Experts may disagree on when the danger from COVID-19 will be past, but one thing is certain; colleges and universities face the momentous task of figuring out how to remain viable and, hopefully, emerge stronger on the other side. Many institutions will need to pivot current strategies to deal with the after effects of the pandemic on regional economies, family finances, public health, and even social norms.
But what does strategy look like in the face of ambiguity? Colleges and universities will need to overcome two major challenges to setting strategy for an uncertain future.
1. Higher education already struggled with market-focused strategy; this challenge will be exacerbated by uncertainty.
Higher education has long struggled to align strategy with market need, or to develop what some management scholars call “outside-in” versus “inside-out” strategy. In Strategy from the Outside In, Christine Moorman and George Day examine organizations across industries to see what differentiates those who continue to profit and grow even when times are tough.
Those who struggle, the inside-out organizations, innovate by looking inward and developing strategies based on what they’re confident they can do well. They start by asking what are we good at? What new capabilities can we realistically expect to create? How do we sell more of what we produce? On the surface, these aren’t bad questions. But they’re missing an earlier step. By contrast, outside-in organizations end up thriving because they start by asking what the market is telling them: How are the needs of customers changing? What are competitors doing to meet those needs, and where can we provide new value?
The history of online education is littered with inside-out failures, from the dot.com era through the frenzy over massive open online courses, with many institutions developing online strategies focused more on bells and whistles, rather than demonstrated market need. The institutions who have emerged across the last few decades as online leaders did so because they started outside-in, understanding true market needs (whether related to reaching adult learners or boosting undergraduate persistence) before specifically mapping and growing the right technological capabilities to meet those needs.
Adopting an outside-in strategy becomes even more important when market pressures intensify. Ironically, organizations tend to focus inward during major crises, instead of listening to what the market is telling them. After all, how do you focus on the customer when their needs, wants, and their world is changing unpredictably? How do you plan ahead when you don’t know what the situation will be? Faced with so much uncertainty, it’s just easier, though not as productive, to focus inward, on what’s known and can feel constant.
2. Major shifts require bold solutions, but colleges and universities haven’t developed the strategic muscles — and the culture — to get beyond incrementalism.
Even before the current crisis, presidents worried that their institutions weren’t able to rally around the bold strategies needed for their institutions to thrive (or even survive) amid growing threats to finances and mission. Leaders worry that the added financial challenges brought upon by COVID-19 could be a final blow to already stressed institutions. In relatively steady-state environments, small problems only require incremental solutions, meaning they don’t require individuals and organizations to develop the strategic muscles to think more boldly. Incremental solutions won’t be enough this time.
Incrementalism is rooted in human psychology. At EAB, our research has found several cognitive biases that get in the way of bolder visioning at colleges and universities (see table below). In particular, the Here and Now Fallacy (an overreliance on current and internal information when planning for the future) and the Stay the Course Syndrome (adherence to a widely-shared vision even in the face of evidence of its untenability) can stymie college and university strategic planning processes. These cognitive biases act like invisible guardrails in our brains, focusing our attention on what we already know and away from bolder ideas without us even realizing it.
Hidden Enemies to Strategy
The phrase “never waste a crisis” is thrown around often, and there’s hope that this current crisis will help colleges and universities pursue bolder directions that were needed even before anyone had heard of COVID-19. The urgency may be even more apparent to previously reluctant stakeholders today, and the fact that colleges and universities can pivot when needed won’t be lost upon boards and other stakeholders. The key will be to incorporate this crisis-responsive innovation into a new, more sustainable model for higher ed.
How do we design and execute on bold strategy against the odds?
College and university cabinets are less adept than they might like at planning on multiple time horizons. Higher education executives often confide in EAB that meetings, phone calls, and email/text exchanges about today’s fires are crowding out time for larger discussions and decisions with longer-term implications on mission and finances. The number of immediate challenges associated with the pandemic threatens to exacerbate this problem — at exactly the moment when institutions can’t afford to ignore longer-term planning.
Pictured below is how EAB is working with presidents, cabinets, and boards to develop strategy in the face of ambiguity. First, we’re guiding college and university executive teams through various planning exercises and approaches that will all be necessary in the weeks and months to come. Second, we believe that Peter Drucker’s aphorism that culture eats strategy for breakfast (and, as higher education leaders often note– also lunch and dinner) is no less true in a crisis. That means that colleges and universities need to change their culture and mindset in order to make bolder transformation possible. Additionally, our EAB research shows that many higher education institutions still need to grow the organizational resiliency required in the face of an extended crisis. Too often, “strategy” and “culture” are seen as separate initiatives, rather than interlinked. This was a problem even before the current pandemic. Now, there is no time to wait.
Emerging Stronger on the Other Side: EAB Support for Presidents, Cabinets, and Boards
Please feel free to contact me or your Strategic Leader to discuss how we can help.