Skip to Main Content Skip to Footer
Create an Account Login/myAPPA

Create account
Forgot password?
Bookstore

Select Language

Introduction

Top

What is the future of higher education? This is a topic of considerable debate. The public has great confidence in higher education. A March 2012 study by the Pew Research Center for the People & the Press found that 60% of American adults viewed universities as having a positive effect on how things are going in the country, and 84% of college graduates say that the expense of going to college was a good investment for them.1 Others are concerned that colleges and universities are unable or unwilling to be innovative and change in the face of tremendous environmental changes. How are students changing? How is technology changing? How are faculties changing? How are facilities changing? How is the political landscape changing? How are economic factors changing? How are societal norms and expectations changing?

According to the U.S. Department of Education, in the next decade (2010 to 2021), higher education should expect about a 15% enrollment increase, with substantial increases in students from underrepresented racial ethnic groups. Many of these students are first-generation college students and are not ill-prepared for college. Projected increases are as follows:

  • 4% for students who are white
  • 25% for students who are black
  • 42% for students who are Hispanic
  • 20% for students who are Asian/Pacific Islander
  • 1% or higher for students who are American Indian/Alaska Native.2

How students are earning their degrees is also changing. Students are taking free massive open online courses (MOOCs) and obtaining information from multiple sources. Students often attend multiple institutions and mix learning experiences. One-third of students who earn degrees transferred from one college to another on the way, according to the National Student Clearinghouse Research Center, and students are more likely to switch from a four-year college to a two-year college rather than the other way around. Colleges and universities compete with for-profit universities, nonprofit learning organizations, commercial providers of lecture series, online services such as iTunes U, and a host of specialized training centers that provide instruction and credentials for particular trades and professions.3

Technology is transforming higher education. MOOCs, adaptive learning software, and unbundling of traditional degree credits increase access to high-quality education and tailor lesson plans to individual needs. Some colleges are delving into hybrid learning environments, which employ online and offline instruction and interactions with professors. Other institutions are channeling efforts into advanced teleconferencing and distance learning platforms — with streaming video and asynchronous discussion boards — to heighten engagement online. Technology is placing tremendous pressures on faculty members to change their methods of delivery.4 Political leaders are encouraging colleges and universities to use technology to a greater extent to become more cost-effective and productive.

Leaders are also encouraging a greater emphasis on reducing facilities costs, effecting energy savings, addressing environmental issues, and increasing services. Frontline campus leaders see aging facilities where deferred maintenance continues to grow, with respect to not only buildings but also electrical transmission lines, high-temperature water pipes, and other infrastructure issues. Leaders see the need for extensive remodeling and equipment replacement, stunningly large start-up costs for experimental scientists, an insatiable demand for information technology resources, and a keen interest in sustainability efforts that require up-front investment.5

The price tag for attending college and the debt load for students and their families are widely acknowledged problems, and political leaders are levying pressure on colleges and universities to minimize tuition and fee increases and to provide greater transparency in disclosing graduation rates and debt loads. A 2011 Pew Research Center survey found that 75% of adults say college is too expensive for most Americans to afford. Moreover, 57% said that the higher education system in the United States fails to provide students with good value for the money they and their families spend.6

Legal, regulatory, and political realities (particularly as they relate to health care, productivity, transparency, and safety) are affecting all colleges and universities. Federal and state political leaders have embraced the “completion agenda,” which calls for significantly more graduates to meet workforce demands at a time when families are concerned about costs. Many states have enacted legislation embracing the completion agenda and changing funding to tie it to student outcomes, including numbers of graduates, course completions, and transfers.7

All public and private colleges and universities have been affected by the availability of state and federal funds for operating support, capital projects, and student financial aid. Public colleges have experienced a dramatic change in who pays. As measured in constant dollars, state and local appropriations per $1.00 in tuition declined from $2.65 in 1991 to $1.27 in 2006.8 “High tuition/high aid” has become a common practice for public colleges and universities.

Other revenue streams — including contracts and grants, private giving, auxiliaries, endowment and interest earnings, earnings from technology transfer (royalties and licenses), hospitals, and other sources — are no longer easy to predict because of external changes, including the impact of health care reform on academic medical centers and the effect of the post-stimulus environment on federally sponsored research.9

A major driver in the debate about the future of the university centers on its business model. Some observers argue that America’s higher education system is broken and current business models simply will not function in the next decade. “The system of financing higher education is dysfunctional. In addition to the lack of transparency regarding pricing, there is a lack of the incentives necessary to affect institutional behavior so as to reward innovation and improvement in productivity. Financial systems of higher education instead focus on and reward increasing revenues — a top line structure with no real bottom line.”10 Some argue that “more” was the guiding principle for 1999 to 2009 — more buildings, more majors, more students, and more tuition — and predict that higher education will become more “unbound,” with students “less tethered to one campus for four years.”11

Will colleges and universities adopt new teaching approaches that focus on quality and productivity and on student learning needs? Will colleges and universities adopt competency credentialing? Will colleges and universities replace “bricks” with “clicks”? Will colleges and universities resolve price tag and student debt issues? Regrettably, the future is unpredictable, and the changes (or the extent of changes) are unknown. Some colleges and universities are likely to fare better than others in the future. What will distinguish such colleges and universities from others? Strong leaders who have a clear strategy and are accountable for their college’s performance and results will make a difference.

