In a previous article on the HEPI blog we reported one of the results from our University Strategy 2020 research report: 63% of UK universities are due to renew their strategy over next year or the year after. This was based on an analysis of a sample of 52 university strategies. We have since extended this analysis to 155 UK Universities and found that 60% of the entire sector will have a new strategy by 2021. Next year alone should see the re-launch of 50 university strategies.
So how should universities be embracing this critical period of strategy development? What foundations need to be in place, and what actions need to be taken? Here are five key challenges that need to be addressed as part of strategy development, identified during our analysis of university strategies and accompanying interviews with university leaders (see University Strategy 2020).
Challenge #1 Strategy lifecycle
Too many organisations have a ‘strategy-launch’ mind-set – they think the biggest challenge is writing and launching the strategy. Instead, they need to move to a strategy-success mind-set, ensuring strategy effectively drives the change that it prescribes. One way for organisations to change this mind-set is to move to integrated planning for the whole strategy lifecycle, encompassing strategy development, strategy implementation and strategy measurement. As a result, strategies become:
- more change-focused (what exactly is it that we want to be different at the end of this forthcoming strategy period?);
- more implementation-ready (what are the handful of things we need to do differently to bring about that change?)
- more measurable (which performance indicators are key to tracking progress?)
- better risk-managed (what are the strategic risks and how do their risk priorities compare?)
- more agile (what’s likely to change over the life of this strategy and how will it need to adapt in response?)
The first step towards strategy lifecycle planning can be ‘strategy scoping’. This seeks to answer certain fundamental questions about strategy, such as:
- what are the key outcomes that would constitute success for this strategy?
- what is the target audience and what do we want them to do in response?
- what are the key decisions that need to be made?
- what evidence will be needed in order to make those decisions?
- what are the key elements of governance and management that need to be in place the ensure the strategy’s success?
Challenge #2 Distinctiveness
In our analysis of university strategies, we cited many examples where universities stated categorically that they sought to be distinctive. Some then went on the define how they were, or sought to be, distinctive. For the University of Salford, it is their focus on industry partnerships; for the University of Northampton it is their focus on social enterprise. For others, the nature of their distinctiveness was less clear.
Since market forces seem likely to play a greater rather than lesser role in determining the success of universities over the next few years, strategies need to be more articulate about what makes each university distinctive and what needs to be done to consolidate, amplify or defend that distinctiveness. Having clearly-articulated vision, mission and values is a great place to start defining distinctiveness. Our analysis revealed that 92% of university strategies have vision, mission or value statements and 35% have all three. Where there was greatest scope for improvement was in avoiding generality in those statements to ensure that strategies differentiate between what ought to be done in pursuit of vision, mission and values and what ought not to be done. Aspiring simply to be a ‘great university’ isn’t specific enough.
Challenge #3 Evidence-based decision-making
A key principle that underpins all strategic thinking is that no organisation can do everything. Strategy decides where to focus and align effort. A further key principle is that strategy is about change. The rarely-mentioned corollary of this is that activities that are working well and need to continue as they are (i.e. don’t need to change) have no need to feature in strategy. Strategy development, therefore, is a process of prioritisation. The resulting strategy needs to define what the organisation will do and will not do. In particular, that strategy needs to specify what is currently being done that needs to either improve or cease and what is not currently being done that needs to start.
In the interviews we conducted with senior leaders as part of our university strategy research, it was striking how many of our interviewees commented on their new-found planning maturity. Five-year planning horizons had recently become possible. Course-level factors could be aggregated up to university-wide budgets. Predictive models were starting to be useful for setting targets. All of which means that the next generation of university strategies are likely to be the first to be based on genuinely evidence-based decision-making.
This is no trivial undertaking. Moving from diagnostic analytics (what just happened and why?) to predictive analytics (what is going to happen?) and then to prescriptive analytics (what do we need to do to make sure things happen as we want them to?) requires step changes in the analytics maturity of people, processes and technology across the organisation.
It is especially important to stretch but not to over-reach the analytics capability of the organisation; for therein lies the trap of planning paralysis, where decisions are perpetually delayed for want of better evidence.
Challenge #4 Strategy adoption
“Execution is where good strategies go to die”, according to Mark Bonchek in the Harvard Business Review. The Agile Alliance suggest strategy doesn’t even get that far: it is the resistance or indifference of middle managers, the ‘frozen middle’, that saps the energy from the most enthusiastically-devised strategy.
The Strategy Design Framework identifies the key features that need to be designed into a strategy to be conducive to its adoption across the organisation.
A well-designed strategy needs to have:
- an inspiring yet credible destination that everyone can strive towards
- a handful of key methods that are both sufficient and necessary for strategic success
- alignment with the challenges and opportunities in the operating environment and also alignment between strategic aspiration and operational action
- innovation that strikes the right balance between transformational impact and likelihood of success
- meaningful prioritisation of activities with the corresponding allocation of resources
- robust and visible measures of progress towards strategic success
- agility to respond to changing circumstances, when required
- clarity about what needs to be done to achieve strategic success, who is going to be responsible, how they will be held to account and how everyone across the organisation can contribute.
Challenge #5 Strategic agility
How can a meaningful five-year strategic plan be developed when the higher education sector seems likely to be transformed by financial or policy changes in the next year or two? This is a question many Vice Chancellors and Directors of Strategy will be asking themselves over the coming months. Such questions typically lead in one of two directions. The first is hopelessness and inaction. “It’s not worth planning because something will change and we’ll have to start again.” “It’s impossible to predict what’s going to happen so we’d best not try.” “Our projections vary so massively the numbers are meaningless.” In the other direction lies resilience and agility: an underlying belief in the enduring viability of the organisation combined with a practical hands-on approach to making the best of what might turn out to be difficult circumstances.
A useful first step towards agility is to know as much as you can about the challenges you are facing. The VUCA framework is often useful. If you understand whether the challenge you face is due to volatility, uncertainty, complexity or ambiguity, you are well on the way to deciding how best to respond.
- Volatility – the nature of the challenge may be clear, but its onset, duration and amplitude are unclear. In which case, build ‘slack’ into your planning and set up systems or processes to be vigilant to the first signs of change.
- Uncertainty – change is a possibility, but its likelihood is unknown. In which case, invest in information and insight to better understand and prioritise the risks.
- Complexity – the situation has too many contributing factors, too many interconnections between those factors and is undergoing too much change to be predictable. In which case, bring in new tools and new expertise to make the complex merely complicated and then to work out how best to manage the complications.
- Ambiguity – alternative options or possibilities may be known but deciding between them is impossible. In which case experiment at a small, risk-mitigated scale and learn from those experiments.
With uncertainties over the UK’s position in Europe, increased marketplace competition, changes in financial models and increasingly demanding ‘customers’, universities are facing more testing times than ever. However, by being proactive in tackling the challenges of strategy development we can build institutions that are not only fit for the future but are both competitive and relevant on a local, national and global stage.