Changes at the Top: Are You Ready?
by Jeri Davis, MBA
For many CEOs who have dedicated their careers to the mental health field and also might have spent 25 or more years with one organization, planning for retirement is akin to writing a will. Consequently, formulating a succession plan to guide a successful transition for both the organization and the CEO often is delayed, ignored, or postponed until it is almost too late. At least 30% of mental healthcare CEOs and senior managers will be of retirement age in the next five to ten years, according to the National Council for Community Behavioral Healthcare (NCCBH), meaning CEO succession planning is a critical workforce shortage issue. This article addresses some of the considerations and succession-planning steps necessary to prepare an organization for the next generation of behavioral healthcare leadership.
Starting the Process
When should a board and CEO begin succession planning? Picking a leaving date is one of the most difficult steps for a CEO. Therefore, to help a CEO overcome this barrier, the board president and CEO should engage in a discussion about strategic planning for the organization and set a date three to five years in the future when the CEO thinks he/she would like to stop working full time. This is particularly important to do if the CEO is not in good health. If the CEO is not ready to commit to a specific leaving date or exit time frame and the board is happy with his/her performance, revisit this question annually. Alternatively, the board may follow an existing policy of a designated retirement age for employees. In addition, all organizations should have an emergency backup plan in case the current CEO leaves unexpectedly for health or other reasons. An interim CEO (typically a member of the current senior management team), who is recommended by the CEO, should be identified and briefed so that he/she can make a point of keeping abreast of organization-wide issues, and he/she should be mentored by the current CEO. However, this person might not be the new permanent CEO, depending on the results of the succession-planning process.
Succession planning is more than finding the next best leader. It is the process of defining the organization's future direction in terms of leadership skills. It also addresses the emotional issues of change for the retiring CEO, employees, and board alike; political issues of key stakeholders both inside and outside the organization; and communication and transition issues necessary to get the new CEO started on the right foot.
Ideally, the planning for this transition should occur over a three- to five-year horizon and include the following phases:
- Phase one: Situational assessment. The board defines the type of leadership necessary for the organization's next phase of growth, typically in the context of a strategic- planning process.
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Phase two: Board engagement and planning. Roles, responsibilities, and timelines are laid out for the succession-planning process.
- Phase three: Search and selection. The 6- to 12-month process during which successors are identified and screened, and a finalist is selected and offered a position.
- Phase four: Transition. The choreographed process during which the helm is transferred from one CEO to another.
Let's examine these stages in more detail. More >
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