Strategic Leadership|Strategic Leadership in Context: From Academic Programs to Financial Models

Thus far I have described and illustrated several of the key components of the

strategy process. Ultimately each institution has to bring these methods to

bear on specific areas of organizational responsibility. The actual content of

strategic initiatives, goals, and actions is determined by the planning that occurs

within the different spheres of each institution's diverse activities, from academic

to financial affairs. As a result, there is no way to import detailed strategic content

from external sources. The story, vision, contextual position, and deliberative

processes of each college and university are embedded in a unique identity, so

strategic content has to be grown at home.

While giving full weight to uniqueness, it is still possible to highlight the general features of strategic leadership as different organizational operations and programs come to terms with the changing world around them. In doing so, we shall

examine briefly and selectively the way strategic leadership differentially shapes

the consideration of:

• Academic programs

• Student learning

• General education

• Admissions

• Student life

• Facilities planning

• Financial resources

• Fund-raising

198 Strategic Leadership

In analyzing these areas, the goal is to answer basic contextual questions that may

be on the minds of those leading or participating in a strategy process. What difference does a strategic orientation make in approaching issues in various contexts?

What are some of the most telling strategic challenges and opportunities facing

institutions in today's world? Within what frameworks of thought should issues be

situated and analyzed? To anticipate some of our findings, we shall regard the tracings of strategic leadership as an applied and integrative discipline in the ways that

it is contextual and analytical, conceptual and data driven, integrative and systemic, value centered and action oriented, and motivational and collaborative.

STRATEGIC THINKING AND ACADEMIC QUALITY

For many of the reasons that we have analyzed, the introduction of an authentic

strategic perspective is an especially demanding task in the sphere of academic

specialties. Consider the ways in which we ordinarily think about the quality

of academic departments. Let us do so by examining the profile of two history

programs inspired by actual models, one in a major university and the other in a

very small college. The comprehensive undergraduate history program at a large

regional research university with a departmental faculty of fifty-four offers five

majors, eight program concentrations, and 110 courses. Its faculty is well published and many of its members are widely recognized, two of its specialties are in

the top twenty-five in graduate program rankings, and it attracts talented doctoral

students, though it is much less selective in some fields than it would like. Most

of the lower-division courses are large lecture classes supported by teaching assistants, the courses for majors enroll thirty to forty students, and honors students

take a senior seminar. The number and quality of its undergraduate majors have

declined moderately in the last decade, though most students perceive history to

be a popular program that makes moderate demands.

Consider next the history department at a small liberal arts college that has a

solid reputation in its region. With a faculty of five, it offers a single major with

concentrations in European or American history. Its largest class enrolls twentyfive students, its entire faculty is full time, and it places a major emphasis on the

use of original texts and documents in all its classes. Its majors have always been

among the most talented students at the college, and it has a reputation for being

a demanding department.

The realities of institutional mission, culture, size, and resources have shaped

two radically different history departments, even though there are some formal

parallels between them in courses and requirements. As we compare the two

programs strictly with the professional eye of a historian, we have to judge the

small college's program to be marginal in quality and viability. It is very weak

in scope, in depth, and in the professional reputations of its faculty. In terms of

disciplinary measures, one cannot begin to compare the comprehensive range,

depth, and prominence—that is, the quality—of the university program with the

impoverished version that exists in the college.

Strategic Leadership in Context 199

Yet as we turn our attention to the culture of student learning in the small

college's department, other characteristics come to the surface. We learn that

many of the leading graduates of the college studied history, and that a disproportionate number of them, including several eminent historians, went on to earn

doctorates in the field. Whenever these graduates tell their stories, they consistently note that their professors required them to learn history by doing it—by

studying original texts and documents, writing countless interpretive papers, and

participating constantly in discussions and presentations in small classes. Their

teachers held them to rigorous standards but also encouraged them. Faculty members often became mentors to students and interacted with them frequently both

in and out of class. The faculty's narrative of academic quality concentrates on the

character and depth of student learning. They hold themselves to these values and

make professional decisions in terms of this understanding of quality.

These cases allow us to raise an impertinent question. Which of the two undergraduate history programs is of higher quality? Which one creates more educational value for students? The answer depends, of course, on the values that a

person privileges in his or her understanding of academic quality. In the college,

educational worth is measured by student learning as intellectual engagement and

transformation, while in the university, quality is defined around the creation of

knowledge. For most of us, the question brings up a series of conflicts in academic

purposes that can never be entirely resolved, but that can be reconciled through

effective leadership.

Although it seems deceptively basic, the strategic articulation of principles of

educational worth is a difficult task for most disciplines. This is so because it is

often carried out, as we have seen, in a context defined by the internal criteria

of an academic specialty alone or is imposed by an external management system.

When disciplinary logic encounters managerial logic, the tensions are inescapable. Although the transition to a broader pattern of reflection is initially challenging, when a program's educational rationale is explicitly connected to the

more inclusive aims of liberal education and student learning, to special institutional characteristics and capabilities, and to changing methods of the discipline

and the needs in society at large, the process becomes more strategically vital

and fruitful (Association of American Colleges and Universities 2004). As these

steps occur, the model shifts from emphasizing the requirements of management

to focusing on the responsibilities of collaborative strategic leadership.

