Six Components of Leadership Development Success
Healthcare Technology Trends in 2024: Enabling Patient Care at Home
Six Components of Leadership Development Success
Today’s healthcare environment remains challenging. Despite general industry recovery from pandemic lows, many organizations continue to struggle financially, and all face the rigors of adapting to manifold rapid changes. Building high-performance leadership teams at all levels that can create positive, thriving cultures is critical to success in today’s health systems. This article briefly explores the rationale for investing
in leadership development and offers six core components leaders should consider in crafting a comprehensive strategy.
The Complexity of Leadership Healthcare confronts a daunting array of threats and opportunities, particularly in four areas highlighted in the 2023 B.E. Smith Leadership Trends Report (hereafter BES Trends Report) (Figure 1). Each area requires balancing dual imperatives of cost containment and investment for growth.
Financial Pressures
Growth Demands
Workforce Challenges
Digital Transformation
Figure 1
Surveys of leaders consistently name specific top priorities within these areas: revenue growth, staff recruitment and retention, cost control, patient experience and safety, virtual care, and technology infrastructure. 1,2 The list is diverse and complex, as is the set of financial improvement and growth initiatives being pursued (Figures 2 and 3). 3 ,4
1 Sage Growth Partners, The New Healthcare C-Suite Agenda 2024-2025, January 22, 2024. 2 Huron Consulting Group, “Leaders Innovate to Tackle Top Challenges,” 2024. 3 Ibid. 4 VMG Health, Health System Leader Expectations for 2024, January 2024.
© B.E. Smith 2025
BESmith.com | 2
Six Components of Leadership Development Success
TOP COST-SAVING MEASURES THIS YEAR
38% 36% 35% 31% 30%
SUPPLY CHAIN COST REDUCTIONS
INCREASING INTEROPERABILITY & SYSTEM OPTIMIZATION
REDEFINING PORTFOLIO
WORKFORCE COST REDUCTIONS
RECONFIGURING ECONOMIC MODEL
Figure 2
STRATEGIC GROWTH FOCUS FOR 2024
SERVICE LINE PARTNERSHIPS
PHYSICIAN ALIGNMENT
MERGERS & ACQUISITIONS
EXPANSION INTO NEW SERVICE AREAS
Figure 3 | Source: VMG Health
These efforts play out against a backdrop of changing national economic conditions, regulatory complexities, and pressures from growing patient consumerism. 5 Decision-making becomes more complicated and the risk calculus increases.
5 Optum, 2024 Annual Health Care Trends Report, May 2024.
© B.E. Smith 2025
BESmith.com | 3
Six Components of Leadership Development Success
Leadership Development: An Increasingly Critical Investment In this challenging environment, sustained investment in leadership development is timely and promotes long-term success. Common barriers such as tight budgets and limited time to devote to the effort certainly need to be addressed, but the “return on effective leadership investment” can be high. B.E. Smith’s client experience shows that organizations differ in their levels of commitment to leadership development. Leaders frequently characterize their programs as informal or sporadic. An ideal program maintains consistency over time, adapts to evolving strategic leadership requirements, and matches the needs, culture, and finances of the organization.
2:50
GET EXPERT INSIGHTS
Developing a strong leadership team is a multifaceted endeavor. A comprehensive, strategic approach that incorporates retention, recruitment, and other variables is advisable. Six building blocks form the backbone of this approach: assessment, programs, succession planning, retention, recruitment, and interim leadership.
© B.E. Smith 2025
BESmith.com | 4
Six Components of Leadership Development Success
Six Components of Successful Leadership Development
A brief review of current data, observations, and recommendations in each of these six elements helps planners devise the optimal portfolio for their organizations. Additional consideration should be given to the fact that the components often intersect and reinforce one another.
1: Leadership assessment Strategic, enterprise-level leadership development begins with an assessment of current leadership needs and how well the organization’s team meets them. This process forces clear understanding and enables construction of a leadership roadmap that should be regularly updated. A dual focus powers these assessments: required leadership competencies and the landscape of roles.
5:41
GET EXPERT INSIGHTS
Skills and qualities BES Trends Report mapped leaders’ perceptions of critical executive
31%
19%
14%
12%
VISION / STRATEGY
INTEGRITY AND TRUST BUILDING
ABILITY TO BUILD POSITIVE CULTURES
COMMUNICATIONS
traits. Respondents ranked the top four:
Vision and strategy perennially top the list, reinforcing the importance of navigating healthcare’s complex changes and generating sustainable growth. Envisioning new business and clinical models is essential, including in academic medicine where educational requirements are being rethought.
© B.E. Smith 2025
BESmith.com | 5
Six Components of Leadership Development Success
The stakes are high. “Without strong leadership driving these changes,” concludes one analysis, “progress can stall, leaving health systems struggling to take the next step forward.” 6 Every industry now seeks leaders who can “generate new ideas, challenge traditional thinking, and collaborate on meaningful change.” 7 Bolstering trust in healthcare institutions is vital. A recent study showed that over one-third of healthcare customers occasionally or rarely trust their healthcare organization. 8 Integrity, good communications and creation of the right culture are crucial skills for leaders in trust-building.
