Protect Your Leadership Runway Before Day One
By Neill Marshall, Chairman, Ivan Bartolome, President/CEO, and Kurt Mosley, Associations Practice Leader, HealthSearch Partners
Key Takeaways
- Document what you are inheriting.
Establish written baselines for financial performance, workforce issues, physician relationships, quality, culture, and other significant problems so yesterday’s issues don’t quietly become the new CEO’s failures.
- Set conservative, reality-based measures of success.
Don’t make ambitious promises before you understand the organization. Agree on initial expectations and revisit them as your first 60–90 days produce better information. - Don’t automatically inherit every difficult decision.
Boards should determine whether unavoidable layoffs, write-offs, executive departures, or other negative actions genuinely belong to the incoming CEO—or should be addressed before the new leader arrives. - Understand the political terrain before Day One.
Internal candidates, predecessor loyalties, resistors, and unresolved conflicts can become immediate leadership landmines. Surface them before accepting the role rather than discovering them after you arrive.
After posting many articles in our Earned Authority: The First 90 Days series over the past several months, people have been asking us,
How can a new CEO avoid being blamed for inherited problems?
There is another conversation every incoming CEO should have before accepting the job:
What exactly am I inheriting?
If the organization has significant operating losses, declining employee engagement, physician dissatisfaction, quality problems, excessive turnover, deferred capital needs, regulatory issues, or unfinished strategic initiatives, document them. This isn’t about protecting yourself by creating an excuse file. It is about establishing an honest baseline. Six months from now, memories will become surprisingly flexible.
A financial problem that had been building for three years can become “the CEO’s financial problem.” Longstanding turnover can become “turnover under the new administration.” A deteriorating physician relationship can suddenly be remembered as something that “really became an issue recently.” Boards and incoming executives should agree on the starting point while everyone still remembers it.
Our work on the First 90 Days has reinforced the value of establishing baselines around financial performance, quality, workforce, physician relationships, patient experience, and culture. A starting point allows both the board and CEO to distinguish inherited conditions from subsequent performance. Put the important realities in writing, then agree on what reasonable progress looks like at 90 days and one year.
Be Conservative About What You Promise
New executives naturally want to impress the board that just selected them. That can be dangerous. Don’t negotiate your first-year goals while everyone is still in the honeymoon phase and operating on incomplete information. Set success indicators tied to what is actually known. If the hospital is losing money, don’t casually promise profitability in 12 months before understanding the underlying causes. If turnover is high, don’t promise a dramatic reduction before determining which positions, departments, leaders, or market forces are driving it. If physician relationships are strained, don’t promise harmony by Christmas. Agree instead on measurable progress and on a process for revisiting the goals after the diagnostic period.
By Day 60 or Day 90, you will know considerably more than you knew when you accepted the job. Your success measures should be capable of becoming more precise as the facts become clearer. This is not lowering expectations.
It is establishing credible expectations.
An incoming CEO who promises the moon may impress a search committee for an afternoon. A CEO who establishes realistic expectations and exceeds them builds confidence that lasts considerably longer.
Negotiate Resources Before You Need Them
New CEOs should also discuss the resources they may need during transition. That can include funds for communication, public relations, executive coaching, outside cultural assessment, strategic consulting, employee listening, physician engagement, and a handful of early-win initiatives. This does not require a blank check. It requires flexibility.
Boards routinely make a substantial investment in recruiting, relocating, and compensating a CEO, then become surprisingly cautious about relatively modest expenditures that can improve the odds of a successful transition. That makes little sense. Our work on what boards should fund during the first 90 days identifies independent listening, executive integration coaching, board-CEO alignment, visible early wins, relocation support, and clear communication as relatively modest investments that can protect a much larger leadership investment.
Don’t wait until Day 37 to discover that every useful transition initiative requires a three-month approval process. Have that conversation before Day One.
Should a board make difficult decisions/actions before a new CEO starts?
This may be the most controversial recommendation in this article. Why? Because in our experience, sometimes the best thing an organization can do for a new CEO is take obviously necessary, difficult actions before the CEO arrives.