STRATEGIC LEADERSHIP AND POWERFUL LEARNING

The purpose of strategic leadership is to look inside and outside an institution

simultaneously and to align the two perspectives. As it searches for the structural

trends in contemporary higher education, it finds some markers that should rivet

its attention. One of these is the intensifying focus on student learning. Longsimmering changes in the methods of teaching and learning have taken form as

a self-conscious movement. There is a growing preoccupation with the nature 

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of learning itself, with what and how students learn in ways that are motivating,

enduring, and powerful (Association of American Colleges and Universities 2002;

Bok 2006; Gaff, Ratcliff, et al. 1997; Kuh, Kinzie, Schuh, Whitt, et al. 2005;

Levine 2006).

Engagement in Learning

Common in many expressions of the learning movement is a focus on student

engagement—on forms of teaching and learning that make a successful claim on

the interest, energy, and motivation of the student. The emphasis is on ways the

student becomes personally engaged in a process of learning. The implied contrast

is with learning that is passive, in which the student receives knowledge and information from a teacher. In engaged learning, students are agents more than observers, makers of meaning rather than recipients of information (Morrill 2002).

Learning as the Development of Human Powers

One of the critical presuppositions of this intensified focus on learning is that

liberal education has to do with the development of deep and enduring intellectual and personal abilities. One commonly finds that institutions express their

rationale for liberal education in terms of the development of complex cognitive

abilities such as critical, analytical, and integrative thinking; effective communication; global and multicultural awareness; and technological and quantitative

literacy (Bok 2006). Included as well are intellectual dispositions and values such

as curiosity, mental resilience, and imagination as well as commitments to the

values of an open society.

From the perspective of strategic leadership, more important than these lists is

the unspoken presupposition that liberal education has to do with the development of fundamental human powers, the enhancement of the intellectual and

moral capacities through which the human project itself unfolds. In tracing the

evolution of liberal education at the University of Chicago, Donald Levine (2006)

finds and formulates the inner logic in its concern to develop the multifaceted

powers of mind. As Thomas Green suggests, "Coming into possession of the powers that we have as human beings . . . is the defining presence of educational worth"

(1982, 182). So, engaged learning is also powerful learning because it intends to

make a compelling difference in the ways that humans as agents create meaning

and act in the world.

Why does any of this matter for the strategy process? It does not if strategic

planning is simply a discipline of the market. To contribute to academic leadership, strategy has to be integral; it must connect with the deepest purposes of the

organization as it has been shaped in response to the context in which it lives. For

a college or university to understand its differentiating characteristics, it has to

know what it believes in, what it intends its education to be, and how it can create for its time and place the practices and conditions on which powerful student 

Strategic Leadership in Context 201

learning depends. It has to ask itself continually what it means to be an educated

person, and in the plurality of answers to that question, it must reflect on the

center of educational gravity in its own methods and programs. It especially has to

do this in a time when liberal education is neglected and misunderstood. Is liberal

learning about information or knowledge, methods or content, the powers of the

mind or the habits of the heart, or what? How does it relate to the unrelenting

demand of society for a well-trained workforce and of students for careers? (Bok

2006). In pursuing this inquiry, the institution has to consider where, if anywhere,

it has developed generative core competencies that distinguish it from others and

that deeply mark its programs and its environment for learning. A review and selfassessment of the following list of some of the components of powerful learning

will help institutions see what characteristics of learning truly set them apart and

understand strategically where they excel or should or could excel (cf. Association

of American Colleges and Universities 2002).

The Characteristics of Powerful Learning

Powerful learning is:

• Transformative: It intends to develop human intellectual powers, moral capacities, and personal abilities at fundamental levels and in enduring forms.

• Intentional: It help students become aware of the interconnected aims and

results of liberal and professional education and learn how they can design their

studies to connect in purposeful ways with their own goals.

• Engaged: It involves students in learning actively through collaboration, discussion, writing, speaking, performing, doing research, leading projects and presentations, and forming relationships with teachers who have high expectations.

• Global: It involves students in the study of other languages, cultures, and societies, optimally through living and studying in another country.

• Broad: It requires students to master content, methods of reasoning, and ways of

solving problems in a variety of fields and disciplines.

• Coherent: It designs and presents programs of study with a clear rationale and

goals that connect themes, courses, and learning experiences in meaningful and

explicit patterns, both in general education and in the major.

• Useful: It demonstrates how cognitive powers and knowledge are deeply practical in preparing students for employment and civic responsibilities.

• Inclusive: It features programs that address the diversity of human experience

and cultures as enriching educational resources.

• Integrative: It encourages an understanding of the relationship of fields and disciplines in the study of intellectual, moral, and social issues and offers programs

based on interdisciplinary and integrative methods.

• Enriched: It draws upon a wide variety of resources, including facilities, technologies, scientific instrumentation, books and periodicals, cultural events, and

local organizations.

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• Technological: It uses information technology to draw on the new universe of

Web-based knowledge to develop computer literacy and to make learning and

communication continual, global, interactive, and motivating.

• Experiential: It uses a variety of ways to involve students in learning through

experience in service projects, internships, and field research, closely coordinating

theory and practice.

• Responsible: It prepares students to understand and to act on their responsibilities in a democratic society and fosters their commitment to its basic values.

• Substantive: It explores the structure, methods, languages, and content of various disciplines and bodies of knowledge and uses landmark original texts and

materials in doing so.

• Rigorous: It sets exacting standards and has high expectations concerning both

the quality and the quantity of student educational achievements.

• Assessed: It uses a multiple set of methods to evaluate the effectiveness of learning and feeds these results into the teaching and learning process to improve

future performance.

• Encompassing: It occurs in many campus contexts and relationships both in and

out of the classroom and is strengthened by an ethos that carries, communicates,

and reinforces a clear and strong set of consistent messages about the institution's

identity and educational purposes and practices.

