Few responsibilities entrusted to a senior living board are more consequential than choosing the organization’s next CEO. The right leader can impact an organization’s culture, financial performance, strategic direction, quality of care, and resident experience for years to come. A bad choice can be just as consequential, not only to the organization at large, but also to those residents the organization serves.
A successful CEO search begins long before the first candidate is ever interviewed. Transition, while often challenging, is an excellent opportunity for a board to pause and evaluate the overall direction, priorities and challenges of the organization. Before starting any search, it’s important for a board to be clear about what the organization needs from its next leader—and to ensure alignment around those priorities from all the key stakeholders.
“Board alignment is one of the most important and often overlooked factors in a successful executive search,” says Jeff Harris, CEO of Jeff Harris & Associates. “When board members come into the process with different thoughts about the organization’s priorities or the type of leader they think they need, it can be difficult to even compare a strong slate of candidates. In addition, it’s important to remember that the best candidates will be evaluating the board as much as they are the organization on the whole. If the board is not aligned, it will be much more difficult to attract and land the right candidate”
Drawing on decades of experience recruiting senior living executives, Harris identifies several ways boards can set the stage for a more disciplined, efficient, and ultimately successful CEO search.
1. Start With Succession Planning—Before You Need a Search
“In an ideal world, boards will be thinking about succession planning long before they ever need to engage in a search,” Harris says.
The CEO succession process should not begin when a longtime leader announces retirement or submits a resignation. Ideally, succession planning is best viewed as a continuous governance activity, with the board routinely reviewing both the organization’s future leadership needs and the strength of its internal leadership pipeline.
In the best circumstances, an organization may already have a capable successor developing within its ranks. An internal candidate offers several potential advantages: the board already understands the individual’s capabilities, the candidate understands the organization and its culture, and key stakeholders have had an opportunity to develop confidence in that leader.
“You already know that it’s a match culturally; you know that it’s a match with the board; you know that it’s somebody capable,” Harris says.
For many senior living organizations, however, developing a CEO successor internally can be challenging. Communities are often relatively small and organizational structures can be flat, leaving fewer opportunities to develop executives through progressively broader leadership roles. Even organizations with promising internal talent should assess whether those individuals have the experience and capabilities the organization will need from its next CEO.
When an external search becomes necessary, thoughtful succession planning still pays dividends: the board enters the process having already considered what the organization will require from its future leadership.
2. Define What the Organization Needs Before Deciding on the Ideal Candidate Qualifications and Background.
Before deciding who the next CEO should be, a board should first reach agreement on a more fundamental question: What does the organization need its next CEO to accomplish?
Every leadership transition occurs within the unique context of each individual organization one organization may need a leader capable of driving occupancy and improving financial performance. Another may be contemplating expansion, redevelopment, affiliation, or a major capital initiative. Still another may need cultural transformation, stronger operational discipline, or a leader capable of rebuilding confidence among residents, employees, or the board.
Those circumstances should drive the candidate profile—not the other way around.
Boards should examine what worked well during the outgoing CEO’s tenure as well as what may have been missing.
“If there were traits that were missing in the last CEO, they should be very clear about that,” Harris says. “A good search firm is going to be able to guide them to come up with a consistent, aligned picture of what they’re looking for in the next leader.”
That discussion should extend beyond personality and credentials. Boards should be able to articulate the next CEO’s principal priorities and the results they expect that individual to produce.
What will require the CEO’s immediate attention? What should be accomplished during the first six months? What would a successful first year look like? And, looking further ahead, where does the board expect the organization to be three to five years from now?
Answering those questions creates a much more useful leadership profile than a conventional job description alone.
3. Establish Alignment and Process Around the Search
Once the board understands what the organization needs, it must establish how the search itself will be governed.
Boards should determine the role of the search committee and the full board, how senior leadership and other stakeholders will provide input, how candidate confidentiality will be protected, and what criteria will ultimately drive the selection decision.
Just as importantly, every serious candidate should be evaluated against the same agreed-upon criteria.
Harris emphasizes the importance of consistency throughout the hiring process. Finalists should move through substantially the same interview and assessment process, giving the board a meaningful basis for comparison rather than allowing the criteria to shift from candidate to candidate.
