Strategic Thinking: Not Just Preaching It, But Practicing It

StrategyLondon Business School’s Michael Hay writes in Disrupt or Be Disrupted that now more than ever, schools must develop a strategy and business model that fits what they are and what they want to be. The demands facing business schools today are varied and potent. The flatter enrollments in traditional programs, such as the MBA, and the intensified competition resulting from a proliferation of business schools and an increased presence of alternative educational options, such as MOOCs, are unlikely to subside in the foreseeable future.

Thinking strategically, however, often proves to be a rather difficult proposition for many schools. To do so requires answering the hard questions that range from determining the school’s mission and unique characteristics to considering highly practical concerns about whom the school serves, how and where are programs offered, and how the school is funded.

Strategic thinking is not about looking to copy the strategies and practices of other “top-ranked” institutions without asking, “Will this work for us?” Such casual benchmarking is in fact the exact opposite of a strategically driven approach. There is no singular way to be a successful business school.

Ironically, this central notion is precisely what business schools teach their students in strategy courses – concepts that include differentiation, value creation and competitive advantage. Put simply, these concepts must not just be preached, but also practiced by today’s schools of business.

It is true that being more strategically oriented could lead to increased specialization and niche positioning. And, this indeed holds the potential for promoting success. However, as with any strategy, there are trade-offs. At the most basic level, for example, schools also must decide whom they will not serve.

One trend toward niche differentiation has been the substantial growth and variety in degree program offerings (e.g., MS degrees, compressed formats). Such programs could indeed create uniqueness for a school in the broader education market. Moreover, recent reports from GMAC indicate that applicant demand is steady for these types of programs.

Yet, from a long-term strategic standpoint, critical questions remain to be answered. How new or unique are such programs? Do they really offer fresh curricular content, or are they simply repackaged, pre-existing coursework? What are the personal competency development implications for students in programs of shorter duration? Do employers even understand the differences across various degrees? Again, thinking strategically requires asking the tough questions.

Beyond external concerns of market demand, effective strategy requires critical self-reflection. This means schools must recognize their own financial, technological and human capital capacities (i.e., money, facilities and faculty). New programs cannot just be based on what we believe the market desires, but on what we are capable of delivering in a high-quality manner.

The imperative is this: For any management education program to provide sustainable and unique value, business schools must first understand whom they serve before deciding how best to serve them. Schools need a strategically oriented portfolio approach in which attention and resources are focused on the quality rather than the quantity of program offerings. This task is not only difficult, but also quite rare in business schools. This fact alone makes practicing strategic thinking in our own institutions a challenging but high-impact proposition.

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  1. […] A dominant emphasis on enrollments may seem innocuous to many; after all, the existence of a program is explicitly tied to student enrollment. However, maintaining enrollments represents a difficult paradox to manage when it comes to program innovation. For instance, it’s likely difficult to ascertain how closely linked program innovations are to observed changes in enrollments. Innovations that increase alumni satisfaction, improve career progress and increase graduate salaries are likely to create a virtuous cycle that drives enrollment changes. Further still, the hyper-focus on enrollments as the main success metric makes one wonder if the need to innovate becomes tangible only when enrollments are “down”—exemplifying a program improvement strategy that is reactive rather than proactive in nature. […]

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