How to retain and cultivate healthcare executives
Hospitals and healthcare systems need exceptionally strong leadership to manage the constant challenges in healthcare, from the increased focus on value-based care to new government regulations and financial performance pressures. But hospital CEOturnover continues to plague the industry, and many of those who haven’t moved on are thinking about it.
What can be done to cultivate and retain the leaders we need today to guide us into the emerging future of healthcare?
Healthcare Trends – 2016, a B.E. Smith report that surveyed nearly 1,200 healthcare leaders, offers several solutions to the leadership recruitment and development puzzle facing healthcare executives today. According to the report, healthcare organizations not only need to empower executives to engender change, but need to help leaders develop the right skills for the job while also fulfilling their personal career objectives. That’s a tall order, but it’s not impossible.
Disruptive Impact of CEO Turnover
Hospital CEO turnover continues in today’s demanding environment, causing ripple effects throughout the organization. ACHE’s annual report identified CEO turnover at 18% for 2015, down slightly from the peak of 20% and the second highest since 2000.
CEO departures can be costly and highly disruptive; in most cases a loss at the top can lead to turnover among other C-Suite executives, such as COOs, CFOs and CNOs.
The loss of a CEO is disruptive in other ways, too. Some of the initiatives most frequently impacted by CEO turnover include:
- Strategic planning and service development
- Employee and Physician engagement
- Community relationships
- Financial performance
Healthcare’s transformation, especially as it becomes less hospital-centric and more consumer focused, places a premium on skills and experience often required in other industries, such as finance, hospitality, and information technology. Ideally however, you want to put someone with healthcare experience in the CEO role.
That’s likely why 53% of executives surveyed for the Healthcare Trends report plan to develop leaders internally, with another 44% recruiting experienced or emerging healthcare leaders outside their organizations. Regarding the latter, this will require organizations to seek innovative solutions to overcome competitive disadvantages such as location, named by one-third of respondents as a substantial barrier.
Foster Advancement Potential
Career development and advancement are great antidotes to turnover. These are particularly important for healthcare executives who often must leave to advance. Take a look at these numbers, for example:
- 98% of the healthcare leaders surveyed would consider a job change to advance.
- 90% have been approached with a new opportunity in the past year, and half seriously considered it.
- Even among those who aren’t seeking to advance, 69% of them would consider an offer.
Such “passive candidates” are a hidden source of potential recruits for hiring organizations and should be considered in any strategic recruitment campaign.
To foster career advancement within your organization, consider these options:
- Leadership programs: Create programs to identify and develop emerging leaders.
- Interim executives: Use interim executives to maintain momentum and bring fresh perspective to their operational roles. They can also coach and mentor future leaders as well.
- Comprehensive leadership assessments and talent reviews: These types of assessments are often heavily skewed to senior leaders. Try assessing existing managers or high-potential staff, who would greatly benefit from mentoring and leadership development.
Remember that 98% that would consider a move to advance their career we mentioned earlier? If healthcare leaders aren’t getting the career development they want, then they might find what they want elsewhere, with a competitor.
Vision and Strategy
Healthcare leaders who took the survey for the Healthcare Trends report indicated that the three most important executive attributes for 2016 are vision and strategy, integrity and communication, followed by collaboration and agility. Those findings mirror others which identified critical requirements as strategic planning, creativity, and change management.
The B.E. Smith report isn’t the lone voice in this assessment. Boris Groysberg, a professor of business administration at Harvard Business School and the co-author of Talk, Inc., a book on how leaders influence through the power of conversation, conducted his own study of executive leadership skills in 2010. He found that strategy, integrity, and communication are among the top leadership qualities prized by companies across industries and around the world.
Clearly, we should factor these qualities into our organizations leadership development programs, rather than prioritizing skills training, which can result in ineffective leadership.
Another reason to focus on career development is to enhance succession planning. The B.E. Smith report found that among the executives surveyed who expect to develop leaders internally, nearly half admitted that their organization lacked a succession planning program. Additionally those executives who said their organization has a program in place identified it as an informal one (57%).
This leaves healthcare organizations even more vulnerable when executives leave for other opportunities. Ideally; it’s best to have at least one candidate waiting in the wings who has been groomed to step into an executive role. By helping internal candidates prepare to take on new leadership positions, organizations can shore up their succession planning and advance the career development needs of executives.
Interim leaders who often have extensive experience working for several healthcare systems also provide a terrific resource in career development. Their experience and knowledge greatly enhance the five critical succession planning activities, as identified by this year’s survey respondents:
- One-on-one mentoring
- Skills identification
- Executive coaching
- Formal skills assessment
- Continuity and effective transition
Interim leaders not only strengthen and customize succession planning programs, but help shape the careers of potential leaders within your organization.
Even though 2016 is halfway over, it’s not too late to start tackling the challenges in leadership development and recruitment. The sooner healthcare organizations act to address the issue of attracting and retaining executive talent, the more prepared they’ll be to handle today’s rapidly changing and highly competitive healthcare market.