High turnover is a ubiquitous problem in the healthcare industry. Elevated turnover rates are being driven by market forces such as a large number of CEOs reaching retirement age, leadership performance improvement expectations, and industry consolidation. CEO vacancy affects financial performance, community relationships, and employee retention - chief financial officers, chief operations officers and chief nursing officers are most likely to leave an organization following the turnover of the CEO.
The leaving of a key executive is a moment for organizations to sink or swim. Handled well, these transitions will flow smoothly and the organization will often find itself in a stronger, better place than before. Handled poorly and the consequences can have significant and long-last effects. Recruiting the most qualified leaders at the right time is imperative to avoid additional turnover and prevent performance interruption. The quick on-boarding of a proven interim leader who requires minimal training means almost instant time-to-impact. An effective interim C-suite consultant can provide strength and focus so the organization may continue to thrive and grow during a significant leadership transition.
Handling transitions well requires:
1. Understanding the challenges ahead
2. Anticipating issues and likely stumbling points
3. Having strategies and resources at hand to head trouble off quickly
Here, we lay out the challenges that can arise during different types of transitions, and which strategies and resources, such as the utilization of an interim executive, to employ at what time.
Many healthcare executives choose to ‘go out on top.’ They have been a good leader, the organization is well liked, turnover is low, and feedback from all quarters is positive.
In this situation, it is tempting to immediately start a search for a new hire who is similar to the departing executive. However, it is more beneficial to take a step back to re-determine what’s needed for the future success of the organization. Taking the time to review the position’s responsibilities and workload often results in finding that future success requires different goals and skill sets than those needed to get to this point. Resistance to change will abound, but being patient here will reap benefits in the long term.
During this process utilizing a quickly-recruited interim executive allows the organization to successfully operate, and even grow, until the right person is found to fill the position permanently. The interim executive keeps other executive leaders from being overburdened, a situation that often results in more leadership vacancies, and acclimates all staff to the idea of change. Often the interim executive will continue work on a project basis for a short period once the permanent C-suite leader is on board, ensuring a smooth transition, with little, if any adverse effect on facility performance.
In scenarios in which performance has been mediocre, such as fairly frequent complaints, lukewarm participation in surveys with less than stellar reviews, and attracting good talent is possible but turnover is high, the transition strategy is different. Diagnosis of the issues via frank assessments and discussions with staff and remaining executives is critical, and this should not wait for the new executive to arrive. Begin by assessing the executive team dynamic and determine if there is a critical person driving the performance issues, and engage employees at every level in discussions about workplace culture.
Restructuring may be in order, and tensions may run high. It can be especially helpful to recruit an interim C-suite executive to make significant functional changes, manage difficult negotiations, and engineer any departmental reorganization. Often, after the interim exits, so do the negative feelings surrounding the reorganization. Essentially, the interim leader can navigate the tough transactions, and set up the permanent executive for success, and the organization for a fresh start.
When an organization has key areas consistently performing very poorly, they will likely have no community buy-in or business partnerships, and not be able to attract top talent.
The organization needs to be stabilized before a top-notch executive can be recruited. An interim executive with 20+ years of experience will be necessary to stabilize the organization and improve staff morale; and improve the ethics, diligence and intentionality of the organization.
Start-up organizations, or those moving from a volunteer-board management to hired staff, or executing a new business plan, will have a variety of roles that will shift over time as others are hired - it is critical to clearly define job responsibilities. A seasoned interim executive will have experience dealing with unforeseen issues, and help ensure the first members and staff receive the best “executive” communication. The key focus should be on realigning the board’s role from daily operation to governance effectiveness. Once the interim leader gets the organization on its feet, recruitment of the permanent executive can begin.
In some cases, the departure of a long-tenured leader may be seen as “saving” the organization. Here, there will be a lot of uncertainty about current and upcoming changes to culture, relationships, performance expectations, even structure – this is seen as a major change by everyone. This must be handled by ensuring stability for the remaining executive team members that are high performers, and realizing there may be issues that the departing executive has not addressed in the recent past due to “waiting on the next person.” The board or other deciding body must determine if other team members can function for six months (or more) with added responsibilities, or find an interim executive. The interim leader can address any “this isn’t the way he or she did it” attitudes, and create an environment for the new hire in which staff are prepared for change. This is an opportune time to rethink the board-executive relationship, since it’s not going to be “business-as-usual” any longer.
The loss of a key leader can be an opportunity for growth rather than a time to panic. Taking the time for patient, thoughtful assessment of the organization’s needs and the qualities of its next leader, is imperative to the overall success of the organization. Using a quickly-recruited, interim leader gives an organization the confidence that the day-to-day running of the facility will continue without interruption, and the time it takes to properly search for the next, permanent leader who is right for the organization in the long run. This approach requires more time and more work, but surely our facilities, and our residents, are worth it.
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