Finding Your Inner Hedgehog

BOB ELSDALE/JUPITER IMAGES

In his iconoclastic and insightful article published in the Fall 2007 issue of Independent School, “The Case Against Strategic Planning,” Rob Evans convincingly takes on a sacred cow of transitional school governance. I agree with Evans’ overall critique. Schools should dismiss so much of the strategic planning that looks good on paper but that doesn’t actually change a school for the better. But I believe that schools can benefit from an alternative approach to strategic planning that holds real promise for facilitating the kind of change management that will foster the survival and flourishing of independent schools in the years ahead. In fact, it may be necessary in the financial “perfect storm” that has begun to buffet independent schools.

When a school is financially shaky or its key constituencies in some doubt as to clarity of mission, the knee-jerk response of many boards and heads is to call in an “expert” consultant to run the school through a series of brainstorming meetings that usually create more heat than light. Typically, parents, teachers, board members, and even staff members are tapped for large- and small-group meetings to discuss the mission and future direction of said school in a process that can take many months and cost the school many thousands of dollars in consulting fees.

The Illusion of Strategy
The result is too often a glossy booklet outlining in considerable detail the process just undergone, the challenges the school faces, a summary (with innumerable minutiae) of the discussions that have transpired — all culminating in a usually saccharine “vision,” extensively supported by financial projections and action points. This final product is so compellingly professional and eloquently confident in its data-driven analysis that it resonates with Olympian veracity, the elegance of the result alone testifying to the value of the consulting expenses incurred. Unfortunately, the strategic plan that such a process creates is rarely worth the paper it is written on.

An entire industry has emerged of business professors and independent business “gurus” generating a vast literature for Fortune 500 companies to help shape their business approaches. Independent schools ignore these resources at their peril.

This process of what traditionally has been termed “strategic planning,” according to Evans, “isn’t actually strategic at all. More precisely, it doesn’t produce strategic thinking, which is what organizations really need.” Evans also correctly faults the traditional process for being “the antithesis of strategic planning” in that “it is bottom up, not top down; organized, not structured; designed by practitioners, not trustees and administrators.”

Although Evans never offers a clear explication of what he considers “truly strategic” planning, he does intimate that such an approach would deliver “clarity about what the school is and what it isn’t, about whom it’s good for and whom it’s not good for, about what it can — and can’t — become.” In this, Evans is absolutely correct, and I believe the model for how truly strategic planning can be accomplished is to be found in an intelligent adoption of business practices from the for-profit world.

A More Profitable Approach
Compared to the independent school world, the competitive world of for-profit business moves at the speed of light. In that cutthroat milieu, effective strategic positioning and differentiating market strength mark the difference between survival and rapid financial failure. Any product going to market must have some positional strength on its side to succeed, be it pricing or value (perceived or otherwise), that separates it from the competition. Given these demands, the business community has developed highly effective tools to shape business plans in a real-time marketplace, where the rewards and stakes are enormous and instantaneous. Indeed, an entire industry has emerged of business professors and independent business “gurus” generating a vast literature for Fortune 500 companies to help shape their business approaches. Independent schools ignore these resources at their peril.

Some readers, no doubt, are already decrying this assertion by pointing out that schools are not profit-driven and that educating children is not analogous to selling toothpaste. There is, of course, truth to this. I earned my M.B.A. by taking night classes while working as head of a day school, and I often reminded my B-school professors that the business model of nonprofits differed substantively from what was being taught in the classroom, that nonprofit managers had to balance a different set of social and ethical considerations. A school, to take just one instance, that moves a day student into a dormitory at no extra charge to help that student escape from an abusive home situation is hardly working from the same financial rulebook as the CEO of General Motors. But I’ve come to see that these differences ought not to deter us from the essential task of securing the financial sustainability of our schools by borrowing, when appropriate, from the multi-million dollar consulting industry that has churned out enormously valuable insights and tactics that have helped make American businesses the envy of the world, even during economic downturns.

