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You’ve just gotten some bad news. A valued member of your senior management team is leaving your organization. Perhaps he/she has chosen to pursue another career opportunity – or has decided to retire early or step down for health reasons. Whatever the reason, the news is troubling: You’re losing a key player.
If you’re like most healthcare CEOs, you may quickly begin to ponder how your organization will function in the near term with a vacancy in a key executive slot. Your instinct may be to replace the departing executive as quickly as possible – and start the hiring process right away.
Hold that thought. Consider the possibility that you may be facing not only a challenge, but also an opportunity…an opportunity to take your organization on a new path. Too often, hospital executives – beset by the pressures of our demanding industry – move immediately to hire a replacement when a senior manager leaves or is let go. By moving too quickly to begin hiring, however, you may automatically hire someone similar to the person who left, especially if that person was successful in the role and well-liked. In the process, you can miss an important chance to reexamine the position and, in particular, the way it relates to your organization’s evolving strategic goals. I’ve written this white paper to help you consider how your next executive vacancy may, if managed properly, represent an opportunity for your organization.
Before You Recruit: Taking Stock
The key to gaining a long-term strategic benefit from an executive opening is a bit of good preparation before you begin recruiting. Here are several preparatory steps you should consider:
1) Get your senior team together. Ask hard questions about what your organization really needs in the open position and function. What worked well with the person who is leaving? What didn’t? If the vacancy is due to an executive resigning or retiring, the CEO should also meet with the departing executive to get his/her perspective on the position as it is currently structured.
As part of your discussions with your senior management team, think about the budgetary implications of the position. Ask yourselves questions like: Should we eliminate this position – and what would be the impact on the organization if we did? Or should we hire two people instead of one? Have we properly structured the position to meet our institution’s needs?
Consider, for example, the question of whether a hospital should have a VP of Patient Care Services or a VP of Nursing. A vacancy at that level provides a good opportunity to evaluate which of these two positions is right for your institution. You and your team might decide that a VP of Nursing will be more successful because he/she will not be distracted by responsibility for non-nursing duties – which can be a benefit if your organization is dealing with complex nursing challenges, such as a high nursing vacancy rate or a nurses union. On the other hand, a smaller organization without a Chief Operating Officer might determine that a VP of Patient Care Services is the correct choice.
2) Look at the big picture. As part of your dialogue with your team, consider how the open position meshes with your organization’s strategic plan and the challenges anticipated in the years ahead. Ask yourself: What are we really expecting from this position and from the executive who fills it? And what should we avoid? A key aspect of this strategic discussion should be the dynamics and skills of the senior team as a whole. How do senior team members complement each other in their work together? What skills are missing on the team?
In a recent Harvard Business Review article, Stephen A. Miles and Michael D. Watkins note that leadership teams in which members have complementary roles accomplish things that individuals without that synergy can’t. People with complementary abilities can not only compensate for each other’s weaknesses but also create a more effective team, Miles and Watkins observe.
For example, basketball fans may remember the highly successful 1985-86 Celtics “team” that won the NBA championship and had a 67-15 win-loss record. The Celtics featured perennial NBA All-Star Larry Bird, along with Danny Ainge, Robert Parish, Kevin McHale, and Dennis Johnson in complementary roles. Together, that Celtics team proved far stronger than any individual player – and the result was outstanding performance.
However, Miles and Watkins also point out in their article that, if a leadership team currently relies on individuals with complementary functions, making changes in the makeup of the team is more challenging, and leadership succession may thus be smoother if there is some thoughtful planning by the Board of Directors and the CEO. That’s all the more reason to plan carefully before you make an executive hire.
3) Benchmark informally. Consider how other healthcare organizations you know that have a similar size and mission are handling the function. Seek to identify current best practices for the role you need to fill, making use of your own knowledge and that of your senior team members, as well as informal research.
For instance, hospitals traditionally hired CFOs who had risen through the controller ranks. But now some organizations are rethinking that approach. They are instead seeking CFOs who, in addition to strong financial expertise, have backgrounds that also emphasize revenue management and strategic and analytical strengths, such as the ability to evaluate new business plans. Accordingly, you might consider CFO candidates who came up through the revenue management side (for example, a VP of Revenue Cycle Management or VP of Financial Planning) and supplement such a CFO with a strong controller.
Similarly, a number of hospitals are reconsidering the position of Vice President of Marketing and Planning, which traditionally oversaw the strategic planning process and the marketing budget. Instead, they are now often creating VP of Business Development positions, which still include marketing but have a stronger emphasis on developing business plans and launching new initiatives. (See “Strategic Trends in Healthcare Leadership Positions” sidebar for more information on this and other healthcare recruiting trends.)
To view complete white paper, please see PhillipsDiPisa.com in the Thought Leadership section of the website.
About Phillips DiPisa
Phillips DiPisa (phillipsdipisa.com) recruits leaders for healthcare providers, managed care organizations, and life sciences firms. The firm's roots are in Greater Boston - a historical center of medical innovation and excellence. Phillips DiPisa now serves clients along the East Coast and throughout the Midwest, and draws on a national pool of candidates.
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