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A CES Success Story Salvaging the Succession Plan When the Heir Apparent Departs Early
Like the football team that cultivates a young backup quarterback for the starter role when the seasoned signal-caller takes his last snap, most institutions write succession plans that envision their number two executive moving up when their veteran chief officer retires. Such plans ensure a continuity of leadership vision and uninterrupted flow in the operation of the enterprise. Succession plans often work well, with the hand-offs occurring smoothly. But occasionally, the execution doesn’t follow the playbook. The organization finds itself needing to reset its leadership plan and to establish a new direction for its future.
Vibrant, successful and expanding, St. Elizabeth Medical Center in Northern Kentucky found itself in such a predicament in early 2007. The Catholic not-for-profit medical center’s senior management had been in place for many years. Joseph W. Gross had served as President and CEO for more than two decades, helping guide the three-campus health system through substantial growth in size and stature. Marc A. Hoffman, a 30-year St. Elizabeth veteran who served beside Joe as Executive Vice President and COO for 18 years, was anticipated to assume the CEO role when Joe retired. Yet, a development appeared on the horizon in 2007 that would soon affect the entire healthcare delivery market in the tri-state area of Greater Cincinnati area. The Boards of Directors of The St. Luke Hospitals, Inc. and St. Elizabeth Medical Center had signed a letter of intent to combine the two long-time competitive health organizations, creating a larger integrated, world-class health system to serve Northern Kentucky and Greater Cincinnati. The anticipated merger underscored the importance of maintaining a strong leadership at the medical center and forced the heir apparent to the CEO job to examine and his life and decide that his personal plans did not mesh with what the hospital would need. “A large part of me is in the walls of this in great organization and to take the CEO job and then retire in a year or two wasn’t in the best interest of either the Medical Center or me,” Marc said recently. “In order to make a real contribution as CEO, to provide honest value, I really would need to invest a lot more time.” Although Marc’s dedication to St. Elizabeth was strong and he was willing to continue service, he couldn’t envision the seven to ten years he saw would be required to faithfully fill the position. So the problem was how to honor Marc’s desire to take early retirement, yet maintain the leadership and momentum of the institution during a very critical period of growth as well as merger and assimilation. The Solution Without hesitation, Joe sought help from an executive search firm St. E had worked with many times in the past. Joe turned to CES Partners, partly because of many previous successes in locating top qualified individuals for St. Elizabeth, but also because he knew the firm would be able to assist in recommending staff structure and Among the leaders CES has recruited for St. Elizabethhave been Martin Oscadal as Chief Human Resources Officer, Jane Swaim as Chief Nursing Officer, Joe Ruark as AVP of Finance, and Joseph Bozzelli as the Director of Pastoral Care. In fact, Barry Cesafsky and CES Partners have been instrumental in successful searches at St. Elizabeth since the mid-1980s, when it placed Mike Walters there as Vice President (now SVP) of Marketing. “Barry Cesafsky knew us better than any other recruiting firm. Barry Cesafsky, in particular, had the intimate knowledge of our system and our core values that would allow him to hit the ground running on this search,” Joe says. “We knew we would be able to count on him again to find a match, find a candidate that who would fit well in our culture.” The Results Consultants from CES Partners met several times with Joe, Marc and representatives of the Board of Trustees to discuss how best to proceed and address the retirement of Marc while assuring continuity of guidance for the medical center and ultimately the identification of Joe’s successor. The panel soon developed a consensus best course of action. The plan was to begin a search immediately for an individual to step into Marc’s role of EVP/COO. Simultaneously, they would promote Marc to the position of President, but set his retirement for a few months after completing the search for his successor as EVP/COO. Meantime, Joe would maintain his CEO role and devote the bulk of his attention to board development and governance issues as well as the pending merger of St. Luke and St. Elizabeth. The next stage of the revised succession plan would be triggered at Marc’s retirement. At that time, the new EVP/COO would report directly to Joe and be considered a leading candidate to ultimately ascend into Joe’s CEO/President role. With the plan established, Barry and his associates at CES Partners began a national search to fill the position of EVP/COO for St. Elizabeth, knowing that the right placement would also soon be candidate to lead the organization. CES developed a position specification that incorporated characteristics that Joe and Marc and the search committee identified as critical factors possessed by successful leaders at St. Elizabeth. They sought a leader who would be constant in pursuit of excellence in four areas: quality of service; human resources; financial performance, and growth. Beyond embodying these core values, St. Elizabeth sought a candidate who had merger experience, strong personal ethics and drive, and a background that would flourish in a faith-inspired organization. While many healthcare leaders in the tri-state area around Cincinnati and Northern Kentucky might be attracted to St. Elizabeth’s vacant EVP/COO post, CES Partners was able to relate the health system’s story outside the regional healthcare market and attract additional qualified candidates. Many top prospects were located, interviewed and screened. Ultimately, the number two executive in the flagship facility of the renowned SSM Health Care system in St. Louis sponsored by the Franciscan Sisters of Mary surfaced as the best candidate for St. Elizabeth.
Soon after starting in his new capacity, John commented on his delight at being part of the St. Elizabeth organization, and about the process that brought him there. “I truly enjoyed the entire recruitment and exploration process,” John said. “CES Partners was well organized and made the path very smooth; Barry presented the position honestly and forthrightly which I am pleased to say has been exactly on target.”
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The Challenge
Identifying John S. Dubis as a prospective leader for St. Elizabeth was a positive step, but luring him turned out to be a tougher task. Including his most recent nine years as EVP/COO for Cardinal Glennon Children’s Medical Center and previously as president of two other facilities, John’s tenure at SSM was highlighted by market share increases and substantial improvements in operating margin. Dubis was in a fulfilling role and content at SSM. So, CES Partners had to present the St. Elizabeth case well before John saw the potential, including an imminent role of leading a system created by the prospective merger of St. Elizabeth and St. Luke. John was invited to fill the St. Elizabeth post and he stepped in as EVP/COO at the close of 2007, a very turbulent year that set the stage for greater change in the healthcare delivery system of the Tri-State area of Greater Cincinnati.