Nancy Schlichting met her successor last year on a conference panel; she tapped a Ritz-Carlton exec — whom she met through her frequent visits to the hotel — to run the system's most important hospital opening during her tenure. What executive selections like this mean for traditional succession planning.
It's about who you know. We've heard the phrase hundreds, if not thousands, of times, and if you're like most, it probably rings true when it comes to your career. Most job opportunities come to us thanks to a 'heads up' from an old colleague, mentor or professional acquaintance. And, securing a role is much easier when you can draw on a few relationships for a connection into the hiring organization.
The phrase has especially rung true for leadership at Henry Ford Health System, whose CEO, Nancy Schlichting (set to retire at the end of 2016), has eschewed traditional executive search firms and processes, handpicking her successor, Alameda Health CEO Wright Lassiter.
How did she meet him?
They participated in the same panel at last year's U.S News & World Report's "Hospital of Tomorrow" forum, held in Washington, D.C., according to a Crain's Detroit Business report.
This isn't the first time Ms. Schlichting has recruited a next-generation Henry Ford executive. When the system opened its Henry Ford West Bloomfield (Mich.) Hospital in 2009, she recruited a Ritz-Carlton hotel general manager, Gerard van Grinsven, to lead the new facility.
The leadership choice was a curious one, given van Grinsven had no healthcare experience. Ms. Schlichting apparently saw that as a good thing: West Bloomfield was Henry Ford's first expansion into the affluent Detroit suburbs and was designed with a hotel-like atmosphere in mind.
The hospital has been wildly successful in regard to this aim. When I interviewed him back in 2009 on his appointment and the hospital's opening, van Grinsven said the hospital (hospital!) had already received nine wedding inquiries since its opening.
When asked by Becker's about the move several years later in 2012, Ms. Schlichting said, "I hired [Gerard van Grinsven] from the Ritz-Carlton luxury hospital chain to run the building of West Bloomfield. He saw things in the [hospital's development] that healthcare leaders may not have seen."
Schlichting wasn't the only one with confidence in van Grinsven. This summer, he was named CEO of Cancer Treatment Centers of America.
With the cost of using executive search firms reaching the hundreds of thousands of dollars, it seems a cost-conscious decision for executives to tap their own system's presidents or their own successors. This is especially true (and perhaps only successful) when the exiting CEO has proven highly effective and is well respected within the organization, as Ms. Schlichting is. Ms. Schlichting has led HFHS as president and CEO since 2003, and the length of that tenure would seem to add weight to her recommendation for a replacement.
However, before boards rush to give their current CEOs the power to pick the next chief executive, they may want to read an article, published in August, by Becker's Akanksha Jayanthi: "CEO succession planning: How to use incumbents to help, not hurt, an executive search."
As Ms. Jananthi writes in her piece, "Although CEOs can't handpick their successors, they can take certain steps to ensure their preferred candidate's CV sits at the top of the pile."
I imagine that's exactly what happened at Henry Ford. Wright Lassiter wasn't the only CV, but his newly formed relationship with Ms. Schlichting certainly gave the committee a reason to give him a closer look.
I just wish I knew what he said on the panel that won her over.