What Is Strategy

Top

Until the middle of the twentieth century, strategy was synonymous with management; consequently, many organizations find it difficult to define strategy. For experts, strategy is an integrated set of choices that uniquely positions an organization to create sustainable advantage and superior value relative to the competition.12 Five frequent mistakes that leaders make in developing strategy are the following:

  1. Defining strategy as a vision, “Mission and vision statements are elements of a strategy, but they are not enough.” They offer no guide to productive action and no explicit road map, including choices for the desired future.
  2. Defining strategy as a plan. While plans and tactics are also elements of strategy, they do not necessarily result in sustainable competitive advantage.
  3. Denying that long-term (or even medium-term) strategy is possible. Some leaders believe that in a rapidly changing marketplace, an organization should respond to new threats and opportunities as they emerge.
  4. Defining strategy as the optimization of the status quo. Improving current practices does not address the possibility of enhancing the wrong activities rather than transforming the business model.
  5. Defining strategy as following best practices. “Some organizations define strategy as benchmarking against competition and then doing the same set of activities but more effectively. Sameness isn’t strategy. It is a recipe for mediocrity.”13

Questions that can serve as a guide to developing strategy are:

  • What is your winning aspiration? The purpose of your enterprise, its motivating aspiration
  • Where will you play? A playing field where you can achieve that aspiration
  • How will you win? The way you will win on the chosen playing field
  • What capabilities must be in place?  The set and configuration of capabilities required to win the chosen way
  • What management systems are required? The systems and measures that enable the capabilities and support the choices14

Lafley and Martin note that these questions are sequential and represent a cascade or flow of decision making, with the choices of the first question setting the context for subsequent choices and then the choices for later questions influencing and refining the previous choices. Similarly, there can be multiple levels of choices and interconnected decisions. As examples, for colleges and universities, there might be separate aspirations for research and academic programs, and colleges might have separate aspirations for various academic programs.

Some experts say that if an organization is entirely comfortable with its strategy, there is a strong chance that the strategy is not very good. “True strategy is about placing bets and making hard choices. The objective is not to eliminate risk but to increase the odds of success. Good strategy is not the product of hours of careful research and modeling that lead to an inevitable and almost perfect conclusion. Instead, it’s the result of a simple and quite rough-and-ready process of thinking through what it would take to achieve what you want and then assessing whether it’s realistic to try.”15

Colleges and universities are frequently prey to the following two strategy traps, among others:

  • The do-it-all strategy: failing to make changes and making everything a priority
  • The something-for-everyone strategy: attempting to have priorities in every area16

Other strategists identify the following hallmarks of bad strategy:

  1. Fluff. Fluff is a “form of gibberish” and uses “Sunday” words that are inflated and unnecessarily abstruse to create the illusion of high-level thinking. “Fluff has its origins in the academic world and, more recently, in the information technology industry.”
  2. Failure to face the challenge. When the challenge is not recognized or defined, strategies to improve it cannot be evaluated. Instead, the organization has a stretch goal, a budget, or a list of things the organization wishes could happen.
  3. Mistaking goals for strategy. “Many bad strategies are statements of desire rather than plans for overcoming obstacles.”
  4. Bad strategic objectives. “Strategic objectives are ‘bad’ when they fail to address critical issues or when they are impracticable.” “Good strategy works by focusing energy and resources on one, or a very few, pivotal objectives whose accomplishment will lead to favorable outcomes. A long list of things to do usually grows out of planning meetings in which a wide variety of stakeholders make suggestions as to things they would like to see done. Then, in recognition that it is a list, the label “long-term is added so that none of them need to be done today.17

Strategy must be an overarching guide to all operations. Strategy includes the following:

  • Defining challenges
  • Establishing directions and priorities, which are used to develop policies and guide decision making
  • Planning strategy, which addresses how services will be provided
  • Executing strategy, including delegating clear responsibilities to managers
  • Leveraging resources
  • Monitoring and evaluating overarching goals and management operational goals and using strategic performance measures
  • Being accountable for results

Many factors — including institutional control, size, and leadership — affect the strategies that are available to higher education leaders. The institutional control and public, private not-for-profit, or private for-profit status affect all aspects of strategy. For example, many public higher education institutions depend on state resources to construct and rehabilitate educational facilities, while private institutions do not; this dependence on public funds limits both planning and execution. Similarly, state regulations in the areas of construction, human resources, and other contractual arrangements affect strategy for public institutions.

Simply said, being strategic means consistently making those core directional choices that will best move you toward your hoped-for future.18 Many management experts say that creating effective strategy is the most important responsibility of senior executives. A key task of leaders is not to predict the future but rather to give the organization direction, goals, and the strategy to reach those goals.19

Defining Challenges

Most of strategy work is trying to figure out what the obstacles are. If the challenge is not defined, it is difficult or impossible to assess the quality and feasibility of the strategy. Often, organizations propose solutions to a problem before they are clear on what the problem is. Leaders must identify the critical obstacles and then develop a coherent approach to overcoming them. Approaches might require innovation, new delivery mechanisms, or insights into the implications of changes in the environment, such as changes in technology, demographics, regulations and legislation, prices, or competition.20 Several questions are helpful in defining the challenge. What is not working? How can we, for example, consistently think about our college or university in fresh ways that create an emotional and value connection with our students, faculties, employees, employers, alumni, communities, and business and political leaders?21

Defining challenges should focus on both outcomes and processes. Colleges and universities are complex organizations with multiple internal and external stakeholders. Consequently, different stakeholders have different needs and multiple competing needs. For example, an adult student might have a different educational goal than a student who enrolls in a college or university directly from high school. An adult might want an educational program delivered in a different way, at a different location, at a different time, and with different support services than a student who enrolls in college directly from high school. In developing strategy, colleges and universities must carefully segment their customers and identify effective ways to deliver value to them.

