Downloading Success: Executive Succession and Leadership Development – Part 1

Contributors: Bob Clarke and Joe Mazzenga
To learn more about Bob and Joe, 
click here.


image005.jpgIn Part 1 of this two-part series, we explore the executive succession planning (or lack thereof) landscape and the opportunities for leadership development it can represent if undertaken strategically and effectively.

The hospital had waited too long. Barbara (not her real name) had been the CEO for many years, but when she announced her retirement plans, there was no one waiting in the wings to take her place, no one who had been groomed for just this moment.

It was a daunting task to replace her, and not simply because she was well-liked and respected in the facility and the community. The recent years had been rough, and the red ink was growing by the year. It would take some upheaval, and a leader from outside, to begin to turn the ship.

Barbara’s story is a common scenario that, unfortunately, is replayed every year in provider and payer organizations across the U.S. In a recent survey by the National Association of Corporate Directors, 55 percent of organizations admitted their succession plans were informal, and 6 percent had none at all.

Yet if “succession planning” has been ineffective and ignored in recent years, the fault may be in the deployment. For executive succession to work, it must be integrated seamlessly with a long-term commitment to leadership development throughout the organization.

These organizational needs have greater urgency than is always acknowledged. When talent leaves the organization, a gap is created. Departures of key executives create shortfalls in achieving business objectives. In today’s economic climate, that can increase pressures on a healthcare organization exponentially. In addition, the seismic changes created by mergers, acquisitions, and layoffs produce cultural and communication gaps that must be solved by the organization.

Leadership development provides continuity to an organization and accomplishes several key objectives:

• It acclimates and trains young leaders.

• It offers opportunities that help retain executives.

• It reinforces the organizational culture.

• It provides a process that identifies, and rules out, potential successors.

• It ensures attention to diversity remains front and center.

The chief executive officer and the board must drive this process. Indeed, progress in the areas of executive succession and leadership development should be part of the CEO’s performance evaluation. And the board should include trustees who are experienced in guiding the succession process or who have gone through the process themselves as a CEO in their own companies.

Up to 40 percent of the workforce is expected to retire by 2020. That reason alone should spur initiatives to ensure the leadership pipeline is designed and flowing. But surveys show the pace of change is accelerating, beyond the abilities of executives and organizations to keep up. For that reason, some say knowledge and experience will become less important as predictors of executive success than personal traits.

Leadership development and succession planning can reveal which executives are best equipped to lead your health system or insurer through uncertain times in a rapidly changing industry. In addition, many organizations are ill-equipped to deal with a senior executive’s sudden departure due to resignation or illness.

A formalized program creates benchmarks for development and success. It can also eliminate silos and create opportunities for cross-training teams of leaders to tackle nagging organizational issues that may have fallen through the cracks due to the leadership team’s time constraints.

A final reason for the necessity of executive succession and leadership development is retention. These key components of integrated talent management provide senior management a clear understanding of the competencies and expectations of the CEO role as internal candidates in the pipeline. They also provide younger leaders with opportunities and seasoning. And they ensure that leadership in your organization is multi-generational.

In Part 2, we will review key competencies needed to position oneself for selection for the succession planning queue and to optimize your ability to thrive if chosen to lead.


Contact Bob at: [email protected]
Contact Joe at: [email protected]