Is the next big group of healthcare workers joining the Great Resignation coming from the C-suite?
Recent reports on hospital leadership point to CEO turnover holding steady at 16% in 2020 and 2021, respectively, which is slightly lower than the 17.6% average over the previous decade. As Modern Healthcare reported in 2020, several systems delayed planned leadership changes amid the uncertainty of the pandemic.
But CEO resignations picked up in the early months of 2022, per a report from the business firm Challenger, Gray & Christmas, and a November 2022 report from the group points to retirements as the No. 1 reason cited for CEO exits in October and throughout 2022, leaving a big question facing healthcare organizations: Will the executive leaders who helmed their organizations through the worst of the COVID-19 pandemic and recent labor shortages stick around through rough financial times and a potential recession?
If top-level transitions are looming, a clear plan for leadership succession will be crucial. Succession planning is an integral part of the strategic planning process and helps mitigate risk associated with turnover, and cultivates existing talent by matching promising employees with future organizational needs.
However, a Nov. 29, 2022, MGMA Stat poll found that 61% of medical groups do not have a succession plan for leadership positions. Another 35% said they do have a succession plan, while 4% responded “other.” The poll had 558 applicable responses.
Medical group leaders who responded “other” noted that they often have informal plans or their own personal ideas about their own succession plans, or they are in the process of defining a formal plan for leadership positions to be implemented in 2023.
A similar MGMA Stat poll from January 2019 found that most medical groups (57%) did not have a succession plan for leadership positions, while 35% did.
These findings echo previous reports from The Governance Institute that found less than half (45%) of hospitals and systems have formal plans for chief executive and other senior executive succession, despite most of those polled noting that such plans were “critical” responsibilities for their boards.
- Read the 2019 MGMA Stat story for 10 steps to developing a plan, as well as the role of using a talent profile grid and professional development dashboard as part of the work.
- For an overview of the importance of succession plans, types of plans, and steps to create a succession plan, read “The necessity of succession plans” by Rebekah Phillips, RN, BSN, MBA, FACMPE, adapted from her ACMPE Fellow paper.
Succession planning: Where to start?
As Kevin J. Pawl, MS, FACMPE, outlined in his ACMPE Fellow paper, any change in the organization’s culture or leadership “can initiate a full review and new understanding of each team member’s roles and responsibilities,” which was achieved using the Responsible, Accountable, Consulted and Informed (RACI) method to help members of the group understand and appreciate each other’s roles. Answering questions about who does what “can provide a road map for succession planning.”
MGMA offers a Succession Planning Template, used to help identify employees who have current skills — or the potential to develop skills — that can help them move up in an organization or into other positions.
Developing new leaders begins with assessing needs
Understanding who will be the next generation of leaders in your organization should follow a leadership needs assessment to determine the capabilities and traits of that leader.
Leaders from the Mayo Clinic’s very large radiology department detailed their approach to this challenge in a 2019 MGMA Connection magazine article, building a framework of 10 desired competencies across four domains (self-leadership, opportunity leadership, people leadership and strategic leadership) they valued when identifying candidates for leadership positions.
The department then built a curriculum to target and support the desired behaviors for each area and address any deficiencies.
Building processes for succession and strategic management
The Mayo Clinic team, in a 2020 article for MGMA Connection magazine, further detailed how succession management fit within annual planning processes, since reviewing goals and key metrics for the year ahead requires efforts “to plan the human capital required for the future” — or workforce planning, as defined by the National Institutes of Health.
The Mayo succession management process includes three main steps — Identify, Assessment and Development — to help forecast for future transitions, identify emerging talent, review performance, assess candidates’ potential and readiness, initiate career discussions, support their movement into new roles and maintain a scorecard or metrics to assess the strength of the organization’s “bench” of up-and-coming talent.
The processes outlined in the article were used to track more than 500 talent pools across Mayo Clinic’s 70,000-plus employee population.
As the authors note, “formalizing succession management will provide leaders with the business need, process and tools to effectively develop leaders,” and that it’s important for senior leaders “to think about the scope and depth of succession management” beyond their own roles in the C-suite, including “other mission-critical roles throughout the organization.”
Acknowledgment: MGMA acknowledges the extensive contributions of Ronald Menaker, EdD, MBA, FACMPE, and his co-authors on the above-referenced publications.
Do you have any best practices or success stories to share on this topic? Please let us know by emailing us at email@example.com.
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