wp-1449390649630.jpegOver fifteen years in higher education I’ve seen Strategy, Planning and Budgeting battle it out for supremacy in a three way match up. Let’s look at the line-up. In the red corner we have Strategy, which should be the strongest of all, but too often is missing when the going gets tough. In the blue corner is Planning, with the ability to drive strategy out of the organisation, because it can have a sclerotic effect on our ability to cope with uncertainty. And in the green corner, we have Budgeting, with a natural advantage because the dollars need to add up regardless of strategy or planning.

Strategy is often no more than a heart-warming fable, because it is misconceived as a task of rallying staff around a chosen future. And of course we choose a future in which we thrive – why wouldn’t we? For example, most of the top 500 Universities aim to be in the top 100 by 2020. We need to learn from Heraclitus, because, in the same way that we never put our feet in the same river twice, so too are the options available to us for the future changing as each moment passes.

Planning can fall into the trap of reverse engineering a financial outcome that preserves the natural order of things. How many students do we need to afford the staff that we have? What capital investment do we need to house the staff that we have and accommodate the growth in student numbers we need to afford the staff that we have.

And Budgeting is often stage managed as a fierce annual contest over a small discretionary pie. It is momentarily satisfying, but inviting a Pavlovian pattern of behaviour to emerge.

So is there hope? Can Universities find a way that these three can work together to add value to our organisations?

First, I suggest that strategy is strongest when it is preparing us for the range of possible futures that may emerge and enabling us to adapt. People follow value, and money follows people. So money isn’t the starting point for future proofing your University – it is value. How do we continuously find value for our communities – instead of finding communities for our value?

Second, planning should be about alignment, collaboration and learning. How do you adaptively align the internal logic of the organisation with the external reality? How do you collaborate to achieve your goals? And how do you learn and improve from your experiences.

And third, budgeting – well that’s just the financial part of planning isn’t it?

I’ve seen good practice in three places I’ve worked.

In the late 1990’s, I was part of a Government wide project in South Australia linking planning and budgeting. Together we produced the first ever State Strategic Plan, one of the first of its type in the world. It set out the State Government’s areas of focus for the next five years. The budgeting process was then about focussed as best we could on achieving these targets.

In the mid 2000’s I facilitated the University of Adelaide through a scenario-based future proofing exercise, which identified the core capabilities we needed to thrive in the likely futures. Student experience was found to be a critical success factor, and so we then co-created with our students the most dynamic student learning hub in Australia, and through that learn how to listen and partner with students.

And through the mid-2000’s to the present, the University of Melbourne has pursued three transformational strategies to position Melbourne to thrive in an uncertain global higher education market.

The curriculum was re-engineered by creating professional graduate degrees and reducing the undergraduate degrees from 96 to 6, which led to a broader set of subject choices for undergraduate students, and helped propel the graduate schools of Law and Education into the top ten worldwide.

The focus in the early 2010’s on academic standards and performance has actively rewarded better performance and enabled resources to be directed to growth areas.

And the introduction of a new operating Model in 2015 has provided a support services platform that enables better strategic focus and agility of leadership, driven down cost and supported a once in a generation transformation effort to improve the service experience and better support the academic mission.

The common themes throughout these experiences has been the need for strategy to help us make sense of our value to our community in the face of uncertainty, for planning to help us adapt to the changing reality, and budgeting to make sure our resources support performance. Ultimately, institutions of learning need to get better themselves at learning faster than the rate of change. It is not the fittest species that survive – it is the most adaptable.