If a hospital CEO suddenly left, many healthcare organizations would be out of luck. According to a survey from search firm Witt/Kieffer, less than 40 percent of healthcare CEOs have worked with their board to develop a formal succession plan, and only one-third have mentored a successor.
Out of a survey of 200 hospital and health system CEOs older than 55, slightly more than half (51 percent) said they worked with senior management to identify potential successors, but only 29 percent of them actually identified a successor, according to the survey, obtained by FierceHealthcare. Only 17 percent say their successor is prepared to step into the CEO role.
The lack of succession planning could leave hospitals unprepared.
Although healthcare CEOs generally are holding off retirement because they want to solve problems in healthcare (83 percent) or because they feel pressure from the board not to leave (73 percent), about a quarter (24 percent) plan to retire within the next four to five years. Fourteen percent said they will retire in two or three years, and 8 percent plan on retiring within the year.
One healthcare CEO, who is 56 years old and more than five years away from retirement, said in the survey, “Succession planning is not on my radar yet, although I know it should be.”
Elaina Genser, senior vice president and western region managing director at Witt/Kieffer, said in an announcement yesterday, “The time is now for CEOs to work with their boards and senior management teams to identify and mentor potential successors and develop a succession plan. Planning today will make the transition smoother for the CEO, board and entire organization when retirement becomes a reality.”
Sanjay B. Saxena, vice president and partner of San Francisco-based global consulting firm Booz & Company, also encouraged CEOs to think about successors in a previous FierceHealthcare interview. For example, begin succession planning at least three years from the CEO’s expected retirement. Make it an institutional activity rather than taking an ad-hoc approach, Saxena advised.
“Succession planning absolutely needs to be a priority for healthcare executives,” Saxena said. “There’s a significant level of drop-off in talent and experience that exists below the senior team that’s been in place. A lot of that is because healthcare executives have not consistently or uniformly taken the time to think proactively about who are the future leaders within their organizations.”
In addition, Saxena suggested creating a detailed transition plan, in which stakeholders, including board members, develop and execute a six-month plan for the transition.
About Morgan Hunter HealthSearch
Morgan Hunter HealthSearch (MHHS) provides Executive Search and Interim Leadership solutions for hospitals and health systems throughout the United States. Our services include executive healthcare recruiting, retained healthcare executive search, healthcare interim management, executive placement for hospitals.