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Trusteeship Magazine

Parallel Tracks, Same Destination

By The Rev. Dennis H. Holtschneider, C.M.
November/December
2016

By setting a certain culture around innovation, the board sends a clear message that planning matters at the institution.

Ultimately, the board’s job is to satisfy itself that the institution is on a thoughtful path for long-term effectiveness, not necessarily to agree with every item within the strategic plan.

Building strategic capacity on the board will help institutions “make the jump” as higher education moves in new directions.

There’s an oft-told story among DePaul University’s more senior trustees about a former president who walked into a board meeting and asked for approval to construct a new science building. A trustee whispered to the chair of the finance committee, asking if the committee had approved it. “First I’m hearing of it,” he said. The trustee then turned to the chair of the physical plant and property committee. Getting the same answer, the trustee raised his hand and asked whether the board shouldn’t follow its usual processes first. The president responded, “Your job as trustees is to support the president.”

That president didn’t remain much longer.

And DePaul eventually built that science building.

When it comes to major decisions that set or implement strategy, trustees are often the final round of consultation. Intentionally so. From the administration’s point of view, the board does not know the higher education sector as well as the administration, and the administration doesn’t want to be slowed down or possibly frustrated in its attempts to “move things forward.”

The better solution is to create a board that does higher education strategy well. For the past decade, DePaul has been on a journey to build strategic capacity in the organization and on the board. We’re not a national model, but we have learned along the way.

The Right Questions Start with the Right Board

Ascension, the nation’s largest nonprofit health system, accepted the resignations of three of its four trustees two years ago and recruited six new trustees. It had grown far beyond merely a health delivery organization and required broader expertise to understand the many ways healthcare will be changing down the road. The new trustees were experts in emerging technologies, government health policy, insurance, corporate finance, and medical education, as well as new delivery models.

Both the old and the new boards loved the organization and gave their hearts to it, but their conversations were markedly different. The first spent its time overseeing present operations and turning an assemblage of healthcare systems into a coherent whole. The second has spent far more time thinking about where health delivery is going and how to reposition the organization so that it is successful in that new reality.

The strategic capacity of university boards can be strengthened in the same manner. Members are typically selected for many reasons, including providing key expertise for various board committees, leveraging political and corporate connections that can be of assistance, or supporting and helping recruit donors. Not often, though, are board members recruited specifically because postsecondary education is moving in new directions and expertise is needed to help the organization “make the jump.”

At DePaul, we were long blessed with a few trustees who thought strategically within their own businesses and brought those questions to bear in our board meetings. In recent years, however, we have been recruiting trustees specifically because they have strong strategy experience in their various fields. Not surprisingly, the strategy conversations and questions at the table have increased. The board now asks:

  • How we define our competitive set and what steps we are taking to secure or gain market share against it.
  • What we know about the reasons our students choose us or another college and the reasons they stay or leave for another institution.
  • Which degree programs or student populations are growing and which are diminishing, and what steps are being taken to stem any losses.
  • What investments should be prioritized and why.
  • Whether we have the expertise in-house to achieve our strategic goals.
  • Whether we have the resources or should establish partnerships with other organizations to move our organization forward.
  • Whether we are sufficiently prepared to withstand financial challenges and other foreseeable risks.
  • The degree to which we want to be an early adopter of new directions in the delivery of higher education.
  • How we recruit, retain, and support faculty through the arc of their careers, thinking of each hiring and tenure decision as the single most important strategic decision we make.

It’s not that we never discussed such matters before. It’s that the balance of time spent upon strategic issues has increased, and the sophistication of discussion has risen with it.

The Right Data

Boards—and university communities— focus and linger on the issues for which they have good data. Adding a vice president for planning to DePaul’s administrative team had many advantages, but perhaps none so immediate and lasting as the work to assemble and employ institutional data in service of strategic analysis.

We start all strategic discussions now by asking what data we need to see. As the sophistication of that data has grown and sharpened, trustees have become used to seeing reports that visually show strategic progress or failure. We create one page per topic, and put one clear sentence atop each page of data summarizing the trend and implications for DePaul.

Like many universities, DePaul was an easy victim of the “illustrative story,” where the board would rally to direct the administration to “solve” an issue when members had heard a heart-rending story on the subject. The extensive use of data has shifted the culture such that trustees are more likely to ask if the story is part of a larger pattern and to wait for the administration to investigate and bring back fuller information for consideration.

This approach has also enabled us to provide the same data to our faculty and staff for their shared governance work, and increasingly on a more targeted level to the deans for leadership of their various colleges.

Arriving Together

Sharing the same strategic data throughout the organization also helps with another common danger when it comes to the board’s role in strategic planning. Too often, the results of a university-wide planning process are presented to the board with a proverbial bow on top, and the board is asked to approve the institution’s work after, at most, a brief board planning retreat. The risk is that the plan won’t sufficiently address issues the board considers important or that the board might want to head in a direction different from that already agreed on with key faculty and staff constituencies.

The leadership challenge is to enable the parties within shared governance to arrive together at the institution’s strategic priorities. Typically, this requires presidents to design a process whereby the trustees and university community are on “parallel tracks,” receiving common data and frequent updates along the way, so that each one’s deliberations inform the other’s. Alternatively, the university could design a process in which trustee representatives actively sit on the institution’s strategic planning committee, thereby creating one process instead of two parallel processes that, ideally, meet at the end.

DePaul tried this latter “unified” process in 2006 and encountered several challenges.

