Examining the impact of succession management practices on organizational performance: A national study of U.S. hospitals

Abstract

Background: Spearheaded by the industry's transition from volume- to value-based care, the health care reform movement has spurred both unprecedented challenges and opportunities for developing more effective and sustainable health care delivery organizations. Whereas the formidable challenges of leading hospitals and health systems have been widely discussed, including reimbursement degradation, the rapidly aging workforce, and the imminent wave of executive retirements, the opportunity to leverage succession management and talent development capabilities to overcome these challenges has been largely overlooked.

Purpose: To address this key research and practice need, this multiphase study develops and validates an assessment of succession management practices for health care organizations.

Methodology: Utilizing data collected from two national samples of hospital organizations, the results provide a 32-item succession management assessment comprising seven distinct sets of succession management practices.

Results: The results indicate that succession management practices are strongly associated with multiple hospital performance metrics, including patient satisfaction and Medicare Spending per Beneficiary, leadership bench strength, and internal/external placement rate for executive level positions.

Practice implications: The author concludes this article with a discussion of several practical implications for health care executives and boards, including employing the succession management assessment for diagnosing development opportunities, benchmarking succession planning and talent development practices against similar hospitals or health systems, and elevating the profile of succession management as a strategic priority in today's increasingly uncertain health care landscape.