Review Essay

"Strategic Governance:"
The Wrong Questions?

David W. Leslie

Jack H. Schuster, Daryl G. Smith, Kathleen A. Corak, and Myrtle M. Yamada. Strategic Governance: How to Make Big Decisions Better (Phoenix, AZ: American Council on Education/Oryx Press, 1994), 223 pp., index.

During the decade from about 1965 to 1975, the literature on higher education was heavily focused on governance. Finding the right balance of executive discretion, inclusion of stakeholders, and faculty authority was the challenge. Clearly, higher education was going through a watershed period during that decade, and it was changing in ways that were unsettling to boards, presidents, and the public. Faculty and student participation in governance became widely accepted, and by 1975 they were serving on boards of trustees as well as on proliferating committees that oversaw many aspects of campus life. At the same time, states began exercising stronger interests in higher education, perhaps partly in resistance or backlash to the perceived radical democratization of campuses.

Squeezed between newly assertive faculty and students on the inside and newly interested coordinating bodies and other state oversight mechanisms, presidents and boards felt their roles changing and narrowing. Some of the fallout may be best remembered in the very public resignations of at least a few prominent presidents who had signed on as intellectual or educational leaders but who left humiliated by the politically motivated repossession of authority at the hands of activists from all quarters.

Leadership of colleges and universities became a far more complex and uncertain art than in less contentious times. New ideas about the organization [End Page 101] of citadels of learning began to emerge in the 1970s--ideas that portrayed them as semi-governable "anarchies" (Cohen & March, 1974) or "political systems" (Baldridge, 1971). One of the more enduring images was that of the "loosely coupled system," an organization that had no real center but that depended instead on the intelligence of its parts (Weick, 1976). These theorists portrayed colleges and universities as organizations that behave in something other than mechanistic fashion, defying normal logic or rational thinking.

Strangely, this line of thinking seemed to vanish almost as quickly as it had emerged. By the 1980s, concern about the economic survival of higher education had supplanted studies of governance. George Keller's Academic Strategy (1983) became the new landmark on college and university management. In backhanded recognition of the new realities on campus, he bluntly criticized both key actors: "Presidents can't act and faculties won't act" (p. 172).

His solution to the paralysis facing colleges and universities was to suggest a new hybrid form of governance: the "Joint Big Decision Committee," or "JBDC." Presumably this new mechanism would kick-start the urgent planning and strategizing Keller thought was needed in hard economic times. It would bring diverse campus constituents together in a small, high-level working group where their shared perspectives and concerns could--in theory--overcome the paralyzing stand-off to which the parties had retreated. More importantly, it would enable colleges and universities to decide important things about their futures, to "strategize," in the jargon of the day.

It is probably fair to say that the ensuing decade was better financially and worse politically for most institutions than Keller (or anyone else) imagined it would be. On one hand, it was a comparatively flush era--at least as measured by rising enrollments, increased appropriations, stronger private giving, and appreciation of endowments. On the other hand, campuses were far from peaceful as rancorous debates over political ideology, curriculum, diversity, and attention to student concerns dominated campus agendas.

While topical issues diverted attention, the economic foundations of many colleges and universities were beginning to erode in quiet ways. State and federal resources were becoming scarce, and a hidden crisis in public finance erupted in most states during the 1980s and early 1990s. Perhaps more critically, public trust was also eroding. A double squeeze on college and university finance resulted. Parents and students doubted whether they were getting a private real return on the high tuition and fees they were being asked to pay. They became more sophisticated shoppers, learning that "discounted tuition" might be available if they asked. Yet government could not muster a consensus on the "social good" that made colleges and universities a legitimate public investment, either. [End Page 102]

By the early 1990s, serious problems had emerged in the finances of all but the wealthiest colleges and universities (McPherson, Schapiro, & Winston, 1993). Even some of the wealthiest like Yale and Columbia grappled with widely publicized operating deficits and saw presidents depart in discouragement.

