The growing momentum behind the transition from volume- to value-based healthcare has put certain leadership traits and competencies in greater demand for executives to successfully guide their organizations forward.
On top of this shift, as the fate of key healthcare policies hang in the balance, leaders must be comfortable with risk and prepared to execute strategic plans in the face of uncertainty. The ability to deal with risk is important, as it is inherent in many reimbursement models under value-based systems, such as bundled payments.
Identifying and recruiting leaders who are equipped to deal with risk naturally affects executive recruiting and the strategies boards must use to find top talent. Here, Mark Madden, senior vice president of executive search at B.E. Smith, took the time to answer Becker's four questions on how a risk-based environment influences executive recruiting.
Note: Responses have been lightly edited for length and clarity.
Q: As health systems take on more risk under value-based care delivery models, how are boards changing their tactics for executive recruiting?
Mark Madden: This is a sensitive area for boards because they have increased accountability for the leader's performance and the stakes are higher now for organizations. Because there is more risk in the industry, boards have to open up their guidelines for determining the necessary competencies and experience. If you're only going to look for the traits of the traditional healthcare leader, you're probably not going to end up with the leader who will help you manage risk. Boards must broaden their expectations, and in some cases consider candidates who come from outside the healthcare industry.
Q: What traits or competencies are most important for executives to possess in a risk-based environment?
MM: When you are working in a higher risk environment, leaders must be comfortable with risk, but also have the ability to distinguish between good risk and bad risk. They must also be transparent in their communication and embrace change.
Q: What aspects of executive recruiting worked in the past but are not suited for organizations that plan on taking on more risk?
MM: As an executive search firm, we must broaden our focus when evaluating candidates. We can't be stuck on traditional candidates with traditional traits. If we're taking our jobs seriously, we must provide organizations with the best current leaders and future leaders — and they should be different and innovative. They need to be appropriately disruptive. We must also reduce the risk associated with hiring new leaders through the use of technology. We now use new aspects of technology to allow our clients to get a deeper view of candidates and reduce their risk when they make an initial selections for interviews.
Q: What is the most important thing for health system boards and leaders to be aware of as they recruit new leaders going forward?
MM: Healthcare boards and leaders must be aware that it's a challenging workforce environment. Our industry is changing and we're now dealing with a smaller workforce — there are fewer individuals that have enough passion to climb up the ladder. Many people are OK with being a staff level employee. They don't want the stress of the C-suite because they want a better work-life balance. So boards must be aware it will take a substantial amount of time and resources to identify and recruit top talent.
Furthermore, they must be aware that because there is limited talent out there, they must act fast. We've seen with many of our clients there is often a long gap between identifying leadership candidates and engaging them for interviewing. Top talent doesn't stay on the market for very long, so you must move quickly. Taking too long also affects the organization's brand and people's willingness to work with them. People want quick decision makers.