The Must Do's for Welcoming a New CEO

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Tom Haederle
When a new

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Tom Haederle
CEO takes the reins, the

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Tom Haederle
hospital or health system's board of directors is responsible for ensuring a smooth transition. It can be a challenging time that requires the rapid development of a trusting partnership between the board and the incoming CEO to keep hospital operations on track and patient care the best it can be. Welcome to Advancing Health, a podcast brought to you by the American Hospital Association.

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Tom Haederle
I'm Tom Haederle with AHA Communications. Even for the most experienced organizations and governing boards, identifying and welcoming a new CEO is a time of uncertainty, excitement and change. For health care organizations especially, change at the top also provides new opportunities to creatively address some of the field's biggest challenges, including workforce and financial instability. Northwestern Medical Center took advantage of these opportunities to ease the transition for its new CEO and help accelerate their success.

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Tom Haederle
Today's podcast is brought to you by WittKieffer.

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Sue Ellen Wagner
Hello, I'm Sue Ellen Wagner, vice president of Trustee Engagement and Strategy at the American Hospital Association. What steps should board leaders take to ease the transition for the new CEO? Who is responsible for helping the transition? What information does the health care organization share with the new leader and when? These are all questions the board should ask themselves.

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Sue Ellen Wagner
Joining me today are John Casavant, board chair of Northwestern Medical Center, Peter Wright, CEO of Northwestern Medical Center in Saint Albans, Vermont. And Paul Bohne, managing partner with WittKieffer, to share Northwestern Medical's story of their CEO transition. Welcome, and I look forward to our discussion today about CEO transition. I'm going to start with the first question. Where should boards begin to help secure a successful CEO transition?

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Sue Ellen Wagner
And what are some of the best practices to consider? Paul, I'll turn it to you.

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Paul Bohne
Sue Ellen, thanks. And thanks very much for having us as part of the discussion.  This is a key topic on the steps the boards can take to really help to accelerate a new leader. So we're happy with the success story of Northwestern Medical Center to share some anecdotes. You know what I'd say first is, is I see really three key stages as part of successful transitions.

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Paul Bohne
The first has to do with succession planning. The things that boards in partnership with the CEO are doing to look to the future. A second key phase is more specific to the transition planning steps 12 to 18 months before an anticipated retirement. What kind of steps are being taken to prepare for that? And then lastly, as is the onboarding step, which we're going to be talking about as a part of this discussion, really the steps that boards can take to mitigate the inherent risks that come with a new CEO joining.

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Paul Bohne
You know, just to offer a few quick comments about these stages, you know, first, succession planning, of course, is critical. That has to do with how an organization is identifying high potential leaders. One specific step that we see as best practice are how boards can inventory the anticipated key competencies that they'll be seeking in the next CEO. Northwestern Medical Center did a great job of that, and that really is the foundation for helping an organization to move forward.

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Paul Bohne
You know what I see sometimes happen, frankly, is with internal high potential leaders that might be asked, hey, do you have interest in the future CEO role? And sometimes the answer is I might, but I just don't have any clue what the board is going to be seeking. So that's a key step that takes place during succession planning.

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Paul Bohne
You know, I'd also say and we could spend obviously a lot of time on these key phases, but on the transition planning stage, that's really key for how an organization can hold up the mirror on how will this opportunity be evaluated for any candidate, whether that's internal or external. And, you know, one thing that we do with working with clients is to bring basically a lens of here's the key dimensions that candidates are going to be assessing when they're evaluating the opportunity.

00:05:00:24 - 00:05:32:08
Paul Bohne
And those dimensions can include the performance, quality, financial, the strength of the balance sheet, how the organization is viewed in the community, its brand growth. One key facet that we see is also DEI. How is the organization's board composition leadership composition structures aligning to what is said about DEI and how that will inform a candidate's view? So I'll stop there.

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Paul Bohne
But those are, again, some of the key stages that we see.

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Sue Ellen Wagner
John and Peter.

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John Casavant
Paul obviously hit on a lot of the really important things. I think most importantly from a leadership board leadership perspective, I think the board needs to be prepared to be honest and that requires kind of some self-evaluation about the situation. So what is the financial situation? What is the EIB situation? What is the quality situation so that they can present the opportunity and create good expectations for a potential candidate.

