Start planning early
A recurring theme in our conversations was the idea that CEOs should start planning for their transition early — as soon as they start in the role. Some executives shy away from any mention of succession planning, thinking that it will make them a “lame duck.” However, proactive, early conversations about succession and leadership development offer advantages to both the organization and the individual. “My best advice is actually plan for it yourself,” said Kevin Lofton, retired CEO of CommonSpirit Health, “before someone taps you on the shoulder and says, ‘Maybe this is the time.’”
Once the news is formally announced and the transition period begins, CEOs can start to think more concretely about what the next step could mean for them and what their future goals in life might be. For Jim Hinton, who retired as CEO of Baylor Scott and White Health in 2021, this process was very intentional. “After my move was announced, I had time during the transition to explore some things, and I set three goals for myself, all related to my personal mission to make healthcare better,” he said. “I wanted to serve on a public company board because I’d never done that before. I wanted to get involved in private equity, because they had proven to be a great partner to us when I was CEO. And I wanted to help some startup companies in healthcare.”
Nancy Schlichting, retired CEO of Henry Ford Health System in Detroit, went through a similar process but landed on different post-retirement goals. When Schlichting shared with her board that she would like to move toward retirement, the board asked her to help recruit her successor, and she stayed for two years as part of the transition. That gave her sufficient time to plot the right path forward for her.
“I had a very strategic plan during that time, focusing on three buckets of activity,” she said. “One was intellectual — making sure that I would still have challenges when I retired. The second was community — engaging in meaningful ways like I always had. And the third was personal — spending more time with family and friends.”
Manage the social and emotional aspects of the transition
The shift from being in a highly public, powerful role to that of an ordinary “civilian” is profound. CEOs no longer have people deferring to them or seeking political advantages in the organization. Pat Maryland, who retired as CEO of Ascension Healthcare, said that although she made a healthy transition, it can also be jarring. “It was startling when I no longer had the title of CEO,” Maryland said. “It was a wake-up call. I knew, intellectually, that things were going to be different, but I didn’t realize how different. It’s a bit humbling, in a good way.”
John Koster emphasized that stepping down can be a necessary reset for some people accustomed to the attention and flattery they may have received as a senior leader. “The egos and the narcissism of some CEOs is a problem,” Koster said. “People don’t love you — they love the role of the CEO and what that person can do for them. And a week after you’re gone, you’re completely gone, and people move on. The whole notion that people love you and need you — that’s your ego talking to you.”
The board should play a role in making sure that CEOs don’t fall into this trap. Specifically, boards can ensure that CEOs are cultivating other interests and that they have a life outside of the CEO role. Not only does that combination of healthier balance and perspective round out leaders while in their current role, it can also ensure that they don’t try to extend their tenure for the wrong reasons. “When CEOs hang around too long, or let their egos get in the way of identifying and developing internal successors, that good talent moves on, the board has fewer choices and the organization gets weaker and weaker,” Koster said.
Hinton agreed, saying “The departing CEO should be a cheerleader for the success of the organization they’re leaving. Think of it like a relay race — you want the person taking the baton to run a better leg than you did. Especially in healthcare, where the race is even more important because it has to do with people’s lives.”
Be thoughtful about the immediate transition
CEOs are highly motivated, self-driven individuals, and the shift from a packed calendar full of obligations (plus the occasional crisis) to far more free time can be disorienting for some. To fill that void, some CEOs immediately take on a new set of responsibilities — potentially without fully considering whether those new activities are the right fit.
“Be very thoughtful about the things you don’t want to do,” counseled Sharon O’Keefe, who was president of the University of Chicago Medical Center. “When you retire, people call you with a lot of potential opportunities. Unless you’re clear about saying no, you can easily stumble into things that you’re not going to be very satisfied doing, but that also won’t be very easy to extricate yourself from.”
For John Koster, a year-long period of a remote advisory role was ideal. “I was able to relax, do the things I enjoyed and adjust to a different speed of life. I was made CEO emeritus, and because there was not much requested advice, I could get down to what I really wanted to do,” Koster said. “I love to swim, and I’m into meditation and yoga, so I finally had a lot of time to do that. After reflection, I realized that after a lifetime in different aspects of healthcare I still had enough experience and knowledge to make selective contributions, so I then wrote a book and started to take on other projects.”
