Merging Executives into the Matrix
Consolidation happens across all business sectors. Organizations do it to achieve economies of scale, acquire new product lines and consumers, or gain geographical traction. But while consolidation is common, executives can find it disorienting. A CEO of a company that’s been acquired, for example, may go from being a big fish in a small pond to being a big fish in a large, murky global conglomerate.
This is happening in the industry I work in: health care. Independent hospitals, clinics, and other facilities are increasingly rare as major health networks acquire or affiliate with them to expand their reach and patient bases. It’s a business strategy reinforced both by new treatment models and stipulations of the Affordable Care Act.
CEOs, CFOs, CIOs and other top leaders at previously “stand-alone” facilities are finding themselves absorbed into these massive, matrix organizations. Yet as health conglomerates grow and centralize operations, there is only so much room at the top and fewer “chief” jobs to go around.
There can only be one true CEO, for instance—a sort of super-CEO. So what happens to presidents and CEOs brought into the fold? In some cases, they are laid off with severance or early retirement packages. In most instances, they are kept on board but minus a large degree of autonomy and strategic responsibility. A common lament among these proud, accomplished executives is that they are expected to be little more than site managers.
HR executives, system CEOs, and corporate boards often aren’t sure what to do with these seasoned executives. They don’t want to let them go, but they don’t want to continue to pay them their handsome salaries, especially for diminished roles. They may feel these executives don’t have the right skill sets to match current and future needs—the system may, indeed, be looking for glorified site or facility managers or specific service-line directors. Finally, there is a perception that “old-school” executives are not the team players and consensus builders matrix organizations require.
Witness the language below, drawn from a position specification for a health network seeking a president for one of its many campuses:
The successful hire will be a proven leader in a highly complex, matrixed environment, including the ability to lead and execute through influence, negotiation, and persuasion. Experience with building high-performing teams, delegating, and leading change through ambiguity is required. The ideal candidate will have 10 years of progressive leadership experience in innovative, service-oriented environments.
How many top executives in health care have earned their stripes in a truly “innovative, service-oriented” environment? Or led in a truly matrixed enterprise? Few, which presents a clear dilemma for both these executives and the systems that employ them.
The predicament is not as dire as it might seem, however. There are things Human Resources leaders and their organizations can do to support these executives in their transition to a new structural environment:
- Recognize the foundation in place. All executives at some point have been required to “lead change through ambiguity,” delegate, and build high-performing teams. So the discrepancy between what matrix systems need and what “stand-alone” leaders have to offer is not as great as one might think.
- Focus on the individual. Training and HR leaders recognize that all professionals can develop their skill sets and adapt to changing job market conditions. What are their core skills and transferable experiences? Are there inhibitors or derailers that would reduce the likelihood of success in a matrix structure? Does an executive see a move as a demotion or sideways move, or perhaps as an exciting new opportunity?
- Assess and reflect. HR and talent leaders can begin to get answers by sitting down with these executives and having earnest discussions about what they do best. They can rely upon progressive leadership assessment methodologies, in which candidates are evaluated for fundamental skills and behaviors, as well as cultural fit; adaptability; and their ability to perform under given stressful situations, to work in a team environment, to recognize weaknesses, and so forth. By digging a little, a matrix organization can know with a high degree of certainty whether or not a CEO or executive who previously has operated in a silo can make it in a flatter, networked environment.
- Trust your instincts. Data collected from executive assessments is intended to be informative—to complement the organization’s intuition and provide a holistic impression of whether or not someone will succeed in a new role. References play a key role in creating a more complete picture of an individual’s strengths and ability to adapt.
- Play to the leader’s strengths. Once the full picture of an executive is painted, training can fill in knowledge and skills gaps and shore up potential weaknesses. Most importantly, assessment and training can recognize and reaffirm the positive traits that have led to a leader’s past achievements.
Allow me to share another excerpt from a position specification, this one for a VP of Finance—a high-level leader overseeing finance executives at satellite sites but still reporting to the top CFO:
This VP will build and maintain collaborative relationships with the site CFOs, as well as build strong partnerships with the system EVP/COO and SVP/CFO to enhance financial and strategic success. The successful candidate will be results oriented with an ability to embrace working in a complex organizational structure.
In health care and other industries, we are just figuring out what the complex organizational structures of tomorrow ultimately will look like. Sufficed it to say that within such an uncertain environment there is a place for experienced executives willing to explore new roles and ways of working. Training can be the vehicle that carries them through the transition.
Donna Padilla is senior partner for executive search firm Witt/Kieffer. Based in the firm’s Oak Brook, IL, headquarters, she has participated in nearly 300 health-care executive search assignments.