Soft skills have steadily gained importance. A pair of management experts calls them “meta skills” and identified five required for successful twenty-first century leadership (Figure 4). 9
SOCIAL CONNECTION
PROSPECTION The foresight that allows us an edge in preparing for what is to come
RESILIENCE The cognitive and emotional agility to grow stronger through challenge
INNOVATION The innovation mindset that turns challenge into entrepreneurial opportunity
MATTERING The connection to our essential why to fuel each chapter of rebuilding
By way of Rapid Rapport: the ability to quickly form trust with new colleagues across difference
Figure 4 | Source: Kellerman and Seligman
6 M. Defreitas, “How CFOs Are Taking Charge of Financial Accountability and Care Strategy,” HealthLeaders, August 27, 2024. 7 P. Leinwand, M. Mani, B. Sheppard, “Reinventing Your Leadership Team: Your Organization’s Future Depends on Getting This Right,” Harvard Business Review, January-February 2022.
8 Smart Communications, The State of Healthcare Customer Experience, 2024. 9 G. Rosen Kellerman and M. Seligman, Tomorrowmind, (New York: Atria Books, 2023).
© B.E. Smith 2025
BESmith.com | 6
Six Components of Leadership Development Success
Roles BES Trends Report also opened a window onto the healthcare roles that are growing in importance (Figure 5). The top categories underscore the industry demands to improve clinician well-being and productivity, the overall patient experience, and the implementation of value-based paradigms.
ROLES CURRENTLY GROWING IN IMPORTANCE
CLINICAL LEADERSHIP
PATIENT EXPERIENCE
VALUE-BASED CARE
POPULATION HEALTH MANAGEMENT
QUALITY/SAFETY
PATIENT ACCESS
BEHAVIORAL HEALTH
TELEHEALTH
INNOVATION
DIVERSITY
ARTIFICIAL INELLIGENCE
FINANCE
CYBERSECURITY
WELLNESS
0%
10%
20%
30%
40%
Figure 5
Monitoring existing leadership role changes helps keep leadership development relevant. Many executive positions are expanding in scope and accountability. For example, CFOs everywhere share “complex and demanding” role requirements that now extend from “financial expertise to strategic decision-making to risk and stakeholder management.” 10 The leadership development purview further expands to implement a host of entirely new roles that continue to arise as institutions drive change.
10 PwC, “What’s Important to CFOs in 2024,” 2024.
© B.E. Smith 2025
BESmith.com | 7
Six Components of Leadership Development Success
2: Leadership programs and initiatives The leadership roadmap guides programmatic development. A strong program rests on a three-part framework: 11
Impact Specific participant outcomes and changes sought. 11
Vision Objectives regarding the capabilities to be developed.
Method Curriculum and learning approaches to be used.
In addressing these issues, organizations will want to decide how structured the program should be and whether it will be directed at multiple leadership levels or just to the senior cadre. Further judgement will be required in determining the optimal mix of leadership development tactics from:
Targeted training. A growing chorus of experts asserts that this classic tool works best when it can be personalized. Guidelines such as an “S Curve of Learning” have been proposed to individualize training based on identifying where a particular leader’s skills achievement resides on a spectrum from “launch to mastery.” 12
•
Mentoring and coaching.
•
9:20
GET EXPERT INSIGHTS
Dyad/triad management structures.
•
Network building.
•
Assisting leaders in growing their external executivenetwork is particularly important in an era that rewards extensive partnering with outside entities.
11 H.Leroy, M. Anisman-Razin, J. Detert, “Leadership Development Is Failing Us. Here’s How to Fix It,” MIT Sloan Management Review, Winter 2024. 12 W. Johnson, “Manage Your Organization as a Portfolio of Learning Curves,” Harvard Business Review, January-February 2022.
© B.E. Smith 2025
BESmith.com | 8
Six Components of Leadership Development Success
3: Succession and advancement planning Another strategic component of leadership development is succession and advancement planning. Well- constructed plans help handle emergency transitions, secure a vibrant leadership pipeline, and foster retention. Succession planning programs are hardly universal. Previous B.E. Smith surveys showed that only one-third of healthcare organizations maintain programs, and half of those described them as informal.
Three core activities comprise effective succession planning:
Delineating visible advancement pathways. These should identify specific competencies and experience needed.
Providing ways to gain practice for needed skills. Possibilities include simulations and stretch projects.
Offering feedback and coaching along the way. 13
Additional ideal characteristics include:
• Senior management owns the program and is actively involved.
• A rigorous discipline is followed rather than a one-time event.
• The plan is considered a vital strategic document.
• The plan is used to fill key vacancies .
Lateral moves that build skills and exposure for a downstream promotion should also be encouraged. Removing organizational resistance to this approach is vital.
13 G. Westerman and A. Lundberg,
“Why Companies Should Help Every Employee Chart a Career Path,” MIT Sloan Management Review, Spring 2023.
