Healthcare Executive Prospecting — Bet on the Horse or the Jockey?

Experience breeds feelings when it comes to healthcare executive prospecting. Does it work for horse racing too? I will not attempt to prove whether experience improves your outcome at the track. However, healthcare venture capitalists often use horse racing analogies when discussing ideal investments. These venture capitalists prefer to bet on the jockey versus the horse. Their judgement, it’s the people that drive the business.

A healthcare business capital business’s success depends on their capacity to recruit and retain a high-performing Jockey, a. okay. a. “the CEO. inch If it was only really easy to win The Kentucky Derby or deliver a ten-bagger return. My healthcare executive prospecting experience working with healthcare business capital firms provides feelings in defining the business’s CEO need. Once understood, identifying and prospecting the CEO and developing a solid support team for the CEO requires experience, extensive networks, new and real-time research and a thorough process. The intent of this article is to offer outcome-driven information for the healthcare business capital firm that prefers to search internally for a collection CEO versus retaining a healthcare executive prospecting firm.

Recent groups show an increased level of new capital investment from healthcare business capital firms. The health Care M&A Monthly reported in 03 08 that healthcare services deal volume in February 08 totaled 30 completed deals. Looking back to 2007, total funding for healthcare business capital deals was more than $9 thousand across more than 480 deals. Healthcare business capital investment improves the demand for these firms to conduct good and accurate executive search process in order to identify, recruit and retain the CEO. While a healthcare business capital firm often retains a healthcare executive prospecting firm to assist in CEO prospecting efforts, healthcare business capital firms can simulate the search process of the top healthcare executive prospecting firms.

Healthcare business capital firms are committed to prospecting a successful CEO for the collection business and may occasionally be inclined to conduct an in-house CEO search process. The approach is to put a CEO in place that is known by the healthcare business capital firm from previous experiences and business transactions. However, many times these healthcare business capital firms will admit they “don’t know what they don’t know” about the business, the message,

or the pool of available CEO talent. However, if there was any doubt at the starting point, it quickly becomes clear they need to bet on the jockey to run an unfamiliar race. It is at this point the firm should look into copying the search technique that healthcare executive prospecting firms utilize for CEO tasks.

Healthcare executive prospecting firms are engaged to name and recruit leading CEOs for high-growth, venture backed businesses. To reduce the risk of making a hiring mistake, a healthcare business capital business’s internal search process should assess those professionals the firm knows and trusts in parallel with proven professionals who are freshly introduced to the healthcare business capital firm. Ultimately the CEO may be selected from the business’s personal rolodex. However, the value of benchmarking known CEOs against a bigger CEO talent-pool will prove valuable.

CEO contingency and succession planning sits early in the healthcare business capital business’s investment. Prospecting strategies to recruit key CEOs, senior leaders and board members have reached the inspiration for a collection company’s success. Common practice is for the healthcare business capital firm to name and recruit a seasoned and industry-experienced board member, one capable of leading the business if the current CEO cannot finish the race. The immediate need is fiduciary but both succession and contingency planning is highly recommended too. While some individuals believe that succession planning should be below the CEO,

healthcare business capital firms want in developing concepts and financial carry in addition than developing future command talent. Therefore, succession and contingency planning find yourself in the board room for just two reasons: one, if the CEO in place is successful the new board member can maintain his or her fiduciary duties. However, if the CEO seems to lose control of the business or the market, this board member is engaged and able to step up immediately. This hedge strategy can be effective to dramatically reduce downside risk.

If the CEO seems to lose control of the business or the market and the healthcare business capital firm did not plan appropriately, there will be many sleepless nights. It’s during those sleepless nights when the unprepared healthcare business capital firm will incorrectly pursue one of these three options:

i Retain a healthcare executive prospecting firm. However, the search is often initiated on quick sand as the healthcare business capital firm needs to recruit a messiah. On the other hand, the venture capitalist might wish to avoid retaining a healthcare executive prospecting firm as it is perceived to be too cumbersome of a process during this time period of panic. Neither scenario leads to a high-multiple exit.

Turn to someone the healthcare business capital firm knows from previous transactions. This option is not focused on growth but instead on developing a floor to reduce investment loss.

The healthcare venture capitalist will take over the business and act as CEO. My experiences say that poor planning and a subsequent reactionary snazzy jerk will not deliver a confident cash outcome.

The success of a risk-taking healthcare business capital firm is based on hiring and prospecting the right Jockey for the business. While healthcare executive prospecting firms are often critical resources to venture firms, there are occasions when a healthcare business capital firm prefers to conduct their CEO search internally. In those occasions, healthcare business capital firms should simulate the proven search process of the top healthcare executive prospecting firms. Healthcare business capital firms will benefit by doing an fair and thorough executive search process tied to board level contingency and succession plans. This will develop strong businesses and deliver solid returns.

John Frankenberg is Us president, CEO, and Principal in Kraft Search Associates, a Stored Executive Search Firm devoted to the recruitment of high-value Executive Command throughout the Healthcare Industry. John has completed more than 225 Senior Executive and Corporate search tasks during his 12-year career and is known for search process thoroughness, commitment to project success, focus on client business plan achievement and candidate maintenance rates that are among the highest in the industry. Modern Healthcare journal.

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