningful framework for setting specific goals, establishing resources and polices, and measuring progress.

Common Offenders: Practices That May Perpetuate Bias

Three leadership hiring practices that may perpetuate unconscious bias in leadership selection were explored in our survey. One is providing search committee members with candidate photographs as part of the initial candidate profiles. Exposure to a candidate’s appearance can create a host of unconscious biases that may impact first impressions and, ultimately, hiring decisions.

The second is the inclusion of a candidate’s name early in the process, which often leads to perceptions about a person’s gender, race and ethnicity. The third is the growing use of social media to prescreen leadership candidates, which introduces an even broader scope of potential biases, both professional and personal, as well as legal exposure for the employer.  

Findings showed that including photos in candidate profiles is still practiced, but is not prevalent. However, almost seven out of ten respondents conduct an Internet search on candidates prior to interviewing them, and only about one out of ten reported the existence of a formal policy on the use of social media at their organization.

Prior to interviewing candidates, the majority of executives had not received photos; however, two out of ten had. When asked how they would feel about receiving candidate profiles that did not include a name or photo, more than half of executives responded positively; however, four out of ten responded negatively, which included feeling less likely to seriously consider the candidate, suspicious of the candidate or process and, to a lesser degree, offended.

Within our report on unconscious bias, we share full survey results and provide strategies for reducing unconscious bias and driving innovation with diverse leadership. These strategies address the pillars required for leaders to institute meaningful equity, diversity and inclusion within an organization and best practices for minimizing the influence of unconscious biases in leadership hiring practices. To access the report, or to inquire about consulting for your organization on diversity and inclusion hiring best practices, contact Cejka Search today. 

Reference: Cohen, Jordan J., et al. “The Case For Diversity In The Health Care Workforce.” Health Affairs, 2002