The Big Story: Hospital CEO exits nearly double this year
“Twenty-nine hospital CEOs exited their roles in the first three months of this year, nearly double the 15 chiefs who stepped down from their positions in the same period of 2021.”
What it Means for Healthcare Organizations
The doctor is in. But the CEO may be out.
Whether due to retirement, ouster, opportunity or entrenched burnout, we’re in the midst of significant turnover at the top levels of healthcare.
Even before Q1 2022, healthcare executive turnover was high: The hospital sector had the fourth-highest number of CEO exits in 2021 of 29 industries evaluated in a 2021 year-end report from Challenger, Gray & Christmas. The study also found that hospital CEO departures were up 11 percent relative to 2020.
Why? There are a few possible contributing factors…
- Burnout. This one always rises to the top these days. The pressure of shepherding hospitals through the most phenomenally challenging years in modern healthcare history took a toll on CEOs.
- Bowing out. Many CEOs were approaching retirement age at the time of the pandemic. Yet they held off to maintain continuity through the extended crisis. Now they’re deservedly on the golf course.
- Bottom line. Q1 finances were ailing and the outlook is uncertain. “Inflation concerns have some boards looking to new leadership to weather the coming storm,” said Andrew Challenger, whose firm ran the numbers on CEO departures referenced in the articles above.
- Distance. Many CEOs were less visible during the pandemic due to the frantic nature of the work. With less CEO rounding and few opportunities to gather as a system, the separation between leadership and staff only increased. This wouldn’t necessarily directly cause an exit, but could erode support for the exec.
- Hospital M&A continues apace. Elsewhere, hospital closures are happening. That could mean more movement, and perhaps musical chairs with fewer spots.
- The lure of the new. Amid all of this is the attraction to new opportunities outside of the four walls of the hospital. PE money is flowing, and good talent is in demand outside of the acute care setting.
Those are some “whys.” Now let’s flip the script and consider executive transitions, as, well… an opportunity. An opportunity for the board and other leaders to evaluate and retool; an opportunity for the new leader to bring new ideas. If you’re staring down – or anticipating – an executive transition, here are just a few opportunities and challenging either/or options people will be considering, whatever their vantage point – on the board, in the C-suite or leading a marcom team.
- Imagine the organization’s life after COVID-19. Then ramp up with a leader who understands the likely characteristics of healthcare’swinners and losers.
- Debate between retrenchment and adjusting to encompass more transformation and creativity.
- Weigh whether to bring in an outside candidate with fresh perspective but less context, or an internal one with institutional knowledge but possibly a narrower perspective.
- Look for candidates with some risk tolerance. They’ll need it for this new era of healthcare. The person stepping into the vacancy will have a long list of priorities and a chance to not only adjust course for the organization but also potentially help reshape an industry.
- Use the organization’s communications pros to help the board turn vision into a cohesive story that bolsters support for the transition internally and in the community.
- Listen first and intently throughout the organization and community to understand and connect with hearts and minds before making bold moves.
- Balance the financial and operational imperatives, mandates from the board and the opportunity to make changes – or double down.
- Educate the board on opportunities for change and ideas for adjusting the organization’s strategic vision.
- Bring context to clinicians, staff and the community about the challenges of today and the importance of making key moves in time that benefit tomorrow.
For Marcom Leaders:
- Help the new CEO and leaders to push the board to think in new, positive ways about transformation and consider questions that start with, “What if we…”
- Encourage leadership to evaluate, reinstate or rethink how they interact with various stakeholder groups, particularly when it comes to in-person collaboration and events.
- Seize this moment to assess every aspect of the organization. Find the stories that showcase where things are headed and help leadership explain to employees and the community why transformation is necessary and how they can be involved.
- Know that even without a leadership transition, now is a good time to refresh. The past two years have been traumatic, and marcom should help the organization ask the questions, “Who are we today?” “What do we value?” and “How do we work together?”
- Take pride in the critical role that the communications team plays in carrying the emotions of team members through a challenging time. The win? Ensuring people feel optimistic about what’s next and their ability to tackle it.
This piece was originally published over the weekend in our Sunday Quick Think newsletter. Fill out the form to get that in your inbox every week.