Excluding teachers may seem like heresy in an independent school, but our experience suggests that teachers, for all of their many virtues, have little insight into how to run a school.

For while schools are, in some respects, unique businesses with a transcendent mission, they are nonetheless businesses — and ones that are facing unprecedented financial challenges that require supple adaptation or failure. The demographic fluctuations, the challenge of globalism, the demands of new IT expenditures, the persistent upward pressure of wages and benefits, the burgeoning expectations of consumer-savvy parents who demand small classrooms with myriad concierge services in state-of-the-art buildings, the diminishing returns on endowment, expanding energy costs, the challenges of filling beds and desks or meeting development goals in a sour economy, and myriad other factors are converging in a “perfect storm” that will shake every independent school to its foundations and will likely lead to the implosion of many schools unable or unwilling to position themselves wisely amid the shifting shoals of the 21st-century marketplace. Schools that ignore the business side of education today do so at considerable risk to their viability.

Given, then, that the times demand as never before that independent schools apply all of the business acumen they can gather, what lessons might be applied from the corporate world? I believe that two strategic lessons stand out above all others, and they are sequentially related: that a successful business must be strategically differentiated into a value-added market niche uniquely suited to it, and that such a business must then allocate its resources in line with establishing, building, and securing that niche to the exclusion of competitors. When I was in business school, the jargon-inflexed way to say this was to determine your business’s market-differentiated “core competency” and align your “value chain” along that core competency in order to build “barriers to entry” from competitors. These same fundamental insights were arrived at by Jim Collins from his magisterial study of successful companies that has generated two superb books, Built to Last and Good to Great. (Fortunately for us, Collins has more recently applied his insights to nonprofits in the brief monograph, Good to Great and the Social Sectors, though I strongly encourage reading the book-length treatments for fuller understanding of his key concepts.¹)

Finding Your Inner Hedgehog
How might these concepts be applied to a meaningfully strategic approach in the independent school setting? At Cushing Academy (Massachusetts), where I am head of school, we have wrestled with this question — and have come up with a response that we believe holds great promise.

See sidebar to this article, "The Cushing Institute for 21st Century Leadership."

When I arrived at Cushing in 2006, the school was facing what so many of its peers grappled with: the challenge to fill its admissions slots with students of the caliber it sought, bloated expenses and tight revenues, a general confusion in the public perception of just what Cushing stood for, and an endowment that was too small for the school’s long-term goals. Everyone could readily agree that these were tangible challenges that warranted remedy, but bringing in a traditional strategic planner, I suspected, would lead us on a wild goose chase, the end result of which would be a document telling us to be true to our mission statement (which is virtually indistinguishable from every other school’s mission statement) — in short, redouble our commitment to the sort of thought and behavior that led us into this strategic quagmire in the first place.

Instead, we formed a committee that comprised all key administrators and trustees, sworn to confidentiality, in order to honestly examine the school’s actual market position and explore what niches might be available and financially valuable for the school to claim in contradistinction from its peer competitors. This committee was based on a firm conviction that effective change is only brought about by key senior executives and trustees — leaving teachers out of the decision-making process. Excluding teachers may seem like heresy in an independent school, but our experience suggests that teachers, for all of their many virtues, have little insight into how to run a school. We were also operating under the business principle that time matters — that we needed to move relatively swiftly.

The committee first tried to define what Cushing was. No one could. The school had no clear overarching focus and no cogent narrative. It was, like so many schools, an ill-defined attempt to be all things to all constituents, and, as a result, it was unable to rationally allocate resources in a real world of scarcity. There was no clarity about what criteria to apply to building or sunsetting programs, and, as a result, the school was programmatically distended and over-committed, while, ultimately, looking like a pale wannabe of Exeter or Andover.

