Effective boards begin to identify and develop the CEO's replacement the moment he/she starts.
Ray Flachbart was hired by BCI on September 1, 2000, as senior executive vice president/president designee and spent three-and-a-half months working with Barnett. On January 1, 2001, Flachbart became president and CEO of the Meridian, Idaho-based BCI.
"Be proactive and give yourself plenty of lead time," Flachbart continues. "Too many organizations today don't give succession planning the proper time or importance that it deserves. Take your time and get it right. You are selecting the leader who's going to take your company to the next level."
Flachbart certainly has done just that. BCI grew by 65,000 members in 2004-a 21% increase-and was just named "the fastest growing plan in 2004 among all 40 Blue Cross and Blue Shield plans in America.
A properly executed succession plan-such as the one BCI demonstrated-should be ongoing, involve the board of directors, as well as the entire management team, and be aligned with the health plan's strategic plan. If it isn't, a CEO retirement, death or unexpected termination, all have the potential to leave a healthcare organization vulnerable.
"Without succession planning, it is doubtful healthcare organizations would have the leadership team in place to respond to these challenges," says Michael F. Meyer, Witt/Kieffer senior vice president, who leads the firm's corporate/insurance/managed care practice, and is based in Phoenix. "Identifying key internal and external talent-and grooming them for future leadership roles-are among the principal challenges for healthcare leaders today."
Paul R. Dorf, PhD, managing director at Compensation Resources Inc., in Upper Saddle River, NJ, agrees. "[Succession planning] allows for an orderly transition of knowledge and power, without losing sight of the organizational goals," Dorf says. "Executives who are in the thick of dealing with the day-to-day operations and management of their companies, many times, put succession planning at the bottom of the pile."
Similarly, boards may not want to rock the boat. "But in order to provide for the continuity and future success of an organization, succession planning is critical, and should not be put off-when it may be too late," Dorf says.
Succession planning has taken on a new and higher visibility as boards and owners recognize that they need to plan for the future, according to Dorf. "Boards are starting to recognize that they need to move forward with identifying and cultivating the next generation of management," Dorf says.
"The owner of a company who has a singular focus on growing his/her business may not have-or may not want-to think about their own exit strategy, with the consequence that nothing has been done to prepare the company for their eventual retirement," he says.
Bridging the Diversity Gap in Rare Disease Clinical Trials with Harsha Rajasimha of IndoUSrare
November 8th 2023Briana Contreras, an editor with Managed Healthcare Executive, spoke with Harsha Rajasimha, MD, founder and executive chairman of IndoUSrare, in this month's episode of Tuning in to the C-Suite podcast. The conversation was about how the disparity in diversity and ethnicity in rare disease clinical trials in the U.S. has led to gaps in understanding diseases and conditions, jeopardizing universal health, and increasing the economic burden of healthcare.
Listen
Managing Editor of Managed Healthcare Executive, Peter Wehrwein, had a discussion with William Shrank, M.D., a venture partner with Andreessen Horowitz, a venture capital firm in Menlo Park, California, about how artificial intelligence's role is improving healthcare, where we are today with value-based care and the ongoing efforts of reducing waste in the healthcare space for this episode of the "What's on Your Mind" podcast series.
Listen
35th World AIDS Day Marks 20 Years of PEPFAR: Challenges and Strategies to Combat HIV/AIDS
November 29th 2023PEPFAR, having invested $100 billion and saved 25 million lives in the global fight against HIV/AIDS, faces Congressional hurdles in its reauthorization due to abortion debates. Despite widespread support and no evidence of abortion-related activities, the legislative process is at a standstill. Members of PEPFAR and authors of a recent editorial stress the significance of PEPFAR and advocate for integrating behavioral and social science into healthcare programs to achieve UNAIDS targets and address barriers in HIV/AIDS testing and treatment.
Read More