Strategic Leadership in Context: From Academic Programs to Financial Models CHAPTER 10

CHAPTER 10

Strategic Leadership in Context: From Academic Programs to Financial Models

Thus far I have described and illustrated several of the key components of the strategy process. Ultimately each institution has to bring these methods to bear on specific areas of organizational responsibility. The actual content of strategic initiatives, goals, and actions is determined by the planning that occurs within the different spheres of each institution’s diverse activities, from academic to financial affairs. As a result, there is no way to import detailed strategic content from external sources. The story, vision, contextual position, and deliberative processes of each college and university are embedded in a unique identity, so strategic content has to be grown at home.

While giving full weight to uniqueness, it is still possible to highlight the general features of strategic leadership as different organizational operations and programs come to terms with the changing world around them. In doing so, we shall examine briefly and selectively the way strategic leadership differentially shapes the consideration of:

•     Academic programs

•     Student learning

•     General education

•     Admissions

•     Student life

•     Facilities planning

•     Financial resources

•     Fund-raising

In analyzing these areas, the goal is to answer basic contextual questions that may be on the minds of those leading or participating in a strategy process. What difference does a strategic orientation make in approaching issues in various contexts? What are some of the most telling strategic challenges and opportunities facing institutions in today’s world? Within what frameworks of thought should issue be situated and analyzed? To anticipate some of our findings, we shall regard the tracings of strategic leadership as an applied and integrative discipline in the ways that it is contextual and analytical, conceptual and data-driven, integrative and systemic, value-centered, and action-oriented, and motivational and collaborative.

STRATEGIC THINKING AND ACADEMIC QUALITY

For many of the reasons that we have analyzed, the introduction of an authentic strategic perspective is an especially demanding task in the sphere of academic specialties. Consider how we ordinarily think about the quality of academic departments. Let us do so by examining the profile of two history programs inspired by actual models, one in a major university and the other in a very small college. The comprehensive undergraduate history program at a large regional research university with a departmental faculty of fifty-four offers five majors, eight program concentrations, and 110 courses. Its faculty is well published and many of its members are widely recognized, two of its specialties are in the top twenty-five in graduate program rankings, and it attracts talented doctoral students, though it is much less selective in some fields than it would like. Most of the lower-division courses are large lecture classes supported by teaching assistants, the courses for majors enroll thirty to forty students, and honors students take a senior seminar. The number and quality of its undergraduate majors have declined moderately in the last decade, though most students perceive history to be a popular program that makes moderate demands.

Consider next the history department at a small liberal arts college that has a solid reputation in its region. With a faculty of five, it offers a single major with concentrations in European or American history. Its largest class enrolls twenty-five students, its entire faculty is a full time, and it places a major emphasis on the use of original texts and documents in all its classes. Its majors have always been among the most talented students at the college, and it has a reputation for being a demanding department.

The realities of institutional mission, culture, size, and resources have shaped two radically different history departments, even though there are some formal parallels between them in courses and requirements. As we compare the two programs strictly with the professional eye of a historian, we have to judge the small college’s program to be marginal in quality and viability. It is very weak in scope, in-depth, and in the professional reputations of its faculty. In terms of disciplinary measures, one cannot begin to compare the comprehensive range, depth, and prominence—that is, the quality—of the university program with the impoverished version that exists in the college. Yet as we turn our attention to the culture of student learning in the small college’s department, other characteristics come to the surface. We learn that many of the leading graduates of the college studied history and that a disproportionate number of them, including several eminent historians, went on to earn doctorates in the field. Whenever these graduates tell their stories, they consistently note that their professors required them to learn history by doing it—by studying original texts and documents, writing countless interpretive papers, and participating constantly in discussions and presentations in small classes. Their teachers held them to rigorous standards but also encouraged them. Faculty members often became mentors to students and interacted with them frequently both in and out of class. The faculty’s narrative of academic quality concentrates on the character and depth of student learning. They hold themselves to these values and make professional decisions in terms of this understanding of quality.

These cases allow us to raise an impertinent question. Which of the two undergraduate history programs is of higher quality? Which one creates more educational value for students? The answer depends, of course, on the values that a person privileges in his or her understanding of academic quality. In college, the educational worth is measured by student learning as intellectual engagement and transformation, while in the university, quality is defined around the creation of knowledge. For most of us, the question brings up a series of conflicts in academic purposes that can never be entirely resolved, but that can be reconciled through effective leadership.

Although it seems deceptively basic, the strategic articulation of principles of educational worth is a difficult task for most disciplines. This is so because it is often carried out, as we have seen, in a context defined by the internal criteria of an academic specialty alone or is imposed by an external management system. When disciplinary logic encounters managerial logic, the tensions are inescapable. Although the transition to a broader pattern of reflection is initially challenging when a program’s the educational rationale is explicitly connected to the more inclusive aims of liberal education and student learning, to special institutional characteristics and capabilities, and to changing methods of the discipline and the needs in society at large, the process becomes more strategically vital and fruitful (Association of American Colleges and Universities 2004). As these steps occur, the model shifts from emphasizing the requirements of management to focus on the responsibilities of collaborative strategic leadership.

