Strategic Thinking Vs Strategic Planning

TRANSFORMING THE ACADEMY: STRATEGIC THINKING AND/OR STRATEGIC PLANNING? JOHN PISAPIA Florida Atlantic University Building #47 777 Glades Road Boca Raton, Florida 33431 jpisapia@fau.edu Corresponding Author 561/297-3556 DEBORAH J. ROBINSON Florida Atlantic University Building #47 777 Glades Road Boca Raton, Florida 33431 drobin1@fau.edu Presented at the American Institute of Higher Education - 4th International Conference March 17-19, 2010, Williamsburg Virginia, USA

I sometimes feel like I’m behind the wheel of a race car ... One of the biggest challenges is that there are no road signs to help navigate. And, in fact, no one has yet determined which side of the road we’re supposed to be on. — St e p h e n M . Ca s e , Ch a ir m a n , A O L T i m e W a r n e r Transforming the Academy: Strategic Thinking and/or Strategic Planning? ABSTRACT Higher education is experiencing environmental disruptions that challenge today’s leaders and the academy itself to become more agile. This paper shares the application of the strategic thinking protocol (STP) which illustrates a new way of planning called strategic thinking to deal with external pressures for change. To organize our argument we borrow the strategic thinking protocol developed by the lead author. The STP is grounded in a social cognition model of change but recognizes components of the political and cultural models. The STP framework uses core capabilities of strategic thinking skills, strategic sensitivity, value specification, strategic conversations, minimum specifications, chunking change and strategic fitness to develop the actionable plan referred to as a statement of strategic intent in a department of educational leadership and a college of education and compares the results to a traditional strategic planning effort used at the university level. Key words: change, strategic planning, strategic thinking, agility, anticipating, articulating, statement of intent. 2 tables, 1 figure, 25 references The object of planning is change. Planning is a process in which long term goals are transformed into short term tasks and objectives. The planning process seeks to answer four familiar questions: What do we do? Where do we stand? Where do we want to go? How do we get there? In traditional strategic planning, answering these questions is heavily dependent on data, data analysis and operations research techniques such as SWOT analysis and scenario planning. It’s a process that inventories, sorts, analyzes and assesses substantial amounts of data. It relies on long-term planning, linearity and rationality. The process results in a strategic plan which many times displays hierarchies of goals that cascade throughout the organization all tied to the central plan.

There is clear agreement that the idea of strategic planning is good. After all who doesn’t want to see the future, find new possibilities and recognize threats that facilitate or hinder our search for success, and then establish and seek to position the organization in terms of its environment through a series of cascading goals and objectives? Unfortunately, it has been estimated that between 70-90% of all change efforts fail (Axelrod, Axelrod, Jacobs, Beedon, 2006; Covey, 2004; Kaplan & Norton, 2004; Sirkin, Keenan, Jackson, Kotter, Beer, Nohria, & Duck, 2005). Although change is unavoidable, planned change does not appear to be so. Strategic planning worked well in the pre-digital world where formal structures held organizations together. There is also agreement that it works less well in today’s more dynamic environments where values, culture, commitment to the common good of the organization are the glue that holds organizations together (Baldridge, 1983; Birnbaum, 2000; Boon, 2001; Chussil, 2005; Mintzberg, 1994; Robbins & Coulter, 2002; Stacey 2007; Shipengrover, 1996). When strategic planning techniques are implemented in a mechanistic organization with high levels of certainty and agreement they work well. So why doesn’t it work in times of uncertainty and ambiguity? More specifically why doesn’t work well in higher education? Birnbaum (1991) and Kezar (2001) point to distinctive organizational features found in universities - goals which are difficult to quantify - relative independence from environmental influences - anarchical decision-making - voluntary collaboration - multiple power and authority structures - image as opposed to bottom line performance measures - which make them difficult to change. In addition to organizational features, Pisapia (2006) suggests that failure in part is due to leader inadequacies such as: (a) they are trained in and rely upon a linear thinking mindset, which does not work in situations characterized by ambiguity and complexity; (b) they are unable to identify critical societal and institutional forces impacting their environment and thus do not connect their organizations to the major themes associated with success; (c) their concept of change is also linear and therefore they overuse quantifiable parameters in the change process and seek to rationally plan their way to success; and (d) they do not see their