Colleges and universities should look beyond the current array of services and stakeholders and search for “white space opportunities”; that is, areas of potential growth. Strategists believe it is essential to pay particular attention to growth areas, regardless of internal skills, so that organizations can focus on what can be rather than what is. Strategy aims to exploit the new and different opportunities of tomorrow.

As part of the challenge definition process, an institution must recognize the multitude of external and internal factors that affect its future strategy. Analyses of demographics; economic factors; technology; regulatory, legal, and political climates; resources and human and physical assets; and internal policies, procedures, and culture are likely to have a substantial impact on strategy. Careful in-depth analyses in these areas are essential for viable conclusions and decisions.

A college or university must analyze information to understand its current position and its competitive advantages. A thorough internal analysis of strengths and weaknesses and an accurate appraisal of the external environment of opportunities and threats are needed — sometimes called a strengths, weaknesses, opportunities, and threats (SWOT) analysis. As an institution or department completes its SWOT analysis, a number of basic questions must be addressed. For example, in what areas are the institution (or department) particularly competent? Where does the institution have competitive disadvantages? Where does the institution need human, capital, or financial resources? What are the potential new markets? Where can service and performance be improved? Which markets are deteriorating? Where is the institution losing its competitive advantage? The essence of a well-formulated strategy is to maximize an organization’s strengths and opportunities and to minimize its weaknesses and threats.

As part of analyzing current position and competitive advantages, organizations should focus on five competitive forces that shape strategy:

  • Threat of new entrants
  • Threat of substitute products and delivery systems
  • Bargaining power of suppliers
  • Bargaining power of buyers
  • Rivalry within the industry

An understanding that these forces go beyond the institution and beyond “the present environment” is valuable as an organization formulates a durable long-term strategy that is less vulnerable to competition. The job of the strategist is to understand and cope with competition, which is often defined too narrowly and limited to competition as perceived today. In reality, competition goes beyond established rivals to include other competitive forces: demands of customers, demands of suppliers, potential new entrants, and substitute products and delivery systems. Effective strategy analyzes changes in the strength of these forces, which signal changes in the competitive landscape that are critical to ongoing strategy formulation.22

Clearly, the thorough analyses required to identify issues result in substantial information about a college or department. The challenge to the strategist is, first, to decide which data are most important, and, second, to determine if there is consensus on the results of the data analyses. It is important to agree on facts related to each issue before proposing solutions.23

Analyses that define challenges are an important first step for strategy development, and these analyses are not one-time snapshots. Rather, analyses should be conducted frequently to ensure that external and internal conditions have not changed dramatically in a way that would compromise the overall strategy. Strategy can be improved with the use of continual issue-focused strategic planning. Throughout the year, leaders should identify the issues that must be resolved to enhance performance — particularly those spanning the organization as a whole, such as responding to a new competitor or taking an opportunity to purchase facilities or land. Leaders should debate one issue at a time until a decision is reached and should recognize that effective leaders add issues to the strategy agenda as realities change.24

A sound strategic definition of challenges does more than explain a situation; it also identifies a domain of action. Quite simply, what is going on here? The answer is not just deciding what to do, but the more fundamental problem of comprehending the situation.

Developing Direction and Policy

A guiding policy is an overall approach chosen to overcome the obstacles identified as challenges. It channels action in certain directions without defining exactly what shall be done. Good guiding policies are not goals or visions or images of desirable ends; rather, they define a method of grappling with the situation and ruling out a vast array of possible actions. Good strategy is not just what you are trying to do.  It is also why and how you are doing it. A good guiding policy tackles obstacles by creating or drawing on sources of advantage.  In public policy, good strategy creates advantages by magnifying the effects of resources and actions. “A guiding policy reduces the complexity and ambiguity in the situation, concentrates efforts on the situation and creates coherent policies and actions.”25

Decision Analysis and Decision Making

Decision analysis — or the consideration of various options that address the value of services and their impact on the organization, its people, and its resources — must be considered in shaping strategy. Drucker suggests that organizations begin to make choices by asking, “What do we have to do now to attain our objectives tomorrow?” He emphasizes that the most effective way to do something different tomorrow is through eliminating the no-longer-productive and the unnecessary activities. This “sloughing off” activity is critical. Drucker notes that a strategy that proposes doing additional new things without sloughing off old and tired ones is unlikely to produce results. His common sense approach is to ask a number of questions for each activity or process. If we were not committed to this today, would we go into it? What new and different things do we have to do today if we want to be in some particular place in the future? And when? What will not get done at all if we do not commit resources to it today? When do we have to start work to get results when we need them? The challenge for leaders is to select a strategy and to be flexible in making changes as the environment and organization change.26

A brilliant strategy can put an organization in a strong competitive position; however, most organizations struggle with implementation, particularly when they rely on structural changes such as reorganization to execute the strategy. They emphasize the importance of ensuring that everyone in the organization knows the decisions and actions for which they are responsible, encouraging higher-level managers to delegate operational decisions, making sure that important information about the competitive environment flows quickly so that leaders can identify patterns and promulgate best practices throughout the organization, facilitating information flow across organizational boundaries, and helping all employees understand how their day-to-day choices affect the organization’s outcomes.

