A Strategic Planning Primer for Higher Education

A Strategic Planning Primer for Higher Education
This article provides an overview of the strategic planning process. It is intended to help
you understand the concept of strategic planning, the need for strategy in higher education, and
the dynamics of the university-based strategic planning. It includes a brief history of strategic
planning, emerging challenges in higher education, basic models and steps of a strategic
planning process, adapting strategic planning to unique needs of higher education, and a look
into the strategic planning at the California State University system. A glossary of terms and an
annotated bibliography are included.
By Alexandra L. Lerner, Research Associate. College of Business Administration and
Economics, California State University, Northridge. July 1999.
Economic projections available on this site offer an invaluable source of information for
university-based strategic planning. This site provides data for studying changes in the external
environment, setting empirically based goals related to the labor market, and examining an
individual campus’s position in relation to entire higher education sector in the state.
You may scroll down the article or click on one of the following:
Why Higher Education Needs Strategic Planning
Brief History of Strategic Planning
Steps in a Strategic Planning Process and a Strategic Planning Process Model
Unique Aspects of Strategic Planning in Higher Education
Strategic Planning at CSU
Limitations
Glossary of Terms
Basic Models
Annotated Bibliography
References
You may click here for CSUN’s Strategic Planning website

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Why Higher Education Needs Strategic Planning
Universities are driven to engage in a strategic planning process by a variety of forces. These
include: increasing demand for higher education concurrent with a decline in government
funding, changing student demographics, and a need to compete with the emerging models of
higher education while keeping the essence of a traditional comprehensive university. A
strategic planning process can help prepare a university to face these emerging challenges.
According to Benjamin & Carroll (1998, p.3), “if current trends continue, more than one-
third of the Californians seeking to enroll in ”a state university “will be unable to do so by the
year 2015.” Consequently, to avoid such outcomes, universities need to “make major structural
changes in their decision-making systems … and reallocate scarce resources” (Benjamin &
Carroll, 1998, p.21). Universities should also “pursue greater mission differentiation to
streamline their services and better respond to the changing needs of their constituencies”
(Benjamin & Carroll, 1998, p. 22-23). Strategic planning can aid the university in accomplishing
these tasks.
CHALLENGES FACING CALIFORNIA HIGHER EDUCATION
Recent years have brought many changes to the landscape of California’s higher education.
Following is a brief description of these challenges.
Decrease in state government funding
Public universities’ share of the state budget is plummeting; according to David Breneman, it
will decline to 1% in 2002 (from 12% in 1994). At the same time, according to Benjamin &
Carroll (1998) the operating costs per student in higher education are rising.
Increase in demand for higher education
Demand for higher education is expected to increase sharply in the next decade. According
to former CSU chancellor Barry Munitz, university enrollment in California will increase to 2.7
million in 2010, a 50% increase over 1.8 million in 1994. For CSU, this translates into an
additional 100,000 full-time equivalent students (FTE) annually by 2010 (Cornerstones,
appendix, p.2). In addition to the expected population growth, the proportion of the population
that will attend universities will increase. According to Benjamin & Carroll (1998, p. 9), “only
college graduates will be able to hold their own economically” by 2015. As more and more
people recognize that a college degree is essential to their economic well being, demand for
higher education will increase.
Changing demographics
Students’ demographic makeup is changing. As the number of Latino and Asian students
increases over the next decade, the universities will not have a single racial “majority” group. By
2005 about half of the entering class of students will come from non-“Anglo-white” families. In
addition, the average age of the student population will increase, as more “older” students return
to universities to get undergraduate degrees. Seeking “the best conditions for success of all its