In this setting, the appearance of Strategic Governance by Schuster and his colleagues is timely. With resources becoming tighter, institutions have tried to plan more purposefully. But they have met with only mixed success in planning and strategizing. One reason, suggest Schuster and colleagues, is that decision making in colleges and universities requires "legitimacy," or broad acceptance by those who are affected. Planning, on the other hand, requires a rational--as opposed to political--foundation. In Strategic Governance, the authors analyze this connection between governance and planning. They do so by examining the functioning of "Joint Big Decision Committees" at selected institutions, following Keller's ideas, and have asked whether such committees have made a difference in the ability of colleges and universities to make legitimate and valid strategic decisions.

The Study

The authors have carefully and methodically cataloged experience with the JBDC form of decision making. They conducted eight case studies of diverse colleges and universities, selected in consultation with George Keller "and others," a process through which campuses with experience in using JBDCs were identified. The research team conducted site visits during 1987 and 1988, meaning that these committees had not yet been tested fully by the wave of fiscal problems that beset most institutions in the early 1990s.

Data about the JBDCs were gathered from interviews with participants and observers on campuses, as well as from thorough reviews of documents and files. The study is grounded in the experience and perceptions of those who had been directly involved in JBDCs at the participating institutions. But it is also grounded in the "clinical wisdom" and broad background of the principal author, Jack Schuster. Schuster has served as chair of the national American Association of University Professors' Committee T on governance, and has previously written or edited major works on governance. He has also served as executive assistant to the president of a major research university and in staff roles in the federal government. Coauthors Smith, Corak, and Yamada all have had extensive administrative and faculty experience in higher education as well.

First, the authors present a brief conceptual chapter that outlines the "asynchronous" relationship between planning and governance. This theme clearly threads its way through the rest of the book. In calling this relationship [End Page 103] "asynchronous," they mean that governance involves faculty and other internal groups in deciding how to divide resources and accomplish the work of the institution. The authors contrast this process with planning, which involves external groups in deciding what the mission and overall goals of the institution ought to be (pp. 20-21). The answers to these two questions--what to do and how to do it--the authors find, are not tightly related to one another in many colleges and universities. Their analysis is complex but persuasive in showing how planning and governance processes tend to work at cross purposes.

The book's next eight chapters report, chapter by chapter, on each of the eight case-study institutions. The detail reported is considerable but leaves the reader wishing for more analysis and for more continuity.

Four of the cases involved institutions that established their JBDCs during the ferment over participation in governance during the 1970s. The other four institutions initiated JBDCs to deal with economic and strategic planning issues during the 1980s. Notwithstanding their different origins, the JBDCs had variable experiences and histories. Some expired; others achieved substantial influence. The authors speculate about some of the reasons for such variability and infer certain principles about "strategic governance" from the patterns they observed. But the patterns seem less regular than idiosyncratic--indeed, the authors themselves point out that "each case tells a different story" (p. 180).

Although the data do not show clear patterns, the authors push ahead to generate four important criteria for an effective system of "strategic governance." They suggest that "strategic governance" is a process that provides for the informed participation of members of the campus community and which also requires participants to recognize the economic realities that force choices and decisions. These criteria include:

• A governance system that is inclusive . . .
• A planning system that protects and promotes a strategic outlook . . .
• A communication system that emphasizes the importance of informing campus constituencies . . .
• Leadership that is alert to the complexities and nuances of the campus's different organizational cultures and is astute in establishing conditions most likely to forge links between planning and governance (p. 199).

The criteria are presented at the end of the book, but the authors do not show how they might be used to analyze or evaluate the performance of what they call "an appropriately designed strategic planning council" (p. 200).

In the end, this book is an honest and useful look at the serious flaws in how colleges and universities try to make strategic decisions. For all its good faith and clinical wisdom, however, the book also truncates its own potential usefulness when it does not extend the findings to help readers think [End Page 104] through what kinds of decisions JBDCs should make nor to help readers think through how colleges and universities can become stronger and more effective institutions. Perhaps that is not really possible, though, since the study focused narrowly on structures for decision making, and not on outcomes of decision making. Indeed, it may be that structure and outcomes are quite unrelated and that there simply is no "one good way" to guide a complex organization through rapid changes in a complex environment.

