Earlier this year, Humana’s Senior Vice President and Chief Financial Officer announced that he would be retiring on December 31, 2013. As CFO, James H Bloem helped Humana increase the company’s revenue and portfolio nearly four-fold. After many fruitful years serving a leading health care company that has grown since he joined in February 2001, Bloem decided that it was time to begin the search for his successor.
What’s particularly noticeable about this situation is the fact that Bloem will not only help find his successor, but that his 10-month transition period is in line with Humana’s practice of strategic planning and succession management. While every company has different policies and strategies, Bloem’s situation with Humana serves as a lesson for any CFO who wants their retirement transition to happen smoothly for both parties.
Three Strategic Planning Tips
Just as CFOs plan strategically during their day-to-day work in the company, planning their exit just as carefully can help the company transition seamlessly in the long run. It also allows the CFO to exit gracefully.
- Be upfront with retirement plans. This is a tough situation to navigate, because CFOs should avoid announcing their retirement plans too far in advance, but due to the complexity of their senior management position, they should also provide enough notice for a smooth transition. Recent research shows that half of all CFOs haven’t changed their retirement plans in the last five years. This means that the majority of retiring CFOs have known they would do so at least 5 years in advance. With this sort of foreknowledge, be sure to alert the company of retirement within the respected timetable for your situation.
- Offer to be involved in the search process. By offering to stay involved in the search process for his successor, James H Bloem was keeping the best interest of the company in mind. Because he will directly have input during the search, he will be able to help select someone who he believes can fill and exceed his role. Furthermore, the search process is considering both internal and external candidates to ensure that the best CFO is selected.
Check for precedence. While Humana is dedicated to their strategic management succession plans, not every company has standards set in place. However, if possible, check for the precedence set by previous CFOs and analyze when and how they announced their retirement plans. While James H Bloem’s 10-month transition period may seem long to others, it’s shorter than his predecessor, who had a 13-month transition process. Both of these, however, pale in comparison to Dresser-Rand Group Inc.’s Mark E Baldwin, who announced in 2007 that he wanted to work for 5 years before retirement.