Focused on industry wide macro issues that can build up an organization’s value and help create competitive advantage, strategic thinking is the backbone to an organization moving forward (Nelson, 2014). Standing still and not moving with the market and continuing to change and innovate is the death of any business. Customer preference, culture, the market – the world is constantly changing and organizations need to change as grow as a result of their strategic planning. Rooting back to military tactics – scholars have been able to find the beginnings of strategic thinking from the “objectives, missions, strengths and weaknesses” utilized in battlefield strategy. Like a business’s success, military battles were not won based on chance and luck alone (Baloch, n.d.). Looking at what exactly strategic thinking is and how it can be implemented in higher education can help colleges and universities manage and organization their futures. The same strategies originally founded in military tactics can be modified and implanted into the higher education industry in a way to help schools move forward in a tactical way.
Strategic thinking is a strategy described as “a way in which people in an organization think about, assess, view, and create the future for themselves and their associates” (Baloch, n.d). The world is becoming even more accessible and global, making it necessary for institutions to utilize strategic thinking. Competition is increasing due the more global word, with the introduction of online schooling there are more options than ever and geography is less of a constraint for student’s looking to increase their education. Many higher education organizations would even consider the skill of strategic thinking a needed competency for their leaders as today’s world requires colleges and universities to analyze and strategize more than ever before. While it’s absolutely necessary for leaders in higher education to be skilled in strategic thinking, anyone can be a strategic thinker – it’s not a practice singled out only for CEO’s and company presidents. Examining open ended questions, capturing ideas for future improvement and focusing on how to implement these ideas into reality are all ways of practicing strategic thinking (Keegan, 2017). Those at the entry level and middle management staff positions as well as instructors in higher education should still be analytical and practice strategic thinking for the organization as a whole to be successful. These are the positions interacting most directly with students, the customer, and will have the most beneficial ideas through strategic thinking on how to improve operations. There are many benefits to an organization by practicing strategic thinking at all levels. According to Gundy in the book Demystifying Strategy, he mentions several values created by the practice. These are:
- More effective strategic decisions that add real economic value;
- Avoiding making strategic constraints;
- Avoiding time wasted getting there;
- Avoiding unnecessary difficulties and policies;
- Influencing key stakeholders and building ownership;
- At an everyday level, going back to your strategy constantly to help resolve operational dilemmas, and this having a frame of reference;
- Greater confidence and proactivity;
- Far less anxiety about things like ‘Are we deciding to do the right things?’, Will I look silly suggesting this is an option?’ ect. (Gundy, 2012, p. 5).
The recent decline in college enrollments industry wide mean that these benefits showing the reasons why strategic thinking is necessary is more important than ever before. Looking at the benefits and how they can apply to higher education show that strategic thinking allows a college or university to embrace for their uncertain future and look at them as opportunity, create value for competitive advantage and make difficult decisions based off data and in a way that will support the organization’s mission, vision and value.
When the economy takes a negative turn, such as the recession in 2008 – it’s higher education’s time to grow. College enrollment rates tend to rise, especially among working adults, when unemployment rates are up as individuals go back to school to better their resumes when they do not have employment opportunities (Long, 2014). Since the economy has rebounded in recent years, undergraduate enrollment in American colleges has been on a downward trend (Nadworny, 2018). In addition, cultural shifts that make vocational schooling or delaying school more socially acceptable and the rising cost of college tuition making it unaffordable even with financial aid also strain college recruitment strategies to bring in new students. Declining enrollment due to the bounce back in the economy and other factors means that strategic thinking is a growing necessity to keeping colleges open. Someone who is thinking strategically will understand the necessity in this uncertainty of sufficient enrollments and will try and turn the unknown future into opportunities to grow and thrive in their industry (Nordmeyer, 2017). Changes and threats, both internal and external can lead to fear and uncertainty within an organization. How this is handled is what separates strategic thinkers from those just trying to float and stay stagnant. The way a college has recruited before may not be working anymore, even if it’s what they’ve always done. Pressure to keep the budget balanced can put stress on staff to think creatively and outside of the box with strategic thinking for fresh, new ideas that will help them move forward. By embracing these unknowns in the market, through practicing strategic thinking, these threats can be turned into a change to change, grow and enter new markets and strategies. Strategic thinking allows the organization to ponder how this opportunity for growth can be turned in a positive and align the company’s action plan with market trends happening in the industry while keeping true to the mission, vision and values (Nordmeyer, 2017).
