Ensure Seamless Leadership Transitions

health care leadership transitions

At many health care organizations, almost half of senior leaders are approaching retirement age within the next 10 years. Without a disciplined succession planning process, health systems face two risks.

First, they may fail to meet strategic priorities because critical positions are vacant. Second, they may select future leaders who look or think much like the current leadership team—and who aren't necessarily the leaders needed for future success.

This briefing includes eight key insights from our conversations with HR executives about succession planning. Use them to help your executive team and board build a strong, diverse leadership bench ready to meet current and future challenges.

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1. Retirement risk alone won't tell you which leadership positions need succession plans.

If a key senior leader has stated they intend to retire in two years, it's clear you need to prepare a successor for that position. But succession management isn’t just about planning for retirements. You also need to prepare for unexpected vacancies in key positions. It's hard to know exactly which positions you need to prioritize.

Read more on how to determine what positions need succession plans on p. 4.

2. You can't identify high-potential leaders by looking solely at their performance evaluation ratings.

To identify succession candidates, you first need to select the subset of leaders who are high performing and have high potential for future leadership roles. In theory, the performance evaluation process should provide helpful data to identify your organization's top leaders—but there are problems with relying on performance evaluations alone.

Learn more on p. 6, including how Texas Health Resources applies clear, objective criteria to identify its top leaders.

3. Invest in every leader's development—but not in the same way. Concentrate your most significant investment in 10% of leaders.

Once you've identified your organization's high-potential leaders, you want to consider how you'll prepare them to eventually step into their next roles. These individuals need a mix of development opportunities to continue building their all-around leadership competencies, as well as gain skills specific to their next position.

See our guidance on how to scale your investment in leader development on p. 8.

4. Be wary of "secret lists" of successors.

One of the most difficult questions to answer in succession planning is who should know which leaders have been identified as successors. Should it be the CEO alone? The full executive leadership team? The successors themselves?

Learn more on p. 10, including how UPMC takes a transparent approach to selecting which high-potential leaders to invest in.

5. Senior leaders have a rational incentive to hoard talent—and you may be reinforcing it.

Many senior leaders push back when asked to free up their top performers for career paths in growing parts of the organization. While their "hoarding" of talent might be frustrating, it's rational. From senior leaders' perspective, you're trying to take away someone who they've already invested significant time and resources in and who makes their job easier.

Learn how to encourage your senior leaders to share talent on p. 13.

6. Your best leaders may find it easier to advance their careers with a competitor than with your organization.

Your high-potential leaders may have a narrow view of the career opportunities available within your organization—and that view can make opportunities at your competitors look appealing.

Learn more on p. 15, including how Virginia Mason set up a rotational program to accelerate development for their strongest leaders.

7. A commitment to diversity isn't enough to change the composition of your leadership ranks.

Virtually all organizations agree leadership diversity is important and, increasingly, a business imperative: a workforce that is representative of its customers is better able to meet their needs. But many health care organizations still have a long way to go before their workforce reflects their patient population.

Find national statistics on representation of women and people of color in health care on p. 17.

8. What comes first—diverse leaders or diverse staff? You need to pursue both.

For institutions that lack diverse representation across their organization, deciding where to start can be a daunting task. Do you need diversity at the most senior levels to attract more diverse talent? Or do you need diverse frontline staff who can eventually rise through the ranks? The reality is: you need both.

Learn more on p. 20, including Baptist Health South Florida's strategies for building a diverse leadership pipeline.

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