Opinions expressed in AGB blogs are those of the authors and not necessarily those of the institutions that employ them or of AGB.
Paul Friga, PhD, is our AGB Consulting practice area leader for strategic transformation of public higher education and the clinical associate professor of strategy at the Kenan-Flagler School of Business at the University of North Carolina at Chapel Hill.
Well, another school year is underway and while most of us hoped for something closer to “normal” than last year, it is still far from that. All our campuses are still dealing with COVID protocols, hybrid classes, some campus closures, and in many cases, lower enrollments. From a financial perspective, my research suggested that universities lost an average of 14 percent revenue due to COVID-19[i] and when combined with additional COVID-19 expenses, many experienced operating deficits over the past two fiscal years. The federal government truly came through in terms of emergency relief funds of approximately $76 billion[ii], which is almost about the same I suggested very early on in my Chronicle of Higher Education article on how to invest and transform higher education.
This month, I want to encourage us to look to the future! While there is a great tendency and need to attend to operational issues this time of year, the best university leaders are also keeping an eye on long-term strategy.
The purpose of strategy is to guide resource allocations to support movement toward a differentiated future vision supported by key priorities and initiatives. Yes, we need to maintain our operations of teaching, research, and service but strategy is the way that we initiate new energy for institutional change. I recommend working to shift at least 10 percent of your investment into new programs, people, and partnerships each year.
Where should you start? In my projects with universities, I typically begin with the tried-and-true SWOT analysis. By taking a hard look at your strengths, weaknesses, opportunities, and threats when compared to comparable and also aspirational peers, you can begin to get a sense of what needs to change and where to invest differently. The strengths and weaknesses are the internal factors that are typically controllable by the university. Opportunities and threats are external factors that are not controllable but should be considered in a university’s long-term strategy. We are seeing great change in these external factors such as declining numbers of traditional-aged students (increasing need to facilitate part-time and adult learning), new technologies for teaching (Zoom and other LMS advancements), hybrid arrangements for employees (no longer having to even live near the university to work there), and significant potential federal investments in community colleges, minority-serving institutions, and student debt forgiveness. When you complete this SWOT, keep in mind how the university’s environment may look in three to five years, not just today. It takes that long or longer to shift the focus in higher education.
Increase your focus. It is tempting in long-term strategy work to try to be everything to everyone. Higher education still suffers from isomorphism, driven by the ranking system still considered by students in their destination choices. What we actually need is more differentiation based upon specific emerging academic program areas, experiential pedagogies, student support and success initiatives, interuniversity partnerships and scale, and ease of transfer, just to name a few. Once you clearly articulate the future direction and the “New U” positioning, you can begin to start aligning resources accordingly. One of my favorite differentiation strategies was how Arizona State University, under the excellent leadership of Michael Crow, modified its mission statement to be judged not by whom they “exclude” (traditional ranking factor of percent declined admission) but by whom they “include” and how they succeed.
Free up resources. A clear strategy should also help you say “no” to resource requests that are not aligned with the new priorities. Additionally, universities are dealing with revenue losses and need to be more aggressive about examining areas of both academic and administrative spend that could be reduced, especially in situations with declining enrollments. Benchmarking of FTEs and spend are important for this process, and high-level goals should be articulated to get faculty and administration will work together. For example, at UNC CH, our leaders announced three budget challenges: a $100-million structural deficit, $200 million of lost revenue due to COVID-19, and $850 million in deferred maintenance. All units were asked to make budget reductions to help the university weather this storm to be able to pursue its long-term strategy of “Carolina Next: Innovation for the Public Good.”
Help from AGB.
I am the AGB Consulting practice area leader for Strategic Transformation of Public Higher Education and stand ready to review your current strategic plan, identify your market differentiation, and consider ways to invest according to key priorities. I am available to schedule an hour call, at no cost, to review your situation. Just email me at pfriga@agb.org.
Given the urgency of the times, I am hosting a new, special AGB monthly workshop program on “Strategic Transformation” exclusively for board members and presidents. Our next workshop is directly related to this topic! You can register for “Reimaging Long-Term Strategy” here.