The perks of a lateral CEO move

In terms of title, CEOs have already reached the top rung of the corporate ladder. But that doesn't necessarily mean that they should settle in, Donna Padilla, executive partner and healthcare market leader at WittKieffer, told Becker's: There's still much to be learned from moving sideways. 

Today's healthcare C-suite is burdened by frequent exits and executive burnout, and although the industry demands agility, health systems are historically slow to change. Traditionally, CEOs held their seats for years on end; now, that tide is shifting. When an executive is able to move laterally within a system, they confront new challenges and work different muscles. They might bring fresh ideas and a reopened mind to their former office, resisting stagnancy in both the self and the C-suite. 

Here's what Ms. Padilla told Becker's about lateral CEO moves, and their benefits for both CEOs and organizations. 

Editor's note: Some responses were lightly edited for brevity and clarity. 

Question: Have you been seeing more CEOs move to different C-suite roles within the same organization? 

Donna Padilla: I do think there is something about permission to do things laterally, or do something bigger but different. I do think that's becoming much more acceptable, and it should be: It provides an outlet for people to not have to leave the industry, but allows them to serve in a different manner. 

In the business 20 years ago, we never really had that conversation. [There would be questions like], "Well, why would you do that?" or, "That role looks smaller." Twenty years ago, you would start "here," and the next job is "this," and the next job is "this." While clearly you want to do something that's logically in the ladder as we know it, I think [a trajectory change is] refreshing for the industry.

Q: How could lateral moves within a system help to refresh it, as opposed to more classic entrances and exits?

DP: It gives more perspectives. Even those people sitting within the same executive team haven't had a chance to sit in each other's shoes. We've started to see some health systems take the idea of what used to be fellowships, where they spend a month in finance, and then spend a month elsewhere, and at the early part of their career, they get a real expansive look at what the enterprise is. Some health systems have done a great job of saying, "Okay, you've been on the hospital side, now let's go to the medical group for a little while," or, "Go run our innovation center for a year and then come back," because you get a much different perspective versus sitting in the same place. You don't need to leave the system to be able to have a different experience. 

And it helps with retention, especially as you think of some of the new executives coming in. The younger executives are really looking for something that allows them to chase their passion. And if you have a system that allows a little bit more of that portability, it creates more of a retention path to keep people who might feel like they have to leave and go somewhere else to get that same experience. 

Q: Some health system CEOs have extended their tenures over the past year, arguing that long-standing leadership helps to anchor the organization and give the workforce peace of mind. Do you notice any issues with workforce stability when there's more lateral motion and volatility in a health system's C-suite?

DP: It depends how far down the line it goes. I think complete change can be a distraction when you lose the connectivity with where the care is being done, or where the work is being done. You can have an organization that's spending more time just doing musical chairs than looking at what it needs. Sometimes, there's reasons for the volatility. 

I would never say everyone should sign up for 25 years and stay in the role the whole time. But I think it's how those individual pieces at the executive level fit into each other. Are they gelling in a way that is creating opportunity, new ideas? 

I think if your [executive team] is stable but it's dysfunctional, that can be worse. You don't want to keep a team together just for team sake and stability if it has lost its functionality, lost its vision, or they're all running separate parallel pieces to each other. It doesn't matter how long they've been there: If they've stopped gelling, it's a problem.

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