Succession planning requires multiple managment strategies

January 1, 2010

Changing times can mean strategic changes in executive leadership

The company is creating two new positions to assume Butler's duties:

"Succession planning is not optional, and not something to put on the back burner for another day. It is a critical leadership responsibility, and it is integral to the health and stability of any organization," Hilferty tells MANAGED HEALTHCARE EXECUTIVE. "At the AmeriHealth Mercy family of companies, we have always recognized the need for succession planning at all levels of management. The wisdom of this has been demonstrated repeatedly as key people have left the organization over the years for a variety of reasons."

As recently as five years ago, surveys showed that many healthcare companies had an insufficient succession plans in place. A 2004 study from the American College of Healthcare Executives, "CEO Succession Planning in Freestanding U.S. Hospitals: Final Report," showed that only 15% of the 722 responding companies had identified a specific successor to the current CEO. Further, only 15% of current CEOs had themselves assumed their current position as part of a planned succession process.

RECRUITMENT AN ONGOING EFFORT

But newer research shows that companies are increasingly aware of the importance of an orderly transition, with US healthcare corporations identifying succession planning as one of the main priorities in the next financial year.

"Healthcare organizations must focus on developing and retaining their existing workforce while building frameworks for recruitment in growth periods," says Jayson Saba, senior research associate at Aberdeen Group's human capital management practice. The data from Aberdeen, which surveyed 150 companies between September and October 2009, revealed that the primary reasons for this emphasis on staff retention and development is the lack of qualified candidates currently occupying the recruitment market.

The AmeriHealth Mercy Board has appointed current Executive Vice President Michael A. Rashid to succeed Hilferty as the next company's next president and CEO.

"I am very pleased that the board appointed Michael Rashid to succeed me at AmeriHealth Mercy," Hilferty says. "Michael and I have worked together for 13 years, and the board clearly recognizes Michael's role in the success of the company over those years. I believe his promotion is a validation of the effectiveness of our leadership of the AmeriHealth Mercy team."