How to succeed at succession planning
Lois A. Bowers
When LeadingAge President and CEO Larry Minnix and I spoke about his impending retirement, he told me that the organization's succession plan had eased the process.
“We have a very good board succession plan that was created a number of years ago, and the board updated it a couple of years ago, before there was any reason to,” he said.
Having a plan in place allowed a search committee to spring into action quickly when Minnix decided that it would be best for him to step down while the U.S. presidential race was under way, so that the next LeadingAge leader could help formulate the organization's positions related to the election and be in place when a new president and Congress take office in 2017.
Minnix, of course, announced his planned retirement Feb. 5. His replacement, Katie Smith Sloan, LeadingAge's current chief operating officer, was announced Oct. 16 and formally will begin her new role in January.
My conversation with Minnix came to mind last week as I spoke with Mario Mckenzie, a partner in CliftonLarsonAllen's Charlotte, NC, office. The need for succession planning in senior living was one of three big takeaways from the 2015 LeadingAge–Chief Executives of Multisite Organizations Executive Compensation Study, he said. CliftonLarsonAllen had conducted the study.
American Baptist Homes of the West CEO David Ferguson also came to my mind. He and I had spoken a few days earlier about the progress of ABHOW's merger with be.group, announced in July.
Ferguson told me that he had first talked with be.group's leadership more than five years ago. The timing was right, he said, because if the two organizations were to proceed with a merger, “I knew it would take a long time and it would come up to my retirement. If you don't do it between retirements, you won't do it, because the new CEO wants to make their mark and is not interested in talking themselves out of a job.”
Once the ABHOW–be.group merger is complete, Ferguson will serve as an adviser to the combined organization until his retirement in spring 2017. John Cochrane, the current CEO of be.group, will lead the new entity.
Other senior living organizations would do well to follow the lead of these two forward-thinking organizations, based on my conversation with Mckenzie.
“It's pretty stark how aged the executive suite is, for the most part, and how many [CEOs] are already post-65 years of age,” he said. The situation begs the questions, Mckenzie added: “How well are we developing leaders within the organizations outside of those immediate ranks of the C-suite? And are we creating the types of programs and opportunities to keep people within our industry?”
Organizational boards must assume responsibility for succession planning so that they're not “held hostage by a transition” or a crisis, Mckenzie said. So if you don't have a succession plan, it's time to think about one. And if you do have one, it might be time to review it thoroughly.
Also, look at the internal programs you have in place to encourage those within the organization to learn new skills and seek opportunities for promotion to senior positions. “In a perfect world, we will be creating that pathway well in advance and then, hopefully, aligning our executives to achieve the outcome,” Mckenzie said.
Programs such as LeadingAge's Leadership Academy, recently named in honor of Minnix, are helping to increase hiring options for the field, too. LeadingAge developed the program, Minnix said, because CEOs said their top concern was finding leaders for the future. Several state societies offer programs as well.
How is your organization preparing for your leader's eventual departure? Leave a comment below or let me know at email@example.com.
Lois A. Bowers is senior editor of McKnight's Senior Living. Follow her on Twitter at @Lois_Bowers.