organizations as dependent upon the actions and views of other organizations and individuals, therefore, they do not connect with significant forces on their critical paths of success (p. 2). Kezar (n.d., p.6) adds that failure as seen from the research of Eckel and Kezar (2003), Gioia and Thomas (1996), Schön (1983), and Weick (1995) is also in part due to the fact that “people fundamentally do not understand the proposed change and need to undergo a learning process in order to successfully enact the change.” While organizational, leader, and learning features are important facilitators or barriers, essentially, the reason strategic planning works less well today is due to its most important feature of a heavy reliance on rational and linear assumptions of cause and effect about events. This leads to difficulty of predicting in complex environments, results in narrowing vision, creating a rigidity of the process, destruction of commitment, increase of politics, shortened tenure of lead administrators, and the process itself becoming more important than the results. Most scholars suggest that the process by which strategy is created must be reconceived to meet the needs of a rapidly changing environment. Problem and Purpose Higher education institutions are not mechanistic organizations. Today, higher education institutions are challenged by changes in fiscal pressures, technology explosions, internationalism, student and community demographics, faculty roles to meet the needs of communities and the people who live in them and serve public purposes. When the gap between the interests of the Academy and the interest of society widens their legitimacy is questioned (Boyer, 1994; Ghosal, Bartlett, & Morgan, 1999; Magrath, 1996). As this gap has expanded, state appropriations have declined and are projected to continue to decline in the long term. In response the Academy has tightened enrollments, raised tuition, and negotiated new relationships with their states to become quasi-private institutions (Mortenson, 2004; Selingo, 2003). The argument advanced for funding declines is that colleges and universities are not meeting the public’s needs. Scholars suggest that serving society is a compelling obligation, yet the gap is growing between what society needs and what higher education currently provides (Cherwitz, 2005; Newman, Couturier, & Scurry, 2004).

Universities that are more dependent on state funding must change to reconcile this perceived gap. Even those who wish to remain independent must change to garner more resources. So change is inevitable, but success is not. The problem confronting the Academy is how to transition from an organization of inward-looking silos to an organization of collaborative outward-looking departments and colleges that shrink the gap. Clearly the challenge concerns organizational change that alters the attitudes, values, beliefs, and behaviors of the institution, its employees, and the public. In response to these important issues, scholars and institutional leaders are calling for new models and “new thinking” to expand institutional boundaries and restore the social compact between higher education and colleges and universities (Walshok, 1995). This paper provides a model of change that meets the unique organizational features of higher education institutions. The paper first describes the difference between strategic planning and strategic thinking, and then describes an intervention - the strategic thinking protocol - to guide higher education change. Finally it presents the expected findings from two case studies [Department of Educational Leadership, College of Education], of applications of the protocol at Florida Atlantic University. The results of these cases will then be compared to the results of a traditional strategic planning process utilized at the University level. Theoretical Framework Just as there is clarity on the challenges facing higher education institutions there is also clarity on the critical nature of strategic thinking rather than strategic planning to an organization’s success (Bonn, 2001). Strategic thinking, which is often intertwined with strategic management and strategic planning in the literature, has been offered as the new planning organizer for dynamic organizations including universities. Bonn, (2001), Graetz (2002), Liedtka (1998), and Mintzberg (1994), are among many who draw a clear distinction between the systematic nature of pre-identified strategies called strategic planning and the more integrated perspective of strategic thinking. Mintzberg (1994) for example, noted that thinking strategically is distinct from conventional conceptions of planning. Analysis which is the hallmark of planning