Responding to the unknown may mean having to make big leaps that may or may not work out and analyzing all aspects of to try and decrease the risk. Management consultant, educator, and author Peter Drucker explained it best by saying, “The best way to predict the future is to create it” (Baloch, n.d.). Higher education should apply this to their own practices in recruitment and retention practices to gain and keep students engaged with the school. Embracing online and non-traditional schools with fresh recruitment approaches are all ways that colleges can use strategic thinking to work through a declining pool of prospective students.
As Michael Porter said in his “What is strategy article” this focus on separating yourself from peer groups is the focus of strategic thinking (Nelson, 2014). Creating a competitive advantage in higher education is something strategic thinkers for the school should strive to help attain for their organization. Embrace the thought of students as being paying customers and know their wants, needs, how they change and adapt and ensure that everything in your organization supports your customers in a way that is relatable but yet stands out to them in a positive manner. The article Strategic Thinking: Catalyst to Competitive Advantage describes competitive advantage as “the more competitors stake their strategic thinking upon being the lowest price producer or delivering the highest quality, the more they start to look alike in their marketplace, thus losing their competitive edge over one another. Delivering greater value maximizes higher unit prices; whereas, greater efficiency results in lower average unit costs” (Baloch, n.d.). As student’s become even more cost conscious with the rising cost of tuition, it can be hard to balance price efficiency with options offered to students in order to achieve the right equilibrium for the institution. A firm can outperform and out-distance its rivals only if it achieves competitive advantage by delivering greater value to customers or creating comparative value at a lower cost or do both. Looking at how this applies to collegiate institutions, colleges needs to set themselves apart from its peer group and find a way to continue bringing student’s in and create a sustainable competitive advantage. Their competitive advantage should set the school apart from its main competitors and draw the student’s in by showing them why they need to pick this institution over all their other options.
Businesses can use a variety of tactics in order to analyze their strengths and weaknesses in terms of competitive advantage. A SWOT analysis looks at a firm’s strengths, weaknesses, opportunities and threats. The strengths and weaknesses portion looks at the internal aspects of a organization while the opportunities and threats are external to the organization but still impact them. To maximize competitive advantage and separate from your peer group in a positive way, the organization would emphasize its strengths, maximize opportunities while trying to work through any weaknesses and planning and handling threats (Baloch, n.d.). A bit more specific than SWOT is another tool utilized by strategic thinkers – the PEST analysis. This analysis looks more at external factors than the previous SWOT strategy. This acronym stands for Political, Economic, Social and technological. This analysis allows strategic thinkers to plan on how they would react to external events impacting their organization. Once they identify any external risks or opportunities they can strike in the best interest of the organization to maximize positive outcomes and lower the risk to the business (Baloch, n.d.). The third strategy strategic thinkers will utilize is similar to the SWOT and PEST – risk analysis. Focused on external factors, the risk analysis is mostly focused on where the organization may be vulnerable to competitors. Understanding where competitors may pass up your organization is necessary is making a competitive advantage (Baloch, n.d.).
Higher education is no exception in needing these analysis strategies. What makes customers choose a school over all other competitors is their competitive advantage. Strategic thinking plays a big part in determining an institution’s competitive advantage. The advantage a company can strive for can be related to price, quality of education, networking and future opportunities available – any number of different qualities that they feel their students value and will make them choose them over their competitors. This type of purchasing decisions requires much more thought and time then when a customer decides to pick up a candy bar at the grocery store and other impulse decisions. Choosing a college can be an emotional and difficult decision. Students want to be able to relate to their school and know it is a good fit for them. The high price tag of a college education makes the decision a stressful one for students. There’s no shortage of schools to choose from – both traditional and nontraditional making it difficult to ensure that your institution stands out in a good way is necessary to make the cut for student’s with multiple options. Utilizing the SWOT, PEST and risk analysis allows higher education institutions to use strategic thinking to determine their competitive advantage over their competitors.
