Succession Planning Strategies for Health Care Organizations

Over the next 10 years, the workforce will significantly shift as Baby Boomers continue to retire, taking with them a wealth of industry and institutional knowledge. This will compound health care’s current challenge of attracting, recruiting, and retaining high-quality administrative leadership and skilled clinical talent.

These conditions are unlikely to abate as the birth rate continues to decline and workers retire. As a result, heath care organizations must operate with a succession mindset — both for leadership positions and priority operational or clinical positions.

What is a health care succession strategy?

A succession strategy is a documented assessment within an organization’s requirements for leadership positions and a plan for how changes within the leadership will be managed. While the strategy for every organization will differ, it should:

• Be a part of the strategic plan and reviewed annually
• Identify key organizational positions crucial to day-to-day operations and long-term success, and document requirements for the identified positions
• Identify any internal candidates with interest and capacity to step into leadership roles as positions are vacated
• Provide a detailed plan for future leaders when addressing transitions
• Be focused on the organization’s greater mission and reflect organizational values and goals
• Be communicated openly and transparently across the organization

A succession strategy doesn’t determine whether an organization will ultimately fill a position with an internal or external candidate, but it provides guidance for conversations surrounding these decisions. Both options can be appealing.

An internal candidate brings strong institutional knowledge and may integrate into a new role with less disruption. An external candidate can provide a fresh perspective and new qualifications to help an organization access new markets, talent, or revenue streams.

A succession strategy encourages leaders to invest in the people they manage and pass their knowledge on. When an organization has a clear and transparent succession strategy, leaders understand advancing depends on the way they teach and train their staff to replace them. This investment should be communicated formally to help drive organizational focus and behavior.

Targeted succession-minded approaches and strategies for other key positions may be necessary, including physicians, advanced practice providers, and finance professionals. Each of these are important for your organizations’ ongoing success.

How can health care organizations develop internal candidates?

Health care organizations should consider the following strategies to develop internal candidates:

• Make leadership development a strategic priority — Hiring the right people, helping them develop their skills, and encouraging a high level of engagement can help retain top talent in a time where skilled labor may be in short supply.
• Identify critical positions — Keeping the succession plan manageable starts by identifying key positions critical to organizational success, whether that means positions to increase revenue, develop strategy, or create growth, or others with important skillsets.
• Identify high potentials — Who on existing teams are achieving top results and can be a future leader? Organizations may employ leadership development programs or psychometric assessments to help identify candidates with high leadership capacity.
• Draft a preliminary development plan — For each high-potential leader candidate, identify skills gaps and create preliminary development activities.
• Confirm the players and the game plan — Consider creating a talent committee. Conduct regular reviews of the development plan using a transparent and structured process.
• Execute the development plan — Developing internal candidates is hard work, but it ultimately increases the organization’s future success. Organizations should consider adding structured career coaching to development plans so each high-potential candidate receives growth opportunities, as well as the ability to provide feedback on training efforts.
• Monitor progress against goals — Regularly review development objectives and track metrics such as the number of critical positions filled with internal candidates to see the time, effort, and money being used to develop internal leadership is being used effectively.

When should organizations develop a succession strategy?

The short answer is now. Even if leaders are not near retirement age and there are no anticipated transitions, circumstances change. People often get new job opportunities or may get sick. Developing a succession strategy before it’s necessary helps reduce disruption when an employee leaves and can prevent reactive decisions from being made.

What positions within health care require a succession strategy?

While the formal focus of a succession strategy may be centered on key management positions, health care organizations should operate with a succession mindset at all levels. Staff can be cross trained to flex to different roles and be able to step up if a manager is sick or leaves. Having a larger group of capable employees can help things run more smoothly, both for patients and staff. It can also create buy-in, ownership, and commitment.

Don’t forget to consider reimbursement professionals, who are vital in collecting revenue. Reimbursement systems can be complex and difficult to manage, and the technical skills needed to operate these systems — while identifying opportunities for improvement — can be crucial for organizational success. While reimbursement personnel are not often thought of as leadership, it’s important for health care organizations not to overlook these professionals when considering succession strategies.

What if my organization already has a succession strategy?

Organizations with existing succession plans should engage in critical review. Ask:

• Does our plan reflect current organizational priorities and market realities?
• Will the current plan set the organization up for success and growth?
• Should additional key positions be added to our strategy?

Review buyout agreements and other old plans to reflect current market conditions and the organization’s strategic direction. Reflecting on past plans while acknowledging current realities can protect the future health of an organization beyond the loss of a long-time leader.

How we can help

A succession mindset is important across all of health care and life sciences. Our deep health care knowledge coupled with CLA’s talent solutions can help organizations develop succession plans, navigate personnel transitions, and recruit talent.

Contact us

Seeking succession planning guidance for your health care organization? Complete the form below to connect with CLA.