Research shows that two levers are most effective in implementing strategy: clarifying decision rights (for instance, specifying who “owns” each decision and who must provide input) and ensuring that information flows where it is needed (for example, by promoting managers laterally so they build networks needed for the cross-unit collaboration critical to a new strategy.27

Leaders must view strategy and execution as linked with the following approaches:

  1. Keep the strategy simple. Avoid drawn-out descriptions of lofty goals. Instead, clearly describe what the organization will and will not do.
  2. Challenge assumptions. Ensure that the assumptions underlying long-term strategy reflect real market economics and the organization’s actual performance relative to its competitors.
  3. Speak the same language. Recognize that all stakeholders — leaders and academic, administrative, communication, and finance teams — must agree on a common framework for assessing performance.
  4. Discuss resource deployments early. Challenge departments about what resources they need and when they will need them to execute their strategy.
  5. Identify priorities. Deliver planned performance by emphasizing the requirement for a few key actions taken at the right time, in the right way. Make strategic priorities explicit so that everyone knows the tasks on which to focus.
  6. Continually monitor performance. Track real-time results against the plan, resetting planning assumptions and reallocating resources as needed. Remedy flaws in the plan and its execution— and avoid confusing the two.
  7. Develop execution ability. Because no strategy can be better than the people who must implement it, make selection and development of managers a priority.28

In addition, leaders should seek the input and support of individuals who have the institutional memory and skills necessary to successfully navigate a new idea through the system.

Strategy Execution

Top

Strategy experts agree that a well-thought-out strategy is crucial; however, only solid execution ends in successful results. Execution is the result of thousands of decisions made every day by employees acting according to the information they have and their own self-interests. The leader’s responsibility is to ensure that strategy is fully communicated to all employees, that all stakeholders are committed to the strategy, and that incentives — both financial and nonfinancial — are aligned with strategy. A second critical responsibility is to maintain flexibility. No one expects to formulate a strategy and follow it with no adjustments. Colleges and universities operate in complex environments — economic and social changes as well as competitors’ actions call for making appropriate adjustments.

Neilson and others surveyed several thousand employees and generated a database of 125,000 profiles representing more than a thousand companies, government agencies, and not-for-profit organizations in more than 50 countries. When asked if they agreed with the statement that “important strategic and operational decisions are quickly translated into action,” the majority answered no. In particular, employees at three of every five companies rated their organization weak at execution.29
It is easy to err in execution; common mistakes include the following:

  • Underestimating time and complexity of execution
  • Not fully factoring in current commitments
  • Not anticipating system implications, effects, and pushbacks
  • Not looking at execution through the eyes of those doing the work
  • Underestimating needed communication and coordination30

When a company fails to execute its strategy, the first thing managers often think to do is restructure. However, our research shows that the fundamentals of good execution start with clarifying decision rights and making sure information flows where it needs to go. If you get those elements right, the correct structure and motivators often become obvious.

Leverage Resources

An effective tool to integrate strategy in day-to-day decision making is to align and allocate resources consistent with the strategy. Each organization’s strategic plan with its mission, goals, and objectives should serve as the vehicle and essential foundation for funding. Some institutions present their annual budgets by aligning them with strategy. Many institutions now integrate strategy and the budget by setting aside funds for strategic initiatives. Stakeholders then present proposals designed to reach the goals identified in the plan. Another strategy is to provide rewards to organizations or individuals for their contributions in achieving results identified in the overall strategy. Some institutions use responsibility center budgeting in which the central administration delegates budgetary authority to schools or major academic programs (responsibility centers) as an effective budgetary tool.

To be effective, resources must be allocated to the goals, and the strategy must identify objectives. A number of key questions should be asked. Are resources aligned with the strategy? Are resources being allocated to the areas of greater need to ensure that goals are being met? Are resources adequate? Is the resource allocation strategy sustainable?

Nonprofit organizations have no bottom line and are prone to consider everything they do to be critical. Consequently, they may be unwilling to say that if an action does not produce results, then maybe resources should be redirected elsewhere. Drucker says that nonprofit organizations need the discipline of “organized abandonment” and should face up to critical choices. He also emphasizes the balancing problems that nonprofit leaders have in concentrating resources on a common goal and appropriate diversification. If a leader concentrates resources, then maximum results can be a reality. Concentrating resources is also risky, particularly if the wrong concentration has been chosen.31

Monitoring and Evaluating

Institutions must monitor and evaluate strategy to understand if it is moving in the direction defined by strategy. A number of key questions are relevant. Are the goals being achieved? Why? Why not? Are goals being achieved consistent with the proposed timelines? Why? Why not? Are the resources adequate? Do employees understand and make decisions based on the overarching strategy? Are the goals realistic? Should the goals be altered? What are the learning outcomes? What are the other educational outcomes?

Monitoring and evaluation include both quantitative and qualitative analyses. The quantitative analyses are usually determined through data analyses and comparisons with benchmark institutions. The qualitative measures are usually determined through stakeholder surveys of business and industry, students and alumni, and employees. On the basis of qualitative and quantitative analyses, leaders can make changes in the overall strategy at any time. These changes could be small or significant.