Loose Coupling, Opportunistic Adaptation, and Strategy

The book by Schuster and associates raises more questions than it answers. After decades of flirting with assorted schemes derived from Tayloristic rational management theory (PPBS, MBO, TQM, etc.), higher education needs the authors' honest assessment of how decision making works in a world that is, frankly, somewhat less than rational. In this sense, Schuster and colleagues appear courageous. They do not look past the difficulties of perceiving, knowing, and predicting, nor do they underestimate the problematic nature of building consensus around solutions. In short, they do not insult the reader's intelligence with a simplistic packaged program--as they might well have been tempted to do.

On the other hand, their focus on structure, rather than on decisions, processes, culture, or context may have created blind spots that do not take account of major lines of thinking about "how colleges work," as Robert Birnbaum so elegantly put it (Birnbaum, 1988). These other lines of thinking suggest that strategizing in the traditional sense (that is, applying rational logic to decision making about future states of the organization) is simply not possible in the circumstances found in most colleges and universities. Three important ideas capture this reasoning.

First, it is possible that a loosely coupled organization simply cannot (and perhaps should not) make "strategic" decisions. One of the presumed strengths of a loosely coupled system is that it can adapt by relying on the collective (and independent) intelligence of its constituent parts. A university with many colleges and other program units probably does not have enough centralized intelligence (or information) to impose some standardized strategy on, say, an engineering school, a school of nursing, and a department of Slavic languages simultaneously.

Second, to use Karl Weick's term, "octopoidal" adaptation is necessary in a nonuniform environment. He notes, categorically, that "environments are problematic" (1977, p. 218). In this kind of setting, it is more realistic to sense than to think, to process than to decide, to test than to solve. Using the image of the octopus, Weick is pointing out that, in some cases, adaptation is most intelligent when it simply tests all of the opportunities for change at the same time--sending out feelers in many directions at once to sense [End Page 105] where and how to move. This approach, he suggests, may be far more productive than to bull ahead toward an objective regardless of the obstacles that may arise along the way.

Third, it is quite possible that "strategy" is simply not worth developing. Henry Mintzberg, one of the seminal thinkers about strategic planning in business, has recently discussed "the rise and fall of strategic planning" (1994a, 1996b) over the previous two decades. Two main points emerge from his analysis. Environments do not always move in ways that strategic thinking can detect. (He distinguishes, for example, among environments that behave cyclically, "circumferentially," and "tangentially." In other words, environments do not behave in the same way from one year to the next, nor can environments be predicted reliably.)

His other main point is that formalized thinking procedures tend to be comparatively impoverished. So to isolate "strategizing" activity from the normal flow of information and decisions and impose a formulaic method on the process is, in essence, to sanitize but denature the organization's way of finding a path through its circumstances. Implicitly, the "strategic" method of planning is less informed and riskier than the more chaotic but "normal" methods. Since the return on investment in strategizing is so problematic, it may be far more rational to embrace apparent irrationality and allow the free flow of information, creativity, and serendipitous experimentation among the various parts of an organization. In short, being opportunistic may be more productive than trying to predict and control an organization's future.

Process vs. Product

Schuster and associates clearly understand that the culture of colleges and universities places a high value on process in governance. Decisions are considered illegitimate if they have not been processed by an array of committees, senates, boards, and administrative staffs. Rationality and democratic process contend as competing values at the core of academia's two cultures--the administrative and the academic.

The authors vividly present the problem with visual figures that juxtapose "efficiency" with "participation" in several different ways. But the dilemma always repeats itself: colleges and universities have to decide if they are to survive, but they cannot decide without deliberating in the most democratic fashion possible. Therefore, the JBDC is a symbol of the academic conundrum. It is at once the handmaiden of democracy and the instrument of rational planning. Because people expect conflicting things from a JBDC, it accomplishes less than these expectations demand.

