Time for being Strategic: now or never
None of us has a crystal ball to foresee how the post Covid-19 future would look like for the university sector worldwide, but one thing is certain: it will not resemble the recent past, and the emerging picture will probably be bleak. And it is precisely in times of uncertainty that higher education institutions need to be more strategic than ever.
Strategy is essentially about setting organizational goals among a range of available options (business models) and charting a course of action to pursue objectives that fulfill the vision, mission and values of the organization. Many institutions will need to reexamine their mission to confirm its validity and adjust or even reformulate it as needed to face the emerging “new normality”.
The strategic review exercise should start by confirming or redefining which are the core communities the institution aims to serve, and through what programs--i which disciplines, at what levels and through which delivery modes—it can best be done. The review will need to be followed by the development of an execution plan that takes into account essential elements like people, processes, systems, technology and resource allocation. And such plan will need to be financially viable (at least in principle), with precise modeling of aspects like pricing, cohort sizes, class sizes, number of programs, proportion of online delivery, number of locations, etc., all of which will be determinant for financial success.
The current circumstances are so uniquely unusual that the strategic and tactical options available to many institutions will be far from optimal and most likely will simply help prolong some sort of survival status. Institutions will only be able to transition into a new phase, with real prospects of thriving again, when there is more clarity on what to expect of the post-crisis higher ed markets and on how university education demand will trend going forward. Afterall, this unprecedented pandemic will hit hard millions of families, severlely affecting their finances and forcing them to reallocate discretionary spending in education to satisfy other more basic and urgent needs.
With increasing financial pressure, downsizing will be a logical path for many struggling institutions, especially those in which revenues have shrunk beyond hope of short-term recovery. This will imply maintaining only those programs that are core to the institutions’ identity and mission and are deemed financially sustainable. It also means shutting down, temporarily or definitely, underperforming programs, schools, departments and campuses where declining enrollments and revenues are insufficient to cover fix costs. And worst of all, it will also mean letting go valuable faculty and administrative talent.
Bottom line: The strategic review is inevitable. I will not be easy for boards and executive teams in charge, and the resulting decisions and action plans will be painful to execute. Nevertheless, staying still to “wait and see” is not an option.
GRG Education is offering new institutional clients a free one-hour preliminary strategic consulting session via Zoom. Contact us to learn more.