  • Some of the trustees who volunteered had one specific interest and did not attend the meetings at which that topic was not discussed.
  • We had not created a way for trustees who attended university meetings to inform or otherwise bring other trustees into the decision making of which these representatives had been a part. As such, the larger body of trustees still wanted to be brought into the process of thinking about the strategy and did not cede its involvement to this smaller body of trustees.
  • Faculty were upset at trustees’ cursory knowledge of academic life, and trustees came to believe that faculty did not appreciate the larger financial implications of their planning. This led both groups to reinforce their characterizations of the other and to repeat those impressions to their respective groups.

In 2012, we tried a parallel-tracks process that worked better for us. Trustees discussed and created a set of issues for the plan to address; this then informed the university strategic-planning process. The trustees received the same data as the planning committee and were given updates along the way so that they could provide input if they wished. When a first draft of the plan was prepared, the board reviewed and commented before a final draft was approved by the planning committee and various faculty, staff, and student governance bodies. Updates had been given at every board meeting during the yearlong process, and a significant portion of every board meeting had been reserved for that purpose, making final approval relatively easy to achieve.

Making Room for Strategy

The best intentions don’t come to pass if they aren’t given time on the agenda. A number of years earlier, DePaul cleared room for strategic conversations by assigning much of the board’s routine business to the committees.

Today, each board meeting examines some significant strategic topic. The board needs to hear the administration’s point of view on online education, competency-based education, the complete loss of Illinois state funding for the poor, the impact of negative interest rates sweeping the world, and the effect of operating in Chicago with its attendant pension and other financial challenges. The board must understand and question the strategies of the various colleges and receive updates on some of our most significant investments, to consider course corrections or adjustments.

Each October, we dedicate a substantial portion of our regular board meeting to a formal strategy report and update. We review what’s been accomplished to date, what new challenges have emerged, and ways in which the plan must be adjusted. Because DePaul creates six-year strategic plans, the three-year mark is also used as a university-wide formal review and moment for adjustment to the plan. Since the university community is involved in this process, a parallel process is also employed here.

In addition, we often use the 45 minutes that we set aside for a standing item in every board meeting specifically to educate the board on the issues the university is facing. Better knowledge of the complexities we face helps the board to judge the initiatives we are proposing.

Exceptions to the Management/Governance Firewall

A great deal of strategy is shaped and set outside the formal strategic planning process. Contrary to all advice for trustees to stay out of management’s typical operational purview, we’ve learned to invite them into certain strategic questions early. They help us to shape our conception of the issue in front of us, design possible solutions, and implement those solutions once adopted.

Examples abound. Our new academic programs in IT, hospitality, and real estate all took shape because of the work of individual trustees to pull together key leaders in their respective industries and help design the programs, working with faculty and deans in the process. We even recruited trustees to the board so that they could advise us as we considered entering into allied health education. They not only pushed us to move aggressively into this space, but to consider doing so in a far broader manner than we would have, reshaping the offerings across five of our colleges, all of whose degrees serve the health industry in some manner.

We brought together a task force of trustees to consider, first, whether to and then how to strengthen our commitment to Division I basketball. As we contemplated building a major new arena in the middle of Chicago, it was that working group of trustees that reviewed multiple options and ultimately shaped the structure of the deal with Chicago’s Convention Center for a shared-use facility.

We also ask trustees to help lead the hiring of certain deans and VPs. We talk at length with the trustees as a whole about the performance of deans and key vice presidents. Strategy often resides at the level of the individual college, and we have learned to work across the management-governance divide for specific projects and purposes.

Establishing a Board-Driven Culture around Innovation

The board sets a certain culture around innovation, whether it realizes it or not. By requiring the institution to tie the annual budget, the master plan, the annual goals for senior administrators, the president’s annual evaluation, and possibly even various compensation incentives and other institutional rewards to the achievement of the strategic plan, the board sends a clear message that planning matters at the institution. By focusing its own annual schedule and agenda on these topics, the board signals that it will focus intently on these matters, as well.

These structural matters are reinforced when the board supports innovation even in the leanest of times, asking to see the funds in the annual budget that will support key investments to push the organization forward. Boards must also give administrators permission for strategies to fail, seeing creative activity and quick exits as management successes, not failures. Without such supports, presidents will be understandably hesitant to innovate.

A board can overstep, of course, by reading the latest article in the Wall Street Journal and pushing the administration to adopt full-scale every passing fad for the reinvention of higher education. Presidents often have the unenviable job of dousing some ideas from the very people who write their annual job evaluations. Ultimately, the board’s job is to satisfy itself that the institution is on a thoughtful path for long-term effectiveness, not necessarily to agree with every item within the strategic plan.

Building Strategic Capacity

Between the simple approval of the institution’s plan and the much more enjoyable shaping of that plan in its early stages, trustees can play many key roles. The challenge is for the board to staff itself with knowledgeable individuals who know higher education, strategy more generally, and the specific strategic areas that the institution is undertaking. Conversations are dramatically improved by data that raise key matters for attention and shape the particular manner in which they will be addressed. The organization can move forward effectively if the board and institution work in ways that help them to arrive at strategic priorities together. The board can play a powerful role shaping specific individual strategies, even as it allows the administration the room to actually lead the institution.

Strategy is ultimately a dance, of course, and more a square dance than a tango. With attention to the other dance partners—and one’s limited but key role—it’s also the most enjoyable and fulfilling role board members can play in the life of their institutions.

Image Credit

P. MEDICUS/GETTY IMAGES
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