Korn Ferry Healthcare Executive Survey Finds More than Half Believe Their Organizations Do Not Have a Ready-Now CEO Successor
Los Angeles. February 4, 2019
- Nearly a Third Do Not Have a Succession Plan –
- Two-Thirds Are More Worried about the Age of C-Suite Members Than 5 Years Ago -
LOS ANGELES, Feb. 4, 2019 —. According to a recent Korn Ferry (NYSE: KFY) survey of healthcare executives, there could be a looming leadership crisis at hospitals and healthcare organizations across the United States. More than half (54 percent) of the survey respondents say that if something happened to their CEO, there would not be a ready-now successor.
Nearly half (43 percent) disagree that they have an effective CEO succession plan in place that develops internal candidates to meet future business needs, and nearly a third (27 percent) say they have no succession plan at all.
“Hospital and healthcare systems are incredibly complex entities and it is critical to their success that effective leadership is in place to guide them now and into the future,” said Christine Rivers, Korn Ferry Senior Client Partner, Board and CEO Services Practice. “Succession management programs are key to creating smooth transitions as management changes occur.”
According to the survey, two-thirds (66 percent) of respondents are more concerned about the age of members of their C-suite than they were 5 years ago. However, the survey also found that 85 percent believe members of their C-suite can embrace the rapid pace of technological advancements in healthcare.
“Just like virtually every other industry, technology is at the core of healthcare,” said Rivers. “However, with a strong leaning toward value-based care and outcomes-based strategies, healthcare leaders must also be relentless champions of the people they serve.”
When considering who should be in the CEO succession pipeline, 87 percent of respondents say candidates must be from inside the healthcare industry. Nearly two-thirds (64 percent) believe it is more likely successors will come from inside the organization, and 94 percent say it’s important to have gender and ethnic diversity in the CEO successor candidate pool.
“Since the majority of respondents believe their next CEO will come from inside the organization, it’s important to develop talented leaders across all levels to ensure a solid pipeline of qualified candidates who could one day assume top roles,” said Rivers.
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About the Survey – The Korn Ferry survey was conducted in December 2018 and garnered responses from CEOs, CHROs and other members of the C-suite at nearly 70 healthcare systems and hospitals across the United States.
To what extent would you agree with the following: My organization has an effective CEO succession plan in place that develops internal candidates to meet future business needs.
Agree to a great extent - 19 percent
Agree to some extent - 37 percent
Disagree to some extent - 22 percent
Disagree to a great extent - 21 percent
If something happened to your CEO tomorrow, would your organization have a ready-now successor?
Yes - 46 percent
No - 54 percent
When considering your succession management pipeline, how many levels below the CEO are included?
Only the CEO’s direct reports - 50 percent
Those who report to the CEO's direct reports - 29 percent
Farther down the pipeline - 21 percent
For what extent of time does your succession management plan encompass?
N/A we don’t have a succession plan - 27 percent
1 year - 11 percent
2-3 years - 35 percent
4-5 years - 18 percent
More than 5 years - 9 percent
Does your next CEO need to be someone who is in the healthcare business or could they come from outside the industry?
They must be from inside the industry - 87 percent
They can be from outside the industry - 13 percent
How important is it to have ethnic and gender diversity in the pool of CEO successor candidates?
Extremely important - 44 percent
Somewhat important - 45 percent
Not important - 11 percent
When considering successors to the C-suite, is it more likely that they will come from inside your organization instead of external hires?
Much more likely they will be internal hires - 20 percent
Somewhat more likely they will be internal hires - 44 percent
Somewhat unlikely they will be internal hires - 18 percent
Very unlikely they will be internal hires - 9 percent
Compared to 5 years ago, how concerned are you about the age of members of your organization’s C-suite?
Much more concerned - 33 percent
Somewhat more concerned - 33 percent
Somewhat less concerned - 29 percent
Much less concerned - 5 percent
Are members of your C-suite able to embrace the rapid pace of technological advancements in healthcare?
Yes to a great extent - 25 percent
Yes to some extent - 60 percent
No to some extent - 15 percent
No to a great extent - 0 percent
About Korn Ferry
Korn Ferry is a global organizational consulting firm. We help clients synchronize strategy and talent to drive superior performance. We work with organizations to design their structures, roles, and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop, and motivate their people.