Every college is faced with making tough decisions on how they should stand out. Strategic thinking helps make a solid foundation for these decisions based off data and interpreting that data to learn from it and make future decisions based off it. Evaluation of data, both internal and external, means that a decision made from strategic thinking is founded in evidence evaluated to be used in the best way for the future of the organization (Page, 2012). The decisions leaders are making are both short and long term – both of which need to move the organization forward in a way supportive of its goals that aligns with its mission, vision and values. Short term goals help provide immediate solutions to a company’s problems, however, without analysis of past, current and predictive market trends and how those can form into long term goals for the organization – a business cannot make a successful strategy (Nordmeyer, 2017). Incorporating the data is the foundation but the art comes in interpreting this data and how to move forward, short and long term in the best way for the business. This type of strategy goes far beyond just a plan which just outlines the steps. For higher education institutions, data can show the type of students enrolling, the number of hours they are enrolling in and any other quantitative data that can be used for analysis and strategy. Strategic thinking takes the plan one step further and answers why it is the right decision, how it will move the business forward and analyzes all aspects of the decision (Kleinman, 2017).
Inside Higher Ed reported in 2016 that only “41% of private colleges and 29% of public colleges were meeting enrollment goals” (Pierce, 2017). Industry wide – something has got to change if colleges want to survive. Strategic thinking by looking at data science can bridge the gap into finding a competitive advantage to fight for enrollments in the coming academic years. Simply saying, “we need to be better” is not enough in strategic thinking. How colleges take the data they have available and this data to to strategize how to stand out, expand enrollments and draw prospective students to their school a is the basis of the strategic thinking in higher education requirement that needs to happen for colleges and universities to survive in this competitive market. The data collected should be analyzed to see what trends are happening both industry wide and school specific to see what has happened and to see what may be happening in the future. Using this data to strategize in alignment with the institution’s mission, vision and values ensures that not only is the strategy in line with what the institution believes, but the strategic thinking will help towards making good decisions for the institution’s future.
While the data portion of strategic thinking through data based decision making involves more science, there is also an art to strategic thinking through embracing the unknown and creating a competitive advantage. Both the science and the art must be balanced. This type of thinking requires one to assess a situation, see the big picture as well as the details that make it up and understand how and why the outcome came to be. Strategic thinking doesn’t just accept the future, it creates it. Strategic thinking by institutions of higher education allow the college or university to embrace for their uncertain future by creating opportunities, create and sustain a competitive advantage and use data collection for strategy in a way that will support the organization’s mission, vision and value. For industry wide issues such as declining enrollment from an improvement in the economy and smaller numbers of high school graduates, schools cannot afford to not fight for their future. Assessing, analyzing and creating the future is the basis of strategic thinking and will be used for the institutions that want to best combat the industry trends working against them. Strategic thinking is a proactive approach focused on analysis and creating a positive future for an organization (Baloch, n.d.). It fills in the gaps from what is thought of as a long-term unattainable dream and what is currently happening to try and get where the organization needs to go. Needed both as a departmental action and for the college or university as a whole, there is much to be gained from the practice of strategic thinking in higher education.
Strategic thinking is the basis that higher education needs to evaluate their policies and make the best decisions for the institution as a whole and the student’s moving forward. Creating more value for student’s and keeping true to the institution’s core values should one of, if the main goal for colleges and universities. In higher education, strategic thinking can be achieved by capitalizing opportunities, innovating and striving for new competitive advantages and using any and all available data to make science based decisions that are based on facts. While strategic thinking can take up a fair bit of time from the organization, the many benefits to its practice make it a worthwhile venture for colleges and universities.