The frequency of monitoring and evaluation depends on the nature of the organization and the environment in which it is operating. For most organizations, monitoring is an ongoing process. Many organizations review many metrics in the form of a dashboard, balanced scorecard, key performance indicators, or other performance measurement systems. The key is to focus on trends and exceptions.

Strategic Performance Measures

As W. Edwards Deming and Peter Drucker said, “You can’t manage what you don’t measure.” Strategic performance measurement is now an essential part of higher education for evaluating strategy and for providing information to the public. The purpose of measurement is not to know how an organization is performing but rather to enable it to perform better. When integrated into management decision making, performance measurement can be a powerful tool.32 Strategic measures must be combined with action steps that provide leaders with information not only on why performance is as it is but also on what changes are necessary to bring about improvement. Well-designed strategic measures focus attention on strategy and include useful information to make resource allocations, help the institution assess its progress in pursuing its strategy, and lead to an observational difference in an institution’s actual behavior and performance.

Much has been written about performance measurement, and although a variety of systems are in place, all effective strategic performance measurement systems share certain characteristics:

  • They integrate into decision making.
  • They focus on a few desired results and measures and are easy to understand.
  • They lead to action.
  • They include well-selected and communicated measures and performance targets.
  • They recognize limitations.

Because the overarching purpose of measurement is to enable an organization to perform better, performance measurement must be integrated into decision making. Performance measurement should support long-term objectives and specific actions and should span multiyear planning and budgeting horizons. Strategic performance measurement should influence budgetary allocations, including hard choices about reallocations and funding high-priority items.

The desired results as defined by strategy are essential to determine which strategic measures should be used. Strategy answers a number of questions. How is performance for this institution to be defined? Who are the constituencies and what are the results for each of them? Is the institution effective in its core purposes of educating students and conducting research? Which goals are most important?

Strategic performance measures should identify a well-coordinated set of action steps aimed at long-term improvement. Campus leaders need to know what performance is, why performance is as it is, and what changes and resources are necessary to bring about improvement. To illustrate, most colleges measure freshman retention rates and frequently compare them with previous years’ rates and with rates for similar institutions. If a college’s rate has declined or is lower than the rates of benchmark institutions, leadership should review information that explains why the rate has declined or is low. An analysis might show that students have dropped out of college for financial reasons and that student financial aid expenditures are lower than those of other institutions. In this example, the college might consider a strategy of allocating resources to student financial aid to improve retention and then determining the extent to which retention improves. Simply knowing the retention rate does not adequately inform leadership.

All performance measures and targets must include a rationale and a purpose; people must know why things are measured and, more important, what they are supposed to do about them. Measurement must be based on a careful analysis of the areas the campus controls. Only then can individuals execute the right actions to improve performance of the institution as a whole.

Selecting the measures themselves can be a formidable task. The quantity of output is not by itself an adequate measure of performance. The complexities of measuring the quality and quantity of student learning are enormous. Many benchmarks are outside of the institution, and collecting accurate and comparable performance data from other institutions, organizations, and states can be problematic. Some performance measures can be susceptible to manipulation without real changes in what they were intended to measure or reflect. Institutions must address a number of other questions. Is the measure easily understandable? Against what benchmark or standard will the measure be compared to chart success or progress? To what extent is the measure reliable and valid?

Facilities leaders should use quantitative and qualitative performance metrics that focus on operational and capital measures and customer satisfaction. For example, facilities leaders should measure both the quantity and quality of a given space for its current use. Facilities leaders must also look at the backlog of deferred maintenance and the extent to which actions are remedying and reducing that backlog. The cost-effectiveness of custodial services and the satisfaction of students, faculty, and administrators are also important. Finally, performance must be benchmarked with similar institutions. The APPA Facilities Performance Indicators (FPIs) are excellent examples of relevant performance measures for facilities management departments to use in the strategy development process.

All performance measurement systems have limitations, and it is important to recognize these limitations. Education results are long term, and significant changes in areas such as graduation rates do not occur overnight. In addition, some measures are best used for internal purposes; using them externally to compare one institution with another can be inappropriate and damaging.

Accountability for Results

Accountability for results has become a way of life for many colleges and universities. Accountability can be an effective tool to give the institution, the department, and the individual timely and helpful information about the performance of the institution.

For accountability to be effective, a positive culture must be established, and the following conditions must be in place:

  1. Agreement about goals
  2. A focus on improvement rather than a negative focus
  3. Open dialogue focused on solving problems and weaknesses
  4. Recognition of progress and strengths
  5. Transparency and openness to review data

Ultimately, results only occur when leadership and all stakeholders in an organization embrace an effective accountability system.

Strategic Planning

Top

Simply said, strategy determines where an organization is going during the next year or further in the future. Strategic planning outlines how an organization is going to reach its goals and how it will know if it got there or not. The focus of a strategic plan is usually on the entire organization, while the focus of a business plan is usually on a particular product, service, or program. Strategic planning is an ongoing activity rather than an annual or once-every-five-year event.

A variety of perspectives, models, and approaches can be used in strategic planning, depending on the organization’s leadership, culture, complexity, and environment. Most plans are goal-based, focusing on strategies to achieve goals and specific actions (who will do what and by when). Strategic plans can span a timeline of 1 year, 3 to 5 years, or 10 to 20 years into the future.

