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CEO: Redefined

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CEO: Redefined

by: 
David Hinsley Cheng, Partner at DRG Search

A decade ago, leaders were perhaps easier to define. In the days of contracts or fee-for-service reimbursements, boards relied on a steady hand at the top, a CEO with solid long-term experience in the IDD sector, skilled at overseeing all elements of his or her agency, from contracts to quality assurance to human resources to program administration.

Now, amid the shift to managed care and value-based payments, the world in which organizations operate is changing at a dizzying clip. If today’s agencies are ships, the waters they’re traveling into are uncharted. So what’s the best way to navigate in 2018?

Start by redefining what you need in a captain.

The new face of leadership

With changes to Medicaid and other public funding creating ripple effects throughout all levels of an organization, boards seeking a new leader might consider radically rethinking the top position’s job description. As I talk with more and more CEOs and boards of directors, I see a steady trend toward focusing less on day-to-day program oversight and more on visionary planning, whether that means long-term program development, merging with other organizations, looking at economies of scale, diversifying revenue from fundraising operations, creating opportunities for private enterprise, or, most realistically, some combination of all the above.

The next round of incoming leaders will need to be cognizant of business-building, including tightening efficiencies and brainstorming opportunities for revenue diversification. So, in identifying the next wave of CEOs, as one example, we prioritize new program development over lengthy programmatic oversight. Demonstrable creativity and a record of forward thinking takes precedence over a resume highlighting decades of steady experience in the sector. In short, today’s CEO job description has shifted from one of operational expertise to one of prescient change-management and fearless innovation.

You’re not looking for a ferry-boat captain, somehow who’s safely steered his ship back and forth over the course of many years. You’re looking for a Starfleet captain, going boldly where no organization has gone before.

But this model isn’t the CEO of the future—it’s the CEO of right now.

Where are you headed?

Laura S. Kaiser and Dr. Thomas H. Lee argue in the Harvard Business Review that healthcare and human service organizations should take the present as an opportunity to adjust business models and redesign programs around improving quality of care for consumers—even in regions where contracts have not yet caught up with current national trends. “We see a compelling case for acting now to achieve value-based care without worrying when the market will make the shift,” they write. The time to start tasking your CEO with this shift is now.

Along with shoring up program quality and increasing fundraising capabilities, many organizations have found recent success in developing businesses and contracts that benefit their customer base along with the larger community, from direct mail fulfillment services to popular local coffee shops. Business enterprises can help deepen an agency’s connections to the larger community and create an atmosphere in which people with disabilities are increasingly valued in the marketplace, as well as helping to diversify revenue for the organization, a win-win for all involved.

So where should you look?

In hiring leaders, we’ve successfully found strong leaders in a number of different molds. In some instances, we’ve successfully recruited candidates from private hospital backgrounds, drawing on their experience in dealing directly with Medicaid funding, creating efficiencies, and reducing costs. We’ve also looked for candidates in different states where the industry has already weathered systemic adjustments, and where CEOs therefore already have experience with managed care organizations (MCOs) are well-accustomed to running agencies like a business.

Thinking more broadly, leaders with experience in organizations or companies that have undergone rapid change often also bring strong applicable experience to the table. Resilience is a key element of CEO success, especially during times of industry-wide transition, and as Sarah Bond and Gilly Shapiro write in their 2014 study, Tough at the Top?:Our research is clear—that resilience is learnable—and the way most people learn about their own resilience is through successfully navigating the tough times.”

Laying the groundwork

If you do opt to hire a CEO from outside the human services world, it is crucial that you have a strong leadership team already in place. Ideally, your highly-skilled Chief Financial Officer, Chief Programs Officer, Chief Operations Officer and Chief Development Officers will be able to manage the day-to-day of the organization, ensuring high-quality programs and implementing planned changes on the ground while the CEO spends his or her time focused on high-level strategy with the board, interfacing with the community, and steering the agency toward more effective business development. With a strong team for support, the learning curve for a CEO coming from the for-profit world, for example, would be considerably less steep.

As you take a broader view of what kind of background your CEO could come from, bear in mind that certain state funding agencies do require CEOs to bring with them a minimum qualification of industry-specific experience. CEOs of Connecticut organizations receiving funding from the state’s DDS office, for example, are required to bring with them a minimum of one year supervisory experience in the IDD sector. Other states might offer more latitude, but be sure to ascertain what specific contractual rules are in place prior to launching your CEO search.

Lastly, never lose sight of the fact that while working within the field of disabilities is a highly rewarding career, it is not for everyone. Strong business skills can never stand in for a genuine sense of compassion for the people whom the agency services. Connection to your agency’s mission and an ability to connect to others in an authentic way are both paramount.

With all of this in mind, here are some key points to remember in shifting your thinking about your agency’s next leader:

  • Ensure you have an air-tight senior team in place. Otherwise your CEO may need to spend time working internally rather than on strategic external program development.  
  • Check requirements from your major public funders that might limit the parameters of your CEO search before you begin.
  • Cast as wide a net as you can. Be open to candidates from unrelated fields, provided they bring with them the requisite experience in navigating change and driving innovation.
  • In interviewing candidates, be sure to ask about instances of adversity and change—learning about difficult times in a candidate’s career is far more informative than hearing a long litany of seemingly seamless successes.
  • Empower your new hire to innovate by taking up the reins of creativity on a board level as well. Create a culture in which new revenue opportunities can spring up and flourish—and that starts at the top.

In a changing world, the most successful agencies will be the ones who not only adjust nimbly to each new shift, but who drive change themselves in new and unimagined ways.

The first leap is yours—letting go of your old ideas of what a CEO should be and, not just accepting, but embracing the exciting unknown.

David Hinsley Cheng is a Partner at DRG Search where he has been working exclusively with nonprofit boards lead CEO searches for over 22 years. He can be reached at dcheng@drgsearch.com.