Advice & News

October 15, 2020

The Necessity and Mechanics of Institutional Change


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Stories about falling college enrollments and the closing of small private colleges seem to be everywhere. The number of potential new college freshmen in the Northeast and Mid-West is projected to decline by over 20 percent over the next five or six years. The causes for this decline, beyond the effects of COVID-19, are falling birthrates, reduced numbers of international students, and economic pressures on families, among other factors. For tuition-dependent campuses, especially small private colleges that are heavily dependent on tuition, which are not well known beyond their immediate region, and have small endowments, this projection should be a call for urgent action.

Unfortunately, many trustees are not knowledgeable about higher education. Under 10 percent have any professional experience in the field. Who can imagine a major bank or Silicon Valley firm declaring that 90 percent of their directors know little about the goals, strategies, and competitive environment of their business? Yet, this is the case with colleges and universities. Without adequate background, trustees think they can cut their way out of trouble by replacing full-time faculty with part-timers and substituting technology for teachers. Other trustees and presidents think they can fundraise their way to the future, thus taking their attention away from the need for changes in how institutions operate.

Many staff members who understand the challenges are isolated from decision-making and many faculty members seem unaware of the urgency of the situation because critical information is not shared. As a consequence, leaders and faculty members do not seem to appreciate the need for new strategies, including the need for dramatic changes in the cost structure of their institutions and even the possibility of a merger with a partner institution.

Major elements of the cost structure include the amount of teaching by full-time faculty, tuition discounting as a form of financial aid, debt service on capital projects, and the scale and scope of administrative operations. A test of the economic model is to examine the alignment of mission, goals, strategies, resource allocation, rewards, and results. For example, if the goal is to engage students in a transformational education experience but under 50 percent of students graduate in 5 or 6 years, there is a lack of alignment between mission and results.

Given these circumstances, the president and the senior team must master the methods of institutional change and understand the "points of leverage" for achieving it. Only then can they assure the alignment of mission, goals, strategies, resource allocation, rewards, and results. And they must do this in ways that not only respect institutional heritage and culture but also find ways to make the campus more welcoming of change. After all, as Peter Drucker said, "Culture eats strategy for breakfast."

One of the more popular models for shaping institutional change was developed by McKinsey, a consultancy.

The McKinsey "7S" Model specifies the following elements.

  1. Strategy: Goals and rationale must be clear in order to follow and evaluate progress.
  2. Structure: The campus must be informed and organized for achievement.
  3. Systems: Day-to-day tasks must be accomplished even as change is implemented; communication must be constant; support must be available. The metrics for monitoring progress must be known.
  4. Shared values: Core values must be acknowledged; organizational culture must be understood; even small "wins" should be shared and celebrated.
  5. Style: Attention must be given to the manner of implementation; engage the community in it.
  6. Staff: Faculty, staff and students, alumni, and neighbors. All stakeholders are important. They must be included in planning and informed about problems as well as progress.
  7. Skills: The competencies needed for implementing change must be available or developed; training may be needed. Consultants may be useful.

The points of leverage to support the change agenda include both actions and occasions that can be used to support the attainment of strategic goals. They are available on every campus and can be used to emphasize the mission, values, and goals. They help reinforce the need for change; highlight the alignment of mission, results, and the steps in between; and recognize those who contribute to progress. Is realignment called for? In what areas can resources be reallocated from lower priority to higher priority activities?

Consider the following points of leverage:

  • The mission statement -- the statement of purpose -- the touchstone for goals, plans and monitoring, and results.
  • Board of Trustees' public agendas that can be used to highlight plans and actions.
  • The strategic plan, the roadmap to change.
  • Regional accreditation or programmatic self-studies that provide an opportunity to reflect on conditions and the commitment to change.
  • Orientation and training of trustees, administrators, faculty, and others: preparing for commitment; local, regional, and national knowledge; and action.
  • Board By-laws provide the framework for board responsibilities and actions.
  • The Campus or Faculty "Handbook" includes the policies and protocols for the campus and is another means of reinforcing shared values.
  • Full faculty and all-campus meetings provide opportunities to share goals, ideas, imperatives, means, and results.
  • Annual academic program and administrative unit reviews can highlight strengths and needs.
  • Annual goals and objectives for senior officers, deans, and their direct reports.
  • Annual budget requests and allocations for continuing and new initiatives.
  • Staffing decisions at all levels should be made with priorities in mind.
  • Funds for faculty, curriculum, and program development as related to priorities.
  • Funds for administrative staff development and recognition.
  • Annual awards, rewards, and other forms of recognition for meritorious service. These include appointments, reappointments, tenure, promotion, and compensation decisions.
  • Articulation agreements with community colleges and professional and graduate programs are another opportunity to advance goals and results.
  • Fundraising materials can tell the story of institutional growth during challenging times.
  • Meetings with area employers to learn about needs and opportunities.
  • A foundation grant to support the change agenda.
  • Orientation activities for new employees and students, and...
  • Other forms of public recognition for people and efforts.
Change is difficult. Nevertheless, with declining numbers of potential students due to demographics, immigration policy, visa restrictions, developments in other countries, and economics, institutional leaders must find the right balance of revenues and expenses. They must reach the optimal alignment of mission and results. These conditions require thoughtful but urgent action. Venerable institutions either are closing or at risk of closing. The tools described above can help manage necessary changes and assist in assuring needed progress.