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A homegrown succession plan fills the ranks with promising go-getters, and saves time and money.
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Vance Reynolds, chief executive officer at River Region Health System in Mississippi, understands the value of working one’s way up to an executive position. He began his career as an assistant CEO in Louisiana before rising through the ranks to his current position. His experience was invaluable in preparing him for his current role: He learned from a seasoned executive who had deep knowledge of the system, and he says his mentor "made sure I learned the ropes, especially in working with physicians. It was so helpful. I saw what worked, how to interact with key relationships and even what not to do."
The advice Reynolds gives to assistants who now train under him: Pay your dues. "You always think you’re ready to move up and can get frustrated if it doesn’t happen within your timeline. Be patient and trust the process" now in place at health facilities affiliated with Community Health Systems Professional Services Corp.
Special Projects CEO Tim Trottier finds value in working as an assistant but also sees advantages to coming in directly as a hospital CEO, as he did. "When you have experiences and successes with other organizations, you can bring them with you," he says. Now on special assignment for Community Health Systems, Trottier had an assistant working with him in his former position as CEO of Easton Hospital in Pennsylvania. His advice: "Establish relationships."
Although Reynolds’ and Trottier’s onboarding experiences were different, both situations reflect the fact that the management company’s executive recruiting team has spent years honing hospital succession plans that now consistently place the right talent in the right jobs and foster that talent throughout their careers. And, we have data that support those assertions.
Sorting a Diverse Crew
Because there is a limited talent pool of chief executive officers, chief financial officers, chief operating officers and chief nursing officers with for-profit health care experience, top-notch C-level hospital executives are rare. Members of Community Health Systems’ HR department, based at headquarters in Franklin, Tenn., must identify and match executives to the needs of each of its 122 affiliated hospitals across the country. Those needs vary by community, culture, hospital size, revenue and specialty. Consider this: With four C-level positions in each facility—and some have more—that’s nearly 500 positions to manage and fill.
Finding top talent each time an executive position becomes available can be difficult and time-consuming, sometimes resulting in significant downtime in these mission-critical roles. And, if the wrong candidate is hired, hospital operations may be negatively impacted for up to two years, including recruiting time and learning curves.
These hiring challenges became even more acute in 2007 when Community Health Systems acquired another hospital company and more than 50 additional hospital facilities sought its management services. There was immediate turnover in some facilities as executives opted to retire, were promoted or changed positions. We found ourselves with more positions to fill—and an urgent need to reduce the unproductive downtime that comes during recruitment. We quickly realized the necessity of a formal process to recruit, develop and retain top-level executives.
Many Points of Entry
We seek talent at multiple levels, specifically focusing on facilities’ needs and candidates’ experience levels. When positions become available, internal promotions and transfers are usually the first considerations. This allows veteran, proven candidates to be called up, greatly increasing their likelihood of success.
We also attend to the other end of the pipeline: New Master of Healthcare Administration or Master of Business Administration graduates can begin their careers as administrative specialists in medium-sized or large hospitals. Specialists are coached, guided and provided specific on-the-job training by experienced top executives in the hospital, or even across the geographic region, as is the case with our chief nursing officers. Specialists receive management development training and are provided networking opportunities.
After 18 to 24 months, specialists typically are ready for challenges in medium or large facilities in assistant C-level roles. More-experienced new hires may start their development at this level.
Growth and advancement of our assistant C-level personnel is expected, not simply encouraged. "We don’t want assistant CEOs or assistant CFOs. We want future CEOs and CFOs," says Bob Horrar, vice president of administration and human resources.
Executives who receive development training can also advance to assistant C-level roles at larger hospitals or, if ready, can move to full C-level positions at small or medium-sized facilities that range in size from 50 to 250 beds. Experienced executives may start directly at the C-level in small or medium hospitals, working up to larger facilities or to a corporate vice president position.
Moving up often involves moving around. We recognize that not everyone can, or is willing to, relocate. Many people have regional or community preferences: "We are keenly aware of geographic differences in cultures and personal styles. Mapping the right person to the right location just makes sense," says Lisa Friday, director of HR and infrastructure.
So, during interviews we find out who is willing to relocate. It’s a given for assistant C-level positions, although full C-level personnel are not expected to relocate. For those willing, affiliated hospitals provide full relocation packages.
Our growth and development system is only part of our succession planning strategy. We acquire top talent in many ways. Our in-house executive recruiting team has found candidates for more than 75 percent of all C-level positions without the use of external recruiting agencies. They find candidates via internal and external referrals and through Internet tools. "Our use of social networking tools, such as LinkedIn, has increased exponentially within the past year. We’re able to build closer relationships to a much broader range of people. Recruiting is all about maintaining relationships, so having that broader reach is invaluable," says Tom Williams, director of human resource and talent acquisition.
Facility leaders have viable candidates interviewed at corporate headquarters at the beginning of the recruitment process. Prior to the on-site interview, C-level candidates complete an online proprietary profile assessment benchmarking them against clearly defined skill sets, behavioral traits and certifications of existing top performers. The assessment is not a personality assessment or intelligence test, but rather a profile to identify each candidate’s areas of strength and potential weaknesses. The assessment produces data allowing recruiters to tailor the interviews with targeted scenarios relevant to each person’s profile, or job-match pattern. The scenarios are real-life situations common to each position and allow us to assess candidates’ thinking and problem-solving styles.
Since we began using this tool in 2006, we have increased our hospital executive hiring success rate to 80 percent, measured by a minimum of two years’ retention and a satisfactory to excellent performance evaluation by facilities’ leaders.
That’s not the only bottom-line impact: From 2008 to 2009, we halved the use of recruiting agencies to fill CEO and COO positions and reduced associated costs by 26 percent.
Keeping Tabs on Top Talent
Once hired, we stay engaged with our facilities’ executives in a variety of ways, including:
Senior executives see the benefits: One in three affiliated hospitals now have assistant C-level managers, allowing senior executives to identify and mentor them as future leaders and anticipate skills gaps. The approach has dramatically increased internal promotions, with 60 percent to 70 percent of our facilities’ C-level positions now filled by internal candidates.
We measure quantitative benefits as well, and release annual turnover metrics and management ranking reports. These reports help us identify:
The reports are distributed annually to five division presidents, who in turn rank their divisions’ hospital administrative specialists, CEOs and assistant CEOs. These rankings provide timelines for promotion by identifying next steps and developmental needs.
Finally, feedback from executives is critical in tracking progress. Such feedback shows that our HR professionals have gained many supporters through the increased internal promotions and decreased recruiting agency fees.
We are proud of our services supporting affiliated hospitals. As each hospital’s operations change and grow, the HR department is evolving to remain relevant. Next on our list is to implement a companywide human resource information system to develop feedback loops between performance expectations and actual performance, evaluate performance metrics, introduce a range of performance review techniques, and store information about employees.
Our focus on advising hospital executives on operation strategies has earned members of our HR department active and consultative voices in hospital administration. As we bring more executive searches in-house, we have more opportunities to get to know our top executives. We watch them move from being job candidates to assistant CEOs to top bosses, and we are proud of their achievements. We also learn from them as they become mentors to future CEOs. We look forward to helping them continue to build a solid foundation for our affiliated hospitals.
The author is director of talent development and retention at the Community Health Systems Professional Services Corp. in Franklin, Tenn.
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