Healthcare leadership in meeting

Growing Pressures Facing Healthcare Leadership

blog ralph henderson 2016New government regulations, increased financial pressures, changes to patient care models and dramatic shifts in the industry's workforce are signaling major changes for healthcare organizations this year. These changes are not only impacting healthcare practitioners -- healthcare leaders also are feeling the strain.

The recent Healthcare Trends – 2016 White Paper by B.E. Smith, the nation’s leading full-service healthcare leadership solutions firm, provides a comprehensive analysis that distills the trends that are commanding executive attention this year.

Among these are the weight of the requirements for leadership to keep up with the rapidly changing healthcare landscape, the fact that healthcare leadership recruitment continues to be a challenge, and mixed feelings leaders have regarding their potential for career advancement in their current positions.

Trend: Vision/Strategy Leadership Requirement

One major trend is healthcare leaders’ daily struggle to keep up with the pace of transformation in their industry. The report showed that leadership competencies and speed of change are the top two concerns for executives.

Leadership skill sets are evolving rapidly in response to these challenges. The intelligence report found the three most important executive attributes are vision/strategy, integrity and communication, with collaboration and agility closely following. Those findings mirror others which identified critical requirements as strategic planning, creativity and change management. Such qualities must be factored into development programs, which often prioritize skills training over leader development, resulting in ineffective leader competencies.

Trend: Leadership Recruitment Remains a Challenge

In today’s demanding environment, hospital CEO turnover is a continuing issue. The American College of Healthcare Executives’ annual report identified CEO turnover at 18% for 2015, holding steady from 2014 and down slightly from the record 20% turnover in 2013. CEO turnover can be the catalyst in additional leadership changes according to B.E. Smith’s intelligence report, the top three executives most likely to depart following a CEO change are the chief operating officer, chief financial officer and chief nursing officer.

Important programmatic disruption can also stem from the loss of a CEO. Initiatives most frequently impacted:

  • Strategic planning and service development
  • Employee/Physician engagement
  • Community relationships
  • Financial performance

Debate continues on the desirability of recruiting top leadership from outside the industry. Healthcare’s transformation, especially as it becomes less hospital-centric and more consumer-focused, places a premium on skills often required in other industries. The top sectors cited in B.E. Smith’s 2016 intelligence report as offering the most qualified leaders are finance, hospitality and information technology.

Yet, as one survey participant stated: “Healthcare experience is crucial and there are more and more healthcare leaders growing from within the industry.” A leading executive concurs, “It is really hard to take someone who is non-healthcare and put them in the healthcare CEO role.” Perhaps that is why 53% of B.E. Smith surveyed executives plan to develop leaders internally, with another 44% recruiting experienced or emerging healthcare leaders from outside their organizations.

Trend: Career Advancement Potential Still Mixed

healthcare trends blog 2016Career development and advancement are the great antidotes to turnover. Particularly at-risk are the healthcare executives who “must leave to advance;” the B.E. Smith report found that one in four find themselves in this category of executives and nearly all would consider a job change. Indeed, in further evidence of the fluid market, 69% of those not seeking to advance would also consider an offer. Such “passive candidates” are a hidden source of potential recruits for hiring organizations and should be considered in any strategic recruitment campaign.

Another important survey implication is the need for more comprehensive use of leadership assessments and talent reviews. Respondents noted that such tracking is heavily skewed to senior leaders rather than managers or high-potential staff who would greatly benefit from mentoring and leadership development.

These trends and the others identified by the Healthcare Trends – 2016 whitepaper point to 2016 being a year that brings a variety of challenges in industry direction, leadership, as well as workforce and career management. Progress continues, but the evidence shows that organizations and leaders will clearly need to work on multiple fronts and seek available assistance to achieve success in today’s rapidly changing and highly competitive healthcare market.