"The skills that got us here aren't the same skills that will move us into the future, because the hospital is no longer the center of the universe."
That's how one executive described the situation facing hospital and health system leaders as they try to identify and prepare people to move into C-suite positions in their organizations. She spoke as part of a panel of health care executives and industry experts convened by Health Forum this summer to discuss succession planning in an era of high turnover and a transforming health system.
The turnover rate for hospital and health system CEOs has hit an all-time high of 20 percent, and the average tenure is now a mere four years. And hundreds of baby boomers currently at hospitals' helms are looking retirement straight in the face.
Then there's the whole transformation thing. What kinds of talents are needed to guide hospitals into population health and risk management? What personality types can navigate an integrated system that includes non-acute providers?
"We are looking to identify the necessary skills going forward as the health care industry shifts its focus from sick care to well care," said Michael Rowan, president of health system delivery and chief operating officer of Catholic Health Initiatives. "These are two entirely different things and involve a completely different set of players."
Panelists noted that new executives increasingly are coming from outside of health care, from industries such as retail, IT and finance.
"I've seen national data showing that as much as 30 percent of hospital CEOs do not have a health care background," said Diane Cross, a trustee at University of Minnesota Health. "That says something about our industry and where it's heading."
Some traits are more important than health care experience, panelists agreed. Leaders need to be able to communicate with a wide range of staff and partners, and with the communities they serve. "One of the most important things hospital executives can do is to be a role model, an inspirational leader," Cross said.
Susan Clark, president and CEO of Sacred Heart Health System in Pensacola, Fla., cited a Harvard Business Review article suggesting that organizations look at an individual's potential rather than at someone who has a specific skill set. "It's important to take the individual through the organization and provide experiences that are not vertical," she said. "It's about getting them out of their comfort zones and seeing how they address challenges and develop their skills."
Succession planning is a particular challenge for small hospitals, noted Jason Spring, CEO of North Valley Hospital in Whitefish, Mont. His critical access hospital has worked with other small facilities to share positions across the region on certain projects, such as ICD-10.
In other cases, he's leased staff from a larger tertiary partner. "This has worked well and gives people who have the talent the opportunity to go higher than the opportunities at a critical access hospital present," he said. "It gives them a chance to become regional players and stay in the community."
Other participants in the panel discussion described their talent review assessment processes and special efforts to train nurses and physicians to take on leadership roles.
Succession planning has never been the priority it should be at most hospitals and health systems. Given the new realities, that has to change.
"In my experience in working with health care organizations, I've found that our most successful clients have the most extensive succession plans," said Doug Smith, president and CEO of B.E. Smith, an executive recruiting and consulting firm. "That's no coincidence."
B.E. Smith sponsored the panel discussion, which you can read here.