STRATEGIC LEADERSHIP AND POWERFUL LEARNING

The purpose of strategic leadership is to look inside and outside an institution simultaneously and to align the two perspectives. As it searches for the structural trends in contemporary higher education, it finds some markers that should rivet its attention. One of these is the intensifying focus on student learning. Long-simmering changes in the methods of teaching and learning have taken form as a self-conscious movement. There is a growing preoccupation with the nature of learning itself, with what and how students learn in ways that are motivating, enduring, and powerful (Association of American Colleges and Universities 2002; Bok 2006; Gaff, Ratcliff, et al. 1997; Kuh, Kinzie, Schuh, Whitt, et al. 2005; Levine 2006).

Engagement in Learning

Common in many expressions of the learning movement is a focus on student engagement—on forms of teaching and learning that make a successful claim on the interest, energy, and motivation of the student. The emphasis is on ways the student becomes personally engaged in a process of learning. The implied contrast is with passive learning, in which the student receives knowledge and information from a teacher. In engaged learning, students are agents more than observers, makers of meaning rather than recipients of information (Morrill 2002).

Learning as the Development of Human Powers

One of the critical presuppositions of this intensified focus on learning is that liberal education has to do with the development of deep and enduring intellectual and personal abilities. One commonly finds that institutions express their rationale for liberal education in terms of the development of complex cognitive abilities such as critical, analytical, and integrative thinking; effective communication; global and multicultural awareness; and technological and quantitative literacy (Bok 2006). Included as well are intellectual dispositions and values such as curiosity, mental resilience, and imagination as well as commitments to the values of an open society.

From the perspective of strategic leadership, more important then these lists are the unspoken presupposition that liberal education has to do with the development of fundamental human powers, the enhancement of the intellectual and moral capacities through which the human project itself unfolds. In tracing the evolution of liberal education at the University of Chicago, Donald Levine (2006) finds and formulates the inner logic in its concern to develop the multifaceted powers of mind. As Thomas Green suggests, “Coming into possession of the powers that we have as human beings . . . is the defining presence of educational worth” (1982, 182). So, engaged learning is also, powerful learning because it intends to make a compelling difference in the ways that humans as agents create meaning and act in the world.

Why does any of this matter for the strategy process? It does not if strategic planning is simply a discipline of the market. To contribute to academic leadership, the strategy has to be integral; it must connect with the deepest purposes of the organization as it has been shaped in response to the context in which it lives. For a college or university to understand its differentiating characteristics, it has to know what it believes in, what it intends its education to be, and how it can create for its time and place the practices and conditions on which powerful student learning depends. It has to ask itself continually what it means to be an educated person, and in the plurality of answers to that question, it must reflect on the center of educational gravity in its own methods and programs. It especially has to do this in a time when liberal education is neglected and misunderstood. Is liberal learning about information or knowledge, methods or content, the powers of the mind or the habits of the heart, or what? How does it relate to the unrelenting demand of society for a well-trained workforce and of students for careers? (Bok 2006). In pursuing this inquiry, the institution has to consider where, if anywhere, it has developed generative core competencies that distinguish it from others and that deeply mark its programs and its environment for learning. A review and self-assessment of the following list of some of the components of powerful learning will help institutions see what characteristics of learning truly set them apart and understand strategically where they excel or should or could excel (cf. Association of American Colleges and Universities 2002).

The Characteristics of Powerful Learning

Powerful learning is:

•    Transformative: It intends to develop human intellectual powers, moral capacities, and personal abilities at fundamental levels and in enduring forms.

•     Intentional: It help students become aware of the interconnected aims and results of liberal and professional education and learn how they can design their studies to connect in purposeful ways with their own goals.

•     Engaged: It involves students in learning activities through collaboration, discussion, writing, speaking, performing, doing research, leading projects and presentations, and forming relationships with teachers who have high expectations.

•     Global: It involves students in the study of other languages, cultures, and societies, optimally through living and studying in another country.

•     Broad: It requires students to master content, methods of reasoning, and ways of solving problems in a variety of fields and disciplines.

•     Coherent: It designs and presents programs of study with a clear rationale and goals that connect themes, courses, and learning experiences in meaningful and explicit patterns, both in general education and in the major.

•     Useful: It demonstrates how cognitive powers and knowledge are deeply practical in preparing students for employment and civic responsibilities.

•     Inclusive: It features programs that address the diversity of human experience and cultures as enriching educational resources.

•     Integrative: It encourages an understanding of the relationship between fields and disciplines in the study of intellectual, moral, and social issues and offers programs based on interdisciplinary and integrative methods.

•     Enriched: It draws upon a wide variety of resources, including facilities, technologies, scientific instrumentation, books and periodicals, cultural events, and local organizations.

•     Technological: It uses information technology to draw on the new universe of Web-based knowledge to develop computer literacy and to make learning and communication continual, global, interactive, and motivating.

•     Experiential: It uses a variety of ways to involve students in learning through experience in-service projects, internships, and field research, closely coordinating theory and practice.

•     Responsible: It prepares students to understand and to act on their responsibilities in a democratic society and fosters their commitment to its basic values.

•     Substantive: It explores the structure, methods, languages, and content of various disciplines and bodies of knowledge and uses landmark original texts and materials in doing so.

•     Rigorous: It sets exacting standards and has high expectations concerning both the quality and the quantity of student educational achievements.

•     Assessed: It uses a multiple set of methods to evaluate the effectiveness of learning and feeds these results into the teaching and learning process to improve future performance.