involves a need for logic, reasoning, linear and rational thinking. It involves being able to manipulate words and numbers. Strategic thinking, on the other hand, places a premium on synthesis and integration and requires the ability to examine new possibilities dealing with large chunks of information, and the ability to pull pieces together into a big picture. It involves being able to recognize patterns and visual images. In strategic thinking not only are the data sources different but the analysis of the data is different than strategic planning. What exactly is strategic thinking? How does it differ from strategic planning and/or strategic management? Strategic thinking is the ability to analyze influencing factors inside and outside the organization, to discover strategic direction that should guide the organization’s decision-making and resource allocation for a period of 3-5 years. Leidtka’s (1998) taxonomy offers an overview on the differing dimensions of strategic thinking versus strategic planning. These dimensions include: vision of the future, strategic formulation and implementation, managerial role in strategy making, control managerial role in implementation, strategy making and process and outcomes. Table 1 provides an overview of these differentiations.

There is growing agreement that strategic thinking and strategic planning are interrelated and both are necessary for effective change to occur (Heracleos, 1998; Hussey, 2001; Liedtka, 1998). The fault line is drawn by seeing the purpose of strategic thinking as envisioning potential futures, discovering innovative strategies to move to the future state, and internally creating horizontal alignment. The purpose of strategic planning in this union is to operationalize the strategies and initiatives developed through strategic thinking. Thus organizations first engage strategic thinking which

creates a common direction and a broad set of initiatives to move to a future state, and then strategic planning is put into place to develop the details. “Thus what is being proposed in large measure . . . is a dialectical framework within which strategic planning and strategic thinking work in tandem, rather than one in which strategic planning impedes the flourishing of strategic thinking.” (Lawrence, 1999, p.13) There is little clear agreement on the core elements related to strategic thinking. Several proposals have been put forth. All agree that the activity results in a plan commonly referred to by strategic thinkers as a statement of intent (see Hamel & Prahalad (1994). Liedtka’s elements include system perspective, focused intent, thinking in time, hypothesis-driven, and intelligent opportunism. She says, "A strategic thinker has a mental model of the complete end-to-end system of value creation, his or her role within it, and an understanding of the competencies it contains." O'Shannassy (2003) proposed a model for what he called the 'Modern Strategic Management Process' in which strategic thinking is the starting point. He said: "...strategic thinking combines creativity and analysis which facilitates a problem solving or hypothesis oriented approach” (p.57). Bonn (2005) suggests the key elements of strategic thinking are systems thinking, creativity and vision. She said "research on strategic thinking should address the following levels: (a) the characteristics of an individual strategic thinker; (b) the dynamics that take place within a group of individuals; and (c) the organization context." (p. 340) Pisapia, Reyes-Guerra and Coukos-Semmel, (2005) break the term down into teachable concepts. They suggest that strategic thinking involves being able to utilize systems thinking, reflection, and reframing skills. They conceived these skills as interrelated and complementary thought processes that sustain and support one another. They theorized that when they are used in tandem, leaders are better able to maneuver through complex environments. In later work, Pisapia (2009) identified individual strategic thinking skills, strategic sensitivity, strategic conversations, minimum specifications, chunking change, and strategic fitness as the core elements of the strategic thinking protocol which he teased out of the six habits he associates with strategic leadership.

The intervention In dynamic environments, leaders and managers at every key intersection of the organization must be able to work in a strategic way! Pisapia’s point of view is that working in a strategic way means developing and executing an actionable strategy (Pisapia & Pang, 2009). He suggests that what works in dynamic times is the leader’s ability to accomplish four tasks: (a) anticipating changes, challenges and opportunities in internal and external environments, (b) creating and articulating common values and direction in a generative/minimum specifications manner, (c) establishing the social capital necessary to mobilize actions, and (d) building the capacity of their organizations by anchoring the learning in engaged, self managed followers/teams. He offers the strategic thinking protocol to develop an actionable strategy and the strategic execution protocol to create the social capital and build organizational capacity. This paper utilizes the portion of his model that deals with strategic thinking. The protocol, as constructed, results from the interplay of three strategic habits: agility of the mind, anticipating the future, and articulating a direction. It joins agility with anticipating and articulating to pursue two tasks: (a) anticipating changes, challenges and opportunities in internal and external environments, and (b) creating and articulating common values and direction in a generative/minimum specifications manner to foster perspective transformation and organizational fitness. The successful strategy is one that meets the characteristics of the organization’s environment and its internal resources. As seen in Figure 1 agility is the core competency that drives the protocol features of anticipating and articulating. Agility refers to the ability of participants to use three strategic thinking skills: systems thinking, reframing and reflection in ways that combines rational knowledge with intuition, and promotes individual and organizational self-discovery, and open mindedness. The result of using these skills is a mindset that guides thinking and is successful in interpreting environmental forces and identifying strategic initiatives.