Strategic Thinking and Powerful Learning

The effort to evaluate which forms of learning are most in evidence at an

institution is a rewarding strategic task, and the preceding list of characteristics

offers a place to start. Groups of faculty and staff in a strategy process can analyze and map their own institutions and programs by asking several questions

about each characteristic: Which most resonate with our narrative of educational

identity and quality? Where are we now, and where would we like to be in the

future? Where are we deficient, where adequate? Which of these forms of learning

are distinguishing characteristics? Are there any that are or could become core

competencies? What strategies and goals would move us forward? The process of

analysis should stir the interest of many faculty and staff members, for it offers a

systematic template for defining issues about which they care deeply.

In the process of discussing and evaluating its culture and characteristics, an

institution begins to gain a clear sense of its own identity and its vision as a

community of learning. Its self-evaluation should be realistic and recognize that

generally no more than several of its characteristics can become core competencies. The discussion should also be guided by all the forms of available evidence,

such as a content analysis of its academic programs and practices, its results on

the National Survey of Student Engagement, and other forms of assessment and

strategic evaluation.

One of important affirmations in this book is that the character and quality

of student learning are a central strategic issue. The study by George Kuh and 

Strategic Leadership in Context 203

his associates (2005), Student Success in College, shows the intimate connection

between student learning and this wider view of strategy, even though the authors

do not use that term in describing their findings. As we have already seen, the

study describes the characteristics of twenty campuses whose graduation rates

and engaged learning practices exceed what would be expected in terms of their

institutional and student profiles. The colleges present features that bear directly

on aspects of strategic leadership because, among other things, they demonstrate:

a "living" mission and "lived" educational philosophy, an unshakeable focus on

student learning, an improvement-oriented ethos, and a sense of shared responsibility for educational quality and student success. Moreover, they each embody

a strong culture and highly resonant identity that marks out paths for student

success and an environment that enriches student learning. The leadership of

these institutions is also focused on student learning both in terms of the actions

of those in positions of authority and as distributed in processes and relationships

throughout the organization. In our terms, the narratives, values, and visions of

these colleges and universities are expressed in their organizational cultures, programs, and collaborative practices, all of which are sustained through a distributed

process of strategic leadership.

Perhaps it is no clearer than in the sphere of student learning that official

leaders are often followers in strategic leadership. Teachers and students take the

lead in shaping the practices of engaged learning, which those in academic leadership positions may then help to clarify, systematize, and support. In the sphere

of teaching and learning, the idea that strategy emerges from practice is entirely

apt and accurate. When the University of Richmond issued its strategy report

entitled Engagement in Learning in the mid-1990s, it chose a theme that arose from

the educational practices that were emerging in and outside its classrooms. The

strategic consciousness of those practices arose in dialogue with faculty members

and students who shared with the planning committee their uses of collaborative

learning, interactive classes, experiential learning, study abroad, service learning,

and student research. The report carried a title and explored themes that would

soon emerge prominently in the wider conversation in higher education.

General Education

One of the places where the strategic analysis of student learning should concentrate is general education (cf. Gaff, Ratcliff, et al. 1997). Because it occurs at

the intersection of a series of defining organizational commitments, it is a quintessential strategic issue. To begin, general education typically represents a major

investment of institutional resources. Its special courses and requirements draw

heavily on faculty time and energy and require a large number of faculty positions. In most institutions, more than half of a student's first two years of study

are devoted to general education, so its influence on a student's early educational

experience is often decisive. Typically a student makes some form of intellectual connection with the campus during these years or may never do so. Thus, 

204 Strategic Leadership

the relationship to retention and enrollment is crucial. Most importantly, many

institutions explicitly define the meaning of liberal education around the purposes

of their general education programs.

In terms of the motif of powerful learning, it is often in general education that

institutions make explicit their distinguishing characteristics, core competencies,

educational values, and credos. In the course of the work on the Association

of American Colleges and Universities' Greater Expectations (2002), it became

clear that institutions were increasingly tying their general education programs

to their special characteristics and competencies. A college or a university's distinctive academic profile in teaching, curriculum, and research was translated

into ways to engage students in coherent, intentional, and integrative forms of

general education.

As we consider strategic leadership in the context of student learning and general education, we see the depths to which it must reach. It must draw on the

institution's most powerful conceptual resources in order to address comprehensive educational questions. In working on general education, faculty members

and academic administrators have to be encouraged and enabled to be educators, not just field-specific experts. It may appear odd that institutions committed

to higher learning need to focus on the conceptual foundations of programs of

study, but that is a requirement of strategic leadership. A well-founded, distinctive,

and rich program of powerful learning in general education and throughout the

undergraduate curriculum and co-curriculum brings into focus an institution's

specific educational capacities, reflecting its story, values, and identity. It creates

a sense of common enterprise and seeks to involve students and faculty in the

experience of a true educational community. If this intense focus on learning is

to be sustained, faculty as educators need to reach periodically for the best current literature on student learning, study model programs, and continue to think

deeply and coherently about educational design and execution, all in terms of a

differentiated concept of quality (cf. Bok 2006; Levine 2006). Such is the nature

of strategic thinking in the academic sphere. As a form of leadership, it moves

through conflicts and disagreements to find the shared values and concepts to

which people are willing to make commitments.

ADMISSIONS: BRANDS OR STORIES?