•      : It occurs in many campus contexts and relationships both in and out of the classroom and is strengthened by an ethos that carries, communicates, and reinforces a clear and a strong set of consistent messages about the institution’s identity and educational purposes and practices.

Strategic Thinking and Powerful Learning

The effort to evaluate which forms of learning are most in evidence at an institution is a rewarding strategic task, and the preceding list of characteristics offers a place to start. Groups of faculty and staff in a strategy process can analyze and map their own institutions and programs by asking several questions about each characteristic: Which most resonate with our narrative of educational identity and quality? Where are we now, and where would we like to be in the future? Where are we deficient, where adequate? Which of these forms of learning are distinguishing characteristics? Are there any that are or could become core competencies? What strategies and goals would move us forward? The process of analysis should stir the interest of many faculty and staff members, for it offers a systematic template for defining issues about which they care deeply.

In the process of discussing and evaluating its culture and characteristics, an institution begins to gain a clear sense of its own identity and its vision as a community of learning. Its self-evaluation should be realistic and recognize that generally no more than several of its characteristics can become core competencies. The discussion should also be guided by all the forms of the available evidence, such as a content analysis of its academic programs and practices, its results on the National Survey of Student Engagement, and other forms of assessment and strategic evaluation.

One of the important affirmations in this book is that the character and quality of student learning are a central strategic issue. The study by George Kuh and his associates (2005), Student Success in College, shows the intimate connection between student learning and this wider view of strategy, even though the authors do not use that term in describing their findings. As we have already seen, the study describes the characteristics of twenty campuses whose graduation rates and engaged learning practices exceed what would be expected in terms of their institutional and student profiles. The colleges present features that bear directly on aspects of strategic leadership because, among other things, they demonstrate: a “living” mission and “lived” educational philosophy, an unshakeable focus on student learning, an improvement-oriented ethos, and a sense of shared responsibility for educational quality and student success. Moreover, they each embody a strong culture and highly resonant identity that marks out paths for student success and an environment that enriches student learning. The leadership of these institutions are also focused on student learning both in terms of the actions of those in positions of authority and as distributed in processes and relationships throughout the organization. In our terms, the narratives, values and visions of these colleges and universities are expressed in their organizational cultures, programs, and collaborative practices, all of which are sustained through a distributed process of strategic leadership.

Perhaps it is no clearer than in the sphere of student learning that official leaders are often followers in strategic leadership. Teachers and students take the lead in shaping the practices of engaged learning, which those in academic leadership positions may then help to clarify, systematize, and support. In the sphere of teaching and learning, the idea that strategy emerges from practice is entirely apt and accurate. When The University of Richmond issued its strategy report entitled Engagement in Learning in the mid-1990s, it chose a theme that arose from the educational practices that were emerging in and outside its classrooms. The strategic consciousness of those practices arose in dialogue with faculty members and students who shared with the planning committee their uses of collaborative learning, interactive classes, experiential learning, study abroad, service-learning, and student research. The report carried a title and explored themes that would soon emerge prominently in the wider conversation in higher education.

General Education

One of the places where the strategic analysis of student learning should concentrate on is general education (cf. Gaff, Ratcliff, et al. 1997). Because it occurs at the intersection of a series of defining organizational commitments, it is a quintessential strategic issue. To begin with, general education typically represents a major investment of institutional resources. Its special courses and requirements draw heavily on faculty time and energy and require a large number of faculty positions. In most institutions, more than half of a student’s first two years of study are devoted to general education, so its influence on a student’s early educational experience is often decisive. Typically a student makes some form of intellectual connection with the campus during these years or may never do so. Thus, the relationship to retention and enrollment is crucial. Most importantly, many institutions explicitly define the meaning of liberal education around the purposes of their general education programs.

In terms of the motif of powerful learning, it is often in general education that institutions make explicit their distinguishing characteristics, core competencies, educational values, and credos. In the course of the work on the Association of American Colleges and Universities’ Greater Expectations (2002), it became clear that institutions were increasingly tying their general education programs to their special characteristics and competencies. A college or a university’s distinctive academic profile in teaching, curriculum, and research was translated into ways to engage students' incoherent, intentional, and integrative forms of general education.

As we consider strategic leadership in the context of student learning and general education, we see the depths to which it must reach. It must draw on the institution’s most powerful conceptual resources to address comprehensive educational questions. In working on general education, faculty members and academic administrators have to be encouraged and enabled to be educators, not just field-specific experts. It may appear odd that institutions committed to higher learning need to focus on the conceptual foundations of programs of study, but that is a requirement of strategic leadership. A well-founded, distinctive, and rich program of powerful learning in general education and throughout the undergraduate curriculum and co-curriculum brings into focus an institution’s specific educational capacities, reflecting its story, values, and identity. It creates a sense of common enterprise and seeks to involve students and faculty in the experience of a true educational community. If this intense focus on learning is to be sustained, faculty as educators need to reach periodically for the best current literature on student learning, study model programs and continue to think deeply and coherently about educational design and execution, all in terms of a differentiated concept of quality (cf. Bok 2006; Levine 2006). Such is the nature of strategic thinking in the academic sphere. As a form of leadership, it moves through conflicts and disagreements to find the shared values and concepts to which people are willing to make commitments.