Anticipating involves the development of strategic sensitivity to signals from the organizations internal and external environment by continually reading both objective and subjective data provided by the environments. The key tools of anticipating are looking, listening, and learning - analysis and intuition - asking the right questions. Articulating involves dialoguing, integrating, distancing to gain perspective, seeing things from different perspectives which allow time and information for reframing - gaining new perspectives and identifying new alternatives - unifying as leadership and members understand and trust each other. The key tools are surfacing and sharing assumptions, understandings and passions through strategic conversations which break the pattern of debate, strength of one input perspective. The strategic thinking protocol is grounded in a social cognition model of change that seeks to alter mental models by using a generative strategy - multiple interpretations - strategic conversations - consensus shaping - navigating. This model reflects the most recent paradigm shift in leadership thinking which considers how ideas, thoughts and mental representations develop and are used by leaders to make a mental connection between the leader and follower (Gardner, 1995; Senge, 1990). This cognitive approach focuses on affecting change in an organization’s beliefs, values and direction by engaging members in sensemaking processes. The mental connections it seeks form the foundation for enhanced performance and continuous organizational learning.

The protocol also recognizes components of the political model of change - persuasion, informal negotiation, mediation, and coalition-building. Remnants of the cultural model of change - symbolism - tradition - rituals - are also evident as the process moves along (see Eckel & Kezar, 2003 & Kezar, 2001 for full descriptions of these change models). As the protocol proceeds through its paces a collective understanding of the issues and future possibilities emerge and are codified in a statement of strategic intent. As Doz & Kosonen (2009) suggest, what matters is that a collective commitment and bonding to the outcome of the decision process emerges from the protocol. The protocol The strategic thinking protocol outlines a process to follow to develop a statement of strategic intent. The Statement of Strategic Intent establishes the mission and aspiration for the organization to work toward. When properly crafted, the one page statement of strategic intent [front and back] serves as an orienting device that articulates the Intent and provides a sustaining direction around which organizational members [hereafter, members] can cohere. It does not focus on today’s problems but on tomorrow’s opportunities. The statement of intent contains an aspiration, or hope, for what the organization wants to become. It also contains the blueprint for organizational behavior, and the initiatives that will move the organization toward their aspiration. The strategic thinking protocol is guided by a committee [each committee adopts its unique name: the New Directions Task Force, the steering committee - the navigating team - the guiding coalition]. This nucleus of senior faculty and administrators with credibility guide the process, sort the input, search for clues that it’s time to adapt and what that adaptation should look like. It’s important to place key opinion leaders on the committee. As Burton Clark (1972) suggested, in higher education these opinion leaders are senior faculty whose support and participation is necessary if change is to occur. He says, “A single leader . . . can initiate the change, but the organizational idea will not be expanded over the years and expressed in performance unless ranking and powerful members of the faculty become committed to it and remain committed even after the initiator is gone” (p. 177). The charge to this committee is to reviews data, participate and observe conversations and interviews, develop interview summaries, and draft statements for the full community to review and provide input on. The committee