Strategic planning is a process that helps an organization make decisions on how to achieve its strategy, including allocating its resources — financial, capital, and people resources. For higher education, strategic planning must address the customer: For whom should we pursue goals? To determine where it is going, the organization needs to know exactly where it stands and then must determine where it wants to go and how it will get there. The resulting outcome is the strategic plan.

Strategic planning is making decisions today in an effort to mold the future. Such planning builds on an organization’s strengths while recognizing a changing and competitive external environment. Drucker describes strategic planning as an entrepreneurial skill “aimed at action.” Strategy is about making choices: Do I serve this customer group or a different one? How are my customers and prospects changing? If my business model was good for yesterday’s customers, how does it have to change to keep them?”33

Strategic planning is inextricably interwoven into the entire fabric of management and is a responsibility of all managers. It is an attitude, a way of life, a thought process rather than a prescribed set of processes, procedures, structures, or techniques.

Drucker summarizes strategic planning as the “continuous process of making present entrepreneurial (risk-taking) decisions systematically and with the greatest knowledge of their futurity; organizing systematically the efforts needed to carry out these decisions, and measuring the results of these decisions against the expectations through organized systematic feedback.”34

If resources were not limited, there would be no need to select one objective over another; however, in the planning process, focusing efforts on fewer or more limited objectives generates larger payoffs. Rumelt gives an example of a small business school developing a strategic plan. The first draft was a list of areas in which the school would announce initiatives and try harder with increased research, more alumni giving, the creation of programs, and a sustainability initiative. Data showed that the largest segment of students took jobs in small to medium-size local accounting businesses. Rumelt asked the group to image that they had only one objective and it had to be feasible. One-half of the group came up with “getting the students into better jobs,” and the other half focused on public relations. The group combined the two ideas and decided the primary objective would be to get the students into better jobs by selecting 10 target firms that should be hiring their graduates but were not. Faculty committees would study these firms’ recruiting practices and would create programs to meet their needs and standards. The school also committed itself to a new course of studies on media management that would attract students, and if students got jobs in the media, it would help raise the school’s profile.35

Ron Ashkenas and Logan Chandler observe that many strategic plans have very little meaningful substance that can be translated into action, and, as a result, many strategic plans end up as shelf decorations or hard-to-find files on crowded hard drives. They identify four steps to make better use of the hard work that goes into planning a strategy:

  1. Insist on experiments to test the assumptions you have made. Strategic plans assume that certain outcomes will result from a given set of initiatives. Too often those assumptions are supported by secondary research, educated guesses, or assumptions rather than field tests. Strategic planners should consider specific short-term experiments whose results will communicate what works and what does not.
  2. Banish fuzzy language. Strategic plans are often filled with empty phrases such as “leverage our world-class operating capabilities.” Language such as this can signal that a team does not have a clear idea of what it needs to succeed.36 A typical vision and mission statement for a university is to be a “learning community that seeks to serve society by educating the leaders of tomorrow and extending the frontiers of knowledge.” Rumelt observes that the statement simply indicates that the university wants to be a university, that the statement is not informative, and that it provides no guidance for future planning or policy making.37
  3. Escape from template tyranny. Templates are often a standard fixture of strategic planning. The rigid use of templates can lead a team to be more focused on organizational requirements than on doing the hard thinking about change and innovation. When teams have to complete the same templates each year, the result can be stale ideas, rote responses, and plans that do not fully capture the key issues and opportunities.
  4. Ask provocative questions. In theory, strategic planning should foster intense debates and discussions, but when the process is rigidly structured and the documents are dense with data, the dialogue can be stilted or constrained. To overcome this issue, it is important to ask tough questions when the plans are presented — and to do this in a way that can lead to unscripted answers that will enrich the thinking and increase everyone’s level of confidence in moving forward. A few of the tough questions are illustrative. What are the top two or three things that must go right for this strategy to work? If we pursue this strategy, what are we deciding not to do? What specific capabilities will we need to develop for this plan to succeed?38

Strategic plans frequently fail to deliver their intended results. Often, the problem is not the strategy but rather how the strategy is implemented. Keys to successfully implementing strategy are as follows:

  • Strengthen accountability for results. Get people focused on the results they need to accomplish instead of overloading them with activities and to-do lists. When organizations impose lengthy and bureaucratic procedures to get something done, people lose sight of the result because they are forever following process, getting signoffs, and doing paperwork instead of focusing on results. Implement a clear system for setting accountability, establishing how results will be measured and managing progress.
  • Strengthen accountability for behaviors. Any significant strategy involves some degree of change — in direction, focus, structure, process, or a number of other factors. What makes strategy successful is how well it is sponsored by senior management, both in words and in actions.
  • Build an employee population that acts like owners. Organizations that reach strategic goals have developed employee populations that act like owners; they do the right thing with gusto because it is in their own best interests to do so. Connect the strategy to each individual’s role, and appeal to the individual’s own rational self-interests. Consider encouraging employees to establish their own goals, track metrics, and solve problems.39

There are many examples of strategic plans that do not work. Frequently, strategic plans do not work because they do not take into account the realities of the organization and its environment or they do not focus on outcomes and results. Three common pitfalls are as follows:

  • Pitfall 1: Avoiding saying No. Strategy is about defining what an organization will do to achieve its goals. No company, however, can do everything. A good strategy says Yes to some possible actions but says No to others. All too often, leaders are unwilling to say No to anyone. If your mission statement is so broad that it encompasses everything, if your values statement praises all that is good, if your strategy says that you will be all things to all customers, then you need to learn to say No.
  • Pitfall 2: Not connecting to actions. Without action steps, the big-picture strategy is useless. To develop those steps, the team has to identify actions that are necessary to implement the strategy.
  • Pitfall 3: Listing vague actions steps.  Vague thoughts such as “work smarter, not harder” are sometimes listed as action steps, but they fail to do the job. A good set of action steps helps each manager know what to do first thing in the morning. If your strategic plan fails to define what the management team does every day, then it needs good action steps.40

Strategic Planning Principles

Certain general principles are recognized as critical for successful strategic planning. A first principle is performing an assessment of whether an organization is ready to embark on strategic planning. An institution should have good management and adequate information on which to base decisions before it tries to reach out and move ahead.

