SUCCESSION BLOG #3 – CRITICAL ELEMENTS OF A SOUND SUCCESSION PLAN
In previous articles in this three-part series, we’ve discussed the relevance of succession planning and steps that may be taken to ensure smooth succession. In this final blog post of the series, we’ll highlight five important elements of a sound succession plan.
- Identification of Critical Functions
A sound succession plan begins with identification of all functions deemed critical to the clinical business enterprise. The term “function” is intentionally chosen over “role” as there may be specific tasks within a given role that are more relevant to continuity than others. A best practice to apply to this step would be to gather leaders and discuss, in hypothetical context, the impact on the practice if each specific individual within your practice would be absent for a consecutive 60-day period.
- Document Timeline Relating to Planned Retirements and Exits
If any of the identified “critical” functions are presently served by individuals approaching retirement age, known to be considering alternative professional options, or believed to be at risk for continued employment, estimate and document the date by which you may need to replace their competency and capacity. In some cases, this may be a known date. More likely, its simply an estimation that you will use to drive actions aimed at mitigating risk.
- Identify Potential Internal Successors Qualified by Readiness
In most circumstances, it is more favorable to backfill retirements and exits of key team members with internal candidates. This can be less costly and a lower risk proposition than recruiting talent from outside your organization. It also, however, works only if internal candidates are qualified to fill critical roles. As a second step in creating your succession plan, objectively evaluate each potential internal successor. In doing so, note the level of readiness to assume additional responsibility, rating candidates according to criteria including “Ready Now,” “Ready Within 12 Months,” or “Ready in Less Than 3 Years.” There are various formal methodologies to assess readiness. If you’re not familiar with these, discuss with your professional advisors, who should be able to assist you. For these “internal prospects,” your objective is to migrate each to “Ready Now” status. Formal development plans aimed at increasing skill levels, broadening exposure, and expanding influence of these valued team members should be documented and executed with accountability.
- Gap Analysis
After thoroughly reviewing internal talent that may be available to fill succession needs, take an objective look at adequacy and ability to satisfy potential transition requirements within necessary time frames. More times than not, there will be a talent “gap.” In these very typical circumstances, proactive leaders create recruiting plans aimed at bringing new talent into the enterprise to assimilate ahead of time of the actual need. A sound recruiting plan will include identification of necessary skills and timeline for hire, as well as post-hire activity aimed at accelerating assimilation into the organization. Such new hires may come in as “Ready Now” or as added bench strength that will add depth and capacity while they await additional responsibility.
- Identification of Interim Coverage Options for Critical Roles and Functions
While planning for anticipated events, you should also be conscious of the potential for unexpected need for leadership coverage. As you look at critical functions within the clinical and business enterprise, ask yourself what you’d do if the team member performing these important tasks left unexpectedly, fell ill, or was terminated. How would you cover their responsibilities for 30 -180 days in a way that limits potential disruption? Although not a specific succession exercise, pre-planning for such events is just as important as long-term succession planning. Make sure that temporary replacements in these important roles have been identified, notified, and are prepared for success.
It’s an unfortunate reality that most practice groups find themselves underprepared for an immediate and unexpected transition in clinical or business leadership. If you fall into this category, the good news is that it is not too late to begin your planning. Investment in sound succession planning is a worthwhile one, providing peace of mind while also protecting and enhancing the value you have created in your clinical business. Don’t wait. Take advantage of the resources and capacity that are available to support your efforts as you look to de-risk talent planning for potential transitions in critical roles within the practice.
Jerry L. Kelsheimer is President of Medic Management Group / MMG Healthcare Solutions. His background includes extensive work in areas including business advisory, leadership development, strategic planning, process improvement, and transaction support. MMG is a national provider of consulting services and back office administrative support to independent and system owned physician practice groups. Additionally, MMG has been formally recognized as a multi-year Northeast Ohio Top Workplaces award winner.