Stepping away from the C-suite takes many forms, and hospital and health system executives leave for a variety of reasons, including to retire or to take on new challenges. However, each individual must consider that transition from a business, emotional and personal perspective.
For Peter Fine, who has served as Phoenix-based Banner Health's CEO for 24 years, those considerations were part of his thought process. He announced his retirement in April. However, he began to think about his transition out of the C-suite three years ago.
"I wasn't ready then, but we weren't ready either, because we didn't have an internal candidate at the time," Mr. Fine, 72, told Becker's. "And I wanted to see if we could bring somebody in, have them work with me and the board for a few years and see what would happen."
At the same time, he knew how much longer he wanted to be at the helm.
"You get older. This breaks down. That breaks down. You start thinking about all the pressure that comes from one of these jobs," he said. "And these are high-pressure jobs, especially in certain markets, and they become even more high pressure. There aren't a lot of people who could last in this role for 24 years, let alone voluntarily wanting to do it.
"But I found the job very intellectually stimulating from the very beginning, and I had the opportunity to take an organization, grow it, change it, morph it, develop it with a team and great board members. So it was intellectually stimulating for me. But I also wanted to make sure that I didn't leave in an abrupt fashion and wanted to plan out with the board an orderly transition."
Spencer Stuart, a global executive search and leadership advisory firm, recommends this calculated approach for any C-suite leader leaving their role, based on the firm's conversations with retired health system CEOs for its 2023 article "The Next Chapter for Healthcare CEOs: How to Manage a Successful Transition."
"Succession planning can be daunting," said Kathryn Sugerman, who leads Spencer Stuart's global Healthcare Services Practice and also is a member of the firm's CEO, Education & Social Impact and Board practices. "Early, proactive conversations set the organization and the individual up for a successful transition.
"This gives organizations an opportunity to evaluate the internal talent pipeline and develop the next generation of leaders — both of which should take place months or even years before the transition. This also allows individuals to plan the transition on their terms, with the support of the organization. It gives the individual time and space to consider the legacy they want to leave and thoughtfully plan what is next for them."
Mr. Fine discussed his potential transition timing and management with board members, and in the last half of 2021, they agreed Banner should recruit a president who could predominantly manage operations and also be viewed as a potential successor to Mr. Fine. Heidrick & Struggles, a Chicago-based executive search firm, led the CEO succession project and the search for Amy Perry, who joined the health system as president and COO in November 2021. Ms. Perry will become president and CEO following Mr. Fine's retirement on June 30. Mr. Fine will resign from the board but serve as CEO emeritus through January 2025, providing support to the board and Ms. Perry.
"When we got to the early part of 2023, I started to plan out a timetable and did that with the board," Mr. Fine said. "Once we had a president in place, the decision that we were going to move forward at a specific time and had timing in place, then we talked more aggressively about schedule to get us to a certain point and time.
"We started playing that out. The board started having more dialogue. We hired a consultant last year to work with the board and talk to them individually and as a group about qualities and traits they were looking for in a successor. Of course, that was related to our strategic plan and their own perspectives on what kind of talent would be best for the strategic plan. We weren't looking for a turnaround situation, and you weren't looking into a situation in which someone [would be] coming in to develop a whole new plan. Amy was involved in developing the current plan and ownership of it."
Once those conversations took place, Banner solidified the CEO transition timetable, which was in place by early 2024. The board then decided after interviewing and outside consultation that Ms. Perry met the organization's needs.
"We decided there was no need for me to leave in [until] January 2025 as planned, so we sped up the process and announced I would be leaving in June and Amy would start in the CEO role July 1," Mr. Fine said. "And that I would stay on as adviser to the board and CEO for about seven months until the end of January."
Managing the social and emotional aspects
While starting conversations early and being proactive are an important part of a successful transition out of the C-suite, so is managing the social and emotional considerations of the transition, according to Spencer Stuart.
"Disentangling one's identity from their work can be hard for leaders who have accomplished great things professionally," Ms. Sugerman said. "Going from the C-suite to 'ordinary civilian' can be a profound shift. Cultivating interests outside of work now can lead to better balance and a more well-rounded perspective for C-suite leaders now while also providing a runway for the transition to the next phase."
This is part of Mr. Fine's approach. For example, he plans to start reading books that he has been saving for retirement. He is currently reading "Benjamin Franklin: An American Life" by Walter Isaacson.
"It's fabulous," Mr. Fine said. "Next one on my list is his book about Leonardo da Vinci. So I'm reading books that are interesting, intellectually stimulating, about great people and to understand what made those people great. And I'm a history buff, so I have lots of books like that to work my way through as well."
Planning for the immediate transition
When transitioning out of the C-suite, executives plan for their immediate transition in many ways. But Ms. Sugerman cautioned executives to spend an appropriate amount of time considering their options.
"C-suite leaders are busy," she said. "The inclination when leaving the C-suite is often to pack one's schedule to remain busy. New activities and commitment can be energizing if they are the right fit. Taking time to consider how to spend one's time and not saying yes to everything early on can help leaders transitioning out of the C-suite to find activities that continue to engage and inspire them, not just keep them busy."
Some executives may decide that joining boards is the right commitment for them. However, Mr. Fine decided he does not desire operational responsibilities, whether it is at Banner or another organization. However, he did decide he wants to stay intellectually stimulated.
"I'm on one public board right now. I'm also on the board of a portfolio company for a venture capital firm, which I likely will look to do more work for from a governance perspective, just to ensure I maintain intellectual stimulation," he said. "You can't just go cold turkey from these types of roles."
For executives who do want to join boards, Ms. Sugerman recommended that the individual be strategic.
"Many executives seek board service when they leave the C-suite," she said. "Being a former executive makes one a desirable candidate for a board role, but not necessarily board ready.
"Taking steps towards the end of one's career to prepare for board service can create more board opportunities sooner. What one needs to do to prepare for board service will look different for each executive depending on their career experience and background. This is something that should be discussed with a trusted partner who understands and can advise on board readiness and effectiveness."
Mentorship and giving back
Some executives have considered mentorship and giving back as part of a successful transition from the C-suite. Ms. Sugerman pointed to Kevin Lofton, CEO emeritus of Chicago-based CommonSpirit Health, who founded Elevate, a program to support rising Black healthcare leaders, with Eugene Woods, co-CEO of Charlotte, N.C.-based Advocate Health.
"I worked with some other retiring executives, and some active ones, to come up with an initiative called Elevate Black Healthcare Leaders," Mr. Lofton told Spencer Stuart last year. "We wanted to identify a pipeline of Black healthcare executives who can step into big roles at regional and national systems. We've offered our experience to this group so that as positions come available, we can help them be better prepared."
Ms. Sugerman said many executives enjoy mentoring and giving back throughout their career but have limited time to do so outside of their formal executive role.
Therefore, "finding more ways and new ways to support and advise people in their careers can provide fulfillment," she said. "For some this means taking on more [one-on-one] mentoring and for others this could be joining or creating formal mentoring programs."
No matter what activities or commitments executives take on as they transition out of the C-suite or when they decide to make that transition, Mr. Fine does not encourage people to stay at the helm as long as he has.
"It's a lot. It's stressful. It affects your health if you're not careful. And you want to be able to leave the organization better than you got it," he said. "That's a sign of a great leader.
"And then also you want to leave at a point in time where you still can enjoy your life and have the opportunity to do things. I read a lot about how to transition out of a career, and there is no magic formula. It's unique to the individual. This idea of not doing anything for six months, that's not a bad idea. Keep your contacts and stay engaged with whatever subject matter you want to be engaged in. But don't feel a burden on yourself to do something of significance."