How to Develop a Succession Plan to Preserve Your Healthcare Supply Chain
Healthcare Supply Chain
Baby boomers are retiring at a rate of 10,000 per day, and health care is getting hit especially hard. President and CEO of AMN Healthcare in San Diego calls this “one of the most challenging eras of clinical workforce shortages.” While much concern is centered around a shortage of clinicians, and rightly so, the retirement of baby boomers in other hospital areas is also poised to have major impacts. Healthcare supply chain is one of those. How so? First, consider the importance of effective healthcare supply chain management.
Supply chains represent 30 percent of hospital spending, second only to labor. Managing a healthcare supply chain effectively is critical, but also a complex process. It involves obtaining resources, managing supplies and delivering to providers and patients. The total process requires the interaction of independent stakeholders, such as manufacturers, insurance companies, hospital administration, providers, group purchasing organizations and several different regulatory agencies. Effectively managing a healthcare supply chain involves aligning it with the hospital’s care delivery model. Misaligned incentives and the independent goals of various people on the supply chain can disrupt its flow and have a significant effect on costs. According to one study, hospitals could save $9.9 million each year by making their supply chain more efficient.
Now, let’s get back to baby boomers retiring. As these important positions within the supply chain become vacant, it’s vital that hospitals recruit and retain talent that can maintain a supply chain, and possibly make it even more efficient. How can healthcare organizations prepare for this great succession? Include the healthcare supply chain in your succession planning strategy. Here’s how.
Build Your Bench Strength
Bench strength is defined as “the competence and number of employees ready to fill vacant leadership and other positions.” Bench strength not only ensures a company can successfully execute its mission, but it increases stakeholder confidence. Health care organizations can build their bench strength by conducting a strategic competency assessment. The purpose is to leverage strengths and address weaknesses to ensure your mission will be achieved and your culture maintained despite a changing environment. Additionally, it identifies top talent that can be leveraged to improve performance and mitigate risk. On the other hand, it also shows over-leveraged talent that might negatively affect the organization’s mission and culture.
Make succession planning part of your company’s culture. Be proactive, not passive when it comes to filling vacancies. Consider these four best practices.
- Make it an ongoing process. Staffing reviews are a key driver in the succession management process. Leadership teams from across departments should meet periodically to discuss their teams’ performance, needs and strategies to develop high-potential leaders.
- Be inclusive. Instead of just focusing on a handful of candidates for key roles, use your periodic reviews to develop a large pool of management and leadership talent.
- Keep the process simple. Don’t get bogged down in tons of paperwork and written evaluations. A complicated process will inhibit open discussion. Create a forum for open-minded conversation by keeping the process documents to a minimum.
- Make management “own” it. The HR department will support succession planning, however, management should “own” it. Developing managers and leaders is the responsibility of existing managers and leaders. This is integral to an effective succession plan.
Use Data Analytics
Take an analytical approach to identify your future leaders. Objective intelligence helps organizations make decisions that are free from politics or bias. New techniques allow for algorithms to perform assessments that rank leaders based on the highest to lowest performers. For example, a “talent assessment of leadership” uses big data algorithms to compare annual outcome data, such as quality outcomes, financial results, employee turnover rates, patient satisfaction levels, and much more. The tool groups your high-performing individuals so that they can be added to your talent pool. When mission-critical positions become vacant, you are immediately ready to select candidates from the talent pool.
Include these results in your succession planning discussions. They are a robust tool that can greatly add to the personal opinions of managers to give the organization a more comprehensive picture of its talent pool.
Get to Know Millennials
To attract and retain top millennials, organizations must get to know their “style” of both being managed and of managing. Millennials do job-hopping more than any other generation. It would be a shame to put all the time and effort into building your bench strength only to have half your talent pool jump ship for a better position somewhere else. What should you know about this generation? Here are five key attributes.
- They are motivated by meaning. Millennials want to feel like they are making a difference. One survey found that 84 percent agreed with this statement, “knowing I am helping to make a positive difference in the world is more important to me than professional recognition.” While supply chain management doesn’t seem quite like saving the world, help your up and coming leaders to see the importance of effective management on the organization as a whole. They need to see their contribution affects patients both directly and indirectly.
- They are tech-savvy communicators. These “digital natives” grew up expressing themselves on social media and communicating via their electronics. Many companies have made their communication platforms similar to popular social media sites, encouraging collaboration, relationship building and information gathering via this forum. Millennials also like feedback, and these forums provide an easy way to give it.
- They like collaboration across all levels of employees. Millennials often get a bad rap about not respecting authority. The truth is they like a cross-functional way of working that blurs the lines of rank. Instead of blindly following orders passed down, they believe they should be part of the process and have a say in the best possible solutions. They want a good relationship with their boss, often viewing him or her as a mentor. Leverage this quality by regularly gathering feedback.
- They are task, not time, oriented. Millennials don’t like the idea of being wed to the clock. Instead of viewing this as lazy, take advantage of their task-oriented trait. While they don’t want to be forced to sit at a desk from 9 to 5 everyday, they will see a project through, often working overtime when needed.
- They don’t mind change. Millennials aren’t upset by the huge shift in health care. They see change as an opportunity to improve.
One more thing about millennials. If they don’t mind job-hopping, they don’t mind coming back to you. Keep a record of your top performers. If you lose them, you might be able to recruit them back at a later time.