Seeing the Next CEO at an Integrated Healthcare Organization

Selecting a new CEO is a critical moment for any organization. It’s a high-stakes decision, especially when replacing a successful chief executive whose vision, leadership style, and abilities are well-known and admired. The organization faces significant pressure to choose the right person to lead it through an uncertain future. 

A leading integrated healthcare system, which encompasses five hospitals and more than 50 clinics, faced this challenging situation when its CEO departed after 14 years of service. During his tenure, the CEO helped build a physician-led organization with a strong record of community engagement and outstanding results. Under his leadership, the system achieved clinical excellence, earning recognition as one of America’s 50 Best Hospitals. 

When faced with a vacancy in a top role, many healthcare organizations engage search firms to identify external candidates. However, this approach risks selecting someone who may not be the right fit. 

In this case, the healthcare system had a unique advantage. It avoided the risks associated with an external search due to several factors: multiple highly qualified internal candidates, a board of trustees and HR department that had long been preparing for the next CEO transition, and a comprehensive selection process. This process provided a wealth of relevant information about each candidate, ultimately leading to the identification of the organization’s next CEO. 

A Multi-Year Journey 

When the time came to replace the CEO incumbent, the HR team worked closely with the board of trustees to ramp up succession management efforts. They knew the organization hoped to promote from within, instead of looking outside for the next CEO. An internal hire would be the best way to preserve organizational stability, continuity, and its culture of success. 

“We knew it was critical to focus on what competencies were needed in the future CEO, not who should take the helm. We needed a robust succession plan that was development-oriented, and designed and driven to meet both the organization’s complex business challenges and the challenges healthcare faces daily,” the chief learning officer (CLO) says.  

Before its CEO’s departure was even on the radar, the HR team had already partnered with DDI to develop a Success Profile^SM for the CEO role. This Success Profile identified the mix of competencies, experience, knowledge, and personal attributes required for the CEO position. To ensure alignment and connection with the business, DDI and the HR team matched the Success Profile to the organization’s strategic plan and reviewed it annually during talent discussions. 

While having the Success Profile was important, what mattered even more was how the organization used it to build a strong pipeline of internal candidates and accelerate their development. 

“We believe in investing in leadership development, and we knew we had a pipeline of people who potentially could be considered for the CEO role,” says the healthcare system’s CLO. 

The organization conducted annual talent reviews involving C-level executives, board members, and a senior HR executive. These reviews assessed each leader’s readiness to advance. To identify strengths and development areas, succession-track leaders underwent a comprehensive DDI executive assessment. This assessment used job-relevant simulations, inventories, and interviews to create a detailed profile of each leader. The resulting data was then shared with the individual leaders and a CEO-led talent development review group to guide targeted development planning. 

Working the Process 

The healthcare system had cultivated a strong pipeline of senior leaders through accelerated development programs and extensive assessments. However, when the time came to select the next CEO, they needed a rigorous process to make the right decision.  DDI helped to design the six-month selection process. 

The selection process began with an initial screening, followed by a more advanced screening and panel stakeholder interviews for five candidates. Three finalists advanced to DDI’s Acceleration Center in Pittsburgh for comprehensive assessment. DDI customized the assessment to address the organization’s specific business challenges. It included interviews and “day-in-the-life” simulations, offering insight into how each candidate would handle tasks and responsibilities typical of the CEO position.  

The output of this assessment was comprehensive reports specifying each leader’s strengths and development opportunities. The reports also provided critical insights and data about the leader’s readiness to ascend to the organization’s top job. As the leaders had been through previous DDI assessments, the results revealed how much development progress they had made over time. 

The board of trustees invited each candidate to give a SWOT analysis presentation, which allowed the committee to observe the candidate in action applying critical executive-level skills such as strategic thinking and communication. 

The data-gathering phase concluded with additional candidate interviews with members of the search committee and medical and administrative leaders. Afterward, the search committee met to integrate and evaluate the wealth of data collected on each candidate and make a hiring recommendation to the board. 

“Having an outside resource like DDI was valuable at each step of the process. Their consultation and guidance helped keep objectivity and our business needs in the forefront of the discussions. This was particularly helpful when having long-tenured internal candidates, any of whom could have been successful,” says the CLO. 

In the end, the board selected a physician who had previously held multiple leadership roles within the organization. The board of trustees was confident in their selection of the new CEO because of the robustness of the selection process, and the quantity and quality of the data they could access.  But, as the chief learning officer emphasizes, it was also an outcome borne of a long organizational commitment to accelerating the healthcare system’s leaders. 

The previous CEO had prioritized developing physicians as leaders throughout his 14 years of service.  And when it came time to pass the torch, the investment into the systems and structures to do so proved to be a smart one.  

HR’s Role in Selecting the Healthcare System’s Next CEO 

While the healthcare system’s board of trustees ultimately chose the next CEO, the HR team shaped an effective and thorough selection process. 

“It was our role to design, develop, and implement the search process, and get alignment with the search committee and ultimately to get all the board members to say, ‘Yes, this is a good process and, yes, this will get us what we want,’” says the chief learning officer. “We took it from concept to execution along with making sure all of the stakeholders’ needs were met.” 

Another important priority led by the HR team was to seek out stakeholders with differing opinions and facilitate discussion. 

The CLO describes the healthcare system as “a high-performing organization with a very high-performing board and a long-serving, very successful CEO.” As a result, everyone involved had an opinion on the decision.   

The chief learning officer says she and her team worked effectively with the board and met the needs of all key stakeholders because they could draw on outside expertise from DDI. 

“I’ve been told that in many organizations doing a CEO search, HR is relegated to scheduling the interviews. That was not what happened here, in part because DDI assisted us with excellent language about the reasoning and the rationale. They also delivered high-quality consultation and tools to help us conduct highly effective interviews and assess competency. 

“Many of my colleagues from other organizations have asked me, ‘How did you keep a handle on this process?’ I’m convinced that the partnership with DDI and a solid, strong search committee with the right values was how it happened.” 

Learn more about DDI’s succession management solutions.