Change is the new normal in health care, and being prepared for dramatic change at all times is essential for successful health care organizations. Arguably the most significant change that any governing board will go through is the change in leadership when a CEO transition takes place. Regardless of the reason for the change, managing it is essential. Now more than ever, with the exodus of experienced executives from the work force, trustees are not only responsible for finding a replacement, but they may also have the duty of ensuring the success of a new CEO with no prior experience in the corner office.
I was appointed to the CEO position of an independent health system in my early 30s. With relatively little C-suite experience, I relied heavily on my board to help me establish my leadership for the success of the organization. The goal of this article is to suggest a framework for boards to use in facilitating the success of a new or inexperienced senior leader. It is based on John Kotter’s “8-Step Change Model” as outlined in his 1995 book Leading Change.
Step 1: Create Urgency
For successful change to occur, the entire organization should understand the cause of the change. In most cases, the reason for CEO departure is well-known. Boards should be forthcoming and honest about this not only with the staff, but also with the community and other stakeholders The urgency of a successful CEO transition cannot be under communicated. The new senior leader will continue to forward the mission, vision and values of the organization. The leader’s successes will facilitate success for the patients, community and employees.
Step 2: Form a Powerful Coalition
Trustees not only manage the change, they lead it. To do this, they should form a coalition of supporters. Boards often have relationships with people who can be important to the success of a new leader. They should consider building a team of players to huddle around a new CEO. This team might include an experienced local CEO of a non-health care entity to act as a mentor as well as someone from the medical community who has exhibited good leadership and can guide the new CEO into good relations with the medical staff. Every member of the board needs to be willing to share his or her expertise and knowledge. Don’t be afraid to offer every resource possible to your new executive. Having a solid coalition of supporters who become actively involved in the change process is critical.
Step 3: Create a Vision for Change
Creating a vision for change can be broken down into two specific, yet intertwined, areas. First, there is the success of the organization, for which the vision is strategic in nature and should be discussed at the board level. Consider having more time than usual allocated to strategy and planning at board meetings during the initial months with a new CEO. Encourage your new executive to look for opportunities as well as threats in your market to help shape and implement the vision. In some circumstances, the organization should bring in an outside expert to assist in the strategy development process.
The second vision area is the new CEO’s success, which is inseparable from that of the organization. The vision for this change process will often deal more with form than function. Consider hiring an executive coach to assist with this vision. Another option is to consider using a standardized test, such as the Myers-Briggs Type Indicator, to assist a new leader in this process.
Step 4: Communicate the Vision
On behalf of the board, the CEO should communicate the organizational vision to all stakeholders. Special attention needs to be devoted to areas that differ from the past. Any time the board and CEO can be shown to be in agreement will be benefit the new CEO. As to the vision of the successful CEO integration, the change in style, personality and interpersonal relations needs open discussion. Encouraging the CEO to engage the staff in this dialog will only help the organization through the change process. A new leader needs to understand how his or her leadership style is perceived. Self-awareness is a major key to the success of any senior leader.
Step 5: Remove Obstacles
Any CEO transition process includes challenges and roadblocks. They will come in the form of an upset bargaining group, an underfunded medical director, a major compliance concern or any number of other unexpected issues. Keep in mind that the board’s job is not to jump into operations and “get behind the desk,” but to offer support to the CEO primarily through strategy and policy governance. The board should provide an open and non-threatening environment for discussion. Encourage the CEO to find solutions by reaching out to other health care executives who may have been through similar scenarios and be open to using resources for continuing education to bolster his or her knowledge base, confidence and communication skills.
Critics will always be ready and willing to let everyone know when something goes wrong. To combat this, there must be a concerted effort on the part of the CEO and the board to create, achieve, and celebrate short-term achievements. The CEO should be bold about letting staff and stakeholders know when objectives are being met. Furthermore, the board can affirm the success of new leader through organizational publications and at public meetings or other local events.
Step 7: Build on the Change
In Leading Change, Kotter warns that many change initiatives fail because organizations declare victory too soon. Real change needs to be hardwired and proven over time. Therefore, celebrate when a new management initiative proves successful in a particular service line. But don’t declare victory in that initiative until it has been reproduced in many of your service lines with significant and sustained results. And yes, praise your new CEO for developing a beneficial relationship with the once-adversarial practice manager of a competing clinic. But if your goal is consolidation of the primary care market, don’t declare victory until that happens. Small wins are the building blocks to sustained success.
Step 8: Anchor the Changes in Corporate Culture
A successful CEO transition is a significant accomplishment for the organization. As such, the vision for change must match the mission, vision and values of the organization. If implemented properly, an inexperienced CEO will soon become the experienced leader for your organization. The vision for change will have been developed, implemented and achieved. Then new opportunities and challenges will take precedence. What will remain are the core beliefs of the organization and that is what will continue to guide each and every change process for years to come.
Jeremy Normington (email@example.com) is CEO of Moundview Memorial Hospital and Clinics, Friendship, Wis.