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diverse students,” universities need to provide education that will allow graduates to “fully
participate in a diverse society committed to democratic values” (Cornerstones, appendix, p 3).
New models of higher education
New models of providing higher education have emerged in recent years. According to some
researchers, a gap between what the public wants and what traditional universities provide is
growing (Rowley, Lujan, & Dolence, 1997). Changes in the educational needs (i.e. a need for
more specific, applied education), unmet by the existing system of higher education, have
prompted emergence of for-profit, “convenience” universities, such as the University of Phoenix
and National University. Adapting to the needs of the consumer-driven market (Traub, 1997),
they view the student as a customer, target specific functions (based on the market need), and
offer schedules convenient for students. Thus “traditional” universities must find ways to deal
with this new competition.
Keeping elements of a “traditional” model
“Universities can’t move completely away from a provider-driven model to a consumer-
driven form of higher education. … The quest for new knowledge, the analysis of theories and
practices, and the free exchange of ideas would suffer if colleges and universities only offered
what was popular” (Rowley, Lujan, & Dolence, 1997, p. 54). Eliminating disciplines because
they are currently not in demand is contrary to the mission of a comprehensive university. Yet to
some degree all campuses must consider student preferences for applied education and the larger
labor market.
Lack of consensus in state government
The government is debating the purposes of higher education and who should have access to
it. At the same time, universities, and particularly the CSU, are challenged to meet their mission
to provide access and affordability, ensure quality through maximum attention to the teaching
and learning process, and provide evidence for their results (Cornerstones, appendix, p. 3-4).
Economic transformation
“California’s economy has undergone a profound transformation in the last two decades.”
The major economic growth areas, high-tech and high-tech based industries, will employ well-
educated individuals, able to move easily among careers and employers. Californians, who lack
adequate education and competencies useful across career lines, especially those without at least
a college degree, will be at a disadvantage, in terms of employment opportunities, earning
capacity, and higher unemployment rates (Cornerstones, appendix, p. 2).
Click here for Cornerstones Report, Appendix

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NEED FOR STRATEGIC PLANNING IN HIGHER EDUCATION
Strategic planning is one of the major steps the universities can take to address these
challenges. Strategy is a tool for the university to find its competitive advantage and place
within the environment.
California’s universities must bring about the needed institutional redesign and devise an
effective strategic plan for developing California’s human resources. By pursuing a greater
mission differentiation and reallocation of resources they will better respond to the changing
needs of their constituencies (Benjamin & Carroll, 1998).
The present lack of effective strategic planning has lead to dire predictions from many
observers. According to Benjamin & Carroll (1998, p.1), “the present course of higher
education in the state – in which student demand, tuition, and costs are rising much faster than
public funding - is unsustainable. Unless significant steps are taken to address the situation,
hundreds of thousands of Californians will be denied access to higher education within the next
20 years.” “That is a serious, sobering, economic, political, and social catastrophe, and there is
nothing in the framework of a current situation that is likely to prevent that from occurring”
(Breneman, 1995).
“Institutions of higher education that do not rethink their roles, responsibilities, and structures
… can expect a very difficult time in the next decade and the next generation. Some will not
survive. Most will be expected to do much more with far less” (Glassman & Rossy, n.d.).
BENEFITS OF STRATEGIC PLANNING
Engaging in a strategic planning process benefits universities in a variety of ways.
Strategic planning:
• Creates a framework for determining the direction a university should take to achieve its
desired future,
• Provides a framework for achieving competitive advantage,
• Allows all university constituencies to participate and work together towards accomplishing
goals,
• “Raises the vision of all key participants, encouraging them to reflect creatively on the
strategic direction” of the university (Hax & Majluf, 1996, p. 32),
• Allows the dialogue between the participants improving understanding of the organization’s
vision, and fostering a sense of ownership of the strategic plan, and belonging to the
organization,
• Aims to align the university with its environment,
• Allows the university to set priorities.
Please click here for a complete list of References

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Brief History of Strategic Planning
MILITARY ROOTS
The history of strategic planning begins in the military. According to Webster’s New World
Dictionary, strategy is “the science of planning and directing large-scale military operations, of
maneuvering forces into the most advantageous position prior to actual engagement with the
enemy” (Guralnic, 1986). Although our understanding of strategy as applied in management has
been transformed, one element remains key: aim to achieve competitive advantage.
Taking its name and roots from the military model, early models of formal strategic planning
“reflected the hierarchical values and linear systems of traditional organizations. Undertaken by
elite planning function at the top of the organization, its structure was highly vertical and time-
bound. A certain period would be set aside to analyze the situation and decide on a course of
action. This would result in a formal document. Once this was done, the actual work of
implementation - which was considered a separate, discrete process - could begin” (Wall & Wall,
1995).
Although individual definitions of strategy vary between authors, traditionally, theorists have
considered planning an essential part of organizational strategy. For a comprehensive definition
of strategy, please refer to the Glossary of Terms.
BUSINESS
Strategic planning in organizations originated in the 1950s and was very popular and
widespread between mid-1960s to mid-1970s, when then people believed it was the answer for
all problems, and corporate America was “obsessed” with strategic planning. Following that
“boom” strategic planning was cast aside and abandoned for over a decade. The 1990s brought
the revival of strategic planning as a “process with particular benefits in particular contexts”
(Mintzberg, 1994).
Here is a brief account of several generations of strategic planning. SWOT analysis model
dominated strategic planning of the 1950s. “The 1960s brought qualitative and quantitative
models of strategy. During the early 1980s, the shareholder value model and the Porter model
became the standard. The rest of the 1980s was dictated by strategic intent and core
competencies, and market-focused organizations. Finally, business transformation became de
rigueur in the 1990s” (Gouillart, 1995).
Subsequent newer models of strategic planning were focused on adaptability to change,
flexibility, and importance of strategic thinking and organizational learning. “Strategic agility”
is becoming more important that the strategy itself, because the organization’s ability to succeed
“has more to do with its ability to transform itself, continuously, than whether it has the right
strategy. Being strategically agile enables organizations to transform their strategy depending on
the changes in their environment” (Gouillart, 1995).

