Not-for-Profit Hospitals Lack Succession Plans

Sutter Health undertook a six-month “continuity planning” project last year, evaluating 51 top managers across 26 hospitals to determine the extent to which each of their talents matched the organization’s needs.

It cost several hundred thousand dollars, and went a long way toward helping the company figure out who its future leaders are.

Sutter is the exception, not the rule. Only about 40 percent of not-for-profit hospitals and health systems have succession plans, according to a survey of CEOs at 544 organizations published by the Governance Institute.

Donald Wegmiller, chairman of Clark Consulting, tells Modern Healthcare that organizations should systematically evaluate managers to identify and cultivate potential leaders. What’s happening now, he says, is that CEOs are recommending their replacements without really knowing much about each manager’s capabilities.

“If you want to really determine who in the organization is going to step into roles permanently, you need to do a little more than write a name down on a piece of paper,” Wegmiller says. “To our view, there’s very little (real succession planning) being done.

We have seen organizations lose a great deal of talent because there wasn’t any clear-cut plan for those individuals to move forward in the organization.”