In 2023, many healthcare systems moved to a leaner, more agile C-Suite. Becker’s Hospital Review called 2023 “a year of C-Suite layoffs and streamlining,” and the numbers back this up. Eight months into the year, 17 hospital systems had announced changes to their executive suite that resulted in fewer positions and leaner, more agile teams.
In many cases, consolidation can help companies save money, improve efficiency, and adapt more quickly to changing environments and priorities. However, it’s important to pause and consider the strategy behind consolidation. As Les Hirsch, a healthcare executive at St. Peter’s in New Brunswick, N.J., recently told Becker’s Hospital Review, “The good news is, we’re lean. The bad news is, we’re lean.”
If you’re considering slimming down your C-Suite, ask yourself these five questions before you move forward. They’ll help you clarify your thinking and make sure that it’s the right move for your organization.
5 Questions to Ask Before Slimming Down Your C-Suite
1. How much will cutting costs benefit your organization?
Slimming down the C-Suite almost always leads to cost savings, but many experts warn against consolidating for financial reasons alone — they encourage leaders to consider the bigger picture. Are you part of a large hospital system with a comfortable amount of resources? Or, are you a smaller hospital system, or a standalone organization, with limited funds? If you’re larger, make sure consolidation makes sense practically, not just financially. If, however, your resources are truly limited, executive consolidation may be the practical solution you need to reduce costs.
2. How confident are you in your current leadership team?
If you’re looking to build a lean executive team, having the right leaders in place is key. When positions are cut, the members who are left have an even greater amount of influence and responsibility. Do you feel excited about many of the current leaders at your organization? Can you see ways that their current approaches, strategies, and leadership styles could benefit other arms of the organization or other locations? If you feel enthusiastic about their abilities, consolidation may allow you to amplify their impact. If, however, your confidence is wavering, it may be wise to hold off on consolidation until the right leaders are in place. (Note — if you’re looking for fresh, innovative healthcare C-Suite leaders, a healthcare recruiter can help! Learn more about our recruiting services and how we can support the executive search process).
3. Is your organization in a transformational period?
One of the best times to have a lean executive team is when you’re entering a transformational period. When your organization is rapidly changing, or attempting to adapt to rapid industry changes, it can be helpful to have a lean team who can easily meet, strategize, and make decisions. When your leadership team is overly full, it can become difficult to make decisions and move key projects and initiatives forward. While healthcare is always changing, some periods require more agility than others. Is your hospital trying to maintain the status quo, or is it interested in making major adjustments to its approach? If you’re on the cutting edge, a lean approach may help you move forward faster.
4. Is your leadership team already spread thin?
It’s no secret that burnout is prevalent in healthcare right now. The U.S. Surgeon General has issued an advisory about the healthcare worker burnout crisis, and 2023 turnover rates in the healthcare C-Suite have been high. To combat this loss of talent, be realistic about the amount of capacity each of your executive leaders has to spare. If you eliminate a few positions, who will take on the new responsibilities? Do your leaders truly have room on their plates for new initiatives? If not, are there other ways to cover the gaps? Taking actions to protect executives from burnout now can save you from bigger problems further down the road.
5. Are there strategic benefits to consolidating, in addition to financial benefits?
The essential question to consider is this: does slimming down the C-Suite have strategic benefits for your organization, as well as financial benefits? Many organizations are drawn to a lean model to cut costs, but it’s important that in addition to financial benefits, you are also seeing strategic benefits. There are many potential pros to moving toward a lean management model — quicker decisions, better adaptability, and more openness to new priorities and initiatives, among other benefits. But remember — once you’re lean, you’re lean! While you can expand your team in the future if needed, be sure that your organization is truly ready for a mean, lean approach before making a big change.
And, if you need a partner to think through your executive team structure or strategy, please reach out! Our highly skilled team is here to help.
Lauren Bencekovich is the founder and Managing Director of Lauren Recruiting Group, a boutique healthcare recruiting firm that matches healthcare executive candidates with hospitals and health organizations. Do you need a strategic partner to help you think through your C-Suite strategy? Visit our contact page to schedule a 30-minute intro call with one of our team members. We look forward to connecting and sharing our expertise!