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Peter Wright
And from the executives perspective, you know, an executive is stepping into probably a new environment and it's about relationships, right? Is the executive considered, you know, management's representation to the board or board's representation to management? You know, I was very fortunate, there was a really well thought out transition plan, not only before I arrived during the recruitment process to really provide transparency and clarity what the strengths, what the weaknesses are, very clearly what their strategic intent was.

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Peter Wright
So I knew long before I was even a finalist whether I was going to be a good fit. And then during the transition, a lot of communication, a lot of focus on what the board wanted the relationship to be like. And and that goes back to the board's education, the board's development, which reaches far beyond 18 months. It's years and years of continuous investment and their own education and their their own view of of what governance should look like.

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Peter Wright
And so it was it was a lot of good planning. And I've seen it work well and I've seen it be very weak. And so it really has to do with the board's continuous look at themselves and how they view the partnership with the executive.

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Sue Ellen Wagner
Yeah, I'm really glad you mentioned board education, obviously, at AHA Trustee Services, we provide a lot of resources, but board education is really key because these business and community leaders are not coming in from a health care environment. So just understanding that health care environment. But I like how all of you talked about that CEO board partnership. Moving to the next question.

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Sue Ellen Wagner
Did Northwestern Medical Center have a clear framework of the type of leader you actually saw it, and how did that support you during the selection process? John, I think that's for you first.

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John Casavant
Thank you, Susan. That's a great question. We spent a lot of time reaching out to the community, to our strategic partners and to the staff at the hospital, really making sure we understood where we were and where we wanted to go to help us develop the framework of what we wanted in our next CEO. And that certainly made it, I think, much simpler to define when we sat down with a whole bunch of people to interview our CEO candidates, what we were looking for.

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John Casavant
And I think it also gave the candidates a perspective on what they could have from expectation.

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Peter Wright
And it was reflective in the process. You know, the the interview process was structured and designed really to highlight not only the values of the organization and and what they thought was really important, but also how they had mapped out the future. So, you know, from materials to people who participated in the interview process to the types of questions that were asked, I had a really clear understanding ending of where the organization was and where they wanted to be through that planning and structure.

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Peter Wright
And that transition wasn't a planned one. Right. I mean, Northwestern has a long history over the last 30 plus years ... they had an executive who had been there for almost 20 years, one that had been there for almost ten years, and the previous executive was there about 18 months or so and just found out it wasn't the right fit for him.

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Peter Wright
And so it wasn't like this is a oh, we know this is coming. So they had to move quite nimbly in order to get that all together. But the end product was, you know, a very smooth onboarding, a very smooth transition into operations and a strong level of support that I felt that not only are they here for me, but there's a well thought out, well developed plan to ensure that I'm successful.

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Paul Bohne
You know, Sue Ellen, what I would call out that John and the board did a remarkably good job of which is they really built a community around the selection process and is it's so important to hear a lot of voices for a board because this really you know, this is really where the board has to demonstrate very visibly its leadership and exercising its most critical responsibility.

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Paul Bohne
And that, by the way, doesn't mean the board is, you know, democratizing the process or there's a lot of different voices you hear, but going through the selection process. Also critical is to coalesce around what competencies will really equate to success. And so through John's leadership with the committee that was assembled, there were individuals that really could think objectively that were looking out for the organization's best interests.

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Paul Bohne
But they really got to a distilled set of what really mattered most. And that's something that sometimes boards can struggle with if they really don't do the work to to frame what competencies are really going to matter most.

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Sue Ellen Wagner
Yeah, you've all hit on some key points. The key competencies is really critical and I think having that fully developed process so that the board is not only prepared but that the CEOs who are being interviewed also can get a sense of what the hospital's like with the board, what the culture is like, which kind of leads to my next question.

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Sue Ellen Wagner
And Peter, this one's for you. What key needs did you have of the board and of the team and what important questions did you have to accelerate your successful transition?

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Sue Ellen Wagner
That's a great question. Thanks. It what I needed to know is that the board was a cohesive unit with one focus and one message, and it was very clear that the Northwestern board was very disciplined, not only in their own education and training, but in how they develop their position and how they developed their messaging and that they were all on the same page.