In the end, it is a tool that does not exactly fit the task and may be too clumsy to survive in an era that demands nimble responses to an erratic environment. The question this book called to my mind is a version of the [End Page 106] old process-product debate. Which is the more important, reaching the right decision regardless of method, or following the proper method regardless of how good the final decision? Can good politics find the middle ground and reasonable compromise in the means/ends debate? Quite obviously, the book by Schuster and associates has merely uncovered the unresolved tension over this issue, a tension that has real implications when threats from the external world are as substantial as they have been in recent memory.

Does It Work? Can It Work? Should We Try?

If JBDCs were conceived as a tool to use in planning strategically, perhaps they were destined to be unsuccessful--not because they were intrinsically flawed but because strategizing is so problematic in the first place. Schuster and his associates legitimately ask whether the JBDC has been implemented in a way that facilitates or hinders success in strategic planning. But they do not ask whether strategic planning is in fact a workable idea in academic institutions or in any other context. In the end, they leave the reader with the impression that a well-designed JBDC structure and a properly conducted JBDC process might have produced good strategy.

I do not believe that this implication takes sufficient account of evidence--and theory--that questions whether "strategizing" can work at all. Ellen Chaffee (1985) proposed several definitions of strategy, including the comparatively primitive linear/rational type. Her thorough and intelligent analysis noted that "strategic planning" had evolved through successive generations of new ideas: the "adaptive" and "interpretive" phases (pp. 142-145). If "strategy" is defined as a rational set of assumptions and a logically derived set of operational corollaries leading to a measurable set of prescribed "outcomes," then it is unlikely that a reasonably successful corporate organization can strategize intelligently. No process or structure will overcome a host of problems that preclude this kind of Tayloristic approach to adaptation and change. Instead, Chaffee's work implies that "real" strategizing represents an intersecting of environment (the adaptive) and corporate culture (the interpretive) in some unspecified synthesis. Perhaps the next phase of research is to examine stages of experience more closely to uncover how that synthesis occurs or does not occur.

First, look to Hearn and Heydinger's (1985) work on the environmental scanning effort at the University of Minnesota. Their extensive interviews and observations of the process yielded twelve major tensions that they felt would affect its success. Hearn, Clugston, and Heydinger (1993) conducted a five-year follow-up, concluding that the strategic scanning process did not become a permanent element of either university administration or planning because tensions were produced by adding a new method to search for information. (They speculated that other reasons may have also been [End Page 107] involved.) This work and others point out how difficult it is to form "strategy" at the corporate level in colleges and universities, if for no other reason than that they are simply not organizationally capable of establishing and maintaining a consensus about it.

Second, work on organizational learning suggests that information is continuously generated and interpreted, meaning that the "magic bullet" approach to adaptation--finding the one best solution--is inadequate (Levin, 1991, p. 248). Instead, entrepreneurial freedom at low levels of the organization is likely to produce more appropriate solutions to problems. Mintzberg (1994a) points out that organizations actually do better when they encourage and use "informal learning" than when they try to control planning from the top: "Strategies must be free to appear at any time and at any place in the organization, typically through messy processes of informal learning that must necessarily be carried out by people at various levels who are deeply involved with the specific issues at hand" (p. 108). He urges managers to "avoid. . . . costly misadventures caused by applying formal technique, without judgment and intuition, to problem solving" (p. 109).

Mintzberg's The Rise and Fall of Strategic Planning (1994b) argues that organizations essentially adapt by learning and that strategizing actually may be a dangerous intervention in what is otherwise a naturally occurring and highly functional process. He is especially skeptical of strategies that emerge from the "managerial mind" (p. 241). Corporations he has studied experienced strategizing as intrusive and upsetting, as episodic exercises that were more likely to introduce discontinuities and errors than to serve the organization well. His point, then, is that organizations need to use both hard and soft information and to promote learning at the lowest levels to adapt to changes in the environment.

A third line of research into "corporate entrepreneurship" supports the idea that normal organizations change from the bottom up--and that doing so is better than trying to impose a rational, top-down solution. Stopford and Baden-Fuller (1994) examined stressed British corporations' efforts to recover. They found that the successful adapters essentially engaged in "cumulative incrementalism" and "inched forward . . . [making rapid] partial changes" (p. 533). They avoided trying to engage in large-scale strategic change, choosing instead to "spread and minimize risks by initiating many different projects" (p. 523). This approach resulted in what the authors characterized as a condition of "concentric entrepreneurialism." By sorting out the more and less successful small experiments, the firms gradually returned to healthier states.

