Leadership Succession Planning: Three Key Areas You Must Address

Succession Planning
Mark Madden
September 18, 2019 02:45 AM (GMT-04:00)
Thought Leadership

In today’s fast-changing health care industry, succession planning has never been more important for hospitals and health systems who hope to not only compete, but to win over both leaders and patients

As the health care market continues to innovate to meet patient demands for quality and value, the need grows for talented leaders to pave the way. However, increasing turnover rates and a decreasing active workforce are creating a more competitive environment for organizations searching for new, highly qualified leaders.

Organizations with a ‘revolving door’ approach to filling leadership positions face serious risks, including a loss of bench strength, the erosion of organizational culture and the high financial cost of recruiting and replacing leaders. The health care organizations that are successful in the competition for talent -- and that avoid the costly practice of replacing lost leaders -- are the ones who have a solid plan in place for their internal talent.

Succession planning as a practice began as a simple effort to identify which employees could move into which leadership roles, if needed. The practice has grown and evolved over time to include training and growing of talent, with progressive organizations already realizing benefits to their culture, their business and their daily operations.

As you begin to develop a succession program of your own, there are three key areas to address: culture, operations/finance and people. In order to address each of these aspects, you must understand how each fit into a meaningful succession program, and how to successfully incorporate each into the program as a whole.


Culture plays a large role in succession planning. It is the responsibility of organizational leadership to drive the mission, vision and values – the key components of company culture. If there is no plan in place to transition to new leadership when the need arises, the scramble to fill those roles can be costly, and without an established strategy for moving new leaders into vacant roles, there is no way to ensure the company’s culture will endure. To make succession planning a part of your culture, keep these things in mind:

  • Establish shared values and talk frequently about the benefits of the program
  • Be transparent with changes
  • Attach succession planning explicitly to leadership development and strategic planning


For many Boards, the concept of investing in recruitment is easy to understand, but the costs go much deeper than professional fees. Today, the cost of replacing a CEO for a mid-size hospital can reach up to $300,000. At any leadership level, the true cost of replacing employees can be twice their base salaries (depending on total compensation, role and experience).

Facing these financial risks, it makes sense to establish a program that supports and nurtures your top talent and eliminates the revolving door of costly recruitments. To demonstrate the need for a succession program to your Board, consider taking these steps:

  • Create a succession plan that encompasses all levels of leadership
  • Build in checkpoints, goals and ways to demonstrate return on investment
  • Clearly establish that the program will take time to bring results


According to a 2018 Gallup Poll, 85 percent of employees are unhappy at work. Investing in employees is the best way to position your organization for success not only today, but in the future. A succession plan creates a story you can tell your employees – a story where they are valued, supported and developed throughout their career. Forward-thinking organizations recognize that building a program based on shared values allows you to invest in your team and to create a path to future success. The focus then shifts from filling open positions to acquiring the talent to bolster your organization’s vision, goals and values.

When creating a plan to support your people, remember these points:

  • Establish a clear guide for advancement gives team members a career path
  • Communicate the reason for the succession plan prevents fear of the unknown
  • Discuss the succession program during recruitment to build loyalty and encourage new team members to plan for internal growth

In this challenging time of healthcare reform and a shrinking skilled workforce, planning for the future is more critical than ever – a good succession plan will save you time, money and talent, all valuable commodities in this increasingly competitive environment.

For more succession planning advice from Mark Madden, a thought leader in the area of healthcare executive search, mentoring and succession planning, contact Mark Madden at (800) 209-8143 Ext. 64585 or email: mmadden@cejkasearch.com. Read Mark's white paper on strategic succession planning for a more extensive overview.

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