As we have seen, many practitioners of strategy locate the core of the process

in the way an organization differentially positions its products and services in a

competitive marketplace. In consumer products companies, the analytical and

quantitative methods of marketing have become the queen of the business sciences and drive much of the corporation's strategy. Some of these same trends

have migrated to the campus. In sharp contrast, we have located the strategy

process at a deeper level by rooting it in collegiate narratives of identity and

aspiration. In today's world the contrasts between these two starting points often

show up most vividly in the work of admissions offices.

Strategic Leadership in Context 205

The strategic plans of most colleges and universities include a strategic initiative

or, more aptly, an imperative concerning admissions and enrollment. Since many

private institutions are only several bad years in admissions away from extinction,

and virtually every institution depends heavily on tuition, marketing usually has a

prominent role in collegiate strategic planning reports. As a consequence, its language and methods are increasingly in use on campuses, no matter how distasteful

most faculty members find the terminology of markets, brands, and customers.

Based on visits to many campuses David Kirp (2003) reports that the language of

marketing is here to stay, whether we like it or not, both for good and for ill.

Our question is similar to one that he poses: When it comes to the use of

strategic marketing, is it possible to reconcile the values of the academic commons with the marketplace, or will colleges and universities sell their birthrights?

In considering admissions in a strategic context, we have the test case of an issue

that we have examined in several guises, and that, as we have seen, has been

the focus of many studies, including those by Kirp (2003); Bok (2003); Newman,

Couturier, and Scully (2004); and Zemsky, Wegner, and Massy (2005). In general

terms, it concerns the limits of commercialism and market competition in higher

education. In this specific case, the question is focused on the appropriate use of

the terminology and methods of marketing in admissions.

Strategic Leadership and Marketing

We can begin to address this question by examining several basic characteristics

of integral strategic thinking that differentiate it from a discipline of marketing.

In particular, deep strategy requires integrative and systemic forms of thought

and action. What may be invisible at an operational level comes into full view in

strategy. It reveals the connectedness between and among academic and administrative activities and programs.

Consider what is required to reach virtually any goal in admissions, whether

to increase applications or yield or to attract more students with certain talents,

backgrounds, or levels of family income. The admissions program is simply the

leading edge of a complex and connected strategic system. No matter where

one touches it in such a structure, that point connects to all of the structure's

major components. A strategic system requires faculty and administrative leaders

throughout the organization to understand its interconnections.

When seen in this light, effective admissions work begins with the integration

of several different forms of knowledge, from narratives to data. The institution's

story and vision, its distinctive educational characteristics and core competencies, should be woven into virtually every facet of the verbal and visual messages

that an admissions office communicates. These are drawn from a complex set of

beliefs and information about the institution that are both discovered and validated in a process of deep strategy. Strategic thinking brings a discipline to this

process of integration and makes the creation of the message a differentiated,

authentic, and focused process.

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Branding

A proponent of branding and integrated marketing claims that "At root, a

brand is the promise of an experience. Understanding and communicating the

validity of that experience to target audiences are parts of the branding process"

(Moore 2004, 57). From this it is clear that branding and marketing depend on

a complex strategic task that precedes it, which is "understanding . . . the validity of

the experience." The validity of soda pop, a coffee shop, or an automobile is one

thing, but the validity of an educational experience is quite another. The word

"experience" does not mean the same thing in describing products and education. Products are experienced through functional use and consumption, while

education involves an intangible process of intellectual and personal transformation. Products are infinitely modifiable to meet the desires of the customer, while

education sets standards that learners can only satisfy through changes in their

capacities and knowledge, based in good measure on their own will and motivation. Especially since branding has its origins in selling consumer products through

repetitive and sometimes deceptive mass advertising, if we omit the essential step

of discovering and articulating an institution's authentic identity, its purposes

could be reduced to whatever the inventiveness of marketing chooses to make of

them. One of the responsibilities of strategic leadership is to ensure that education

is not reduced to commerce.

These considerations offer a clear perspective on the use of the methods and

language of marketing in higher education. The terminology that we use matters,

and not just to spare the sensitivities of the faculty. Language conveys a system of

thought and values. An authentic university generates and conveys knowledge

as a public good and is constructed around a different set of values and purposes

from those used by businesses that sell products and services. The issue is whether

the methods of thinking and decision making used in business can fit that world

of thought. Some business practices do fit, including the methods of marketing

and the tools and concepts of strategy, as we have been at pains to show. To do

so, the language and the relevant processes of management can and should be

translated into the idioms, values, and methods that illuminate educational issues

and university decision making. If that happens successfully, then the methods of

integrated strategic marketing can bring new insights and disciplined processes to

the work of admissions and other departments. Yet some terminology, like the use

of the word "customer" for student and "brand" for identity, image, and reputation,

resists translation and cannot be made into central strategic concepts without

distorting the meaning of education.

THE STUDENT EXPERIENCE

Whereas admissions is often at the center of institutional planning documents,

student life is rarely at the core of institutional strategy. Ever since the doctrine

of in loco parentis was swept away in the late 1960s, a vacuum has existed in the 

Strategic Leadership in Context 207

articulation of the educational purposes of student life. To be sure, many student affairs officers have an intellectual perspective that animates their work.

Most campuses try to build linkages between residential and academic life, often

through ingenious practices and programs. Nor is campus life lacking in countless opportunities for student learning and personal development in everything

from volunteer service to artistic programs to athletics. Yet typically there is no

coherent or compelling conceptual vision of how all these activities contribute to

student educational growth. More often than not, it seems that "edutainment" is

at the strategic center of things, with consumer satisfaction the goal.

