Amid an uptick in abrupt CEO exits, some hospital leaders are drawing out their departures.
Carol Burrell, president and CEO of Gainesville-based Northeast Georgia Health System, announced her planned retirement in February — and she did so in a nonurgent manner. She said she would leave "within the next year or so" and is "committed to serving until a successor is identified and there's a clean handoff."
Ms. Burrell is one of a number of CEOs giving retirement notices well in advance. The reasons might seem obvious: Sudden exits, especially from a tenured leader, can disrupt entire systems. A longer transition period gives boards time to identify the right successor and even allows for some overlap in which the outgoing and incoming CEOs can exchange ideas.
But Donna Padilla, an executive partner and healthcare market leader at WittKieffer, told Becker's that most health systems have fallen behind on succession planning. Over the past decade, The Governance Institute has not recorded a significant increase in the practice; at any given time, only 44% of organizations have a succession plan in place, Ms. Padilla said.
When systems do take the time to plan ahead, they're likely to make better appointments, Ms. Padilla said, "They're being far more thoughtful than what can be somewhat reactive."
Torrance (Calif.) Memorial Hospital echoed this sentiment when it announced a succession plan that would take approximately three years. CEO Craig Leach led the hospital for 17 years before deciding to retire, and handpicked his own replacement, Keith Hobbs.
Mr. Hobbs joined Torrance Memorial from the helm of Glendale, Calif.-based USC Verdugo Hills Hospital with the knowledge that he would eventually take Mr. Leach's place. But the title did not shift hands instantaneously: Mr. Hobbs served nearly two years as executive vice president and nine months as president before becoming CEO in November. During that time, he learned directly from Mr. Leach, formed relationships with leadership and front-line staff and led a number of projects. A Feb. 13 blog post from the hospital stated that the transition was a major milestone, and "nothing had been left to chance."
"It's hard replacing a trusted, longtime leader like Craig Leach, but the task was made easier with Keith Hobbs as the candidate," board Chair Greg Geiger said. "We already know what kind of leader he's going to be because he's been here for a few years. We have all the confidence in the world in him."
Memorial Health, a five-hospital system in Central Illinois, took a similar approach. The system is temporarily splitting its president and CEO roles to allow for a gradual transition. On July 1, Ed Curtis will stop being the organization's president and CEO and will be only its CEO. Kevin England, current senior vice president and chief administrative officer, will become president and report to Mr. Curtis. Within a year, Mr. Curtis is expected to retire, and Mr. England will assume the CEO title.
Mr. England told Becker's that lengthy succession plans are common at Memorial Health and help ensure stable transitions.
"It's an extremely well-thought-out and robust succession planning process that the board did not miss a beat with," he said. "And it was well executed all the way up to the point of developing an execution of a communication plan that was put out following the decision."
George Hernandez Jr. has helmed San Antonio-based Memorial Health for 19 years, seeing the system through Hurricane Katrina and COVID-19. He told Becker's he began succession planning around 2006, just one year after taking the job.
"I've been focused on making sure that we had plenty of outstanding leaders in the organization today. This is a very planned retirement that's gonna take a couple of months — but you know, any of us could be here today and gone tomorrow," Mr. Hernandez said.
"I think it's more important that you have the positions filled with key people that can handle their areas of responsibility, no matter who's in charge, and give them enough authority over their areas to manage. The next CEO is the board's decision, but my succession planning has been ongoing — putting the right people in the right jobs in the right place so that we can succeed day in and day out, and if something happens to me or them, the organization will still be strong."