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Is Strategic Planning Possible?

November 14, 2009

Having now endured  innumerable meetings dealing with budget reductions, I am beginning to realize reluctantly  that budget cutting can never be done in a rational way during a budget crisis.  If any institution should be able to address its budget problems rationally, you would think that it would be a university.   Alas, this is not the case.  Our administrators constantly tout the need to make strategic budget-cutting decisions that will phase out weak and underperforming academic programs, that will protect strong programs, and that will promote growing programs.  Whenever specific programs that are underperforming or that are not central to the mission of the university are discussed, administrators  inevitably raise objections to reducing or eliminating them.   That program has some outstanding professors.  Eliminating this program will not be tolerated by certain members of the state legislature.  This program has a lot of students.  And so on.

More than 20 years ago, Cynthia Hardy published a case study (The rational approach to budget cuts) of how administrators  at one Canadian university dealt with budget cuts caused by a significant reduction in provincial appropriations.   The parallels between this Canadian university and the one that I work at are remarkable.   They are both about the same size and the magnitude of the budget cuts is similar.  There are also some major differences.  The Canadian university had medical and law colleges while we have vet and engineering colleges.  Being a Canadian and having gone to Canadian universities as an undergraduate and graduate student, I can attest that Canadian university academic cultures and administrative structures are very similar to ours.  Hardy’s case study does much to illuminate how our administrators have behaved, are behaving, and will continue to behave while responding to our budget crisis.

Administrators have no choice but to take the stance that budget cuts are going to be strategic.  This is the only stance that makes them look like leaders both to their bosses and the faculty.  It makes it appear that they have  a vision and a plan to implement it, whether they have either or not.   This supposed strategic plan can also be used later to justify budget cuts, regardless of how strategic these cuts really are.  In spite of mounting evidence to the contrary, strategic planning is also believed  to be the way that businesses deal with budget crises.  And the university is increasingly being viewed as just another business by its leaders and academic staff.

The problem for university administrators is that universities are not businesses and are not organized like businesses. Universities are complex entities with many internal constituencies and are administratively highly decentralized  organizations.  Other major complicating factors that constrain strategic planning include tenure and academic freedom.  Faculty cannot be fired.  They pay little attention to administrators and they are not reluctant to criticize administrators.   University administrators spend very little time trying to influence the thinking of their faculty.  In fact, they are often so politically inept at dealing with faculty that many of their efforts to influence faculty backfire, often unbeknown to them.   Faculty do not look forward to visits to their departments by deans, provosts or presidents, and such visits rarely produce much good will.  Many academic programs at universities also have outside constituencies with significant political connections and any attempt to cut these programs will raise an immediate political outcry that administrators cannot ignore.  In short, internal and external realities make strategic planning largely ineffective, as Hardy demonstrates.

Strategic planning involves a series of fundamental steps:  setting goals, identifying alternatives to reach these goals, collecting and analyzing relevant data that can be used to choose among alternatives,  evaluating the consequences of each alternative, and finally selecting the best alternative.  In reality, this rational process is undermined at all steps.  Powerful vested interests within the university that oppose differential or any cuts to their programs (empires) begin to apply pressure on senior administrators to limit cuts.  External constituencies are quickly alerted and political pressure put on senior administrators.   Administrators also have their own biases.  Then there is the overriding problem of being unable to predict the future.  Which programs will become nationally recognized if they get cut less?  “Investing” in already nationally recognized programs by limiting cuts to them is a much more certain strategy that few will fault, especially in the short term.  These days for administrators only the short term is relevant.

What happened in Canada is what I predict will happen here.  The administrators at the Canadian university worked out a rational plan for making differential budget cuts.   In reality, actual budget cuts to units often did not resemble those that were planned.   In the end the relative percent of the university budget going to each unit was nearly identical before and after the cuts.  This same thing happened here with the cuts to the FY2010 budget.  Limited differential cuts were made, but many of these cuts were “backfilled.”   Some units that nominally received budget cuts, in fact, got no or only minimal cuts in reality.

The only way strategic planning can be done at a university is from the bottom up and any proposed changes need to be implemented jointly by administrators and faculty.  For this to happen administrators have to spend time listening to faculty.  During a budget crisis, they do not have the time.  Consequently, the inability to do strategic planning in response to a budget crisis is ultimately a good thing.   I did not believe this a year ago and, in fact, strongly endorsed strategic planning.  I now think that Hardy is right and that strategic planning to deal with a budget crisis is impossible and even undesirable. The constraints on administrators that prevent them from making meaningful differential cuts more importantly prevent them from making stupid mistakes.   During a crisis, “do no harm” is a much better mantra then “don’t let a crisis go to waste.”

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