Gail Boudreaux, CEO of subsidiary UnitedHealthcare, the country’s largest payer, stepped down, while UnitedHealth CFO David Wichmann assumed her responsibilities and became president of the parent company. These and other changes at the top are designed to allow the company to “better serve the emerging markets and our growth, as much as anything.'”
History will judge whether UnitedHealth’s moves were wise, but I applaud an organization that takes bold steps to align its leadership team with its long-term strategic direction. In today’s environment, nearly every healthcare organization is reimagining itself. Along with organizational and operational makeovers, however, must come leadership change. Is the current leadership team equipped to help the organization evolve? Once the planned evolution is complete (UnitedHealth, for instance, envisions a “future state”) who will run the show? Has the leadership team been reimagined as well?
Evolving Leadership
There are two things that boards and their CEOs must do to ensure that leadership is aligned with the hoped-for future state. First, they must engage in comprehensive succession planning for the executive team. This happens less than one might think. According to a survey of healthcare CEOs conducted by my firm, fewer than half of these chief executives and their boards conduct formal succession planning.
Secondly, once succession planning becomes ingrained in an organization’s regular strategic planning, it must be flexible enough to account for potential new roles and creative restructuring of leadership. We see hospitals and systems expanding their C-suites — adding chief strategy officers, chief population health officers, chief patient experience officers, chief governance officers, and other new titles. This is a good sign but these new roles are often add-ons as opposed to pieces of an entirely new executive puzzle.
Another challenge: many ACOs and other organizations are becoming both providers and payers to take advantage of changed reimbursement models and a new competitive landscape. Fine. But how will they evolve their executive team accordingly? For instance, must a future CEO and surrounding team have a balance of provider and payer expertise? Such individuals with dual experience are hard to identify and recruit.
An often overlooked aspect of succession planning is that of the board itself. Boards must do their own succession planning and emphasize it as much as executive succession. Sometimes this means that trustees must have the courage to eventually replace themselves—to set term limits and admit that the board as currently comprised may not be suited for the future it envisions.
A Selfless Act
Succession planning is a healthy practice but not easy. It asks leaders to imagine a day when their roles will be changed or diminished, or they will no longer be in the executive or board team photo. It requires directors and executives to put the good of the organization first, and in this respect exemplifies selfless, forward-looking leadership.
James Gauss is chairman of the Board Services practice at the executive search firm Witt/Kieffer. He has more than three decades of experience advising board members and CEOs on best practices in leadership transition, succession planning, and board member and executive recruitment.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker’s Hospital Review/Becker’s Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.
