Once an organization sets out a mission and vision, it can begin the process of creating a strategic plan that is consistent with it’s mission and moves it toward its vision of success. There are a number of ways to do this, and I believe that the right way is to find a judicious balance between centralized planning and decentralized experimentation and exploration.
This post has been difficult for me to write, as evidenced by the long gap between posts. My original intent was to discuss the two-way flow of ideas from the top down and from the bottom up. I had in mind the work of Robert Burgelman on Intel in the 1980s (Organization Science, 1991), who found that executives at successful firms both created (“induced”) strategy and developed environments where strategic decisions came from lower (“autonomous”) levels of the organization and that major shifts in strategic direction were often the result of internal experimentation and selection rather than executive fiat. I wanted to use this idea as a springboard to point out that effective corporate senior leadership teams have dismantled their centralized planning apparatus, and that universities would be wise to do so as well.
The problem that I kept running into is that almost every university will claim that they do this, and no self-respecting university president would ever admit that the faculty are not intimately involved in the strategy making process. I also suspect that the vast majority of faculty members feel that they have absolutely nothing to do with the strategic direction of their university. So where is the disconnect?
I realized after reading this excellent post from the Harvard Business Review blog that the answer lies in the difference between formal strategic plans and actual strategy making. Yes, the faculty is included in the strategic planning process. They are invited to provide feedback, serve on committees, attend round tables and open forums, etc.
However, this work will usually only result in high-level goals and objectives that everyone can agree on. Here is a good example of strategic goals from Sarah Lawrence College:
- Cultivate a vibrant, diverse, and engaged student body
- Fortify the distinctive attributes of the college
- Renew our leadership role
- Build our capacity to deliver our mission
These are admirable goals and I’m sure they have broad consensus at the school, but real strategy is a series of decisions about how to allocate resources, what specific initiatives to pursue, etc. And in universities, these decisions are largely made at the executive level without input from faculty or lower administrative levels. The faculty may complain of their lack of involvement, but often restrict their interest to their traditional domains of teaching and research, leaving critical issues such as enrollment, retention, student life, and development to administrative staff.
Both of these tendencies are unfortunate. The senior leadership team has management expertise and a holistic perspective on the direction of the university. The faculty has domain expertise, and is closer to the students. They are in a good position to understand where the market is headed. Deans and other mid-level administrators have a combination of the two perspectives. All three groups are valuable voices, and the most robust strategies will include opportunities for all of them to have a hand in real strategic decisions.
This can work is by giving operational units freedom to experiment. A company where I worked for many years, Charles Schwab, proved this with one of the biggest strategic shifts in its history – the decision in 1996 to experiment with online brokerage. This idea did not originate from the executive suite. Rather, middle level employees with direct customer contact devised the initiative with the support of senior management. As the initiative showed more promise, it was organized into a separate unit reporting directly to the CEO. In 1998, when it became apparent that online trading would be a major growth channel, the unit was merged into the general retail operation. At the time, Schwab was the #1 online retail brokerage in the world, with over 3X as many accounts as its closest competitor (an academic discussion of this subject can be found here).
Like the most innovative companies, universities would do well by offering individual academic units the freedom and resources to experiment with new ideas that fit within the general context of the school’s strategic plan. Nurturing ideas that may seem out-of-the-box at first is a great way to discover truly breakthrough programs.