Rarely, in particular, do faculty members show much interest in or understanding of the ways that campus or residential life might be an important part of

the institution's educational mission. More typically, the prevailing sentiment is

annoyance at the coarseness of student social life and the way it distracts from

the pursuits of learning.

Then there is the dark side of student life, which is itself a strategic issue, as

troubling realities from the wider culture invade the campus and shape its character. Levels of alcohol and substance abuse are high and inexorably give rise to

instances of violence, vandalism, and sexual exploitation. Virtually every contemporary campus has developed special programs and interventions to address binge

drinking and its effects on students.

Strategy and Campus Life

Over against this challenging picture are strategic opportunities for distinctive

educational achievement through the campus experience. Probably more than in

any other national educational culture in the world, American institutions have

made the campus experience an important part of what it means to go to college.

The investment of resources in staff, programs, athletics, facilities, and campus

events is massive. Yet in most institutions, the educational purpose of it all is neither conscious nor articulated.

At a strategic moment that makes late adolescence a challenging time in

personal growth and sees technological forms of distance education rising dramatically in popularity, the educational meaning of student life on campus is

a neglected conceptual and strategic theme. It requires a new articulation by

the institution's academic leaders, especially the ideas and voices of the faculty.

Ironically, before long, the campus experience may become one of the primary

differentiating competencies of colleges and universities. What does it contribute

that cannot be found at a computer terminal?

Intellectual Leadership and Student Life

If this strategic challenge and opportunity are to be seized, higher education

needs to use the available theoretical, conceptual, and empirical resources to

understand and enact its student life programs. The insights and the findings 

208 Strategic Leadership

are there, as for example, in the voluminous research and publications by

Alexander Astin (1977, 1993), or more recently in the work of George Kuh

and his associates (1991, 2005). The developmental theories of writers such as

Arthur Chickering (1969), Douglas Heath (1968), and William Perry (1970)

have enlightened both past and present generations of theorists and practitioners. Pascarella and Terinzini (1991, 2005) have analyzed many studies over

the years of the impact of the college experience on students. Working within the

same Harvard context as William Perry before him, Richard Light offers these

conclusions from his decade-long work in the Harvard Assessment Seminars:

"I assumed that most important and memorable academic learning goes on

inside the classroom, while outside activities provide a useful but modest supplement. The evidence shows that the opposite is true. . . . When we asked students

to think of a specific, critical incident or moment that had changed them profoundly, four-fifths of them chose a situation or event outside of the classroom"

(2001, 123).

These scholars and many others provide conceptual frameworks and touchstones that give rich educational meaning to the encompassing forms of students'

intellectual and personal development. In doing so, they reveal some of the cultural infrastructure and patterns of campus life that accelerate and facilitate a

student's successful engagement in higher learning. Terms that one often finds

in mission statements or hears on campus, like "personal growth," "intellectual

maturity," "responsibility," "commitment," "autonomy," "democratic citizenship,"

"leadership," and "community," are made intelligible and actionable as they are

connected to coherent models of human development that interpret education as

the unfolding of fundamental human powers and possibilities. They provide the

integrative perspectives that are needed to make powerful learning an institutionwide commitment and strategic priority.

Once again, the strategy process becomes a form of leadership. It does so

as it urges connection among the parts of a system, and as it reaches for the

conceptual resources that can do justice to the richness and variety of education as a form of human empowerment within an intentional community. As

Ernest Boyer put it when issuing the influential report Campus Life: In Search of

Community, "We believe the six principles [of campus life] highlighted in this

report—purposefulness, openness, justice, discipline, caring, and celebration—can

form the foundation on which a vital community of learning can be built. Now,

more than ever, colleges and universities should be guided by a larger vision"

(1990a).

STRATEGY AND FACILITIES

Under most accreditation standards, institutions are required to have a campus

master plan. A plan that defines the location of future buildings and the use of

campus space would seem to be a classic exercise in long-range planning, not

strategic thinking. After all, the major variables are spaces and physical masses 

Strategic Leadership in Context 209

that are under the control of the designers and the design. They can be reduced

to precise drawings and blueprints, whatever the driving forces of the surrounding

world may be.

Strategic Space

Yet at the level of strategic reflection, it is clear that campus and building plans

are part of a system of beliefs and distinctive educational purposes. The plans of

today's colleges and universities display a sharp consciousness of how the goals

of an engaged educational community should determine the places, shapes, and

forms where learning takes place. Campus spaces are configured to facilitate collaborative learning in small groups, to create places where people can interact, to

connect to technology, to allow for the placement of laboratories so that faculty

and students can do research together. Physical space increasingly has become

transparent to the educational goals that it serves.

A Sense of Place

Strategic plans and similar studies of campus life also reveal that the campus is

lived space, so it is often lodged in memory and in personal experience as a major

theme in the institution's story. A sense of place is commonly a defining element

in the shared values of a community, and many students, staff, and graduates

develop intimate connections to the campus, its landmarks, and special natural

and architectural features. Places carry meanings that contribute to the larger

purposes of education.