Strategy does pay off for some organizations in some situations (Huff, Huff, & Thomas, 1992). But generally speaking, the payoff of strategizing is only greater than the payoff of incrementalism when the organization's survival is seriously threatened. [End Page 108]

So perhaps Schuster and his associates have asked the wrong question. (And perhaps we have learned not to be as impatient about developing "strategy" as Keller suggested a decade or so ago.) The right question is not whether JBDCs can produce good strategy. It is, "How can colleges and universities promote and use organizational learning and adapt nimbly to their erratic environments?"

Continuous Adaptation: An Emerging Idea

I think the idea that structure and process can be rationally designed for results should probably be replaced by a more empirically grounded understanding that organizations are emergent and fluid and that they survive by engaging in somewhat opportunistic transactions with a continuously changing environment. If this concept can be established, it would mean that organizations thrive quite independently of any a priori ideas about how they should be structured and how they should plan and make decisions. Direct observation of organizations' behavior could test the proposition that effective ones do not necessarily "strategize" or even engage in stereotypically "rational" behavior.

The literature suggests to me that successful organizations seem to be good at continuous adaptation, seem to have strong cultures, and seem to enjoy well-developed communication skills (both internally and externally). They form strong internal value systems that serve as compasses and filter information from a wide variety of sources through that value system. They do not make "strategic" decisions in the old linear/rational way but sense and flow in a continuous process of growth, change, and reimagining.

If this is true--and it is, at best, my own working guess because the number of empirical studies on-point is limited--then it is difficult to understand why so much effort has gone into schemes like "strategic planning." It is also easy to see why Schuster and his associates found such ambiguous outcomes of the JBDC experience.

In my own work with E. K. Fretwell on how colleges and universities adapt to fiscal stress (Wise Moves in Hard Times, forthcoming), we found many problems in the strategy formation process. Most of the institutions at which we conducted site visits were vexed by erratic environments. Federal and state policy lurched back and forth with the vagaries of partisan whims. Economic conditions in each state and region varied continuously from favorable to unfavorable. Student demographics, preparation for college, and interests in major fields changed in ways that had not been predicted.

Most of the institutions we studied also behaved like loosely coupled organizations. Influence was quite free flowing and, for the most part, they were only marginally successful in establishing legitimate decision-making processes that could solidify fluid influence patterns into a working consensus [End Page 109] about "strategy." Further, leaders' efforts to construct such a consensus often produced resistance and sabotage.

We concluded that, in at least some of our cases, strategizing had cost time, money, and good will without producing visible returns. In a few other cases, institutions did not strategize as explicitly but successfully engaged in continuous experimentation--inching forward and encouraging entrepreneurialism. These institutions achieved small changes over time that, taken together, resulted in a more purposeful and efficient operation. But a third group, those institutions in the most peril, had engaged in strategizing and had made major changes from the top--changes that seemed intelligent and successful in the early stages of implementation. In short, there is no one magic formula. At best, we can say we found that institutions adapted to widely varying circumstances in widely varying ways and with varying degrees of success.

With the help of Schuster and associates, we are beginning to understand that there is a great deal more to adaptation than what happens in a JBDC or any other formal strategic planning exercise. In my work with Fretwell, we found a great deal of change and adaptation going on throughout the colleges and universities we studied--whether they had JBDCs or planned strategically or not. We did not find that any one kind of process worked more or less well than any other. Instead, we found that institutions making simultaneous decisions on many fronts at the same time (which we called "simultaneous tracking") were adapting more effectively than those that had delegated the responsibility for strategizing to JBDCs. Change in colleges and universities comes when it happens in the trenches; what faculty and students do is what the institution becomes. It does not happen because a committee or a president asserts a new idea. We need further study of how and why these street-level changes occur and how they actually shape the directions of a college or university.