A second principle is showing the willingness to assign the best people to work on the project. The distinction that marks a plan capable of producing results is the commitment of key people. A manager who does not have a plan is the one who says, “But I cannot spare my best people now. They have to finish what they are doing before I can put them to work on tomorrow,”41

A third principle is understanding that leadership’s attention, priority, and time are critical. Strategic planning cannot be delegated to the planning office. If top management becomes too absorbed in putting out fires and dealing with current operational problems, then the process is likely to fail. Leaders must make the most important decisions, including those affecting resource allocations.

A fourth principle is recognizing the desirability of extensive participation of employees and customers. The decision-making process is improved by involving the people on the front line who will be sources for quality and productivity gains. Encouraging participation usually means more staff buy-in, fewer efforts to sabotage the plan, and a greater likelihood of success. Also, most organizations find that many opportunities come from customers. Ben and Jerry’s top-selling ice cream flavor is Cherry Garcia; both the flavor and name were suggested by a customer.

A fifth principle is understanding the importance of recognizing that there is no single perfect approach or process.

Communicating the Plan

Top

A plan should be written in a format and style that fit the culture and needs of the organization. Because the plans should be widely distributed to stakeholders, they must be written to appeal to these stakeholders. For example, an executive summary should be available. Most plans should include the following:

  1. Executive Summary. This summary should be written in a style that is easily understandable to any internal or external stakeholder of the organization.
  2. Vision, Mission, and Values Statements. These statements should describe the philosophy of the organization.
  3. Goals and Strategies. All major goals and related strategies should be included.
  4. Appendices. In general, appendices include the following:

Appendix A, Operating Detail: specifies objectives, responsibilities, and timelines for completing objectives

Appendix B, Data Analysis: includes information from data analyses, such as SWOT analyses

Appendix C, Financial Plan: describes the resources needed (human, financial, and capital), the proposed sources of these resources, and a timeline for allocating them

Appendix D, Performance Measures: includes quantitative and qualitative measures and also timelines for evaluating progress in achieving goals

Facilities Planning

How does facilities planning relate to overall strategy and strategic planning? Ideally, facilities planners should participate in the strategy and strategic planning process. Strategic plans often call for the development of a campus facilities master plan to support newly developed strategies, goals, and initiatives. A college’s overall strategy must address its facility and technology infrastructure, which creates a sense of place for the institution, its students, and its alumni. Facilities are physical representations of an institution’s identity, reinforce a sense of community, and are central to the educational mission of the institution. Facilities support learning. The amount of daylight in a classroom can have a measurable effect on learning outcomes. Architectural space design can create an environment that encourages small group interaction. For these reasons, implementing an effective strategy that is embraced campus-wide by administrators and academics is an important function of the facilities manager.

Facilities planning not only responds to strategy and new initiatives but also must assess the condition of existing facilities, analyze current and future space needs, and develop land use and infrastructure future plans, including student housing, transportation and parking management, landscape and pedestrian circulation, and multiyear capital improvement, energy, and sustainability plans. Campus leaders must ensure that academic, facilities, finance, and other administrative strategies are in alignment. A facilities strategy that does not have the support of campus and academic leadership is not likely to yield results.

Summary

Top

The future is unpredictable for colleges and universities. What will distinguish some colleges and universities form others in the future? Strong leaders who have a clear strategy and are accountable for their organization’s performance and results will make the difference. With a greater emphasis on the value of higher education, uncertain financial support, and increasing competition from other institutions and alternative delivery mechanisms, higher education leaders face mounting pressure from stakeholders — students, faculty, employees, alumni, donors, boards, employers, and political leaders — to show results. To make the greatest possible impact, colleges and universities must focus on strategy by explicitly stating their intended outcomes and plans to accomplish those goals.

References and Resources

Top

1. Pew Research Center for the People & the Press. March 1, 2012.

2. Hussar, W.J., and T.M. Bailey. Projections of Education Statistics to 2021. U.S. Department of Education, National Center for Education Statistics, NCES 2013-008. Washington, DC: U.S. Government Printing Office: 2013.

3. The Chronicle of Higher Education. Next: The Future of Higher Education. Chronicle of Higher Education: September 30, 2013.

4. Koller, Daphne. “Deathknell for the Lecture Technology as a Passport to Personalized Education.” New York Times, December 5, 2011.

5. Brinkman, Paul T., and Anthony W. Morgan. “Financial Planning: Strategies and Lessons Learned.” Planning for Higher Education 38(3) (2010): 5–14.

