Published on 2014/11/26
Lessons From a For-Profit: Strategic Planning
Strong strategic plans translate into well-thought-out tactical plans that feed into budget planning and helps keep all departments accountable and the entire institution transparent.

In this series, we’re exploring the lessons traditional institutions and successful for-profit institutions can share with each other, and in this installment we will focus on strategic planning. The darling of accreditors, in reality strategic planning in higher education, ranges from PITA (no, not the Middle-Eastern bread or the anti-meat group) to Guiding Star.

Simply put, in my experience, traditional institutions’ strategic plans are pretty much worthless, but strategic planning is essential. And in for-profit institutions, strategic planning is of limited value, but strategic plans are golden. You may want to read that again because it can be a bit confusing. It’s about process versus outcome, and the two sectors have very different takes on the subject.

Here’s how it works: in traditional institutions, there’s generally a broad governance structure that allows for input from almost every corner of the organization. This structure places emphasis on input, and we all know that the broader the input, the less focused the output. So, in the traditional setting, the process of gathering input serves to enlighten groups and individuals; to surface issues and opportunities; and to, as much as possible, get everyone on the same page. The resulting plans, however, are usually vague, difficult to execute and in need of revision before the ink dries.

On the other hand, the organizational structure of the typical successful for-profit institution is flatter, with less emphasis on extending governance across the organization and more emphasis on student and institutional success. It’s not uncommon, then, in a for-profit institution for employees to have very little, if any, input into the strategic plan, and it’s very common for those same employees to know exactly what is in their institution’s plan. Although the process is obscure, the resulting plans serve well in guiding decision making at all levels.

An example? I was involved in a site visit at a very successful for-profit school recently. When asked about the strategic plan, employees across the institution — from the business office to adjunct faculty members — could readily relate how what they did supported that plan. However, when asked what input they had had in the plan, most just gave me a blank stare. They accepted that the plan came from management and the board and didn’t expect to have an opportunity to provide input in that process.

Here’s an example of a for-profit that I believe really got it right by embracing the planning process as well as the resulting strategic plan. First, this institution has a structure in place to collect input from every employee in the organization by having sub-groups get together to create SWOT (Strengths, Weaknesses, Opportunities & Threats) analyses. These are then used by management to create an institutional SWOT. The reality is that there are dozens of these SWOTs, too many to realistically do more than inform the final document presented to the board of trustees, but the process engages everyone and leads to better focus and communications across the organization.

Management’s SWOT is translated into a strategic plan that covers the next five years and is accompanied by a one-year plan with very specific targets for success. The board then approves these plans and the organization moves on to the next phase. And here is where it gets interesting.

The approved plans are then delivered to the institution and used to develop tactical plans for the coming year. These are very specific, highly detailed action plans and every activity maps to one or more of the elements in the institutional strategic plan (a brilliant implementation of the software program TracDat manages this complex process). Next, these tactical plans are used to develop the budget for the coming year, where each tactic is funded based on its contribution to the strategic plan. Finally, every unit reports to management on both their tactical plan implementation and budget performance every quarter, and these public reports hold the units accountable and coordinates efforts across the institution. It is a thing of beauty.

Traditional institutions should use elements of the for-profit’s approach to tighten up your strategic planning processes and better integrate them with your budgeting processes to create actionable, meaningful plans. And for-profits, try taking a page out of the traditional schools’ proclivity to garner broad-based input; it will result in faculty, staff and students who feel more connected with the institution and its plans for the future.

In the next installment we’ll take a look at nimbility, starting with determining if that’s even a word.

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