ADMISSIONS: BRANDS OR STORIES?

As we have seen, many practitioners of strategy locate the core of the process in the way an organization differentially positions its products and services in a competitive marketplace. In consumer products companies, the analytical and quantitative methods of marketing have become the queen of the business sciences and drive much of the corporation’s strategy. Some of these same trends have migrated to the campus. In sharp contrast, we have located the strategy process at a deeper level by rooting it in collegiate narratives of identity and aspiration. In today’s world, the contrasts between these two starting points often show up most vividly in the work of admissions offices. The strategic plans of most colleges and universities include a strategic initiative or, more aptly, an imperative concerning admissions and enrollment. Since many private institutions are only several bad years in admissions away from extinction, and virtually every institution depends heavily on tuition, marketing usually has a prominent role in collegiate strategic planning reports. As a consequence, its language and methods are increasingly in use on campuses, no matter how distasteful most faculty members find the terminology of markets, brands, and customers. Based on visits to many campuses David Kirp (2003) reports that the language of marketing is here to stay, whether we like it or not, both for good and for ill.

Our question is similar to one that he poses: When it comes to the use of strategic marketing, is it possible to reconcile the values of the academic commons with the marketplace, or will colleges and universities sell their birthrights? In considering admissions in a strategic context, we have the test case of an issue that we have examined in several guises, and that, as we have seen, has been the focus of many studies, including those by Kirp (2003); Bok (2003); Newman, Couturier, and Scully (2004); and Zemsky, Wegner, and Massy (2005). In general terms, it concerns the limits of commercialism and market competition in higher education. In this specific case, the question is focused on the appropriate use of the terminology and methods of marketing in admissions.

Strategic Leadership and Marketing

We can begin to address this question by examining several basic characteristics of integral strategic thinking that differentiate it from a discipline of marketing. In particular, the deep strategy requires integrative and systemic forms of thought and action. What may be invisible at an operational level comes into full view in strategy. It reveals the connectedness between and among academic and administrative activities and programs.

Consider what is required to reach virtually any goal in admissions, whether to increase applications or yield or to attract more students with certain talents, backgrounds, or levels of family income. The admissions program is simply the leading edge of a complex and connected strategic system. No matter where one touches it in such a structure, that point connects to all of the structure’s major components. A strategic system requires faculty and administrative leaders throughout the organization to understand its interconnections.

When seen in this light, effective admissions work begins with the integration of several different forms of knowledge, from narratives to data. The institution’s story and vision, its distinctive educational characteristics and core competencies, should be woven into virtually every facet of the verbal and visual messages that an admissions office communicates. These are drawn from a complex set of beliefs and information about the institution that are both discovered and validated in a process of deep strategy. Strategic thinking brings a discipline to this process of integration and makes the creation of the message a differentiated, authentic, and focused process.

Branding

A proponent of branding and integrated marketing claims that “At root, a brand is the promise of an experience. Understanding and communicating the validity of that experience to target audiences are parts of the branding process” (Moore 2004, 57). From this, it is clear that branding and marketing depend on a complex strategic task that precedes it, which is “understanding . . . the validity of the experience.” The validity of soda pop, a coffee shop, or an automobile is one thing, but the validity of an educational experience is quite another. The word “experience” does not mean the same thing in describing products and education. Products are experienced through functional use and consumption, while education involves an intangible process of intellectual and personal transformation. Products are infinitely modifiable to meet the desires of the customer, while education sets standards that learners can only satisfy through changes in their capacities and knowledge, based in good measure on their own will and motivation. Especially since branding has its origins in selling consumer products through repetitive and sometimes deceptive mass advertising, if we omit the essential step of discovering and articulating an institution’s authentic identity, its purposes could be reduced to whatever the inventiveness of marketing chooses to make of them. One of the responsibilities of strategic leadership is to ensure that education is not reduced to commerce.

These considerations offer a clear perspective on the use of the methods and language of marketing in higher education. The terminology that we use matters, and not just to spare the sensitivities of the faculty. Language conveys a system of thought and values. An authentic university generates and conveys knowledge as a public good and is constructed around a different set of values and purposes from those used by businesses that sell products and services. The issue is whether the methods of thinking and decision making used in business can fit that world of thought. Some business practices do fit, including the methods of marketing and the tools and concepts of strategy, as we have been at pains to show. To do so, the language and the relevant processes of management can and should be translated into the idioms, values, and methods that illuminate educational issues and university decision making. If that happens successfully, then the methods of integrated strategic marketing can bring new insights and disciplined processes to the work of admissions and other departments. Yet some terminology, like the use of the word “customer” for student and “brand” for identity, image, and reputation, resists translation and cannot be made into central strategic concepts without distorting the meaning of education.

THE STUDENT EXPERIENCE

Whereas admissions are often at the center of institutional planning documents, student life is rarely at the core of the institutional strategy. Ever since the doctrine of in loco parentis was swept away in the late 1960s, a vacuum has existed in the articulation of the educational purposes of student life. To be sure, many student affairs officers have an intellectual perspective that animates their work. Most campuses try to build linkages between residential and academic life, often through ingenious practices and programs. Nor is campus life lacking in countless opportunities for student learning and personal development in everything from volunteer service to artistic programs to athletics. Yet typically there is no coherent or compelling conceptual vision of how all these activities contribute to student educational growth. More often than not, it seems that “edutainment” is at the strategic center of things, with consumer satisfaction the goal.