We next began to discuss the need for a unifying vision of Cushing going forward. We laid out what I believe are the three strategic options for any school:

1. Keep on the current path, only more so.

2. Become something entirely different from what we currently are.

3. Determine our most marketable current competency and put that forward as our core strength, aligning our message, program, and resources with that. (Everyone on the committee had previously been required to read Jim Collins’ books, so we referred repeatedly to his “hedgehog concept.”)

We quickly agreed that numbers one and two were untenable. We were having these discussions in the first instance because the school felt adrift, and trying to make any institution something it is not is a sure recipe for deracinated disaster. Trying to get Pampers into the toothpaste business, we noted, was not feasible.

The traditional approach to strategic planning is not wholly without value. It is just the wrong tool for the task to which it is often applied.

Working from approach number three led us to list the school’s key strengths — real strengths that had become hidden in our efforts to be all things to all students. Ultimately, we winnowed a list of seven to two that held the most promise of leveraging historical value, public perception, and market opportunity. During that stage, we kept reminding ourselves that Cushing could not succeed by trying to directly compete with an Exeter but, rather, could best compete by becoming a niche player and owning that niche. Our rallying cry at this point was that we would “be Southwest Airlines to their Delta.” We then formed two subcommittees, each of which was tasked with preparing a presentation arguing that its given topic warranted being selected as the central strategic focus of the school. Some weeks later, the committee viewed the two presentations and voted unanimously to bind together Cushing’s disparate strengths in globalism and technology in order to found the Cushing Institute for 21st Century Leadership.

During this process, faculty and parents were told that the committee was meeting and, at each key stage, we reported out to the broader community what we had discussed and where we had arrived. We then garnered considerable and broad-based feedback, which we clearly articulated as advisory, and brought it back to committee. The feedback invariably improved (but did not fundamentally alter) the committee’s thinking without paralyzing a deliberative and expeditious process. The faculty, in turn, felt informed and consulted, which, in the end, led to their consent and growing enthusiasm.

Once the new strategic plan was more fully launched, we began to build resources behind the initiative. Far from added-on marginalia, the Cushing Institute for 21st Century Leadership incorporated previous relevant programs at the school and became the hub of all learning at Cushing. Every department launched discussions about how to prepare students for the twenty-first century in their respective classrooms and reported back to the faculty as a whole on their progress. The institute was given a prominent physical place, a director and other personnel were designated, and the institute was even given veto power over any new academic programs at the school. Money for travel, marketing, and a speakers’ series were directed toward the institute’s first-year rollout, and the hiring of teachers was informed by criteria we designed to assess whether they were well prepared to teach in a 21st century curriculum. Faculty even determined what skill sets they should inculcate for 21st century students (such as data-mining and qualitative selection on the Internet). Teachers were granted professional development requests based upon their potential contribution to the school’s new initiative. There were many other facets, culminating in a formal partnership between Cushing and the James Martin 21st Century School at Oxford University to develop programs together that will be shared as free-ware on the Internet for schools around the globe.

The point of this synopsis is not to tout Cushing’s program, but to underscore that the process we underwent leveraged existent strengths that resulted in strategic resource allocation and programmatic distinctiveness. Programs that did not further the initiative were given fewer resources in order to build those that did. The school had a new clarity in its message both internally and externally, building a palpable enthusiasm that Cushing was working as a unified team. As a result, we now had a more compelling narrative to bring out to the world. The annual fund doubled in two years, and applications at the 142-year-old school rose 35 percent within one year of the initiative’s launch (with a quantifiable increase in SSAT scores of applicants). As one coach said to me, “Cushing feels like it’s on its way to the championships these days!”

Cushing now knows what its unique strength is, as well as what it is not. This gives us clarity not only about what students to attract but those who are not the best “fit” for the school, so we can be more efficient and effective at segmentation of our marketing. We have criteria by which to choose where best to direct our monetary and human resources. We have trimmed large portions of the old budget from programs that were not value-added while adding new programs and building new revenue streams aligned with our “hedgehog concept.”