Salem College and a Sense of Place

Salem College in Winston-Salem, North Carolina, is located in the restored

Moravian village of Old Salem, whose roots reach back to the mid-1700s, when

German-speaking Moravian settlers arrived in Salem from Pennsylvania to create

an intentional community of faith and labor. The sense of historic identity of the

village is interwoven with the college and the neighboring academy, which grew

from a school for girls that the Moravians started before the American Revolution. College and village also share a common architectural signature defined by

simple geometric forms, pitched tile roofs, arched windows, brick structures in

Flemish bond, rhythmic green spaces, and pathways of worn brick. The campus

leads off the large village square into intimate quadrangles created by buildings

that largely conform to the style of the eighteenth-century town beyond. Historic

artifacts are everywhere, from antique furniture to embroidered samplers created

by young women over 150 years ago. A sense of intimacy and community, of

historic fabric and authenticity, defines the place. These very values shape the

human transactions and relationships of those who dwell there as students, deepening bonds between them as responsible members of a historic community of

women, and marking their experience for life.

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Countless campuses have similar stories that give the campus a voice in its

narrative of identity. So master plans and decisions about major renovations also

are crucial parts of educational strategies for the future. A building has an impact

on its human community and the natural environment, which is itself a vital issue

in contemporary decisions about facilities. Its physical fabric and infrastructure

are critical considerations for efficiency, effectiveness, and sustainability but also

for the meanings that it carries. Campus designs and buildings ground the identity

and the heritage of a community. In all these ways campus space and architecture

are parts of an integral strategy that moves the organization toward the vision it

has defined for itself.

STRATEGY AND FINANCIAL RESOURCES

Those who study collegiate strategic planning reports and documents soon

come to a surprising realization. Many plans do not include either a financial

model to test the cost of the initiatives being proposed or a method to fund them

within a designated period of time. This is more than a little odd, since strategic

planning has precisely to do with creating goals and allocating resources to translate them into reality. Without a sense of financial capacity, many of the goals

in a strategic plan become what its critics complain that they are anyway, either

wish lists or a safe place to store the excess baggage of campus opinion and desire.

Without financial feasibility, a strategy compromises its credibility and loses an

effective mechanism of decision making and leadership.

Many institutions are diffident to define their financial capacities and priorities

because there can be political risks in doing so. To signal that some units or programs may have a higher priority than others is dangerous. In adversarial contexts,

the setting of priorities may unleash a torrent of conflict. Yet these challenges

should not prevent us from exploring the possibilities of an optimal process, even

if its application may have to be tailored to a variety of circumstances.

Financial Models

A fundamental requirement for effective strategic planning is the use of an

analytical financial model. The model can be quite simple but should capture the

key points of leverage that determine the institution's financial position. Effective decision making requires that these leverage points be deeply understood and

carefully charted, including the key ratios that indicate financial position. Our

suggested dashboard of strategic indicators in chapter 5 shows data that should

be included in a model or in an accompanying analysis of financial position.

Key ratios and indicators such as debt to assets, debt payments to revenues, net

tuition after discounts, and unrestricted net income have to be understood both

operationally and strategically. Most accounting firms can provide a set of analytical and comparative ratios for colleges and universities, and bond agencies

create powerful sets of metrics in issuing ratings. Strategic thinkers and leaders 

Strategic Leadership in Context 211

focus on these comparative trends and ratios and attend particularly to both

marginal income and expense and to the danger zones in their financial metrics

(cf. Townsley 2007). Every institution's financial engine drives results precisely

through the interaction of its most important variables in revenue and expense,

assets and liabilities. Strategic leaders are often skilled in relating the dynamics of

the engine to the critical success factors in the educational program (Collins 2001,

2005). Although most of the revenue and expense streams have differing rates of

increase and decrease, they can be translated into an analytical and quantitative

model that is able to test the financial consequences of various strategic decisions

and economic trends.

Each of the major task forces and groups developing strategies should use the

model to test the financial results of its proposals and should highlight these

as part of its report. The SPC will select options for further consideration and

implementation with a clear sense of the resources that they will require, and the

steps they will take under adverse circumstances, such as high inflation or serious

recession. Without a clear window into the inner workings of its own financial

world, it cannot meet these responsibilities.

Transparency and Financial Information

A financial model can project plausible scenarios for the future, but the institution's basic financial position has to be communicated clearly as well. As we noted

in our discussion of SPCs, governing boards and presidents do well to disclose all

the basic financial information that is relevant to the work of strategy. Although

it can be difficult if the institution is in a weak position, or an especially strong

one, it is far better in the long run that these issues be shared rather than hidden. The tendency of some faculty members to deflect hard financial choices to

administrators, and for administrators to keep problematic financial facts from

the faculty, is part of the same unhealthy syndrome. A credible process requires

both shared information and shared responsibility. An ability to deal honestly

with limits and possibilities as defined by context is one of the characteristics of

effective leadership. MacTaggart (2007a) makes this point repeatedly in discussing institutions that began their academic turnarounds by becoming transparent

about their often-precarious financial positions.

Strategic Priorities

In an environment in which resources for higher education have become

perpetually strained and erratic, each institution will also have to reconfigure

continuously the relationships between its resources and its goals. As a matter

of course, institutions will use their strategy processes to redefine many of the

assumptions about what programs they offer, to whom, and how. The criteria

for priorities in the operating budget will have to become more transparently

and consistently strategic. For some time now, collegiate institutions have used 

212 Strategic Leadership

criteria, often tacitly, that weigh programs in terms of variables such as (1) quality,

(2) centrality, (3) demand, and (4) cost (Dill 1997, Ferren and Stanton 2004).

The more systematic use of criteria of this kind should become an explicit part

of strategic plans and their implementation. They have to become the constant

canons of decision making that keep an institution in strategic balance both

within itself and with the environmental forces that affect it. In developing a

useful series of detailed procedures to achieve ongoing strategic balance, Robert

Dickeson notes that "Balance can be defined as 'bringing into proper proportion,'

and such is the nature of the ultimate task of institutional leadership" (1999,

121). The effort to think and act responsively and responsibly in all aspects of

decision making, from the cost-effective design of each course and program to

the best combination of all programs, has to become a new center of strategic

gravity.

