Interim Leaders as a Strategic Necessity in Healthcare

By Brian Krehbiel

Interim executives have long played a role in successful leadership teams. If a CEO or CFO or COO leaves, an interim keeps things running and helps an organization to maintain business as usual or as close to it as possible. But the interim as a “stand in” is a limited view. This is rarely what organizations actually want—rather, in hiring an interim they usually really want to learn something about the role and about their leadership team.

In speaking with organizations throughout healthcare, I see more of them approaching interim leadership opportunistically, as a chance to gain insight and use it to their strategic advantage. There will be inevitable change at the top, so those hospitals or systems who anticipate it and use it as a learning and growth experience will win out. This is especially true given the current healthcare context:

  • The industry is experiencing tremendous change.
  • Consolidation and M&A activity is widespread.
  • Organizations are getting flatter, reducing leadership layers.
  • Executive turnover is high (for healthcare CEOs, for example, still near 20% annually).
  • Leadership talent is extremely tight and recruiting is tough.

All of these factors point toward a greater role for interim leadership, especially interims brought in from the outside and who are new to an organization. In healthcare, interim leaders can provide strong, capable leadership during inevitable short-term transitions. They can also:

  • Buy valuable time: When an executive position opens up, time is needed not just to recruit a replacement but to really assess and rethink a role. Even and especially for the CEO position, starting an immediate recruitment following a vacancy can be premature and potentially misguided. The organization needs time to take stock. This is especially true during a merger or acquisition. I speak with many hospitals and health systems who struggle to recruit for vacant executive positions if a merger or other partnership is pending. (How do you convince an executive to sign on in the midst of such uncertainty?) An interim can give six months or a year to let a merger play out until there is a better context for recruiting permanent executives.
  • Provide a new lens on the organization: Interim executives are, in many ways, hired consultants brought in from the outside to get first-hand experience in a role and organization. Among other things, they can bring invaluable insight into whether a role – on paper – is set up to succeed, no matter who fills it. As experienced executives, typically with decades under their belts, they’ve seen a few things to share with a new organization. The interim may recommend changes to a role, even the CEO position. During a leadership change, hiring a one-to-one replacement straightaway isn’t always the right thing to do. It could be that the role (CEO, COO, etc.) needs refining in terms of its exact responsibilities and reporting relationships, especially within a larger system.
  • Alleviate pressure on the current executive team: Too often a leadership vacancy creates a bandwidth issue for the executive team. If a COO leaves, for instance, it can be all hands on deck in terms of finding other executives to run operations. Or one executive may be pulled away from his/her “day job.” Unless an obvious successor to a role is waiting in the wings, it is more pragmatic to hire an interim executive to pick up the slack left by a departing executive.

Qualities and Caveats

Therefore, interim leaders are a strategic necessity. The caveat is that an interim executive has to be someone not just new and with an outsider’s perspective, but who gets the organization, its culture, and what its strategic needs are. A good interim executive in healthcare must also be:

  • Experienced, polished, with a strong track record in the industry
  • Positive and proactive
  • Able to hit the ground running
  • Communicative and relationship-oriented; able to provide clear updates on status and progress

It has to be a person who is collaborative and additive to the team rather than someone to stand in. In this respect, hiring an interim – as with hiring an executive permanently – requires care and thoughtfulness around the individual who is selected.

[Note: This article originally appeared on LinkedIn; the original article can be found here.]

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