Suppose the organization knows a reduction in force is unavoidable. Or, there is a major financial write-off that everyone knows must be taken. Or, a senior executive is clearly going to leave. Or, an internal candidate for the CEO position has made it clear that he or she will not support the person selected. Why automatically require the incoming CEO to own every one of those decisions?
There are certainly circumstances where the new CEO should make the call. A board should not strip a CEO of legitimate management authority simply to make the transition easier. But other circumstances mean delaying an inevitable decision merely shifts the political damage from the outgoing leadership or board to the incoming executive.
Boards should ask a straightforward question:
Is this genuinely a decision the new CEO needs to make, or are we simply waiting for the new CEO to take the blame?
Those are very different things. If a reduction has already been decided, don’t pretend the incoming CEO invented it. If a financial write-off is clearly attributable to prior years, don’t wait until the new CEO’s first quarter to recognize it without documenting where it came from.
If an executive’s departure has effectively been decided, don’t necessarily make the new CEO begin the relationship by delivering the news. A new leader should not arrive with a trail of unnecessary casualties attached to his or her name before having had the opportunity to earn trust.
How should a new CEO handle an unsuccessful internal candidate?
Internal candidates deserve special consideration. An unsuccessful internal candidate may be extraordinarily valuable to the organization and become one of the new CEO’s strongest allies. Or not. The board needs to know which situation it has.
Who believed the internal candidate should have received the job? Who is personally loyal to that individual? Does the internal candidate genuinely support the board’s selection? Does he or she intend to remain? Can the new CEO reasonably rely on that person?
These questions should not be ignored because they are uncomfortable. Veteran healthcare CEO Jim Decker’s 25/50/25 Rule offers a useful way to think about the terrain an incoming CEO inherits. In his experience, roughly 25% may support a new leader immediately, 50% are waiting to see what happens, and another 25% may resist. His broader lesson was not to waste the first 90 days trying to win everyone. Understand the loyalties and emotions that are already present and focus on building credibility with the people willing to be won over. That becomes especially important when a respected internal candidate was passed over. A board that knows an internal candidate intends to undermine the new CEO actively should address that reality rather than hand the incoming leader a political landmine with a welcome basket.
Your First 90 Days Start Before Your First Day
One of the clearest lessons from our conversations with healthcare CEOs is that Day One is too late to begin preparing for Day One.
Matt Fry demonstrated that, literally. Two weeks before officially becoming CEO of Freeman Health System, Fry began quietly walking the hospital as a visitor. He entered through public doors, tested wayfinding by intentionally getting lost, ate in the cafeteria, watched volunteers interact with visitors, observed the condition of the facility, and examined security around the emergency department.
He wasn’t running the organization yet, he was learning it.
Because employees didn’t yet recognize him as the CEO, Fry saw things that often disappear once everyone knows the boss is watching. Those observations subsequently helped him identify small symbolic actions and larger opportunities for improvement. His story reinforces a larger principle:
Your employment may begin on Day One. Your transition should not.
The period after the offer and before acceptance is an incoming CEO’s opportunity to ask harder questions, surface uncomfortable realities, clarify expectations, identify potential landmines, negotiate the conditions for success, and determine whether the organization is truly prepared for the leadership it says it wants. After accepting the position, the remaining time before Day One can become an extraordinary learning opportunity.
Don’t simply use that period to learn what you are walking into, use it to improve what you are walking into.
Most executives negotiate hard over salary, incentives, relocation, severance, and benefits and they should. But remember, compensation determines what you will earn. Other negotiations may determine whether you succeed.
- Negotiate time to diagnose.
- Negotiate realistic expectations.
- Establish the starting baseline.
- Secure resources.
- Identify potential early wins.
- Surface political landmines.
- Clarify the status of internal candidates.
- Determine which unavoidable negative actions should occur before your arrival rather than automatically becoming part of your leadership story.
A title gives you positional authority on Day One. What you negotiate before Day One can give you the time, resources, clarity, and runway to begin earning something far more valuable: the authority to lead.
Ivan Bartolome,
President & CEO
HealthSearch Partners
Neill Marshall,
Chairman
HealthSearch Partners
Kurt Marshall,
Associations Practice Leader
HealthSearch Partners
Up Next: Negotiating To Win