Selective Excellence at Yale University

An example will help to illustrate these points. Although institutions often

have used phrases like "selective excellence" to describe their efforts to target

their resources, their decisions have not always produced either excellence or

clarity. Does selective excellence mean that we will be good at some things and

mediocre at others, or just what? In describing Yale's University's future several

years in advance of its three hundredth anniversary, President Richard Levin

offered an illuminating strategic interpretation of the phrase. Yale, he said, would

strive for excellence in everything it does while concentrating on its demonstrated

strengths. In some fields, like the humanities and the arts, Yale could aspire to

comprehensive excellence across most specialties. In other fields, however, such as

the physical sciences and engineering, it would have to choose several specialties

and concentrate its resources on a few distinguished faculty groups. "The range

of human knowledge is so vast and so rich in variation that not even a great university can aspire to comprehensive coverage of every subject worthy of study"

(Levin 1996, 10).

The special features of strategic thinking are placed in sharp relief in financial

decisions. The analytical, integrative, and systemic characteristics of strategy as a

discipline have to confront the continual tendency to think of budgets in strictly

operational or political terms. Lacking a strategic perspective, financial decisions

are driven by a grab bag of urgencies. With effective strategic thinking comes the

ability to integrate purposes and meanings with facts and numbers. Either annual

budgets are integrated into strategic priorities and plans, or the institution loses

its purposefulness. Since leadership is all about purpose, it has to make its guiding

presence known in responsible and coherent financial decisions.

Financial Equilibrium

A strategic orientation offers not only a framework for thinking about financial

issues, but it insists on content as well. One of the goals of an effective strategy 

Strategic Leadership in Context 213

is the achievement of long-term financial stability for the organization. For most

colleges and universities, this means achieving financial equilibrium, the characteristics of which can most easily be illustrated for independent colleges and

universities but that increasingly have direct parallels at state-sponsored institutions as well. Being in equilibrium involves (1) maintaining a balanced operating

budget; (2) keeping the rates of increase in expenditures and in revenues in line

with one another while accounting for discounts in financial aid; (3) making

annual provisions for the depreciation of the physical plant and equipment that

should eventually reach 2 percent of replacement value; (4) creating annual budgetary flexibility by building in contingencies for enrollment variations and other

factors, and using any proceeds to create funds for new initiatives and reserves up

to designated levels; and (5) safeguarding the purchasing power of the endowment

while providing for a steadily enlarging stream of endowment income.

Financial equilibrium sets a rigorous standard that many institutions can only

aspire to as a model. Nonetheless, the concept illustrates the structural depths

that strategy must reach in order to be an effective method of leadership. To

achieve equilibrium, all the options and tools of policy and decision making are

on the table within a long-term horizon of aspiration. Every choice and issue, from

increasing tuition to the effectiveness of the financial leadership of the president

and board, are part of the strategic equation of financial equilibrium.

The task is to build a financial engine that can meet the test of sustainability

by operating in perpetuity at the highest levels of effectiveness and efficiency.

The engine will always need more fuel, but it has to be built so that it can operate

under adverse conditions, switch to resilient strategies when fuel supplies run low,

and continuously replenish some of its own resources from within. From a strategic

perspective, the goal is constant: to create a financially self-renewing organization

that is able to dominate its environment by exercising choice about its future.

Affordability: Hitting the Wall

As our environmental scan has suggested, the challenge of creating financial

equilibrium has intensified for almost all institutions over the past decade because

of structural shifts in the affordability of higher education. Strategic thinking and

the goal of financial sustainability are strict taskmasters in the current environment. Years of tuition increases beyond rates of inflation have lifted college prices

well beyond the growth in average family incomes. The average price for room,

board, and tuition at major private universities in 2007 was only a few thousand

dollars less than the median family income before taxes. Many public universities

face parallel challenges as they cope with declining state subsidies from an incoherent trend toward privatization that results in escalating tuition charges.

Colleges have responded by discounting their charges based on need and merit

aid, creating a vicious fiscal cycle in which higher charges produce lower marginal

new revenues as more and more families become eligible for discounts. As a result,

countless colleges have begun to "hit the wall" financially because the price of 

214 Strategic Leadership

tuition has reached a structural limit in families' financial capacities. If the trends

continue, it is just a matter of time before students from all but the top 5 percent

in family income will receive ever-enlarging discounts, progressively diminishing

net tuition income and slowing starving many institutions.

Many institutions with the right locations, programs, and innovative capacity

have responded strategically and creatively to the new limits by finding new

revenue streams that build on existing administrative and faculty overhead.

They create professionally oriented graduate programs, open centers for adult

education around the region, and expand offerings and enrollment in low-cost

fields with a practical turn, often using distance learning to expand their reach.

In many cases, these programs produce income on which the academic core of

the institution has come to depend, even as the core itself shrinks in size. The

situation is not unlike the patterns in large research universities, where undergraduate tuition, research overhead, and programs with high net revenues fund

the research and teaching in the arts and the humanities (cf. Zemsky, Wegner,

and Massy 2005).

In some cases, however, the new financial engine will not be sustainable,

since it is subject to intense competition from other institutions and low-cost

educational providers, and rapid shifts in demographic and economic trends.