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Peter Wright
There's a lot of history that goes into  - when you're on this board, your focus and your loyalty is to the collective success of the organization and not your own individual agenda. That makes a huge difference because the board's then able to, you know, have very robust discussions where there isn't always agreement, but also have a unified approach, which makes it very clear for the executive and very easy to work in a very supportive environment.

00:13:09:20 - 00:13:43:21
Peter Wright
It's also important for me to know how I look at the executive. What's their goal with with the relationship with the executive. And I think that they very clearly see their role as governance, as advocates for what the community needs. And that my role is very clearly in operations and execution of the strategic plan. But as a member of the board as well, that my voice and my perspective was something that they that should be part of their thought process.

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Peter Wright
And so coming into all of that, all the advanced materials, there is a very clear onboarding process where I was oriented internally to the organization. But connection with the community was also very important. You heard John talk earlier about strategic partners, and so meeting those partners, developing relationships with those partners, holding me accountable, asking me and holding me accountable to the relationships with those partners was very important.

00:14:14:13 - 00:14:34:21
Peter Wright
So I went through an assessment and had an outside organization where I took some they're kind of like tests. They were able to kind of pressure test, where am I going to do well? Where am I going to need support? That was great for me. You know, as a as a student of ongoing learning where I am and what I need help with.

00:14:34:24 - 00:14:55:27
Peter Wright
It was great for the board to see this is where we need to let Peter go and do his thing, and this is where we need to surround him and support him. And so as a byproduct of that, I said, Hey, I'd really like to get an external coach to help me get better at these things that this assessment pointed out, and they were 100% behind it.

00:14:55:27 - 00:15:21:21
Peter Wright
So, you know, just that preparation, that approach, and that bleeds into each and every board meeting operations every day, committees. How frequently John and I communicate, I think one of the best tones that John has said as a board chair is every time he and I have a meeting, we connect. The last thing that he says and the last thing that all my committee chairs say is, What can we do to help you?

00:15:21:23 - 00:15:40:07
Peter Wright
What do you need from us in order to help move things forward? How can we be of support? And it just sends a very clear message that above all else, we're here to make sure that you're successful. Because if you're successful, the organization's successful, and that's in the best interests of the community.

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Sue Ellen Wagner
Yeah, you know, that's great. That board CEO relationship is so critical. And even more important is that board chair/CEO relationship. And I think the fact that you have that support from your board is something that's essential to the success of your organization. So appreciate that. Why is it so key to create this working partnership during a CEO transition to ensure success?

00:16:08:06 - 00:16:15:03
Sue Ellen Wagner
And how did you go about establishing your relationship? So I think that's a nice follow up question.

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John Casavant
Yeah, I think it's I think it's pretty simple. It's in my mind, too. And it's it's the it's the key. It is the key to it that we need to we need to be intentional about that. Peter's new in our community. He's got to meet the community. It's helpful to have somebody with him I think is as we all start these new relationships.

00:16:37:24 - 00:17:01:28
John Casavant
So I think intentionality about it, thoughtfulness and then just honesty about the relationship as we start and as we grow that relationship. He needs to feel supported as he goes through this. And he needs to know that we're lockstep beside him. Sometimes we're behind him, and sometimes we're going to need to be in front of him, helping him be, you know, the problem solver that he can be in our community.

00:17:02:05 - 00:17:03:21
John Casavant
To me, it's very simple.

00:17:03:24 - 00:17:32:00
Peter Wright
Yeah. I think it's also the bi-directional flow of information. And I rely on the board to be eyes and ears for the organization because we spend all our time in or most of our time inside the facility and they spend all of their time outside the facility and all of their individual networks. Its this really elaborate ... think of a spider web of of collection of information that they can constantly help me understand what's going on.

00:17:32:02 - 00:18:01:09
Peter Wright
Help me understand the direct and indirect impact of the things that we're doing. And and we can communicate to them and say, here's our position, here's our message, here's what we're hearing, here's what we're doing. And that message. So when when somebody catches John or another trustee at a meeting and says, geez, I had this not so ideal experience, that member of the community can know, they've just they've just escalated that and we can get back to them.

