Critical Success Factors as Tools for Planning in Unpredictable Environments

1. Critical Success Factors as Tools for Planning in Unpredictable Environments Brian Nedwek, Ph.D. Executive Director, Forest Institute-St. Louis briannedwek@yahoo.comor bnedwek@forest.edu June 16, 2014

2. What we seek to do today • Understand effective elements and planning processes in an unpredictable environment • Know if one is heading in the right direction • How to build a useful planning tool • How to launch Critical Success Measurements • Identify some useful resources

3. Traditional Assumptions about the External Environment • Predictable revenue streams • Stable and gradual change • Known competitors • Inherent worth of the product

4. Traditional Assumptions about the Internal Environment • Incremental funding and indifference to prioritization • Innovation owned by top management • Focus on improving existing programs and services • Gradual infusion of technology to improve efficiency

5. Certainty, Predictability, Safety Where have they gone?

6. Uncertainty . . . .

7. Some Emerging Trends . . . Health Care as Harbinger • Less expensive professionals • to do more sophisticated things • in less expensive settings. • Source: CM Christensen, R. Bohmer, and J. Kenagy, “Will Disruptive Innovations Cure Health Care?” See: http://hbr.org/web/extras/insight-center/health-care/will-disruptive-innovations-cure-health-care

8. Look at what is here . . . • Self-diagnostics and Service • WebMD • PsychCentral • Home testing kits, monitors, sensors, ingestible sensors • Explosion of apps • Brain training products, e.g., Lumosity • Personnel • Physician assistants and nurse practitioners versus primary doctors, LPC’s versus psychologists

9. Some Emerging Trends . . . Higher Education • Part-time faculty delivering majority of training • Growth of “skill builders” enrolled in community colleges* • Altered relationships between faculty and learners and among learners • Evidence-based accountability tied to performance funding** • Growing view of education as a commodity • *The Hechinger Report (March 26, 2014) • **http://www.ncsl.org/research/education

10. Some Emerging Trends . . . Higher Education • Loss of influence in state budgeting fights • Redefining programs and services just to stay alive • Imitation being confused with innovation • Added pressures on regional and specialized accrediting bodies to bolster accountability

11. Implications for Planning • Engage the process from an integrated perspective, i.e., overcome organizational silos in priority-setting • Becoming brutally honest about strengths and the degree of weaknesses • Focus on devising strategies to achieve a “transient competitive advantage” * • Abolish ceremonial planning and embrace integrated strategic thinking *(Rita McGrath, 2013)

12. So, what does effective planning look like in a rapidly changing world?

13. Focus of strategic planning (or strategic thinking) “. . . A disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it.” (Bryson, 1995, p. 5) “. . . A formalized procedure to produce an articulated result, in the form of an integrated system of decisions.” (Mintzberg, 1994, p. 12)

14. Effective planning requires . . . • Goals/objectives/strategies/outcomes that are clear, integrated, and linked to mission, vision and values (Porter, 1996) • Objectives and strategies are financially and politically feasible • Information-based choices • Clear timelines and task specification • Accountability • Linkage to resource allocation choices • Nimbleness in responding to unanticipated opportunities or threats

15. Recall what planning is intended to promote: • A sustainable competitive advantage for the organization • Information-guided decisions about fundamental choices

16. Making fundamental choices about . . . • Whom do we wish to serve? • How do we want to be perceived, i.e., the brand promise? • What programs and services will reinforce this distinctive image? • How will we and our stakeholders know we are succeeding?

17. So, how do you know that you are succeeding? • Figuring out who wants to know what using: • Key Performance Indicators (KPI’s) • Critical Success Factors • Dashboard Indicators

18. Who wants to know if you are succeeding? • Regional accrediting bodies • Boards of Trustees or Governors • Legislative Oversight bodies • CEO • Senior Managers • Donors

19. Key Performance Indicators are used to . . . • Monitor conditions or resource usage as compliance behavior • Measure performance against stated policy, program, or institutional goals • Forecast problems • Build the policy agenda • Support resource allocations • Create bases for comparisons Nedwek (1966)

20. Characteristics of KPIs • Data capture from legacy systems • Bundled into core functions, e.g., finance, enrollment, degree production • Attempts to link measures with institutional strategic priorities • Indicators assembled to reflect available data, but not necessarily relevant data • Explosion of indicators, e.g., University of California • Basis for rudimentary performance-based funding in 25 states • Basis for building snapshots of organization, i.e., dashboards

21. What are Critical Success Factors in Planning? Characteristics of an institution that when realized represent its ideal state at a point in time. Can be institution-wide or unit-specific Specialized subsets of KPIs

22. Enterprise-wide Factors • Driven by institutional goals, mission & values* • Multiple measures narrowed to critical factors • Benchmark standards • Established realistic timelines • Senior management accountability & Board oversight *NCAL (2014)

23. Unit-specific Measures • Sensitive to distinctive mission of academic unit, e.g., College or support service • Consistent with institutional mission, goals, and institutional CSF’s • Timelines consistent with unit plan • Unit level accountability is clearly articulated

24. Model-building Choices: Institutional Level • What dimensions make sense? • What measures in each dimension make sense? • What is the best baseline? • What is an appropriate comparative standard? • What level of success can be achieved and by when?