© B.E. Smith 2025
BESmith.com | 9
Six Components of Leadership Development Success
4: Retention Making sure high-performing executives stay is a corollary to investing in their development. Voluntary turnover is a significant concern. The rate for healthcare CEOs is a substantial 16%. 14 B.E. Smith research shows that other C-suite executives frequently depart when the top person leaves, amplifying the impact. What factors contribute to retention? Illumination comes from BES Trends Report (Figure 6).
FACTORS THAT MOST INFLUENCE INTENT TO REMAIN AT CURRENT ORGANIZATION
45%
41%
34%
22%
ORGANIZATIONAL CULTURE
COMPENSATION PACKAGE
COLLEGUES
CAREER POTENTIAL
17%
16%
14%
10%
MANAGEMENT
FLEXIBLE SCHEDULING
OPTION FOR REMOTE WORK
OTHER
Figure 6
The list demonstrates that retention involves a mix of people and policy considerations. For compensation, organizations are stepping up performance bonuses and having some incentives vest over time to bolster retention. Fostering a positive culture varies for each organization. But a common problem that can induce attrition is that “leaders in unhealthy cultures often focus on what made them successful in the past” and display “entrenched behaviors.” 15 Meaningful opportunities for advancement and role expansion are also intertwined with leadership retention.
5:41 6:50
GET EXPERT INSIGHTS
14 American College of Healthcare Executives, “Hospital CEO Turnover Rate Remains Steady,” August 8, 2023. 15 McKinsey & Company, “Organizational Health is (Still) the Key to Long-Term Performance,” February 2024.
© B.E. Smith 2025
BESmith.com | 10
Six Components of Leadership Development Success
5: Recruitment
The executive talent market remains competitive. Excellence in recruiting is essential to leadership development for everything from filling the new roles being created to attracting leaders when promising internal candidates may not be ready. Important recruiting tactics:
Write better job descriptions. Succinctly pinpoint both current requirements and where the role/position is headed. Search broadly. It is often necessary to recruit nationally and to consider candidates who may possess non-traditional backgrounds. Stress skills-based hiring. Seek corroboration of the desired competencies. Avoid overreliance on credentials, especially for some academic medical leadership roles. Adjust compensation offers.
3:11
GET EXPERT INSIGHTS
Enhanced packages feature “at-risk compensation, supplemental executive retirement plan contributions, additional continuing medical education opportunities, employee stock options, and more work/life flexibility.” 16 Deploy technology. Uses range from candidate communications to developing requirements based on internal data analysis. Improve interviewing skill. Carefully construct selection committees and train interviewers to ask questions designed to elicit evidence of a strong match with competency requirements and cultural norms. Seek diversity. Look for diverse thinking and ideas.
16 M. Devereaux, “Executive Search Firms See Demand for New Roles, Innovation,” Modern Healthcare, May 2024.
© B.E. Smith 2025
BESmith.com | 11
Six Components of Leadership Development Success
6: Interim leadership Another component to include in thorough planning is interim leadership (IL). Among many benefits, it produces a multiplier effect for the other leadership development tools. Interim leaders can serve in versatile capacities: Fill vacant position. IL maintains strategic momentum and allows sufficient time to hire optimal candidates. With organizations reporting longer leadership search durations, this role assumes greater importance. Project completion and advancement. Leaders are stretched, and key projects may need external help. Experienced interims are valuable resources in such situations. For example, B.E. Smith recently placed an interim financial executive who augmented a CFO’s financial team to drive savings across four operational areas. Mentoring. Interims are adept at mentoring employees as well as onboarding the permanent replacement. Role definition refinement. Interims can provide experience-based feedback on a new or shifting role’s definition and requirements.
Fresh perspectives. Interims bring insights from varied external experiences.
Partnering for Leadership Development Success
Many organizations support comprehensive, consistent, and innovative leadership development through engagement with a specialist firm. The right partner empowers the full spectrum of activities. For example, a strong executive search team enhances recruiting by maintaining a disciplined process, reaching “passive” candidates not seeking a new position, and providing compensation advice.
Another partnering opportunity involves recruiting multiple positions over a specified time period to ensurea more integrated view of leadership hires.
© B.E. Smith 2025
BESmith.com | 12
Six Components of Leadership Development Success
Conclusion Renewed or expanded commitment to leadership development is especially timely and rewarding. Opportunities abound for program development. B.E. Smith has prepared an Action Planning Grid to crystallize prominent considerations and options (Exhibit A). It aims to help organizations take a comprehensive view and build the strong leadership roadmap needed for sustained success.
How B.E. Smith Strengthens Your Leadership Team
Leadership Search
Tenured search executives maintain extensive networks of C-suite and executive talent Competency-focused search based on critical success measures Disciplined, lean process to reduce time to fill
Interim Leadership
Largest network of interim talent, from managers to senior executives Clinical, financial, and operational functions Temporarily fill open positions or engage for specific projects
Academic Leadership
Dedicated Academic and Life Sciences Practice specializing in leadership, clinical and faculty searches Veteran search professionals with experience in academic medical and biopharma settings. Special strength in Pediatrics
BACK TO FRONT
BESmith.com
Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13Made with FlippingBook. PDF to flipbook with ease