Sector News

How to Avoid Chaos During Leadership Turnover

April 16, 2015
Borderless Leadership

Good strategic planning by HR executives can minimize trickledown turnover and keep the business on track during periods of leadership transition.

Strong leaders and long tenures don’t always go hand-in hand. Sure, Bill Belichick has coached the New England Patriots to four Super Bowl victories over a 15-year career with the team. But he holds the record for shortest stint of any NFL coach—one day as head coach of the New York Jets in 2000.

Good strategic planning by HR executives can minimize trickledown turnover and keep the business on track during periods of leadership transition.

Since hospital CEOs often have shorter tenures than NFL coaches, the key to keeping your organization thriving is to have a survival plan in place, and to be actively implementing it year round—not just right after the CEO gives notice.

When a hospital CEO, CFO, CMIO, or other high-ranking leader departs, he or she may give many months’ notice, but sometimes, departure comes swiftly, and HR and administration must make decisive choices quickly. John McCabe, MD, CEO and senior vice president of hospital affairs for SUNY Upstate Medical University in Syracuse remembers the sudden turn of events in early 2004 that led to him assuming his current role.

He had been chair of the department of emergency medicine at his hospital for “most of his career,” he says, and when the previous CEO announced his departure, his colleagues knew they would have to find a leader from the inside who would be trusted by both the medical staff and administration.

McCabe’s tenure with the university began in 1987, so he was a known quantity, and hospital’s administration thought his being physician would help make the staff more comfortable with him.

“When [our prior CEO] left, our campus president asked if I would step in on an interim basis to do the CEO’s job… So, I stepped in to that role for a bit, and that seemed to work well for everybody.” He was eventually moved to the CEO role permanently.

Not only did this work well for McCabe, but, the organization faced no real interruption in the wake of its last CEO’s departure.

Finding good leaders—especially just after losing one—is not always so easy, but human resources leaders can make the transition more seamless by following two strategic best practices.

1. Re-Recruit the C-Suite

Has it ever seemed like executives decide to leave their organizations at the same time? It’s not all in your head—they do, says Lydia Ostermeier, vice president of executive search at B. E. Smith, a healthcare management consultancy. “When a CEO departs, there is always lots of uncertainty. Everyone asks themselves, ‘what does this mean for me?’ This can lead to high C-suite turnover,” she says.

“The CFO, COO, or CNO are not unlikely to go with them, if they were very beloved and had good relationship, or if they are just uncertain or uncomfortable after their colleague’s departure. This can lead to unintended turnover,” says Ostermeier. She says she’s recently noticed a trend of former hospital CEOs recruiting C-suite members from their last hospitals to their new organizations.

The turnover trend can trickle down all the way to caregivers, which can lead to a loss of momentum and strategic direction—and even negatively impact quality of care.

“Re-recruiting your top performers is going be key,” says Ostermeier. “HR immediately needs to talk to them.”. Her suggestion is to make sure they know their voices are heard:

  1. Schedule a one-on-one meeting with each member of your current C-Suite.
  2. Explain to them how valuable they are to your organization and to you.
  3. Tell them that they will be part of selection process for the new leader. Make them feel included, and keep them incorporated in the executive search process.

2. Be Prepared and Don’t Panic 

But don’t just keep your C-suite is in the loop—make sure the entire organization is aware that the hospital will continue to operate as usual.

“Some organizations just go in to stand-still mode,” warns Ostermeier. “They were in full-tilt boogie before the CEO departed, but then everything gets put on hold, from construction projects to research, until each department is sure that the new leadership will stand behind each project.”

As a result, financial and clinical performance can both take a dip—a result that McCabe finds completely unacceptable. “Leadership changes should have no impact whatsoever on patient care. If our systems are built right, they should never be dependent on one person to run smoothly.”

Both McCabe and Ostermeier suggest that HR leaders use this time to seek out interim leadership, launch a full-scale executive search and use any succession plan already in place. It’s key to be proactive and get an interim or acting executive in to the role as quickly as possible to keep the wheels turning. 

“Don’t panic. None of us should be irreplaceable. The institution should be able to run just as it always has,” says McCabe. He’s in the habit of asking his employees to always keep an eye open for potential replacements. “All of my reports should be looking around and asking themselves who my replacement is—who can do my job?” He says their reports should be doing the same thing.

McCabe believes in training promising employees to jump in to an open job at a moment’s notice, if need be—just like he did. McCabe acknowledges that this may be an easier process to set up in a for-profit healthcare setting, and says that he definitely thinks it’s a tougher subject to broach in an academic medical center. “In the finely tuned private business world, it’s just an easier conversation to have,” he says. 

Remember that there will always be departures. “Always be prepared,” advises McCabe. “Push the leadership team to talk succession planning. Make sure everyone has a clear understanding of what their team will have to do in the weeks and months after an announcement is made.”

By Lena J. Weiner

Source: Health Leaders Media

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