Rarely, in particular, do faculty members show much interest in or understanding of the ways that campus or residential life might be an an important part of the institution’s educational mission. More typically, the the prevailing sentiment is an annoyance at the coarseness of student social life and the way it distracts from the pursuits of learning.

Then there is the dark side of student life, which is itself a strategic issue, as troubling realities from the wider culture invade the campus and shape its character. Levels of alcohol and substance abuse are high and inexorably give rise to instances of violence, vandalism, and sexual exploitation. Virtually every contemporary campus has developed special programs and interventions to address binge drinking and its effects on students.

Strategy and Campus Life

Over against this challenging picture are strategic opportunities for distinctive educational achievement through the campus experience. Probably more than in any other national educational culture in the world, American institutions have made the campus experience an important part of what it means to go to college. The investment of resources in staff, programs, athletics, facilities, and campus events is massive. Yet in most institutions, the educational purpose of it all is neither conscious nor articulated.

At a strategic moment that makes late adolescence a challenging time in personal growth and sees technological forms of distance education rising dramatically in popularity, the educational meaning of student life on campus is a neglected conceptual and strategic theme. It requires a new articulation by the institution’s academic leaders, especially the ideas and voices of the faculty. Ironically, before long, the campus experience may become one of the primary differentiating competencies of colleges and universities. What does it contribute that cannot be found at a computer terminal?

Intellectual Leadership and Student Life

If this strategic challenge and opportunity are to be seized, higher education needs to use the available theoretical, conceptual, and empirical resources to understand and enact its student life programs. The insights and the findings are there, as for example, in the voluminous research and publications by Alexander Astin (1977, 1993), or more recently in the work of George Kuh and his associates (1991, 2005). The developmental theories of writers such as Arthur Chickering (1969), Douglas Heath (1968), and William Perry (1970) have enlightened both past and present generations of theorists and practitioners. Pascarella and Terinzini (1991, 2005) have analyzed many studies over the years of the impact of the college experience on students. Working within the same Harvard context as William Perry before him, Richard Light offers these conclusions from his decade-long work in the Harvard Assessment Seminars: “I assumed that most important and memorable academic learning goes on inside the classroom, while outside activities provide a useful but modest supplement. The evidence shows that the opposite is true. . . . When we asked students to think of a specific, critical incident or moment that had changed them profoundly, four-fifths of them chose a situation or event outside of the classroom” (2001, 123).

These scholars and many others provide conceptual frameworks and touch-stones that give rich educational meaning to the encompassing forms of students’ intellectual and personal development. In doing so, they reveal some of the cultural infrastructure and patterns of campus life that accelerate and facilitate a student’s successful engagement in higher learning. Terms that one often finds in mission statements or hears on campus, like “personal growth,” “intellectual maturity,” “responsibility,” “commitment,” “autonomy,” “democratic citizenship,” “leadership,” and “community,” are made intelligible and actionable as they are connected to coherent models of human development that interpret education as the unfolding of fundamental human powers and possibilities. They provide the integrative perspectives that are needed to make powerful learning an institution-wide commitment and strategic priority.

Once again, the strategy process becomes a form of leadership. It does so as it urges connection among the parts of a system, and as it reaches for the conceptual resources that can do justice to the richness and variety of education as a form of human empowerment within an intentional community. As Ernest Boyer put it when issuing the influential report Campus Life: In Search of Community, “We believe the six principles [of campus life] highlighted in this report—purposefulness, openness, justice, discipline, caring, and celebration—can form the foundation on which a vital community of learning can be built. Now, more than ever, colleges and universities should be guided by a larger vision” (1990a).

STRATEGY AND FACILITIES

Under most accreditation standards, institutions are required to have a campus master plan. A plan that defines the location of future buildings and the use of campus space would seem to be a classic exercise in long-range planning, not strategic thinking. After all, the major variables are spaces and physical masses that are under the control of the designers and the design. They can be reduced to precise drawings and blueprints, whatever the driving forces of the surrounding world may be.

Strategic Space

Yet at the level of strategic reflection, it is clear that campus and building plans are part of a system of beliefs and distinctive educational purposes. The plans of today’s colleges and universities display a sharp consciousness of how the goals of an engaged educational community should determine the places, shapes, and forms where learning takes place. Campus spaces are configured to facilitate collaborative learning in small groups, to create places where people can interact, to connect to technology, to allow for the placement of laboratories so that faculty and students can do research together. Physical space increasingly has become transparent to the educational goals that it serves.\

A Sense of Place

Strategic plans and similar studies of campus life also reveal that the campus is lived space, so it is often lodged in memory and in personal experience as a major theme in the institution’s story. A sense of place is commonly a defining element in the shared values of a community, and many students, staff, and graduates develop intimate connections to the campus, its landmarks, and special natural and architectural features. Places carry meanings that contribute to the larger purposes of education.