25. What a minute . . . It’s important to realize that key metrics on their own are not particularly important . . . It’s what they ultimately do for customers that you want to understand. McGrath and McMillan (2009) p.118

26. Critical Success Factors: Enterprise-wide Level • Retention rate increases to XX% by Year XXXX • XX% of faculty position offers to first-choice candidates are accepted • XX% of students reporting satisfactory engagement (NSSE) • Bond rating increases to XX level by Year XXXX • Enhanced academic quality in three dimensions • Nedwek (2004)

27. Critical Success Factors: Unit Level • Licensure exam passage rates, e.g., bar pass of first-timers • Market share increases by XX% • External recognition of faculty performance, e.g., funded research, leadership in organizations • XX% of programs in unit meeting specialized accreditation • XX% of course syllabi meeting “principles of good practice” • Enhanced academic quality in three dimensions

28. How to use CSFs to strengthen the organization • Gap analysis of distance between ideal and actual can be tied to budget allocation per unit improvement, e.g., gauging how much will it cost to improve student retention by 1% • Use as agenda item(s) for key Board committees annually • Create strategic set-aside funding mechanism

29. The Special Case of Dashboards

30. For some dashboard measures • Benchmarking performance against: • Competitors • National or regional norms • Other institutions within systems • Aspirational institutions • Other programs within and among institutional units • Program history, e.g., time-series trends

31. Critical Success Factors: Enterprise-wide • XX % of citizens report satisfaction with police services • By 2015, incidence of Part I offenses per 100,000 is reduced by XX % • What else comes to mind?

32. How to develop measures that make a difference • Measured standards must be politically and financially feasible • Meeting or failing to meet benchmarks must have consequences that reinforce a preferred organizational climate • Measures must be under continuous review so that progress is monitored and corrective actions are undertaken • Measures at the enterprise level should guide the development of measures at the unit levels • Organizational measures must be linked to individual performance measures

33. The end product of strategic planning is not so much to write a ‘plan’ as it is to change thinking and introduce a model in which ongoing decisions are made strategically. Rawley, Lujan, and Dolence ( 1997)

34. Resources • Bryson, John M. (1988). A Strategic Planning Process for Public and Non-profit Organizations. Long Range Planning. Vol. 21, No. 1, pp. 73-81. • Christensen, Clayton M. (1997). The Innovator’s Dilemma. Boston: Harvard Business School Press. • Christensen, Clayton M., R. Bohmer, and J. Kenagy, http://hbr.org/web/extras/insight-center/health-care/will-disruptive-innovations-cure-health-care

35. Resources • The Hechinger Report. (March 26, 2014). http://www.adn.com/2014/03/26/3394266/skill-builders-enrolled-in-college-but-not-for-the-degree. • Heskett, James. (September 4, 2013). How Relevant is Long-Range Strategic Planning? Working Knowledge, Harvard Business Review, September 4, 2013. • iDashboards for Higher Education Providing Insight for Operational Success: An iDashboards Whitepaper. (2013). iDashboards.com • Forest Institute of Professional Psychology. (2010). Strategic Plan 2010-2013. Forest Institute of Professional Psychology: Springfield, MO

36. Resources • George Mason University. (2013). Six-Year Plans – Part I (2013). 2014-16 through 2018-20 • H. Mintzberg. (1994). The Rise and Fall of Strategic Planning. New York: Free Press. • Morrison, Dennis. (2013). At the Speed of Thought: The Role of Disruptive Innovation in Behavioral Health – One Year Later, the 2013 Technology & Informatics Institute. See openminds@openminds.ccsend.com, October 31, 2013.

37. Resources • McGrath, Rita Gunther. (2013). The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business. Boston: Harvard Business Review Press. • McGrath, Rita Gunther and I.C. MacMillan (2009). Discovery-driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity. Boston: Harvard Business School Publishing. • Nedwek, Brian. (1996). “Linking Quality Assurance and Accountability: Using Process and Performance Indicators.” In Nedwek, B. (ed.). Doing Academic Planning. Ann Arbor: Society for College and University Planning. 137-144.

38. Resources • Nedwek, Brian. (2004). Benchmarking Success: Academic and Facilities Factors. SCUP-39. Workshop K. Toronto. • Nedwek, Brian. (2005). “Measuring Strategic Plans and Planning.” In Becoming a Learning Focused Organization: Organizational Distinctiveness and Effectiveness. A Collection of Papers on Self-Study and Institutional Improvements, 2005. Chicago: Higher Learning Commission, 35-37. • Porter, Michael. (1996).”What is strategy.” Harvard Business Review, (November/December) 61-78.

39. Resources • D.J. Rowley, H.D. Lujan, M.G. Dolence. (1997). Strategic Change in Colleges and Universities: Planning to Survive and Prosper. San Francisco: Jossey Bass Publishers. • Tennessee Higher Education Commission. (2014). See: tn.gov/thec/ for downloads on Tennessee’s utcomes-based model. • A. Tompkins. (2014). Foresight 2020 Annual Progress Report. Kansas Board of Regents. See: www.Kansasregents.org/resources/pdf/2785-2014 • Foresight2020boardpresentation_January16.pdf • Performance-Based Funding for Higher Education. March 5, 2014. http://www.ncsl.org/research/education/performance-funding.aspx

40. Resources • Society for College and University Planning. 49th Annual International Conference. July 12-16, 2014. See especially: • K. Newman. July 14, 2014. A New View of Opportunity and Risk Through Dashboards. University of California ERM Program. • T. Beckett. July 15, 2014. Analytics That Rock – See the Dashboards that Top the Charts. Information Builders. • R. Pacheco. July 14, 2014. Input-Adjusted Performance Measures of Institutional Effectiveness. MiraCosta College. • K. Smith and P. Stearns. July 15, 2014. Using Strategic Metrics: Measuring One Plan, Building a New One. George Mason University.