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HIGHER EDUCATION
During the past decade institutions of higher education had to confront numerous changes in
their external and internal environment, and respond to emerging challenges, such as decreasing
financial support, rapid technological advances, changing demographics, and outdated academic
programs. As a result, many universities engaged in strategic planning as means to “make
beneficial, strategic changes … to adapt to the rapidly shifting environment” (Rowley, Lujan, &
Dolence, 1997).
Overall, strategic planning at universities has been only moderately successful, as only few
were able to achieve significantly successful results and “transformed themselves dramatically.
Others have been able to make important changes in parts of their operations. … But many
institutions have stumbled, dissolved into controversy, or lost their nerve” (Rowley, Lujan, &
Dolence, 1997). Although several authors have endeavored to explain successes and failures of
strategic planning in higher education, scholars differ in their opinions. As a result, there is no
consensus (or clarity) on major determinants of strategic planning’s success in universities.
Please click here for a complete list of References

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Steps in a Strategic Planning Process
Although every strategic planning process is uniquely designed to fit the specific needs of a
particular university, every successful “model” includes most of these steps.
The university begins by identifying its vision and mission. Once these are clearly defined, it
moves on to a series of analyses, including external, internal, gap, and benchmarking, which
provide a context for developing organization’s strategic issues. Strategic programming follows
and the organization develops specific strategies including strategic goals, action plans, and
tactics. Emergent strategies evolve, challenging the intended tactics, and altering the realized
strategy. Periodically, the organization evaluates its strategies and reviews its strategic plan,
considering emergent strategies and evolving changes. It usually takes several years before
strategic planning becomes institutionalized and organizations learn to think strategically. The
Strategic Planning Process graph at the end of this section provides a graphical representation
of these steps.
Note: Here we briefly review steps essential to success of any strategic planning process. For
a more detailed description of strategic planning terminology, please refer to the Glossary
of Terms.
VISION AND MISSION
Identification of the organization’s vision and mission is the first step of any strategic
planning process. The university’s vision sets out the reasons for organization’s existence and
the “ideal” state that the organization aims to achieve; the mission identifies major goals and
performance objectives. Both are defined within the framework of the university’s philosophy,
and are used as a context for development and evaluation of intended and emergent strategies.
One can not overemphasize the importance of a clear vision and mission; none of the subsequent
steps will matter if the organization is not certain where it is headed.
ENVIRONMENTAL SCAN
Once the vision and mission are clearly identified, the university must analyze its external
and internal environment. The environmental scan, performed within the frameworks of the Five
Forces Model and SWOT, analyzes information about organization’s external environment
(economic, social, demographic, political, legal, technological, and international factors), the
industry, and internal organizational factors. The labor market projections provided on this site
are most valuable for the environmental scan. Please refer to the brief description of the Basic
Models for more information.
GAP ANALYSIS
Organizations evaluate the difference between their current position and desired future
through gap analysis. As a result, a university can develop specific strategies and allocate