At that point, Koster was far more deliberate about accepting only work that he wanted to do — the work he most enjoyed supporting missions he truly cared about. “I sensed that I didn’t need to do as much work in healthcare as I had thought I might,” he said. “I think of it as ‘preferment’ instead of retirement. I get to do what I prefer, when I prefer, with whom I prefer. And when I don’t prefer it anymore, you’ll know.”
Consider mentorship and giving back
A key area of focus for many former CEOs is supporting and advising people at earlier stages of their careers. Mentorship is something that people feel they can devote more time to in retirement — particularly those who benefited from these relationships on the way up and are now seeking to “pay it forward.”
“I’ve mentored young people my whole career, but I have more time for it now,” said Nancy Schlichting. “I’m helping people start companies and I’m connecting them with people I know. I just love being around young people — these are the people who get me energized.”
Jim Hinton noted that taking off the CEO hat can make you more approachable as a mentor as well. “When it’s announced that you’re leaving, you become a lot safer for people — you’re not the CEO anymore. You can really deepen the authenticity of your conversations with colleagues in the organization,” he said.
These relationships can be specifically targeted to people who have a greater need for support. “I’m focused in particular on mentoring women and communities of color,” said Pat Maryland. “As a woman and as a person of color, I know firsthand that navigating a career in the healthcare industry can be harder for us. I didn’t have a lot of mentors who looked like me. My mentors were male and white. There are so many young people who can benefit from our experience.”
In some cases, former CEOs have gone beyond one-on-one mentoring and set up more structured programs to support the next generation of healthcare leaders. That’s something that Kevin Lofton began to pursue before retirement and continues to lead. “I worked with some other retiring executives, and some active ones, to come up with an initiative called Elevate Black Healthcare Leaders,” Lofton said. “We wanted to identify a pipeline of Black healthcare executives who can step into big roles at regional and national systems. We’ve offered our experience to this group so that as positions come available, we can help them be better prepared.”
Be strategic about joining boards
Board service is another area where former CEOs have critical insights to contribute and far more time to do so. For executives who had limited experience on boards outside of their own organization, the transition period can be an opportunity to develop those capabilities. Pat Maryland was interested in board service and followed this path, stating, “The most crucial benefit of sitting on a board is that it allows you to truly make a difference.”
“Six months before I left, I started working informally with a faculty member on a board readiness program,” Maryland said. “She suggested a few areas that I needed to work on before I retired from my CEO role, like understanding the expectations of corporate for-profit boards versus not-for-profit boards, how to effectively interview for a board opportunity, and how to revise your resume to emphasize the governance aspect. I also became certified through the National Association for Corporate Directors. These steps helped position me to successfully join four boards.”
Other CEOs have expanded beyond their former area of expertise, to keep learning and growing in retirement. For example, Sharon O’Keefe worked most of her career at nonprofit hospitals and health systems. But today, she said, “I’m on three nonprofit boards — which are interesting and keep me close to healthcare and education — and on four for-profit boards. For-profit board service is a whole different world, with very different people than I was used to working with in the not-for-profit side, and new learning opportunities.”
Four key takeaways
Start early. For both the organization and the current leader, early planning and ongoing conversations are critical in laying the foundation for a successful transition.
Be proactive about planning. Set goals for retirement in specific areas — intellectual activities, spending time with family and giving back to the community. You may want to simply relax for some time but likely not forever. “I love golf, but it doesn’t always love me,” said Nancy Schlichting. “I could never just play golf all day.” Consider hiring an administrative assistant, as you’ll likely need help with things like calendars and travel arrangements.
Think about the social and emotional elements. You’ll have less responsibility and fewer people deferring to you. If those things are important to you, the transition may be more disruptive.
Don’t say yes to everything early on. You’ll likely get asked to join boards, advise startups and take on other responsibilities. Avoid saying yes to everything and then having to extricate yourself from situations that aren’t a good fit. You’ll have future opportunities, and you can always say yes later on.
• • •
One overarching principle should guide your thinking about retirement — how you leave can directly affect your legacy. As Sharon O’Keefe put it, “You make a lot of decisions throughout your career, but the most important decision is to know when to leave and never overstay your welcome. Start thinking about it sooner rather than later. Be honest about where you are at with the strategy of the organization, be clear about the challenges that lie ahead, and don’t let your ego get in the way. Take pride in the fact that you’re leaving a good organization and let somebody else take over.”
The authors would like to thank Maitreya Rich, Novreet Dosanjh and Siobhan Ford
for their contributions to this article.