Does Our Institution Have an Effective Strategic Planning Process?*

Michael Townsley’s Small College Guide to Financial Health: Weathering Turbulent Times (NACUBO, 2009) offers an alternative way to pose Eric Denna’s inquiry regarding, “Where the institution is today, but more importantly where it is headed?” In his chapter on strategic planning, Townsley observes that strategic planning is “very difficult to do, but easy to explain”—that is, “strategic planning is selling a service to a target market at a price so that a sufficient number of buyers buy the product to generate enough revenue to maintain the financial integrity of the institution.”¹ In the absence of a strategic plan, suggests Townsley, financially distressed colleges and universities “tend toward the path of least resistance, commonly known as ‘muddling through’ but formally deemed ‘incrementalism.’”² In this environment, institutions make “insignificant” or “uncoordinated” decisions—that is, these incremental changes lack strategic vision and often fail to move the institution forward. This incrementalism can lead to the depletion of critical resources and more importantly the loss of time, potentially an institution’s most valuable commodity, to successfully address any immediate crisis it may be facing.³

To avoid this suboptimal outcome, Townsley believes it is the role of the president, as the CEO, in consultation with the senior leadership team, the governing board, and other campus stakeholders, to lead a strategic planning process that:

• Prepares diagnostics such as the current state of the institution, prepares forecasts, and conducts environmental and SWOT⁴ analyses;
• Selects and rank orders the major strategic issues;
• Develops, tests, and rank orders strategic options; and
• Prepares a strategic plan, action plans, monitoring plan, and implementation schedule.⁵

To successfully perform each of these tasks and accomplish the desired results, Townsley prescribes a series of activities, (see below) referred to as “strategic diagnostics,” which he believes will help institutions avoid making the fatal mistakes that can lead to mission failure and will better prepare the college or university for any unanticipated challenges and/or mid-course corrections if required.⁶ Townsley’s diagnostic process is rigorous and data driven, and if executed well will allow institutional leadership to avoid short-term solutions and focus on long-term strategies essential for promoting the sustainability of the college or university’s business model.⁷

Institutional Strategic Diagnostics

1. Environmental and SWOT Analysis

a. Environmental analysis: Identify economic, political, demographic, and social changes that may have a positive or adverse effect on the institution; and

b. Strengths, weaknesses, opportunities, and threats (SWOT) analysis: Identify the internal strengths and weaknesses of the institution and the external opportunities and threats facing the institution (refers to the environmental analysis).

2. Goals—Goals embody the college’s expected destination based on its given strategy and its desired new academic, operational, marketing, student services, and financial condition.

3. Objectives—Objectives are the precise statement about how an institution expects to achieve its goals. The statement should reflect performance-based measures of what and when the objective is to be accomplished.

4. Financial goals and objectives—A strategic plan regardless of the size or mission of the institution should guide a college toward financial stability; without financial stability, the rest of the strategy is rendered meaningless. Therefore, the strategic plan needs specific financial goals and objectives. In fact, every sector of the institution should have a financial objective that expresses its responsibility for the financial stability of the institution.

5. Strategic options—Exactly how a college meets its strategic objectives depends on its financial condition and the relevant options the college selects—such as, new markets, enhanced programs, administrative restructuring, etc. A set of strategic options—academic, marketing, finance, IT, capital, administrative, and student support need to be developed soon after agreement is reached on strategic goals and should be diligently tested before included in the plan.

6. Selection of strategic options—After the options have been tested and rigorously deliberated, the next step is to select the most promising options for inclusion in the strategic plan. The selected options should address a specific institutional need. Generate new revenues or fill an identified need rather than satisfy a specific constituency.

7. Action plans—Action plans lay out precisely who will do what and when for each component of the plan. This is the most important part of the plan and should thus be carefully crafted and reviewed.

8. Performance benchmarks—The purpose of performance benchmarks is to determine the current condition of the college in reference to the national standards or some set of institutions and to understand the future state of the institution as it puts its strategy into operation. Thus, benchmarks must be relevant to both the institution and the strategic plan.

9. Monitoring schedule—The monitoring schedule should establish a regular schedule to review the progress of the institution so that it can ascertain whether it is meeting its strategic goals and objectives.

10. Implementation schedule—After compilation of goals, objectives, action plans, performance benchmarking, and the monitoring schedule should be reviewed one more time with the board, approved, and then to assure transparency broadly shared throughout the institution.

Michael Townsley, “Strategic Diagnostics,” in Small College Guide to Financial Health: Weathering Turbulent Times, (Washington, D.C.: NACUBO, 2009), 180–185.

Denna and Townsley’s research offer helpful guidelines for the conversations governing boards and senior leadership need to have when addressing the multidimensional nature of charting a path forward in challenging times. Yet, a key to any successful strategic planning process is the ability to operationalize the agreed to and differentiated strategy into the college’s operations. Indeed, once a plan is adopted, Townsley believes a successful outcome requires “operational management,” which he lays directly at the feet of the president—“Efficiently managing operations depends on presidential leadership. The president must know the outcomes of important decisions, the performance of the institution at all levels, the skills of the chief management team, the obstacles or challenges facing the institution, and the strategies and methods used to respond to the obstacles and challenges.”⁸

In his work Collaborative Strategic Planning in Higher Education, (NACUBO, 2009), Patrick Sanaghan offers a slightly different perspective, but one that is equally valuable, when he states that there is no “silver bullet” or single recommended model for guaranteeing a successful implementation of a strategic plan. While the marketplace has offered methodologies based on “linear-thinking”—Gantt charts, critical path methods, financial modeling, and a host of other tools, the reality is that “only people with all their quirks, interests, passion, energy, and hopes can implement a strategic plan.”⁹ For most institutions a successful outcome is predicated on both inclusive presidential leadership and the ability to move an institution through change with determined commitment by the individual stakeholders across all levels of the organization.

*This blog post is adapted from Association of Governing Boards of Universities and Colleges, Baker Tilly, the Council of Independent Colleges, and the National Association of College and University Business Officers, Collaborative Leadership for Higher Education Business Model Vitality: Strategic Conversations for Small College and University Governing Boards and Administrative Leaders, (Washington, D.C.: AGB, 2023), 17-20, with special thanks to Stephen T. Golding, AGB subject matter specialist.

Notes