receives the input and notes items that need adjustment (if any), discusses the changes and redrafts reports to the full membership. The product of the committee’s work is the statement of strategic intent. Essentially, they dialogue, listen, learn, and craft in an iterative process until agreement is reached. A key understanding is that all members receive the same information as the committee. The purpose here is to be transparent so all members understand the problems faced and can participate in crafting the direction that will be taken. The information is processed in the following way. Step 1 – Quantitative and qualitative data are gathered from the internal and external environment. The quantitative data comes from the official University Database upon which decisions are being made. The qualitative data is gathered through interviews of individuals outside the College; summaries are prepared and shared with all members. [The following skill is needed - ability to use analytical techniques to evaluate and synthesize data from multiple sources]. Step 2 – A series of 5 strategic conversations – following a listen – dialogue – learn - sequence are held with all members participating. Strategic Conversation #1 - What do others expect us to do? Strategic Conversation #2 – What do we expect of ourselves? Strategic Conversation #3 – What are we in business to accomplish? Strategic Conversation #4 - What do we aspire to become? Strategic Conversation #5 - What do we need to do to move toward our aspiration? Step 3 – At the end of each conversation, the committee makes strategic choices as to where the investment of time and money will return the best payoff on a college wide basis then presents draft statements for full member review – until consensus on each item – mission – aspiration – core values – initiatives has been achieved. [Aspiration should be compelling – and measurable.]

Step 4 – When the Statement of Strategic Intent is adopted by the organization as policy, it must then be implemented so that it is a living document that guides the organization toward its aspiration. At this time, the committee is disbanded and the protocol enters into the strategic planning phase – implementing teams are structured around each priority – it is this team’s responsibility to flesh out the priority and create a concrete response, and then execute it. Step 5 - The planning phase is guided by a quality committee [composed of different members than the strategic thinking committee]. The quality committee is charged with developing a report card to continuously review the implementation of the approved Statement of Intent. The quality committee uses this report card as a management tool to ensure that the Intent is implemented in a timely fashion. The protocol results in a shared statement of strategic intent [an actionable plan] which is central to developing a high performing organization. It sets the direction. It describes the clear concrete target. It describes the values that the organization will gauge itself up against. It identifies the initiatives that will move the organization along its path to high performance. And, it does all this on one page front and back. It is not meant to rest on top of a book self. It forms a psychological contract with followers and guides the organization's actions. It is meant to be a living guiding statement for the organization/team that creates a new reality for a while. In time all strategy decays and must be recreated. It is suggested that the initiatives found in a statement of intent should be viable for a 3-5 year period. Method The study employed a qualitative multiple case study design to conduct this exploratory research. Creswell (2003) said about the qualitative approach "is one in which the inquirer often makes knowledge claims based primarily on constructivist perspectives, or advocacy/participatory perspectives, or both. . . The researcher collects open- ended, emerging data with the primary intent of developing themes from the data" (p. 18). The rationale for the qualitative approach to this research is that the elements of strategic thinking (from an empirical perspective) have not been studied before. We

have chosen a Type 3 design, that Yin (2003) calls "holistic multiple-case." A holistic multiple-case study refers to a research with more than one case study but, with only one unit of analysis. Multiple cases were examined because they provide more evidence than a single case and add confidence to the findings (Hakim, 1987; Miles & Huberman, 1994; Yin, 2003). These data provided for the convergence of multiple sources of evidence in a process of triangulation (Eisenhardt, 1989; Yin, 2003). The unit of analysis was the department, college and university’s use of strategic thinking and/or strategic planning. Three cases studies were drawn from one higher education institution. The strategic thinking protocol was applied to a university department and college. The third case is the use of the strategic planning process employed at the University level. Interviews, observations, open-ended questions, and document review were used to collect the data. However, in depth interviews were the main method used. The interviews were transcribed. Observations were written in the form of summaries. Documents used in the thinking and planning processes were examined. The three in-depth cases were used to deduce theory from practice by exploring the use of strategic thinking elements: strategic sensitivity, value specification, strategic conversations, strategic fitness, minimum specifications, chunking change were used during the application of the protocol and how those elements would facilitate the development of a strategically fit statement of intent. Expected Results The University case which used the traditional strategic planning method was completed in 2008. The strategic planning process resulted in a plan that was detailed, with goals, objectives and sub objectives. Measures for each were established and the expectation was that each college, department and unit would use the plan to create unit plans. The process was led by external consultants and followed the traditional, political model and cultural models of change. Little attempt was made to change mental models or utilize multiple perspectives of those affected by the plan. Values specification was not a core activity. The resulting plan relied on maximum specification with large initiatives. A total of 12 goal areas and 35 objectives were created. Transparency was afforded through sharing final drafts and requesting comment. A dashboard of indicators was established to measure the implementation of the plan.