6. Pew Research Center for the People & the Press. Is College Worth It. Pew Research Center: May 15, 2011.

7. Albright, Brenda. Performance Funding 2.0. Lumina Foundation, 2009.

8. Wellman, Jane V. “The Higher Education Funding Disconnect: Spending More, Getting Less.” Change: The Magazine of Higher Learning, November-December 2008.

9. Brinkman, Paul T., and Anthony W. Morgan. “Financial Planning: Strategies and Lessons Learned.” Planning for Higher Education 38(3) (2010): 5–14.

10. U.S. Department of Education. The Future of Higher Education. Spellings Commission Report, Chairperson Charles Miller, 2006.

11. Selingo, Jeffery J. College Unbound: The Future of Higher Education and What It Means for Students. New York: Houghton-Mifflin Harcourt Publishing Company, 2013.

12. Lafley, A.G., and Roger L. Martin. Playing to Win: How Strategy Really Works. Boston, MA: Harvard Business School Publishing, 2013.

13. Ibid.

14. Ibid.

15. Martin, Roger L. “The Big Lie of Strategic Planning.” Harvard Business Review, January–February 2014.

16. Lafley, A.G., and Roger L. Martin. Playing to Win: How Strategy Really Works. Boston, MA: Harvard Business School Publishing, 2013.

17. Rumelt, Richard. Good Strategy, Bad Strategy. New York, NY: Crown Publishing Group, 2011.

18. Andersen, Erica. Being Strategic: Plan for Success: Outthink Your Competitors: Stay Ahead of Change. New York: St. Martin’s Press, 2010.

19. Drucker, Peter F. Managing for the Future. New York: Penguin Books,1993.

20. Rumelt, Richard. Good Strategy, Bad Strategy. New York, NY: Crown Publishing Group, 2011.

21. Andersen, Erica. Being Strategic: Plan for Success: Outthink Your Competitors: Stay Ahead of Change. New York: St. Martin’s Press, 2010.

22. Porter, Michael E. “The Five Competitive Forces That Shape Strategy.” Harvard Business Review, January 2008.

23. Mankins, Michael C., and Richard Steele. “Turning Great Strategy into Great Performance.” Harvard Business Review, July 2005.

24. Mankins, Michael C., and Richard Steele. ”Stop Making Plans; Start Making Decisions.” Harvard Business Review, January 2006.

25. Rumelt, Richard. Good Strategy, Bad Strategy. New York, NY: Crown Publishing Group, 2011.

26. Drucker, Peter F. Management: Tasks, Responsibilities, Practices. New York: Harper Business, 1993.

27. Neilson, Gary L., Karla L. Martin, and Elizabeth Powers. “The Secrets to Successful Strategy Execution.” Harvard Business Review, June 2008.

28. Mankins, Michael C., and Richard Steele. “Turning Great Strategy into Great Performance.” Harvard Business Review, July 2005.

29. Neilson, Gary L., Karla L. Martin, and Elizabeth Powers. “The Secrets to Successful Strategy Execution.” Harvard Business Review, June 2008.

30. Andersen, Erica. Being Strategic: Plan for Success: Outthink Your Competitors: Stay Ahead of Change. New York: St. Martin’s Press, 2010.

31. Drucker, Peter F. Managing the Non-Profit Organization. New York: HarperCollins Publishing, 1990.

32. Hammer, Michael. “Why Leaders Should Reconsider Their Management Systems.” Leader to Leader, 2002.

33. Drucker, Peter F. Management: Tasks, Responsibilities, Practices. New York: Harper Business, 1993.

34. Ibid.

35. Rumelt, Richard. Good Strategy, Bad Strategy. New York, NY: Crown Publishing Group, 2011.

36. Ashkenas, Ron, and Logan Chandler. “Four Tips for Better Strategic Planning.” Harvard Business Review Blog Network, October 1, 2013.

37. Rumelt, Richard. Good Strategy, Bad Strategy. New York, NY: Crown Publishing Group, 2011.

38. Ashkenas, Ron, and Logan Chandler. “Four Tips for Better Strategic Planning.” Harvard Business Review Blog Network, October 1, 2013.

39. Clark, Dorie, and Bob Legge. “The Right Way To Execute Your Strategic Plan.” Forbes Magazine, May 8, 2013.

40. Conerly, Bill. “3 Strategic Plan Pitfalls.” Forbes Magazine, August 15, 2013.

41. Drucker, Peter F. Management: Tasks, Responsibilities, Practices. New York: Harper Business, 1993.

Other Resources

Albright, Brenda. “Performance Measurement.” Managerial Analysis and Decision-making Manual. Washington, DC: National Association of College and University Business Officers (NACUBO), 2003.

Collins, Jim, and Morten T. Hansen. Great by Choice. New York: HarperCollins Publishing, 2011.

Collis, David J. and Michael G. Rukstad. “Can You Say What Your Strategy Is?” Harvard Business Review, April 2008.

Guillén, Mauro F., and Esteban García-Canal. “Execution as Strategy.” Harvard Business Review, October 2012.

Kabacoff, Robert. “Develop Strategic Thinkers Throughout Your Organization.” Harvard Business Review Blog Network, February 7, 2014.

Kaplan, Robert S., and David P. Norton. “How to Implement a New Strategy Without Disrupting Your Organization.” Harvard Business Review, March 2006.

Want to contribute to the APPA BOK? Learn more here.

Have a revision suggestion? Let us know.

Leave a Reply

Additional APPA Resources