Recruiting Successive CEO Leaders for Turn-Around & Growth

In 1991, Gratiot Hospital in Alma, Michigan faced a crisis that threatened its very existence. A changing healthcare environment, limited reimbursement, mounting costs and flat utilization of services all led to a dire predicament. By the time the hospital's CEO of 15 years departed, Gratiot Hospital had just a few days of cash on hand. There was genuine concern about whether or not the hospital could meet its next payroll and whether it could continue operating and caring for Gratiot County residents with the same compassion and dignity as it had since 1955.

With the help of Barry Cesafsky and CES Partners Ltd., Gratiot’s Board of Trustees embarked on a path to identify and recruit not only a leader who would help turn the system around, but a succession of leaders who would fulfill the Gratiot mission  for the next two decades, and continuing into the future. 

When Gratiot Hospital was at its  lowest point in its struggle for survival, Barry led the search and recruitment of Bob Baker to serve as the new President and CEO. When Bob arrived, he immediately began assessing the situation.

"I really did not have an appreciation of how much trouble the hospital was in until I got there,” recalled Bob. “Probably nobody knew how precarious things actually were."

Bob then set about the task of righting the ship. He worked with a dedicated and involved Board of Trustees first to establish financial stability and subsequently to  bring about progressive change. By the end of 1993, the hospital was in the black, and it has enjoyed positive margins ever since. The hospital, now an integrated health system, has maintained its strength as an independent front line regional provider through the development of innovative niche services and by establishing collaborative linkages with other area providers.                  

Early in 2002, Bob Baker announced his plan to retire at the end of the year. Although disappointed with the potential loss of Bob to normal retirement, the Board of Trustees applauded Bob's remarkable track record and accomplishments over the previous 12 years. They then set about the task of recruiting a capable successor in order to continue Bob's legacy of leadership. Scott Sheldon, a veteran Board member who was part of the group that recruited Bob in 1991, was designated Search Committee Chair. Without hesitation, he again called Barry Cesafsky and CES Partners.

“Barry had some history with our organization," Scott said, "and that meant a lot. Even though the situation was different after Bob Baker's term, we knew that Barry would apply his knowledge of the industry and bring us a search with a professional, competent CEO that met our needs."                                                                              

Scott and the Gratiot Board knew that the search for a new CEO would be the most important decision they would face. Their challenge was to locate a leader who could maintain the positive growth and sustain the stability that the leadership of Baker had brought to the system and prevent a reversion to the precarious position the health system had struggled through in the late 1980s and early 1990s.

The search began in the summer of 2002. A number of prospects were identified. Source calls were made, resumes were reviewed, and candidates were interviewed and screened. By September, the Board was presented with the resumes of nine capable, qualified and interested individuals. Four were selected for initial interview and two were invited to return for in depth interviews with board members, medical staff, administrative team and community leaders.

After strong positive reactions from Gratiot interviewers about one candidate, the Search Committee recommended that the Board offer the position to Tom DeFauw, the former CEO of Rockford Health System. Tom, a Michigan native, was looking for a challenging acute care setting that would match his personal and professional plans. He and his wife, Susan, were about to send their third child off to college. A move back to Michigan and to Gratiot Health System seemed to fit the bill. Tom accepted the offer and negotiated with Scott Sheldon to begin his new post the first of the year 2003.

"Working with Barry and CES Partners was great," Tom said of the search and transition. "Barry is the kind of person who returns calls and makes himself available to act as a sounding board. This was especially important as we negotiated our terms of employment. He applied his knowledge and professionalism in a real personal way. He truly cared about me and my family and our needs.”

"I am so glad we selected CES," Scott added. "Barry worked with us 12 years ago and he returned to help support our most recent search. I would definitely call on him again."

Tom served as the President and CEO of Gratiot Health System for five years. He  worked to maintain the organization's reputation for providing quality health services while remaining financially strong and expanding the enterprise in the communities that Gratiot serves. Tom had done a wonderful job of leading Gratiot through a successful $60 million building program, which included a new 120-bed four story patient tower and emergency department.  The organization also had strengthened its alliance with MidMichigan Health and its 13 subsidiary organizations.                                    

Yet, in July 2007, Gratiot Medical Center once again sought assistance from CES Partners. After five years at the helm at Gratiot, Tom DeFauw had received an offer that “he could not refuse” from a Michigan health system nearer his home town.  His amicable departure led to a successful search for his successor.  CES Partners worked with the Gratiot Board to recruit Mark Bush as the new President and CEO.  Mark joined Gratiot in early 2008.  CES Partners is proud to have recruited three capable CEOs to Gratiot Medical Center over the last two decades.

For more information about Gratiot Health System, visit www.gratiothealth.org.