00:18:01:09 - 00:18:23:03
Peter Wright
And, you know, we're a community hospital and the first word of that is community. We're here to serve at the pleasure of the community for the community's benefit. And if we don't do that, there's really no reason for us to exist. So that that bi-directional flow of communication and information sharing is just incredibly important to everything that we do.

00:18:23:06 - 00:18:52:07
Paul Bohne
Know if I can call out Peter, you you talked a bit about the assessment data and we are staunch believers that a best practice for boards is to get in dialog right out of the gate with that CEO to really understand their tendencies. And you know, obviously that kind of data can be great for the selection process. You know, that mitigates risk obviously going through a selection process.

00:18:52:07 - 00:19:14:29
Paul Bohne
But importantly, it's really helpful data that helps to accelerate leaders. I think it's fair to say that it helped John and the board understand Peter has strengths, his gifts, naturally, the things that have helped him throughout his career be successful. And then like all of us, you know, the watch for the things that we that we need to guard against.

00:19:15:01 - 00:19:43:23
Paul Bohne
And then how do you just understand that early so that you're having a healthy, proactive conversation to understand that leader, the kind of supports that leader might need. That's mitigating risk, that that's accelerating a new leader. And frankly, so sometimes we see we we still see so many examples of where boards can go through a selection process.

00:19:43:23 - 00:20:01:05
Paul Bohne
Let's face it, it's exhausting. John might agree it's there's a lot there's a lot of time that goes involved in it, but, you know, staying, leaning in to really play that active role to mitigate risks is just so important for boards.

00:20:01:07 - 00:20:13:25
Sue Ellen Wagner
Yeah, some really great information. Thank you, Paul. How did this transition differ from others that you've been part of or witness? So, John and Peter, I think I'll start with you.

00:20:13:27 - 00:20:34:14
John Casavant
I've been involved with the hospital for about 20 years now, so we've been through a few of these transitions. And I think that every time we go through it, we learn something about the process and what we should be doing, what works well, what doesn't work well. We set out to find the the best candidate, and we interviewed ... the final interviews ...

00:20:34:14 - 00:21:03:10
John Casavant
we interviewed six people over two days. And I can remember thinking after the first day, uh oh, we were hoping and for, you know, a plethora of the perfect candidates. And fortunately, on the second day, we found the right one. So I think that it's the intentionality, understanding what you're looking for and being patient and not forcing, you know, I think we were prepared to say, if we don't have the right candidate, then we're going to keep going.

00:21:03:12 - 00:21:13:21
John Casavant
And I think you have to have that confidence in the system that you set up or the people that you choose to help you through that system, through that process to make it work.

00:21:13:24 - 00:21:37:01
Peter Wright
And because of that, I knew that I wasn't just the best out of the collection that they had, but that I was a right candidate for what they were looking for. And there was incredible focus of transition to organizations. When you get there and you're like, okay, well, what is the most important to me? I got to figure out, you know, I spent my first 100 days trying to figure out what's most important the transition to Northwestern Medical Center.

00:21:37:01 - 00:21:59:12
Peter Wright
I already knew that was very clear before I even had boots on the ground. So I spent my first hundred days and kind of look, learn and listen tour, being very respectful to the culture and, you know, how things needed to mold. I knew exactly where I needed to take action in the first hundred days, and I knew exactly where.

00:21:59:19 - 00:22:16:08
Peter Wright
This isn't a strategic priority. I can sit back and wait and let this flow out a little bit because I had that clear focus, that well-thought out education and transition plan from the board. So I knew that what I was doing was exactly what what they wanted.

00:22:16:10 - 00:22:44:11
Paul Bohne
And I'd say so on the the board really had the appropriate rigor in place. You know, the Northwestern board demonstrates, you know, great governance practices. Going back to what I said earlier as to how candidates assess opportunities, the first question that we're asked by candidates is tell me about the board. So, you know, they're looking at, if you will, how the board kind of approaches its hygiene, so to speak.

00:22:44:16 - 00:23:09:28
Paul Bohne
You know, how are the mechanics of the board demonstrating contemporary governing practices nose in, fingers out, you know, appropriately engaged? So that's something that I think through this specific transition with Peter that they were already going to start from a place of success, just given the functionality of the board and, and through their partnership with Ovation Health Care, give Chip and the team at Ovation a shout out here as well.