Salem College and a Sense of Place

Salem College in Winston-Salem, North Carolina, is located in the restored Moravian village of Old Salem, whose roots reach back to the mid-1700s when German-speaking Moravian settlers arrived in Salem from Pennsylvania to create an intentional community of faith and labor. The sense of historic identity of the village is interwoven with the college and the neighboring academy, which grew from a school for girls that the Moravians started before the American Revolution. College and village also share a common architectural signature defined by simple geometric forms, pitched tile roofs, arched windows, brick structures in Flemish bond, rhythmic green spaces, and pathways of worn brick. The campus leads off the large village square into intimate quadrangles created by buildings that largely conform to the style of the eighteenth-century town beyond. Historic artifacts are everywhere, from antique furniture to embroidered samplers created by young women over 150 years ago. A sense of intimacy and community, of historic fabric and authenticity, defines the place. These very values shape the human transactions and relationships of those who dwell there as students, deepening bonds between them as responsible members of a historic community of women, and marking their experience for life. Countless campuses have similar stories that give the campus a voice in its narrative of identity. So master plans and decisions about major renovations also are crucial parts of educational strategies for the future. A building has an impact on its human community and the natural environment, which is itself a vital issue in contemporary decisions about facilities. Its physical fabric and infrastructure are critical considerations for efficiency, effectiveness, and sustainability but also for the meanings that it carries. Campus designs and buildings ground the identity and the heritage of a community. In all these ways campus space and architecture are parts of an integrated strategy that moves the organization toward the vision it has defined for itself.

STRATEGY AND FINANCIAL RESOURCES

Those who study collegiate strategic planning reports and documents soon come to a surprising realization. Many plans do not include either a financial model to test the cost of the initiatives being proposed or a method to fund them within a designated period. This is more than a little odd since strategic planning has precisely to do with creating goals and allocating resources to translate them into reality. Without a sense of financial capacity, many of the goals in a strategic plan become what its critics complain that they are anyway, either wish lists or a safe place to store the excess baggage of campus opinion and desire. Without financial feasibility, a strategy compromises its credibility and loses an effective mechanism of decision making and leadership.

Many institutions are diffident to define their financial capacities and priorities because there can be political risks in doing so. To signal that some units or programs may have a higher priority than others is dangerous. In adversarial contexts, the setting of priorities may unleash a torrent of conflict. Yet these challenges should not prevent us from exploring the possibilities of an optimal process, even if its application may have to be tailored to a variety of circumstances.

Financial Models

A fundamental requirement for effective strategic planning is the use of an analytical financial model. The model can be quite simple but should capture the key points of leverage that determine the institution’s financial position. Effective decision making requires that these leverage points be deeply understood and carefully charted, including the key ratios that indicate financial position. Our suggested dashboard of strategic indicators in chapter 5 shows data that should be included in a model or in an accompanying analysis of the financial position. Key ratios and indicators such as debt to assets, debt payments to revenues, net tuition after discounts, and unrestricted net income have to be understood both operationally and strategically. Most accounting firms can provide a set of analytical and comparative ratios for colleges and universities, and bond agencies create powerful sets of metrics in issuing ratings. Strategic thinkers and leaders focus on these comparative trends and ratios and attend particularly to both marginal income and expense and to the danger zones in their financial metrics (cf. Townsley 2007). Every institution’s financial engine drives results precisely through the interaction of its most important variables in revenue and expense, assets, and liabilities. Strategic leaders are often skilled in relating the dynamics of the engine to the critical success factors in the educational program (Collins 2001, 2005). Although most of the revenue and expense streams have differing rates of increase and decrease, they can be translated into an analytical and quantitative model that can test the financial consequences of various strategic decisions and economic trends.

Each of the major task forces and groups developing strategies should use the model to test the financial results of its proposals and should highlight these as part of its report. The SPC will select options for further consideration and implementation with a clear sense of the resources that they will require, and the steps they will take under adverse circumstances, such as high inflation or serious recession. Without a clear window into the inner workings of its own financial world, it cannot meet these responsibilities.

Transparency and Financial Information

A financial model can project plausible scenarios for the future, but the institution’s basic financial position has to be communicated clearly as well. As we noted in our discussion of SPCs, governing boards and presidents do well to disclose all the basic financial information that is relevant to the work of strategy. Although it can be difficult if the institution is in a weak position, or an especially strong one, it is far better in the long run that these issues be shared rather than hidden. The tendency of some faculty members to deflect hard financial choices to administrators, and for administrators to keep problematic financial facts from the faculty, is part of the same unhealthy syndrome. A credible process requires both shared information and shared responsibility. An ability to deal honestly with limits and possibilities as defined by context is one of the characteristics of effective leadership. MacTaggart (2007a) makes this point repeatedly in discussing institutions that began their academic turnarounds by becoming transparent about their often-precarious financial positions.

Strategic Priorities

In an environment in which resources for higher education have become perpetually strained and erratic, each institution will also have to reconfigure continuously the relationships between its resources and its goals. As a matter of course, institutions will use their strategy processes to redefine many of the assumptions about what programs they offer, to whom, and how. The criteria for priorities in the operating budget will have to become more transparent and consistently strategic. For some time now, collegiate institutions have used criteria, often tacitly, that weighs programs in terms of variables such as (1) quality, (2) centrality, (3) demand, and (4) cost (Dill 1997, Ferren and Stanton 2004). The more systematic use of criteria of this kind should become an explicit part of strategic plans and their implementation. They have to become the constant canons of decision making that keep an institution in strategic balance both within itself and with the environmental forces that affect it. In developing a useful series of detailed procedures to achieve ongoing strategic balance, Robert Dickeson notes that “Balance can be defined as ‘bringing into proper proportion,’ and such is the nature of the ultimate task of institutional leadership” (1999, 121). The effort to think and act responsively and responsibly in all aspects of decision making, from the cost-effective design of each course and program to the best combination of all programs, has to become a new center of strategic gravity.