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resources to close the gap (CSUN strategic planning leadership retreat, April 1997), and achieve
its desired state.
BENCHMARKING
Measuring and comparing the university’s operations, practices, and performance against
others is useful for identifying "best" practices. Through an ongoing systematic benchmarking
process campuses find a reference point for setting their own goals and targets.
STRATEGIC ISSUES
University determines its strategic issues based on (and consistent with) its vision and
mission, within the framework of environmental and other analyses. Strategic issues are the
fundamental issues the organization has to address to achieve its mission and move towards its
desired future.
STRATEGIC PROGRAMMING
To address strategic issues and develop deliberate strategies for achieving their mission,
universities set strategic goals, action plans, and tactics during the strategic programming stage.
Strategic goals are the milestones the campus aims to achieve that evolve from the strategic
issues. The SMART goals model is essential to setting meaningful goals. Smart goals are
specific, measurable, agreed upon, realistic, and time/cost bound.
“Action plans … define how we get to where we want to go,” the steps required to reach our
strategic goals.
Tactics are specific actions used to achieve the strategic goals and implement the strategic
plans.
EMERGENT STRATEGIES
Unpredicted and unintended events frequently occur that differ from the university’s
intended strategies, and the university must respond. Emergent strategy is “a pattern, a
consistency of behavior over time,” “a realized pattern [that] was not expressly intended” in the
original planning of strategy. It results from a series of actions converging into a consistent
pattern (Mintzberg, 1994, p. 23-25). Please refer to the Glossary of Terms for a more complete
definition of emergent strategies.
EVALUATION OF STRATEGY
Periodic evaluations of strategies, tactics, and action programs are essential to assessing
success of the strategic planning process. It is important to measure performance at least
annually (but preferably more often), to evaluate the effect of specific actions on long-term
results and on the organization’s vision and mission (Rowley, Lujan, & Dolence, 1997). The
organization should measure current performance against previously set expectations, and
consider any changes or events that may have impacted the desired course of actions.

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REVIEW OF THE STRATEGIC PLAN
After assessing the progress of the strategic planning process, the university needs to review
the strategic plan, make necessary changes, and adjust its course based on these evaluations. The
revised plan must take into consideration emergent strategies, and changes affecting the
organization’s intended course.
STRATEGIC THINKING
With time, people in the university routinely make their decisions within the framework of
the organization’s strategic vision and mission. Strategic planning becomes an organizational
norm, deeply embedded within the organization’s decision-making process, and participants
learn to think strategically as part of their regular daily activities (Lerner, 1999). Strategic
thinking involves “arraying options through a process of opening up institutional thinking to a
range of alternatives and decisions that identify the best fit between the institution, its resources,
and the environment” (Rowley, Lujan, & Dolence, 1997, p. 15). See Glossary of Terms for
more about strategic thinking.
Please click here for a complete list of References

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Unique Aspects of Strategic Planning in Higher Education
The following section discusses unique aspects of strategic planning at universities.
DIFFERENCES BETWEEN A BUSINESS MODEL AND A UNIVERSITY MODEL
To ensure success of the strategic planning effort, universities need to adjust the “business
strategy model” to higher education. As discussed below, university-based strategic planning
differs from the business model in several specific ways. By recognizing these differences and
changing the traditional model accordingly, universities can increase understanding of, and
participation in the strategy process throughout its constituencies.
Time frame
In the “business world,” strategic planning model timeframe is 2 to 3 years; at universities, it
usually takes 5 or more years.
Consensus
The business model is generally top down, although it is still necessary to get the support and
involvement of people in the company. Because of the importance of shared governance in
university management, faculty’s involvement is key, and building consensus right from the
beginning becomes essential for university – based strategic planning. University faculty can’t be
“directed” (i.e., command authority) in the same way as employees in a company, because
“centralized power” at universities is not very strong.
Value system
Universities’ guiding principle - long-term investment in educating people - is different from
business’ bottom line approach. Differences in the value system require a different approach to
strategic planning at universities.
Customers
Universities do not have a clearly defined customer; students, employers, and the community
may all be considered “customers.” As a result, defining goals and measuring effectiveness
consistently with the university’s mission is problematic.
Context
Change is especially difficult to accept at the universities, because by nature universities are
about preservation.
THE PROCESS OF STRATEGIC PLANNING
The process itself is important to opening the lines of communications, and engaging faculty
and staff in the dialogue. The fact that we engage in “strategic thinking” is more important than
the final product – the plan. The decision-makers can make choices in the context of their

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Document Outline

• Introduction
• Why Higher Education Needs Strategic Planning
• Brief History of Strategic Planning
• Steps in a Strategic Planning Process and a Strategic Planning Process Model
• Unique Aspects of Strategic Planning in Higher Education
• Strategic Planning at CSU
• Limitations
• Glossary of Terms
• Basic Models
• Annotated Bibliography
• References

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