Conclusion

Is Strategic Governance: How to Make Big Decisions Better a useful book? The answer largely depends on the reader's perspective. Schuster and associates have clearly identified a serious dilemma in college and university organization, namely, that legitimacy and efficiency are conflicting values and cannot be easily resolved by manipulating structure or process. They have reflected on how colleges and universities might make good strategic choices independent of the structures or procedures they might employ, which I think is an important contribution. They have also established that diversity among colleges and universities makes it difficult to generalize about change and adaptation. [End Page 110]

In these ways, and assuming one would want to reflect on the richly examined experience of others who have tried the JBDC, the Schuster team makes a serious contribution. However, the organization of this book makes it difficult to relate the case material to themes the authors wish to develop. I also found it difficult to connect the book's conclusions to patterns and consistencies in the data. But most reader will give the authors considerable latitude because of their obvious clinical sophistication and perceptive treatment of the cases.

I came away concerned about the implication that strategic planning could be done successfully if the right methods of structure and process could be arranged. If this is the authors' conclusion, I would challenge them to look further through a different lens. That lens would add a different mix of theory and perspectives to their interpretive work. It would force them (and the academic community) to ask how institutions might best adapt, and it might lead them to visualize the relationship between planning and decision making in a different way--as a process of continuous experimentation, for example. Strategy, in the classical sense, may be a dead issue, and our recognition of it none too soon for colleges and universities facing difficult economic times.

References

Baldridge, J. V. (1971). Power and conflict in the university: Research in the sociology of complex organizations. New York: John Wiley & Sons, Inc.

Birnbaum, R. (1988). How colleges work: The cybernetics of academic organization and leadership. San Francisco: Jossey-Bass.

Chaffee, E. E. (1985). The concept of strategy: From business to higher education. In J. C. Smart (Ed.), Higher Education: Handbook of Theory and Research (Vol. 1, pp. 133-72). New York: Agathon Press.

Cohen, M., & March, J. (1974). Leadership and ambiguity: The American college president. New York: McGraw Hill.

Hearn, J. C., Clugston, R. M., & Heydinger, R. B. (1993). Five years of strategic environmental assessment efforts at a research university: A case study of an organizational innovation. Innovative Higher Education, 18(1), 7-36.

Hearn, J. C., & Heydinger, R. B. (1985, July/August). Scanning the university's external environment: Objectives, constraints, and possibilities. Journal of Higher Education, 56(4), 419-45.

Huff, J. O., Huff, A. S., & Thomas, H. (1992). Strategic renewal and the interaction of cumulative stress and inertia. Strategic Management Journal, 13, 55-75.

Keller, G. (1983). Academic strategy: The management revolution in higher education. Baltimore, MD: Johns Hopkins University Press.

Levin, H. M. (1991, May/June). Raising productivity in higher education. Journal of Higher Education, 62(3), 241-62.

McPherson, M. S., Schapiro, M. O., & Winston, G. C. (1993). Paying the piper: Productivity, incentives, and financing in U. S. higher education. Ann Arbor: University of Michigan Press.

Mintzberg, H. (1994a, January/February). The fall and rise of strategic planning. Harvard Business Review, 72(1), 107-14.

Mintzberg, H. (1994b). The rise and fall of strategic planning. New York: Free Press.

Schuster, J. H., Smith, D. G., Corak, K. A., & Yamada, M. M. Strategic governance: How to make big decisions better. Phoenix, AZ: American Council on Education/Oryx Press, 1994.

Stopford, J. M., & Baden-Fuller, C. W. F. (1994). Creating corporate entrepreneurship. Strategic Management Journal, 15(7), 521-36.

Weick, K. E. (1976). Educational organizations as loosely coupled systems. Administrative Science Quarterly, 21(1), 1-19.

Weick, K. E. (1977). Re-punctuating the problem. In P. S. Goodman, J. M. Pennings, & Associates (Eds.), New Perspectives on Organizational Effectiveness, 193-225. San Francisco: Jossey-Bass.

[an error occurred while processing this directive]