Selective Excellence at Yale University

An example will help to illustrate these points. Although institutions often have used phrases like “selective excellence” to describe their efforts to target their resources, their decisions have not always produced either excellence or clarity. Does selective excellence mean that we will be good at some things and mediocre at others, or just what? In describing Yale’s University’s future several years in advance of its three hundredth anniversary, President Richard Levin offered an illuminating strategic interpretation of the phrase. Yale, he said, would strive for excellence in everything it does while concentrating on its demonstrated strengths. In some fields, like the humanities and the arts, Yale could aspire to comprehensive excellence across most specialties. In other fields, however, such as the physical sciences and engineering, it would have to choose several specialties and concentrate its resources on a few distinguished faculty groups. “The range of human knowledge is so vast and so rich in variation that not even a great university can aspire to comprehensive coverage of every subject worthy of study” (Levin 1996, 10).

The special features of strategic thinking are placed in sharp relief in financial decisions. The analytical, integrative, and systemic characteristics of strategy as a discipline have to confront the continual tendency to think of budgets in strictly operational or political terms. Lacking a strategic perspective, financial decisions are driven by a grab bag of urgencies. With effective strategic thinking comes the ability to integrate purposes and meanings with facts and numbers. Either annual budgets are integrated into strategic priorities and plans, or the institution loses its purposefulness. Since leadership is all about purpose, it has to make its guiding presence known in responsible and coherent financial decisions.

Financial Equilibrium

A strategic orientation offers not only a framework for thinking about financial issues, but it insists on content as well. One of the goals of an effective strategy are the achievement of long-term financial stability for the organization. For most colleges and universities, this means achieving financial equilibrium, the characteristics of which can most easily be illustrated for independent colleges and universities but that increasingly have direct parallels at state-sponsored institutions as well. Being in equilibrium involves (1) maintaining a balanced operating budget; (2) keeping the rates of increase in expenditures and in revenues in line with one another while accounting for discounts in financial aid; (3) making annual provisions for the depreciation of the physical plant and equipment that should eventually, reach 2 percent of replacement value; (4) creating annual budgetary flexibility by building in contingencies for enrollment variations and other factors, and using any proceeds to create funds for new initiatives and reserves up to designated levels; and (5) safeguarding the purchasing power of the endowment while providing for a steadily enlarging stream of endowment income.

Financial equilibrium sets a rigorous standard that many institutions can only aspire to as a model. Nonetheless, the concept illustrates the structural depths that strategy must reach to be an effective method of leadership. To achieve equilibrium, all the options and tools of policy and decision making are on the table within a long-term horizon of aspiration. Every choice and issue, from increasing tuition to the effectiveness of the financial leadership of the president and board, is part of the strategic equation of financial equilibrium.

The task is to build a financial engine that can meet the test of sustainability by operating in perpetuity at the highest levels of effectiveness and efficiency. The engine will always need more fuel, but it has to be built so that it can operate under adverse conditions, switch to resilient strategies when fuel supplies run low, and continuously replenish some of its own resources from within. From a strategic perspective, the goal is constant: to create a financially self-renewing organization that can dominate its environment by exercising choice about its future.

Affordability: Hitting the Wall

As our environmental scan has suggested, the challenge of creating financial equilibrium has intensified for almost all institutions over the past decade because of structural shifts in the affordability of higher education. Strategic thinking and the goal of financial sustainability are strict taskmasters in the current environment. Years of tuition increases beyond rates of inflation have lifted college prices well beyond the growth in average family incomes. The average price for a room, board, and tuition at major private universities in 2007 was only a few thousand dollars less than the median family income before taxes. Many public universities face parallel challenges as they cope with declining state subsidies from an incoherent trend toward privatization that results in escalating tuition charges.

Colleges have responded by discounting their charges based on need and merit aid, creating a vicious fiscal cycle in which higher charges produce lower marginal new revenues as more and more families become eligible for discounts. As a result, countless colleges have begun to “hit the wall” financially because the price of tuition has reached a structural limit in families’ financial capacities. If the trends continue, it is just a matter of time before students from all but the top 5 percent in family income will receive ever-enlarging discounts, progressively diminishing net tuition income and slowing starving many institutions.

Many institutions with the right locations, programs, and innovative capacity have responded strategically and creatively to the new limits by finding new revenue streams that build on existing administrative and faculty overhead. They create professionally-oriented graduate programs, open centers for adult education around the region, and expand offerings and enrollment in low-cost fields with a practical turn, often using distance learning to expand their reach. In many cases, these programs produce income on which the academic core of the institution has come to depend, even as the core itself shrinks in size. The situation is not unlike the patterns in large research universities, where undergraduate tuition, research overhead, and programs with high net revenues fund the research and teaching in the arts and the humanities (cf. Zemsky, Wegner, and Massy 2005).