Strategic leadership forces these issues into the open and tests financial models

for their staying power and durability. The "brutal truths" and structural vulnerabilities have to be confronted before the best options can be chosen. It will take

changes in structural elements, not just budget reallocations, to address these

issues. Options such as the three-year degree, collaborations between community

colleges and four-year institutions, alternating work and study programs, new

educational services for a growing retirement population, and more educational

alliances with organizations in workforce education and management development are examples that change the financial model in more structural terms. In

addition, the ever-present need for new capital to initiate and sustain programs

and scholarship budgets has to be filled through large doses of philanthropy,

which brings us to our next topic.

FUND-RAISING

No matter how successfully a campus implements a system of strategic priorities to manage its expenditures, it will constantly need to enlarge its resources.

Inflationary pressures in salaries and benefits can only increase over time, and cost

increases for facilities and financial aid are inexorable, especially in the highly

competitive world we live in today.

As new strategic needs and goals are developed and approved, they will always

require funding. When these priorities are formulated according to the disciplined

processes of strategic planning, they connect directly to the institution's capacities

to generate large sums of capital and operating funds from sponsors and donors.

This capacity is a defining element in the institution's strategic position and 

Strategic Leadership in Context 215

aspirations, and both public and independent colleges and universities increasingly

need to make it a core competency.

Gift Capacity

One of the most critical strategic indicators of an institution's ability to meet its

goals is its capacity to generate gift and grant income. Consider, for instance, the

amount of gift and grant revenues for all purposes (excluding contract research)

per student that an institution receives per year over a ten-year period compared

with a group of similar institutions. If the institution cannot generate comparable

cash gifts per student, over time it will eventually lose its competitive position

unless it can generate resources from other sources, such as tuition, the management of physical assets, or endowment returns (or state subsidies for public

institutions.)

Assume that institution A, with 3,000 students and a moderate level of gift

capacity, receives $5,000 per year per student for ten years, or $15,000,000 annually to total $150 million for the decade. Compare those figures with those of

institution B, which also enrolls 3,000 students but has a superior gift capability of

$15,000 per student annually. These projections are based on actual gifts received

by twelve colleges and universities from 1998 to 2001 (University of Richmond

2003). Over the course of the decade, institution B receives $45 million annually

and $450 million in total. Unless balanced by other sources, institution B has a

$300 million resource advantage over institution A, and the differences will only

increase over time. Gift and grant income obviously influences decisively the

most fundamental form of strategic and competitive capacity, which is the ability

to generate resources.

Telling the Story

Strategy sets the fundraising agenda in a variety of ways. It helps to sort out

projects that are candidates for support from different sources, such as government, corporations, foundations, alumni, and major donors. In doing so, it also

differentiates the organization's capacities in staff and expertise to be successful in these different domains. Most importantly, the strategy offers a systematic

rationale for the programs that the institution intends to support. The strategy

document should pass into the hands of the development staff and be regarded as

a storehouse of ideas that help to frame and even to compose a large number of

proposals for support.

Often the completion of an intensive strategy process can and should be timed

to coincide with the planning of a capital campaign or similar long-term development program. As this occurs, a well-crafted planning document offers the central

arguments and defines the major elements of a case statement. Donors want to

hear cogent reasons why the projects they are asked to support really matter in

setting the course for the future. A good strategic plan shows precisely how the 

216 Strategic Leadership

project will make a difference both in itself and in the synergies that it will create

to fulfill the institution's larger vision.

Charitable giving depends on many things, including good ideas, reliable information, personal relationships, and a well-organized staff, as well as a motivated

group of volunteers. But it is also driven by the values that people claim and the

causes in which they believe. The pride and loyalty of friends, trustees, and former

students are strategic assets that have to be galvanized into personal financial support and a commitment to secure contributions from others. When an organization integrates its story and vision into a persuasive strategic argument, it creates a

powerful source of motivation. An elegant strategy can inspire generosity, both by

persuading the mind and lifting the spirit. It represents a form of personal address

to all those who participate in the organization's narrative of identity and believe

in the values on which it rests. It calls on them to take responsibility for the wellbeing of an organization that has been entwined in their lives and that serves

vital human needs. Knowing and telling the story are among the central tasks of

strategic leadership in the advancement work of colleges and universities.

Strategy as Conceptual and Integrative Leadership

I have argued that there is more to a strategy process than meets the eye. Even

when it may not be conscious of its own depths and possibilities, strategic thinking embraces immediate concerns but reaches beyond them. As it deals with

specific issues and decisions, strategy also carries presuppositions, forges connections, and builds a foundation for action that has wide significance as a form of

leadership. We have traced these dimensions of leadership in the establishment

of a contextual mind-set for considering academic decisions and as integrated

forms of reflection that fuse the quantitative and qualitative dimensions of issues.

At critical points we also have found that strategy becomes leadership as it offers

unifying conceptual perspectives that provide resources for the development of

educational programs and practices.

Strategy as leadership also creates a disposition to connect decision making

to action, because it reveals the systemic relationships among various projects

and programs. The cycles of connection tie various academic and administrative

strategies and actions to one another, showing patterns of interdependence that

operational thinking alone does not perceive. Through the goals that define

strategic initiatives, a sense of possibility is given form, and motivation is made

concrete. As information is made transparent and hard choices appear in every

priority, strategy becomes credible. For all those reasons, it is appropriate to designate strategy an applied discipline of reciprocal leadership. If it is to fulfill this

demanding possibility, it must be able not only to make decisions, but to execute

them. So now we turn to the agenda for the implementation of strategy.