strategicplanning

Good Strategy/Bad Strategy and Higher Education

Sorry to be so harsh, but strategic planning in higher education borders on the absurd. I’ve been witness to my share. More often than not, the participants in the process – of which there are many because we wouldn’t want to leave anyone out – agree to do what they’ve always done, but more of it.  It’s not actually strategic planning at all – it’s cheerleading and goal setting.

Yes, I know, the circumstances in higher education – both internal and external – make strategic planning difficult. Alex Usher of Higher Education Strategy Associates offers this insight:

“There’s a basic problem with trying to get universities to compete with one another: most of them are structurally incapable of following any coherent competitive strategy at all.

Michael Porter posited that there were basically three generic types of competitive strategies. Those competing on a broad scale could compete on cost (e.g., WalMart), or they could compete on product differentiation that allows them to charge a premium (e.g., Apple, Mercedes-Benz). A third option is to limit oneself to a particular niche and compete in a very small market (e.g., Porter Airlines, which only tries to serve a few destinations).

Universities have a hard time restricting themselves to niches, as breadth is one of the things that distinguishes universities as an institutional type. Competing on cost is also extremely difficult for them to do. That’s not just because of their well-known tendency to conflate quality and expenditures; it’s because low-cost (and hence low-margin) strategies tend to work through expanding production and becoming a high-volume producer. Needless to say, exorbitant physical infrastructure costs make this an unviable strategy for all physically-based universities (though distance and e-learning providers can obviously make it work).

That leaves only product differentiation as a viable strategy. But deep down, this idea scares everyone because higher education is an almost comically conservative and isomorphic industry; what Harvard and Stanford do, virtually everyone else wants to copy, to at least some degree. At the margins, there are some value-enhancing alternate delivery models, with Waterloo’s co-op model probably being the best (McMaster could have done it with problem-based learning, but was so conservative that it never fully capitalized on its medical school’s breakthrough). But even that’s too much for most; hence the rush to differentiate on meaningless points such as food quality.

So – no strategy, no differentiation, just individual universities all providing the same services with some different marketing attached and hoping people will think they’re a “brand.” This kind of thing leads governments to believe that institutions are really undifferentiated and should be treated like utilities; institutions, meanwhile, think their “brand” status entitles them to think of themselves as luxury goods.”

I’m slightly more optimistic than Alex. (Alex is the master of writing provocative statements in order to stir useful discussions.) I think universities can move in new directions; they can identify new opportunities and shift resources accordingly. But they don’t have much practice. Good strategy is about making tough choices: this direction, rather than that direction. For last several decades, universities have had the luxury of not needing to make especially tough decisions. Demand for university spaces has grown dramatically since the mid 20th century and barriers to entry in the industry remain strong – keeping new competitors at bay. Today, though, budget realities, government pressure, and real competition (coming soon) are putting a slow and awkward end to this era. It’s time we learnt how to do strategy.

A good place to start is Richard Rumelt’s book, Good Strategy/Bad Strategy: What’s the Difference and Why it Matters, Rumelt provides dozens of examples of strategies developed by a wide of organizations that are not . . . well . . . strategic. Most strategies, he argues, are nothing more than vaguely defined goals. It’s rare that an organization actually combines these goals with tactics that will make achieving the goals more likely.

Rumelt has little patience for bad strategy – particularly for the “strategy template” – the common practice of creating vision statements, missions, values – which are so common in higher education. Consider his interpretation of Cornell University’s mission statement:

Cornell’s mission statement reads: “To be a learning community that seeks to serve society by educating the leaders of tomorrow and extending the frontiers of knowledge.”

Rumelt’s interpretation:

“In other words, Cornell University is a university. This is hardly surprising and is certainly not informative. It provides absolutely no guidance to further planning or policy making. It is embarrassing for an intelligent adult to be associated with this sort of bloviating.”

Any day someone uses “bloviating” in a sentence is a good day.

Author: Keith Hampson, PhD

Related Posts:

The Concept of Competition in Higher Education

Digital Higher Ed Content and the Long Tail

New Contexts for Educational Content

Contact Keith Hampson > > Research and Consulting for Digital Higher Ed

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15 thoughts on “Good Strategy/Bad Strategy and Higher Education”

  1. Hi Keith. I actually do believe universities can be strategic – I just wanted to show how alien it was for them to be so.

    Agree completely on the excellence of Rumelt’s book, too.

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