The administrative staff and board of trustees were satisfied with the outcome of planning. The Department case which used the strategic thinking protocol was completed in December 2009. The College case which also used the strategic thinking protocol was begun in January 2010 so data from that analysis are not available. Analysis is ongoing, therefore only preliminary expected findings from the two cases available at this time. These findings are recorded on Table 2. The strategic thinking protocol resulted in a two page plan that was strong on identifying core values to portray the expectations of the unit which was used to set internal behavioral standards and evaluate the expectations external stakeholders had of the unit. Transparency and participation was achieved by all members getting the same information through focus group type interviews and data days, and conversations focused on feedback and adjustment of ideas by the coordinating committee. The resulting plan produced 5 initiatives to focus unit work to achieve its aspiration. Planning teams convened around each of the 5 initiatives to pursue them. A project management score card was employed to review implementation and record results. The faculty and administrators were satisfied with the outcome of planning and the process that was used to incorporate their views into the document.

Importance The study is important for several reasons. Foremost, any attempt to embed strategic thinking within an organization processes is stymied by the lack of a working model of strategic thinking (Amitabh & Sahay, 2008, p.7; Masifern, & Vila, 2002 p. 4). This paper outlines a potentially strong model that addresses the unique organizational and participant features of higher education institutions as opposed to downloading a model created to operate in a for profit corporation. From a research point of view, the strategic thinking elements involved in creating a strategic direction has not been addressed thoroughly in the literature. Though there is a multitude of literature on the necessity of strategic thinking within the business world and in large multi-national corporations, little if any literature focuses on whether or not these all-important skills are being incorporated into our higher education leadership practice.

From an organizational point of view, this protocol, when properly applied, should help higher education leaders create a collective mindset that makes sense of complexities facing the organization. It also enables the organizational unit to identify, predict, respond and adapt to non-linear change opportunities and challenges stemming from its environment. Finally, this study is considered foundational because it specifies the elements of a new planning technology and describes its use in a higher education setting. Additional studies need to be carried out in other nonprofit and for profit settings to determine if strategic thinking or strategic planning has the greatest impact on individual and organizational performance. From these studies, it is hoped that professional development modules can be developed and databases created in order to further the effective use of the elements of the strategic thinking protocol. References Amitabh, M. & Sahay, A. (2008, May). Strategic thinking: Is leadership the missing link. Presented at the 11th Annual Convention of the Strategic Management Forum, Kanpur, India. Axelrod, R., Axelrod, E., Jacobs, J., & Beedon, J. (2006). Beat the odds and succeed in organizational change. Consulting to Management, 17 ( 2). Baldridge, V. J. (1983). Strategic planning in higher education: Does the emperor have any clothes? In V. J. Baldridge (ed.), Dynamics of Organizational Change in Education. Berkeley, Calif.: McCutchan. Birnbaum, R. (1991). How colleges work: The cybernetics of academic organization and leadership. San Francisco: Jossey-Bass. Birnbaum, R. (2000). Management fads in higher education: Where they come from, what they do, why they fail. San Francisco: Jossey-Bass. Bonn, I. (2001). Developing strategic thinking as a core competence. Management Decision, 39 (1), 63-70. Bonn, I. (2005). Improving strategic thinking: A multilevel approach. Leadership and Organization Development Journal, 26 (5), 336-354.

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Strategic Thinking Vs Strategic Planning

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Strategic Thinking Vs Strategic Planning — Document Transcript