Until 2020, strategy in higher education was as simple as the instructions on a bottle of shampoo: wash, rinse, repeat. Each autumn, the campus would open its doors to an incoming class of first-years, with the next year’s new batch already on the horizon. And while, in many cases, universities had to make tactical and budget adjustments to accommodate slight variations in enrolments and retention, few paid attention to longer-term, more holistic strategy.
As strategy scholars, with a focus on organisational decline and turnaround, the absence of a strategy in higher education has always confounded us. But it is especially perplexing now that the era of wash, rinse, repeat is over. As enrolments continue to decline and questions around the value of a four-year education give way to emerging alternative offerings, universities need to have a plan for how they are going to survive in the new age of competition.
When they are pressed, it becomes clear that many institutional leaders remain near fanatically attached to outdated legacy practices and are pinning their hopes on a return to pre-pandemic conditions. But perhaps this simply reflects a lack of strategy know-how that they never previously needed. So here is a very quick primer on how to get started.
Michael Porter, the renowned Harvard strategy professor, described the essence of strategy as being about performing different activities from those of rivals – or, at the very least, performing similar activities in different ways. Note: not better. Different. Too many university leaders remain steadfastly focused on “better”, thereby entering a vicious cycle of overspending on the college experience, creating “better” dorms, food, recreation facilities, sports teams and even online classes.
Uniqueness can take many forms. For example, the University of Florida has a significant competitive advantage in its location: the University of Vermont can’t replicate the Florida sun. But uniqueness is more enduring when it derives from a distinct set of reinforcing activities that makes duplication difficult. Take the University of Massachusetts Lowell, which prides itself on entrepreneurship. While many universities boast entrepreneurship programmes, UMass Lowell’s is uniquely and intricately woven into the region’s economic, technical and civic ecosystem.
This place-based advantage manifests itself in a programme called Difference Makers, involving a world-class STEM programme, several maker spaces and labs, a life sciences incubator housing almost 50 start-ups (for experiential learning), and deep ties with the surrounding Boston life science corridor. This complex web of resources, activities and relationships is reinforced daily, enabling UMass Lowell to maintain an edge in what is arguably the most competitive higher education market in the world.
It is critical to understand the only alternative to competing on uniqueness: competing on quality (see overspending, above) or price. But as price wars escalate rapidly, larger competitors often beat out smaller ones because of economies of scale and scope: just think Amazon and Walmart. And for bricks-and-mortar universities, with all their fixed costs, trying to engage in price competition with online behemoths such as Southern New Hampshire or Western Governors universities is a losing proposition.
What about the competitive advantage relating to brand? Certainly, brands play a part – but only up to a point. The staying power of an organisation’s brand depends on the successful delivery on promises made to customers. Pan Am, Kodak and Blockbuster learned this truth the hard way. In higher education, how many universities can rest on their laurels and rely on their brand for competitive advantage? Maybe 100 globally. Maybe. And then only if they can maintain their uniqueness.
As important as what an organisation does to achieve uniqueness is what it chooses not to do. Porter called these trade-offs, and they are critical in prioritising time and resources. As competition ramps up, correctly identifying which battles to fight and which to forgo will set apart winners and losers.
Five years ago, a handful of universities offered sports management programmes. Today, providers of these programmes are seemingly endless. Colleges and universities suffer from Fomo (fear of missing out), endlessly jumping on the latest curricular bandwagon just to keep pace with their competitors down the street. At best, this represents non-strategic imitation; in most cases, it releases the trapdoor to competing on price.
Cynthia Montgomery, a world-renowned strategy scholar, argues that strategy cannot be outsourced. That is true in higher education, too. Too often, the chancellor or president pushes responsibility for strategy down the hierarchy, but most provosts and deans, unless they are from a business or engineering background, are ill-suited to own strategy because their disciplines never encompassed strategic planning or implementation.
University leaders must build a strategic mindset up and down the ranks, then set goals, monitor progress and adjust the strategy accordingly. And ultimately, they need to be held accountable for success or failure.
It may take a while to build that strategic muscle. Fortunately, there are plenty of proven approaches, and just as many case studies of what to avoid. A good starting point is to ask yourself: “What do we do that is unique?”
When we ask leaders this simple question, an awkward pause often ensues. But we have learned to relish that because what follows will form the basis to the strategy – and the hope of institutional survival.
Scott Latham is associate professor at Manning School of Business, University of Massachusetts Lowell, and Michael Braun is director of employer partnerships at Accelerate Montana.
