As the post-acute sector experiences rapid growth, succession planning is more important than ever. Learn how to turn this challenge into an opportunity ...
With the rapid growth in demand, strategic succession planning in post-acute care (PAC) is more important than ever. Learn how you can turn this challenge into an opportunity with insights from healthcare executive recruiting expert and Furst Group Chairman Bob Clarke.
The post-acute care (PAC) sector is at the center of a historic transformation. According to Modern Healthcare, the expected shift from traditional healthcare facilities to home health over the next two years is projected to reach a staggering $265 billion. In the US PAC sector alone, trend analysts foresee a remarkable surge in home-based care over the next decade, driving the market cap beyond $696 billion by 2032.
Amidst the growing demand, many independent organizations are also quickly approaching a talent gap due in large part to looming executive retirements. Add in the pressure of potential acquisition, and the mounting reality of succession planning and management have become a foremost concern. By proactively strategizing leadership transitions, your organization can harness growth opportunities, cater to evolving patient needs, and maintain a cutting-edge approach to care delivery.
Succession Planning: A Transformative Opportunity
Executive succession planning plays a vital role in ensuring stability, continuity, and effective leadership during pivotal periods of change. By proactively identifying and developing leaders who possess the skills and vision to thrive in the evolving landscape, your organization can position itself for long-term success.
Healthcare organizations must prepare for leadership transitions because the impact of transition goes far beyond the role, affecting culture, productivity, profitability, and more.
Executive leadership transitions are inevitable in every industry, but especially during this new era of customer-centric healthcare. Recent years have witnessed a historic increase in CEO and executive turnover. The trend’s momentum comes from a variety of factors—retirements, migrating executives, mergers, and acquisitions.
The hospice, palliative care, home health, and PACE industries are not exempt from these transformational imperatives. A recent article by Hospice News highlights the disruption caused by CEO succession and the rising need for strategic succession planning within hospice organizations. This specialized field demands leaders who can navigate its intricacies, ensure compassionate end-of-life care, and drive innovation.
Counteracting the Consequences of Change
Subsequently, a lack of planning can result in detrimental consequences. Organizations without plans compromise long-term success to evade uncomfortable discussions in the short term, leaving your organization vulnerable when the need for new leadership arises. Despite the consequences, avoiding succession planning is quite common. According to recent surveys, around 49% of hospital boards lack a formal CEO succession plan, and this trend extends beyond hospitals. In the corporate world, 55% of organizations have informal plans, and 6% have no plan at all. Independent hospice, palliative care, and other post-acute organizations often report having informal or no succession programs in place.
So, if your organization is among those without a plan, you're not alone. Implementing succession planning and management offers several advantages:
- Enhances performance, leading to higher profit margins
- Builds a resilient bench of versatile talent
- Cultivates diverse leadership engagement
- Enables agile strategies for growth
- Attracts and retains top talent
What is the Succession Planning Process in Healthcare?
To thrive in any kind of disruption or change, you need leaders who can seamlessly navigate and guide your team through the myriad of cultural and financial impacts that come in the wake of that change. And if transformation is the goal, a strategic succession plan becomes even more imperative.
Initiating the process can be daunting, especially for boards lacking experience in such planning. You may even be asking, what are the four critical steps of succession planning? First, start by securing support and buy-in from key stakeholders internally and externally, perhaps beginning with the Board and the Executive Leadership Team (ELT). Gradually, this can lead to conversations about the executive’s future plans.
Access these resources for more on building and managing your succession plan:
Article: How Avoiding Succession Planning is Impacting Your Profitability and Future
Video: Live Panel Discussion on CEO Succession & Transition
Article: Succession Best Practices & Competencies for Positioning Yourself for Selection
Case Study: RGA Creates a Standard for CEO Succession
Embrace the Future of Care with Confidence
With an exciting future on the horizon for the post-acute care sector, executive talent management, leadership development, and succession planning are at the heart of transformational change and enduring, sustainable, long-term success. Our client partners appreciate our aligned mission of transforming leaders and their impact on the world. And they value the peace of mind our support and guidance bring to these critical endeavors. Together, we can leave an indelible mark on the healthcare industry and beyond.
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