In some cases, however, the new financial engine will not be sustainable, since it is subject to intense competition from other institutions and low-cost educational providers, and rapid shifts in demographic and economic trends. Strategic leadership forces these issues into the open and tests financial models for their staying power and durability. The “brutal truths” and structural vulnerabilities have to be confronted before the best options can be chosen. It will make changes in structural elements, not just budget reallocations, to address these issues. Options such as the three-year degree, collaborations between community colleges and four-year institutions, alternating work and study programs, new educational services for a growing retirement population, and more educational alliances with organizations in workforce education and management development are examples that change the financial model in more structural terms. Also, the ever-present need for new capital to initiate and sustain programs and scholarship budgets has to be filled through large doses of philanthropy, which brings us to our next topic.

FUND-RAISING

No matter how successfully a campus implements a system of strategic priorities to manage its expenditures, it will constantly need to enlarge its resources. Inflationary pressures in salaries and benefits can only the increase over time and cost increases for facilities and financial aid are inexorable, especially in the highly competitive world we live in today.

As new strategic needs and goals are developed and approved, they will always require funding. When these priorities are formulated according to the disciplined processes of strategic planning, they connect directly to the institution’s capacities to generate large sums of capital and operating funds from sponsors and donors. This capacity is a defining element in the institution’s strategic position and aspirations, and both public and independent colleges and universities increasingly need to make it a core competency.

Gift Capacity

One of the most critical strategic indicators of an institution’s ability to meet its goals is its capacity to generate gift and grant income. Consider, for instance, the amount of gift and grant revenues for all purposes (excluding contract research) per student than an institution receives per year over ten years compared with a group of similar institutions. If the institution cannot generate comparable cash gifts per student, over time it will eventually lose its competitive position unless it can generate resources from other sources, such as tuition, the management of physical assets, or endowment returns (or state subsidies for public institutions.)

Assume that institution A, with 3,000 students and a moderate level of gift capacity, receives $5,000 per year per student for ten years, or $15,000,000 annually to total $150 million for the decade. Compare those figures with those of institution B, which also enrolls 3,000 students but has a superior gift capability of $15,000 per student annually. These projections are based on actual gifts received by twelve colleges and universities from 1998 to 2001 (University of Richmond 2003). Over the decade, institution B receives $45 million annually and $450 million in total. Unless balanced by other sources, institution B has a $300 million resource advantage over institution A, and the differences will only increase over time. Gift and grant income obviously influences decisively the most fundamental form of strategic and competitive capacity, which is the ability to generate resources.

Telling the Story

The strategy sets the fundraising agenda in a variety of ways. It helps to sort out projects that are candidates for support from different sources, such as government, corporations, foundations, alumni, and major donors. In doing so, it also differentiates the organization’s capacities in staff and expertise to be successful in these different domains. Most importantly, the strategy offers a systematic rationale for the programs that the institution intends to support. The strategy document should pass into the hands of the development staff and be regarded as a storehouse of ideas that help to frame and even to compose a large number of proposals for support.

Often the completion of an intensive strategy process can and should be timed to coincide with the planning of a capital campaign or similar long-term development program. As this occurs, a well-crafted planning document offers the central arguments and defines the major elements of a case statement. Donors want to hear cogent reasons why the projects they are asked to support really matter in setting the course for the future. A good strategic plan shows precisely how the project will make a difference both in itself and in the synergies that it will create to fulfill the institution’s larger vision.

Charitable giving depends on many things, including good ideas, reliable information, personal relationships, and a well-organized staff, as well as a motivated group of volunteers. But it is also driven by the values that people claim and the causes in which they believe. The pride and loyalty of friends, trustees, and former students are strategic assets that have to be galvanized into personal financial support and a commitment to secure contributions from others. When an organization integrates its story and vision into a persuasive strategic argument, it creates a powerful source of motivation. An elegant strategy can inspire generosity, both by persuading the mind and lifting the spirit. It represents a form of personal address to all those who participate in the organization’s narrative of identity and believe in the values on which it rests. It calls on them to take responsibility for the well-being of an organization that has been entwined in their lives and that serves vital human needs. Knowing and telling the story are among the central tasks of strategic leadership in the advancement work of colleges and universities.

Strategy as a Conceptual and Integrative Leadership

I have argued that there is more to a strategy process than meets the eye. Even when it may not be conscious of its own depths and possibilities, strategic thinking embraces immediate concerns but reaches beyond them. As it deals with specific issues and decisions, a strategy also carries presuppositions, forges connections, and builds a foundation for action that has wide significance as a form of leadership. We have traced these dimensions of leadership in the establishment of a contextual mindset for considering academic decisions and as integrated forms of reflection that fuse the quantitative and qualitative dimensions of issues. At critical points, we also have found that strategy becomes leadership as it offers unifying conceptual perspectives that provide resources for the development of educational programs and practices.

Strategy as leadership also creates a disposition to connect decision-makers to action, because it reveals the systemic relationships among various projects and programs. The cycles of connection tie various academic and administrative strategies and actions to one another, showing patterns of interdependence that operational thinking alone does not perceive. Through the goals that define strategic initiatives, a sense of possibility is given form, and motivation is made concrete. As information is made transparent and hard choices appear in every priority, strategy becomes credible. For all those reasons, it is appropriate to designate strategy an applied discipline of reciprocal leadership. If it is to fulfill this demanding possibility, it must be able not only to make decisions but to execute them. So now we turn to the agenda for the implementation of the strategy.