00:23:10:00 - 00:23:27:27
Peter Wright
Yeah, I think that's really important. The clarity also allowed me to say great, and it was important to to John and the rest of the board on developing what our relationship is going to look like. So in those early days, I did have discussions with John. How do you want this meeting to go? How do you want us to interact?

00:23:27:27 - 00:23:56:12
Peter Wright
How frequently are we going to connect? When do you want me to call you? When do you want me to text you? And when do we you want me to say that can wait until the board meeting. You know what? That sense of urgency. So we were able to spend time and investing in our relationship and the relationship of the leaders to really make sure that what not only myself, but my leadership team, we were meeting the expectations of the board in terms of communication, in terms of style and and flow.

00:23:56:14 - 00:24:26:19
Peter Wright
And, you know, as a result of that, within those first 100 days, I made sure that we either had breakfast or lunch or a cup of coffee with each board member individually to understand why. Why were they on the board? What did they hope to accomplish during their their years of service, and were they interested in leadership? And how did they think the board functioned as a group and what they wanted from me, not only within operations, but sitting around the board table.

00:24:26:19 - 00:25:07:00
Peter Wright
And it was just a a a well-organized, well thought out process. As a result, I think we have incredibly strong relationships. I think we were able to accelerate the early stages of developing trust, which is the foundation of any executive's relationship with the board. And that has helped us through some really difficult decisions that need to be made and in particular very productive outcomes as we roll into a refresh of our strategic planning process, things you wouldn't normally want an executive to lead in the early days.

00:25:07:03 - 00:25:40:19
Sue Ellen Wagner
Yeah. Thank you. And I know just in my work with boards around the country developing a CEO succession plan is something that many struggle with and and developing ways to enhance the succession plan, frankly, to prepare for when they have to deliver another one. And I think all boards really need to be prepared for that. In fact, our AHA governance survey that we recently released earlier this year really shows that many boards do not have an effective succession plan for their CEO.

00:25:40:19 - 00:26:03:12
Sue Ellen Wagner
So I think this is a really important program for folks to watch. So, you know, given that and you all have shared some nuggets along the way, but what guidance would you give to other health care organizations transitioning into a new CEO? And again, you've mentioned some, but you can repeat, please share so that we can share with others.

00:26:03:15 - 00:26:34:26
John Casavant
I can start I think Sue Ellen. I think be thoughtful. You have to be intentional about this stuff. So whether you have a fully vetted plan or not, be prepared. And I think that's about, as I said to begin with honesty about who you are, where you're going, make sure that your strategic planning is well-vetted and and continuous so that if in our case, we have been in a situation where we have planned for a CEO's exit, it's come upon us.

00:26:34:26 - 00:26:45:00
John Casavant
But I think having all of that basic work done on a continuous basis puts us in a position where if we do need to find a CEO, it makes it a bit easier.

00:26:45:02 - 00:27:21:12
Peter Wright
For my perspective. You know, you need to have a thought out orientation plan. You need to be very clear. The board has to have a conversation and make a decision. As I said earlier, is the CEO, you know, the board's representative to management or management's representation to the board. And I think if you choose the former, a member of the board who then is responsible to lead the management team, those are just more productive relationships. Invest in their own education and development.

00:27:21:12 - 00:28:02:19
Peter Wright
You know, we're talking now about not only trustee education, but who are our future leaders. So John and I just recently had a conversation that we shared with the board. We want to know, do you see yourself as a future leader of the board? Are you interested in leading a committee, maybe being the chair someday so that we can structure that education towards just learning more about how to be a trustee for a health care organization or learning how to be a leader in the trustees for a health care organization. And as a result, that structures this kind of education for these members and this kind of education for those looking for for something bigger.

00:28:02:19 - 00:28:25:29
Peter Wright
And I think that's a great conversation. And again, I'm reminded the best time to plant an apple tree was 20 years ago. The next best time is today. And I think if you look at education and development of not only the executive but the board and how they move together in that harmony and build that trust that will never fail you as a good roadmap for moving forward.

