My school has embarked on a strategic planning process this Fall – it’s first in a long while. This is a good thing, and it has gotten me thinking about strategic thinking in organizations. After all, I’ve got a Ph.D. in strategic management and taught it to MBAs for years. I ought to know something about it. The thing is, I haven’t seen true strategic thinking applied much in higher ed, and that may be one reason that many schools are in trouble now.
Oh, I know – most schools don’t believe that a lack of strategic thinking is their problem. They think the woes of higher ed are all due to environmental changes – the economy is poor, declining number of traditional students, high costs, intense competition. All of those things are true, but it is also true that companies manage to survive and thrive in adverse economic conditions, even long term ones if they are able to innovate and change.
And this is what got me thinking. What if, instead of worrying about MOOCs or what ever the “disruptive” technology du jour is, or panicking when the smart MBAs from Silicon Valley tell them they’re about to become obsolete, colleges and universities actually applied the information contained in Strategic Management textbooks? There are many lessons they could learn. I think the following would be among the most valuable:
- Without a strong and relevant mission and vision that is constantly applied and reinforced by senior management, it is impossible to ascertain the logic behind strategic moves.
- Good strategic planning is a process that takes place both from the top down and the bottom up. Good ideas can come from the executive suite or from front line employees. The process has to stimulate discussion at all organizational levels and capture the results.
- Good strategic plans are operationalized by goals and objectives that are S.M.A.R.T. – Specific, Measurable, Achievable, Relevant and Time-bound. Ambiguous goals and objectives lead to ambiguous results.
- Private universities have intrinsically higher costs than other types of educational institutions, and if they attempt to compete on price with true low cost providers, they will lose.
- If you aren’t a low cost provider, your only successful strategy is to differentiate yourself from the competition in a way that is meaningful to your customers.
- Unless you are a large public research university, you cannot be all things to all people. You had better find a niche in which you can dominate your competition.
- Unless you are an Ivy or the equivalent like Stanford or Duke, you can’t compete primarily on educational prestige. Trying to play the rankings game is not a winning strategy for most universities.
- Companies succeed because they solve a problem for their customers. A company cannot be successful unless they understand what problem they are solving, and can articulate it in a concise value proposition.
- Companies compete successfully due to unique resources and capabilities that they possess that create value for their customers and cannot be easily imitated by their competitors. These resources/capabilities are often tacit and deeply embedded in the company’s culture. Senior management must find and nurture them, and not inadvertently weaken them in a rush to change things as fast as possible.
- The critical resources of knowledge-based organizations such as universities always stem from the skills and abilities of the employees. They are the major assets of the firm, and their loyalty and creativity will be the major determinant of the firm’s success.
I am going to expand on each of these 10 lessons and how they particularly apply to higher ed in the coming weeks. In the mean time, let me know if I’ve missed any.