Succession Planning: Best Practices for Healthcare Organizations

In today’s volatile healthcare landscape, leadership continuity isn’t a luxury - it’s a strategic necessity. Succession planning ensures that payer and provider organizations remain agile, compliant, and competitive during transitions at the executive level. Yet too often, succession is treated as a one-time event or delegated to HR without strategic integration.

Drawing on best practices from Rothwell (Effective Succession Planning), Sobel/Harkins/Giber (Linkage Inc.'s Best Practices for Succession Planning), Krames (What the Best CEOs Know), and Hurt & Dye (Courageous Cultures), alongside insights from my 20+ years in healthcare executive search, as well as input from Harvard Business Review, Forbes, and SullivanCotter, this paper outlines a proven, healthcare-specific roadmap for executive succession planning.

1. Why Succession Planning Fails - and Why It Matters Now

The Reality in Health Systems and Payers

CEO and executive turnover across health systems and payers continues to rise. According to SullivanCotter, a growing number of healthcare organizations are ill-prepared for executive exits, leaving major gaps in leadership during high-stakes periods like regulatory change or digital transformation.

“Despite rising turnover, less than 30% of healthcare organizations have a documented succession plan for key leadership roles.” - Forbes Healthcare Council, 2024

These leadership gaps aren’t just inconvenient - they’re costly. Operational delays, cultural instability, and poor handoffs in clinical or administrative areas can translate into seven-figure revenue hits and eroded public trust.

2. Rothwell’s Foundation: A Systematic, Competency-Based Approach

William Rothwell’s framework remains the gold standard in succession strategy:

Start Early: Succession planning should begin 3-5 years before anticipated transitions.

Clarify Competencies: Define what success looks like for each leadership role; especially as payer and provider strategies evolve.

Focus on Continuity: Treat succession as a proactive, continuous process, not a reactive one.

Harvard Business Review reinforces Rothwell’s view: succession must be deeply tied to long-term business planning, not isolated in HR.

“If you’re not integrating succession into your leadership development strategy, you’re not really planning, you’re gambling.” — Harvard Business Review

3. Best-Practice Tools from Linkage: Diagnosis and Development

Sobel, Harkins, and Giber (through Linkage Inc.) offer field-tested tools and frameworks that healthcare leaders can adopt:

Succession Scorecards: Rate readiness of internal candidates using multi-rater assessments.

Critical Role Mapping: Prioritize succession planning for positions with high organizational dependency (e.g., Chief Medical Officer, Chief Information Officer, Chief Population Health Officer).

Developmental Assignments: Structured “stretch” projects prepare internal candidates for enterprise-level leadership.

These templates ensure leadership pipelines aren’t just theoretical; they’re operational.

4. The Traits of Successful Successors: Lessons from Krames

Jeffrey Krames’ work profiling top CEOs (e.g., Gates, Welch, Dell) highlights traits worth cultivating in healthcare executives:

Clarity of Vision: Define a clear strategic north star.

Operational Discipline: Turn vision into executable plans with measurable outcomes.

Learning Agility: Adapt rapidly and learn from failure.

Team Empowerment: Build bench strength across functions.

These traits are especially critical for payer and provider leaders navigating tech adoption, regulatory uncertainty, and workforce burnout.

5. Creating the Right Environment: Courageous Cultures

Karin Hurt and David Dye argue that even the best succession plan fails in the wrong culture. For talent to rise and thrive:

Psychological Safety is essential. Future leaders must feel empowered to take initiative and question the status quo.

Clarity + Curiosity: Set clear expectations but reward inquiry and innovation.

Model the Behavior: Executives should exhibit the traits they expect in successors.

“Most healthcare leaders say they want innovation - but kill it with fear.” - Courageous Cultures

6. Sector-Specific Succession Planning Considerations

Succession planning must account for the distinct pressures and leadership dynamics of both payers and providers.

For health plans, the most urgent risks often center around regulatory shifts, payment reform, and the growing complexity of technology infrastructure. Key roles frequently impacted include Chief Actuary, CFO, and CIO; positions where the learning curve and organizational dependency are high. These leaders must bring strategic agility, policy fluency, and the ability to align actuarial insight with broader enterprise performance.

For providers and health systems, succession risk often revolves around clinical leadership turnover, burnout, and the ability to lead across disciplines. Positions such as Chief Medical Officer, Chief Operating Officer, and VP of Nursing are critical, and the cost of turnover in these roles is both financial and cultural. Successors in these environments need clinical credibility, emotional intelligence, and the ability to drive value-based care and patient engagement.

In both payer and provider settings, succession planning must go beyond identifying potential names on a spreadsheet. It must be an ongoing process that aligns with strategic priorities, emerging business models, and the cultural transformation required to thrive in a post-fee-for-service world.

7. A Proven Framework for Healthcare Succession Planning

Effective succession planning in healthcare follows a repeatable, evidence-backed sequence of actions. It begins by identifying critical roles and defining the competencies required for future success. These competencies should reflect the unique challenges of the sector, whether that’s regulatory navigation for payers or interdisciplinary leadership for providers. Rothwell’s work and Harvard Business Review both emphasize the importance of tying these definitions to the organization’s long-term strategy; not just immediate operational needs.

Once roles and competencies are defined, healthcare leaders must assess internal talent. This includes using structured assessments and readiness scorecards to identify capability gaps. The case-based tools from Linkage Inc. offer proven templates for evaluating pipeline strength across leadership levels.

The third step is development: intentionally preparing potential successors through targeted experiences. This can include executive coaching, mentorship programs, and stretch assignments that simulate enterprise-level decision-making. Jeffrey Krames’ research into top CEOs reinforces the importance of learning agility, vision, and disciplined execution as traits to cultivate during this phase.

A strong succession strategy also requires a supportive culture. As Hurt and Dye emphasize in Courageous Cultures, future leaders must be able to take initiative, challenge outdated practices, and share bold ideas without fear. A culture of psychological safety, paired with clarity and curiosity, ensures that high-potential talent isn’t stifled before it can step up.

Finally, succession planning must be regularly reviewed and adapted. Forbes and SullivanCotter both stress that leadership planning should be dynamic - refreshed annually, aligned with evolving business strategy, and supported by real-time workforce data. When succession is treated as a living strategy, not a static document, it becomes a powerful lever for continuity, competitiveness, and organizational resilience.

Conclusion: Make Succession a Strategic Lever

Succession planning in healthcare must be as strategic and data-driven as finance or clinical operations. It’s not about picking favorites. It’s about risk management, cultural continuity, and performance.

If your board or C-suite hasn’t reviewed a succession plan in the past 12 months, that’s a liability.

If you'd like to schedule a free, complimentary consultation on how we've helped our client organizations implement effective succession planning strategies, please feel free to access my calendar here to book a call.

© Steve McGovern and Executive Search Insights, 2025. Unauthorized use and/or duplication of this material without express and written permission is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to McGovern Executive Search with appropriate and specific direction to the original content.