00:28:26:02 - 00:28:51:05
Paul Bohne
Sue Ellen, to the point that you made earlier about succession planning, it's, you know, over my 25 plus years in this work that the needle just hasn't moved, unfortunately, with the the research that demonstrates that just over half of organizations don't have some form of succession plan. So I still see so many misconceptions about it. There is an aspect of where it's  just get to work.

00:28:51:08 - 00:29:20:19
Paul Bohne
There are sometimes courageous conversations that board leaders need to have with the CEO, because obviously that needs to be a partnership. Sometimes, you know, board leaders just don't want to rock the boat. And CEOs may not always lean in to those kind of conversations. So some of this is just really leaning in. You know, Peter said something that resonated strongly with me, which is accelerating trust building.

00:29:20:21 - 00:29:49:23
Paul Bohne
And so for the onboarding phase, I think it's been said, but it's leaning in. John and the Northwestern board have had that mindset of: our role is to help Peter be successful. Candidly, you know, not all boards have that mindset. I applaud them for that. Obviously, it's a balance of keeping accountability and monitoring performance, but it's also that mindset of, you know, we're here to help the CEO.

00:29:49:26 - 00:30:20:27
Paul Bohne
So I'd say lastly, there's a delicacy, but in an importance of creating an appropriate running lane, so to speak, for a soon to be retiring CEO through the transition planning and through a selection process that can be a very profoundly hard time for incumbent CEOs when they're seeing their board go through these steps. But obviously, the CEO needs to be appropriately engaged in the steps that a board takes.

00:30:20:27 - 00:30:29:20
Paul Bohne
But at the same time, there need to also be some guardrails. And so there's a lot of delicacy in that. But then that's one other call out I would make.

00:30:29:22 - 00:30:54:08
Peter Wright
You know, I think it's about it's again, it's about trust and and having that focus on relationship. You know, when a board starts to talk about succession planning, the first thing an executive is going to think is why are you rushing that conversation? Right? I mean, is it by not doing something? So, you know, it's no, it's the idea of, you know, hey, look, if you win the lottery or when you said you plan to retire.

00:30:54:08 - 00:31:19:25
Peter Wright
So John and I have had this conversation already, Hey, I got to retire in ten years. Great. Let's start the planning for who's going to be appropriate fit for your replacement at that time. And we start to look in the organization, great, we've identified two people who might have potential. So we're investing in their education. And I get to have conversations with my team that says, Hey, we want to invest in you.

00:31:19:25 - 00:31:39:19
Peter Wright
The board and I have talked about you as a high performer and having great potential. And so, you know, we want to invest in you over this period of time so that when it's my time to retire, you're a good candidate for them to consider, right? You set the expectation. It's not going to be a give me,

00:31:39:21 - 00:32:00:28
Peter Wright
right? But at least you're prepared for to be a high quality option for them to consider. And those are really fun conversations to have. But when you get to sit down with a member of your team and say you're a high performer and the board sees that too, and we think you could have this kind of potential for the future of the organization that gets them excited.

00:32:00:29 - 00:32:23:27
Peter Wright
It keeps that loyalty to the organization. It also provides security for the board that, okay, this is something that we can talk about. We'll have internal and external options and we're going to grow and develop. So there's intentionality about why this particular executive is in front of the board and we're running this project that may be within or without their scope.

00:32:24:00 - 00:32:41:19
Peter Wright
And those are great conversations to have. I applaud John for having the courage to speak to me about it early in my tenure, not only for my role, but also looking for future leaders on the board and how we cultivate, develop and recruit future members.

00:32:41:21 - 00:32:58:06
Sue Ellen Wagner
Yeah, I actually want to applaud John, you and your board, for going forward with another succession planning. I think what I've learned from this is it's never too early to start, so planning ahead is essential. Paul, any final thoughts before we close out?

00:32:58:08 - 00:33:18:14
John Casavant
Sue Ellen, thanks for having us. I think you've learned here from John and Peter, you know, some of the key steps that can help to accelerate a leader coming into an organization. It's accelerating trust, getting into dialog early. So, wonderful to be with you this afternoon. Thanks for having us.

00:33:18:17 - 00:33:33:18
Sue Ellen Wagner
Great. And Peter, John and Paul, I do want to thank you for joining us today and for sharing your insights and thoughts. If you would like to learn more about WittKeiffer please visit their website at www.wittkieffer.com