Strategic thinking is at the heart of the “Surviving to Thriving” (Soliday & Mann, 2014) chapter on Planning and Innovation. John Bryson (2011), foremost expert on strategic planning for nonprofits, writes, “What matters most is strategic thinking, acting, and learning in a deliberative context. Strategic planning is useful only if it improves strategic thought, action, and learning; it is not a substitute for them” (p. xiv). In this day and age of industry disruption, our planning must include new levels of strategic thinking if we are truly going to be innovative.
Moving from Operational Planning To Strategic Innovation
In Michael Porter's award-winning article (1996), What is strategy?, he emphasizes the need to move beyond operational effectiveness. Operational effectiveness is more about doing what you do better and less about choosing what you should do differently. Strategic thinking, on the other hand, focuses more on looking at the macro issues that affect competitive advantage and value created in the marketplace by a college or university. An institution’s value propositions should be unique and distinctive. They should set it apart from other peer institutions. This is the focus of strategic thinking.
Key Components of Strategic Thinking
Strategic thinking has a number of key components. Below are some of the most important ones:
- Core competencies: The hallmark strengths of an institution that allow it to excel in comparison to its peer institutions.
- Value proposition: The specific benefits an institution brings to a specific stakeholder group for a particular cost. For example, many private institutions provide quality classroom instruction along with a positive student athlete experience. However, this may come at a cost that is higher than most public institutions.
- Competitive advantage: The specific reasons why students choose to come to one institution as opposed to another. These reasons could include: price, brand strength, instructional quality, selection of programs, co-curricular activities, etc.
- Net value: The specific benefits an institution brings to a specific stakeholder group minus the cost of those benefits. For example, a community college brings open access at a low cost. Many private institutions bring higher faculty engagement, richer campus experience, and a stronger brand strength but at a higher cost.
- Value chain: a set of unique activities that when combined together create unique value for stakeholders.
Creating Greater Value at the Same or Lower Costs
You can point to almost any product or service in almost any industry and you will see constant pressure to provide greater value at the same or lower cost. This principle applies to airline tickets, computers, healthcare, smart phones, and yes, higher education. In recent years there has been increasing unrest among the public who feel that the quality of education is not increasing and the costs are out of control. This has led to unprecedented conversations, legislation, and debate at local, regional, and national levels. Stakeholders are increasingly looking to higher education to function more like other industries where value is expected to increase at the same or lower costs. These trends are forcing higher education leaders to seek innovation, strategies, and change in new and disruptive ways. Strategic thinking can provide tools to evaluate new approaches that will hopefully lead to increased value at similar, or reduced costs. We, in higher education, need to go deeper in our conversations about how we create value for students and other stakeholders while reducing costs and/or keeping pricing the same. This is not to say that there will not be rising prices in some cases. However, the next 20 years will probably look different than the last 20 for three out of four private institutions.
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Follow- Questions:
- What are the unique core competencies of your institution?
- Are you differentiating your value propositions to your multiple student stakeholder groups?
- What is your competitive advantage compared to peer institutions?
- How can you increase your net value to enrolling students by growing the actual and/or perceived benefits while keeping your costs the same or less?
- How can we adapt a set of activities so that our value to our stakeholders is increased while our costs are reduced?
References
Bryson, J. M. (2011). Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement. San Francisco, CA: Jossey-Bass. Porter, M. E. (1996). What is strategy? Harvard Business Review, 74(6), 61–78. Soliday, J., & Mann, R. (2014). Surviving to Thriving: A Planning Framework for Leaders of Private Colleges & Universities. Whitsett, NC: Credo Press.