As we leverage the school more effectively along its 21st century core competency, we also make it more difficult for other schools to compete in our market niche. As the alignment of resources builds our strategic re-positioning into the very sinews of the school, Cushing goes further down a road of implementation that other schools would find difficult to fully copy, should they wish to do so.

Reclaiming Institutional Quintessence
This article is an attempt to build upon Rob Evans’ valuable critique of traditional strategic planning that, from my own experience, especially in the hands of lesser practitioners, can cost a school an enormous expenditure of energy and social capital, not to mention money, without meaningful advancement of the school’s market clarity or business strength. In its stead, I have posited a process that can be used by school leaders and consultants to help schools reclaim their institutional quintessence and, in doing so, provide them with directional viability in turbulent times.

This is not to say that all prior strategic planning has been a waste of schools’ resources. There have always been master practitioners who have steered the planning process toward truly strategic thinking. Moreover, the traditional approach to strategic planning is not wholly without value. It is just the wrong tool for the task to which it is often applied. As a headmaster, I have seen both the wrong and the proper use of traditional planning.

In my first job as headmaster, I called upon an outside consultant to guide my school through a strategic planning process because the school felt uncertain of its direction and was having some difficulty filling its desks and marketing its message. The consultant duly ran us through a series of dreary meetings, replete with making lists on whiteboards and going to or returning from break-out groups, that brought all teachers and many parents into distended discussions of the school’s mission. This led down numerous alleyways of idiosyncratic faculty frustrations and along a variety of narrow paths that spoke to minor departmental interests or broad boulevards that allowed the more philosophic to wax eloquently about meta-educational epistemology. The final result, on paper, was a document that was printed with impressive aesthetic sensibility but that was no more than an anodyne lowest-common-denominator synthesis of committeespeak, albeit supported by an impressive appearance of quantitative rigor. Another final result, on the ground, was that I had to contend with a lot of falsely empowered teachers, each of whom assumed that their comments during the six-month process were so compelling that they should have been decisive. The fact that they had not made their way to the overarching thesis of the final document fostered teacher dissatisfaction.

I have subsequently, however, used a very similar process to foster more cohesion in a school community. The difference was that, in the second instance, I was clear from the beginning that the goal of the process was only to elicit faculty input and to facilitate a community approach to listening closely to each other’s concerns and ideas. Any product from such discussions, beyond the intangible but not insubstantial benefit of furthering communication and understanding, all teachers understood, would only be used in an advisory capacity by the administration. With this caveat clearly conveyed, the traditional approach to strategic planning proved a useful tool for internal community-building but had precisely no relevance to the strategic direction of the school.
Perhaps a more subtle, sophisticated, and useful approach for consultants in the future is to offer a variegated taxonomy of tools for schools to reach for, each suited to particular needs.

Consultants might present schools with an assortment of processes dependent upon their desired outcomes. If fostering community and goodwill, use traditional planning; if pursuing a more clearly articulated market strength, apply the method described in this article. I believe that this is truly strategic planning — cultivating a replicable process that can concretely reposition schools to play to their respective strengths and providing schools with a means to concentrate their resources where they will be most cost effective. For families, the net result of such a process could be a greater diversity of distinctive offerings in the independent school marketplace, and of schools that are more financially confident and solvent.

Of course, the effective implementation of such a strategic plan, once arrived at, depends upon capable school leadership. Fortunately, for schools, there is an even larger literature on leadership in the for-profit sector from which we might borrow.

James Tracy is headmaster at Cushing Academy (Massachusetts) and a strategic planning consultant.


Note

1. In Collins’ taxonomy, “core competency” correlates closely with the Collins’ “hedgehog concept” and aligning resources along the value chain encompasses a number of well-described processes (including “turning the flywheel”), but I think the approaches are sufficiently parallel to warrant conflating them for my purposes.