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27 April, 2017 Posted by John G. Self Posted in Healthcare, Recruiting
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Challenges of CEO Recruiting In Rural Healthcare

Posted April 27th, 2017 | Author: John G. Self

The most important responsibility a governing board has — whether it is for a large corporation or small, rural community hospital — is the selection of a CEO. The obstacles to achieving success are significant regardless of the size of the enterprise.

For the governing board of a rural community hospital, the challenges are exacerbated by a lack of expertise and resources. Trying to do the best they can on the cheap is a risky approach given that a miss-hire, in the best of circumstances, will cost the organization 100 to 200 times the outgoing CEO’s salary, according to several studies.

We touched on this issue in the second half of Wednesday’s podcast in which I outlined three concepts boards should adopt in their next CEO search.

In today’s post, I want to build on my recommendations to governing boards.

Avoid going it alone. Unless you have significant recruiting experience on the board, I recommend that board members seek outside guidance. This does not mean hiring some big-name search firm, most of which have very little experience in rural community hospitals. For some hospitals a search fee of $45,000 to $70,000 or more, depending on the CEO’s base salary plus expenses, is simply out of the question. However, there are lower cost alternatives. Some firms, like ours, will unbundle their search package and construct a cost-effective approach. This could include guidance on candidate screening, giving the hospital access to a firm’s background investigators, providing support in conducting reference interviews and even assisting with onboarding and team building programs. Onboarding is perhaps the single biggest deterrent to a short, disastrous CEO tenure.

Take the time it takes. The search process is time consuming. It is not a one-meeting-and-done process. Interviewing a candidate for an hour once or twice is simply not sufficient to ensure that you have the right qualified candidate. In such a short frame of time, it is unlikely you will get a real sense of the candidate’s style in handling certain situations. We recommend at least two site visits before a selection is made.

Pay attention to style and culture. Two of the most common problems leading to a job divorce is that the new CEO and the Board are at odds over leadership style and/or the vision for the organization’s future. If you hire a candidate, regardless of his or her prior success, who is from the this is the way I’ve always done it school of leadership and who thinks everyone else should adapt to their style, things will not end well and the organization will suffer mightily.

Don’t believe everything you hear. As a general rule, a candidate’s references are going to be good. Not always, but most of the time you can bet the farm on that premise. That is why you must use the interview to dig up opportunities for secondary references – those names of physicians, board members, employees or community leaders in cities where they previously worked. Develop reference questions that focus on a candidate’s stated accomplishments. Not only do you want to find out how they achieved a specific goal, but you need to ask about specific metrics. There is an important rule to remember in conducting reference interviews: if you don’t ask, the reference will probably not tell.

Onboarding is critical. Finding the right candidate is closely akin to finding the right spouse so it is not surprising that there is a collation between the nation’s divorce and CEO turnover rate — both in the 40 to 50 percent range. Enlightened larger organizations use a program called onboarding to mitigate the risks that a candidate will not be successful. The formal definition of onboarding is the action or process of integrating a new employee into an organization or familiarizing a new customer or client with one’s products or services. Onboarding should be formalized but it does not have to be expensive. With the help of your search advisor you can create an internal program or you can engage a firm to help plan to transition.

Here is a hint: If you hired the right candidate, they will welcome this approach to the transition. If you get pushback with a phrase like “I have done this many times. I do not need that kind of help,” then it is time to begin worrying whether you hired the right qualified CEO.


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© 2017 John Gregory Self

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