That discipline becomes especially important when a board encounters a particularly charismatic finalist. A compelling personality can influence even experienced decision-makers. An agreed-upon leadership profile and evaluation framework help keep the board focused on whether a candidate can actually deliver what the organization requires.
4. Choose a Search Partner Who Understands the Market—and the Organization
When an external search is necessary, selecting the right search firm becomes another critical board decision.
Harris recommends working with a firm that has a strong reputation, deep relationships within the senior living sector, and a personalized approach that accounts for the unique needs and objectives of the organization.
Industry experience enables the search partner to understand the nuances of the competitive market for proven leaders and quickly identify target candidates within a developed network. Reputation matters because the recruiting firm is an extension of the organization they are recruiting for. The reputation of the recruiting firm will impact how the organization is perceived by perspective candidates. And a personalized approach should ideally include in person meetings with key stakeholders and touring of specific sites, so that the recruiting form can develop a comprehensive knowledge of the organization and its leadership.
Harris also says that a good recruiting form should be willing to challenge assumptions. An experienced search advisor should be prepared to tell a board when its compensation expectations are inconsistent with the marketplace, when geographic requirements are unnecessarily limiting the talent pool, when a desired credential may be less important than assumed, or when the combination of attributes being sought is unlikely to exist at the compensation level being offered.
5. Recognize That Great Candidates Are Evaluating the Board, Too
Boards naturally spend considerable time determining whether candidates are worthy of leading their organization. But exceptional executives are conducting an assessment of their own.
Many of the strongest CEO candidates are not actively looking for another position. They are successful, respected, and relatively happy where they are. Attracting them requires more than presenting a job description and asking them to explain why they should be hired.
“Boards that expect candidates to prove why they should be hired are taking a limited, outdated approach,” Harris says. “If they want to attract top talent, they need to show candidates why joining their organization is worth leaving a position where they’re already happy and successful.”
That means clearly communicating the organization’s mission, opportunities, challenges, board culture, strategic ambitions, and the impact the next CEO will have the opportunity to make.
Candidate interactions with the board matter as well. A cumbersome search process, inconsistent communication, or visible disagreement among board members can cause strong candidates to question the opportunity.
6. Stay Grounded in the Executive Talent Market
Compensation is another area where market realities sometimes conflict with a board’s expectations.
“One of the big challenges sometimes boards face is that they develop opinions about compensation levels that are independent of understanding the current market space that they’re in,” Harris says.
Rather than determining what the organization believes the position should pay in isolation, boards should understand the market value of the leadership talent they are seeking, including important factors such as cost-of-living comparisons, scope of responsibility and level of experience required.
A knowledgeable search partner can provide real-time perspective on that market and help the board distinguish between reasonable compensation and a salary range that may prevent the organization from competing for its strongest candidates.
7. Maintain a Strong Candidate Pipeline Until the Decision Is Final
As a search progresses, boards should also resist becoming overly committed to a single frontrunner too early.
Finding a candidate whom everyone likes can create an understandable desire to accelerate the process. But circumstances can change. A candidate may accept another opportunity, decide not to relocate, receive a counteroffer, withdraw for family reasons, or encounter an unexpected issue during final due diligence. Counting on a single candidate can risk having to restart the process from the beginning.
Developing multiple qualified candidates and maintaining progress in the search process will serve to maintain their interest and provide the organization with options if their frontrunner falls through.
8. Plan for the Transition—Not Just the Hire
The board’s responsibility does not end when its preferred candidate accepts the position.
The transition from one CEO to another can have a significant impact on how quickly a new leader establishes credibility and becomes effective. Boards should therefore begin thinking about onboarding and transition well before the CEO’s first day.
“The success of a new CEO is as dependent on the buy-in of residents and department heads and other team members as it is on that CEO’s ability to perform,” Harris says.
That makes stakeholder engagement particularly important in senior living, where a CEO leads not simply a business enterprise but a community that is home to residents, workplace to employees, and often a deeply meaningful institution to families, volunteers, donors, and the surrounding community.
If your organization is preparing for a CEO transition, Jeff Harris & Associates can help guide the process and identify leaders equipped to advance your mission. Contact us to learn more.