Multiple factors stand to shake up health care organizations' leadership structures in the coming years, says Will Powley, senior consulting leader with GE Healthcare's Performance Solutions group: economic recovery, health care reform, and, perhaps with the most impact, the impending retirement of the Baby Boomer generation. Combined, these three elements will create a perfect storm for organizations not up to date on their leadership and succession planning, he predicts. "At this point, organizations need to spend some time really determining who their key talents are," he advises. "They need to consider what to do to keep these talents motivated and developing in preparation for dealing with the challenges of health care reform.”
Powley notes that the economic crisis of 2008 has resulted in a "somewhat stagnant" workforce for health care in which employees have resisted the urge to move laterally or vertically, favoring job security over development. This, he says, is on the cusp of changing as the economy recovers: "People are really starting to look for the next opportunity." This leaves health care organizations vulnerable to so-called leadership gaps, in which a leader departs before an ideal candidate can be identified to take his or her place.
Leadership gaps also are likely to occur as members of the Baby Boomer generation, who may have delayed retirement owing to the economic crisis' impact on their 401(k)s, now look again to their plans for the future. "It will be a couple of years before we really see the impact," Powley says, "but organizations certainly need to be deliberately preparing now for the next generation of leaders using a structured process."
Minding the Leadership GapMost health care organizations already have a performance evaluation process in place for employees, Powley says, but many fail to leverage it for leadership development purposes. "Once an employee's performance rating has been determined, organizations typically stop there," he says. "Even among large organizations, very few go any further in terms of a development plan for that person."
Powley advocates a formalized, annual process by which organizations review their talent at the beginning of the fiscal year, then assemble a talent playbook that identifies key employees for succession, assesses resource alignment according to the organization’s strategic imperatives and maps out a development plan for each of them. "The goal should be to determine what they're going to do to keep talent retained and motivated, and would also include a succession plan for each leadership position," he says. "The other component of that is identification of which leadership courses or experiences they want their talent to attend or have in the coming year. A formal talent review session, where each department leader presents his or her team's talents to the CEO, is very critical to this process."
In terms of addressing leadership gaps, Powley's advice boils down to a simple warning: "You can't ignore them." Organizations must make a conscious and conscientious effort to fill any gaps in their succession plans by identifying employees who are the closest to being prepared to assume the role in question, then doubling down on their development. "If you have someone who might one day be right for a position, but is a couple of years away, you need to accelerate their growth with stretch assignments and opportunities to lead projects or initiatives. Put them on stage and see how they do," he says. He observes that this can feel unnatural at first to leaders unaccustomed to sharing their workload—but that the process is critical to ensuring that organizations don't experience negative repercussions when they lose a critical team member to a new position or retirement.
"There are a lot of senior leaders, vice presidents and above, who are still holding tight to the work they did as a director or manager, not allowing the people below them to try that work," Powley says. "Of course, they always think they have too much on their plate. The key is for a current leader to know the capabilities of their employees while believing and having some faith that they can take on more, and different, kinds of work."
Leadership's Next GenerationAnother vital consideration for health care organizations engaging in leadership planning is generational differences, Powley says. "There's an interesting difference I've observed in the last few years with the youngest generation of employees," he says. "They seem to want to do more collaborative work—more social networking within their work, which is a product of the fact that they're a social networking generation. They're more inclined to team and partner, and they're less inclined to take personal responsibility or credit for what they accomplished by themselves."
Current leadership should aim to nurture this new generation of employees by designing development processes that suit their inclination toward teamwork and collaboration, Powley says. "Senior leaders from our Baby Boomer generation need to design leadership curriculums that accentuate these positives, the fact that this generation is very team-oriented, but that also create accountability at the end of the day," he says. "Members of the younger generation are very much self-directed learners. They don't necessarily want to learn in a classroom, but rather want to experience learning in a way that matches their upbringing—point and click, web surfing, Facebook. This plays into how leaders of the future will lead." As an example, Powley cites the customary "new hire orientation" that takes three days of a fresh employee's time. "I'd challenge organizations to say, do you really need that orientation the way you’ve delivered it before, or can you create something shorter, more impactful, and more interactive?”
He concludes by stressing the importance of formalized leadership planning for health care—especially as organizations prepare for a multitude of reform-related changes on the way in the next few years. "Leaders need to take the time to carefully and thoughtfully think about who the next generation of leaders are," he says. "They need a very specific, targeted plan to develop individuals through activities and experiences like coaching, mentoring, stretch assignments, and special training. I think people in health care tend to get caught up in the day-to-day at the expense of strategic thinking. What is important for operations is also important for people development. Organizations must activate a clear and simple talent review, along with succession planning, to prepare for the coming changes in health care.”
