Report 00/24

Strategic planning in higher education

A guide for heads of institutions, senior managers, and members of governing bodies

This version of the document contains the Contents, Summary and Introduction only. The full document is available electronically in Word (507Kb) or PDF (221Kb) formats, or in print from HEFCE.

Contents

Summary

Strategic planning - introduction and overview

The strategic planning cycle 1 - Planning

The strategic planning cycle - Documenting the plan

The strategic planning cycle - Implementing and monitoring the plan

Appendix A: Project staff and members of the Strategic Planning Steering Group

Appendix B: Institutions participating in the project

Appendix C: Glossary

Appendix D: Review questions

Appendix E: Role of the governing body in strategic planning

Summary

1. This guide reviews good practice in strategic planning in higher education (HE). It originated in a consultation exercise which we held in 1998 to review our approach to strategic planning. Many of the institutions consulted said they would welcome some guidance on good practice.
2. The guidance has been developed with the help of a steering group drawn from higher education, and draws on the experience of 13 case study universities and colleges. It is not intended to be prescriptive: each university and college needs to decide how, and how far to make use of this guidance.
3. We aim to provide examples of good practice, and identify common principles. We hope thereby to help heads of institutions and senior managers to plan more effectively and so stand a better chance of achieving their institutions’ strategic goals. Appendix E summarises the role of governing bodies in strategic planning.
4. The guidance sets out a conventional planning process, because it is the most widely employed approach to planning in the sector. But the diversity of the sector means that there is no ‘right’ way, and there are many variations on how strategy is devised and delivered. The guidance deals with planning processes at the corporate level rather than the departmental level, although it does discuss the relationship between the two.

   Overview and key messages

5. The guidance discusses the key phases of the strategic planning cycle - planning, documentation, and implementation and monitoring. It gives examples of good practice from the sector, and includes a series of questions to help senior managers analyse their current approach and identify where improvements could be made.
6. The four key messages can be summarised as follows.

   HE managers recognise that planning is an essential tool

7. In virtually all universities and colleges, strategic planning is seen as an essential tool for effective institutional management. Unless time is invested to analyse the institution and its environment, and to consider its medium - and long-term direction and goals, it is unlikely that action will be focused or goals achieved. Effective planning helps higher education institutions (HEIs) to identify what makes them distinctive and what they have in common with other HEIs, and therefore it helps to maintain their individuality.

   HE managers recognise that planning needs to be systematic and embedded

8. Strategic planning in HEIs is a cyclical process with several related stages. Unless it is undertaken in a methodical and systematic way it will be of only limited benefit. In particular, unless there is communication and consultation throughout the planning cycle, particularly with staff, there will be little sense of ownership and little motivation to work towards achieving the institution’s strategic objectives.

   HE managers recognise that planning must lead to action

9. The plan should set out how the institution intends to operate in order to achieve its strategic goals and the intermediate practical steps for their attainment. There needs to be a commitment to ensure that the plan is not just another document, but a basis for collectively agreed and carefully prioritised action.

   HE managers and governors recognise the need for regular and challenging monitoring of implementation

10. Monitoring the implementation of the plan is an essential part of the planning process, and needs to be more than routine re-endorsement. The process also needs to allow for regular review and updating to ensure that the plan remains relevant.

     

    Strategic planning - introduction and overview

    Introduction

11. The importance of good strategic planning is recognised throughout higher education. All universities and colleges understand the need to clearly identify their mission and objectives, their priorities and targets for improvement, and the action to be taken to achieve them. Good progress has been made over a long period to improve the rigour of strategic planning.
12. But the challenges and opportunities facing higher education are growing every year. There is a constant need to secure greater value from available resources. Also the decisions and choices which institutions have to make become ever more complex as the requirements of students, staff, employers and society change. All of this places a premium on good strategic planning: the quality of planning must itself improve year by year.
13. Differences in approach and procedures are healthy and welcome in the diverse HE sector. There is no single right way to undertake strategic planning: what matters is what works for the institution, taking account of its culture, needs and organisation. But we believe that there is value in reviewing from time to time current approaches to planning across the HE sector, in order to identify the principles that are being applied and then to disseminate those which appear to be effective.
14. In 1998 we undertook a consultation exercise to review our approach to strategic planning in higher education. The results were reported in our circular letter 3/99 to institutions. One message from the consultation was that many institutions would welcome guidance on good practice in strategic planning: of those who commented, 84 per cent said they would like it. This report has been prepared in response.
15. At the same time, we recognise the ambivalence of many universities and colleges towards such good practice guidance. In some cases, this is because their practices and procedures are already well developed and effective, and they question what value they will gain from generic good practice reports. There is also an underlying concern that such guidance may be, or may be used in a way which becomes, prescriptive, seeking to impose a single model which may be inconsistent with what works in practice for individual institutions.
16. We take those concerns seriously. We recognise that good planning cannot be imposed externally. It will happen only if individual institutions want to do it. And it will keep developing and improving only through the innovations and commitment of individual institutions, each seeking to identify its own route to success. So in this guidance we are not seeking to prescribe a single approved model. Instead, we have tried to illustrate the range of good practice and identify the principles applied, with a view to providing a useful overview for those who want it.
17. We have involved universities and colleges at every stage in the project. We hope that most, if not all, institutions will find something to reflect on in the guidance. But we have not sent the guidance to all institutions automatically. Instead we will make it available and let institutions decide for themselves how, and how far, they will make use of it.

    Development of the guide

18. Preparation of this guidance was overseen by a steering group of representatives from the HE sector; the members are listed at Appendix A. We have drawn on the following information: visits to 13 HEIs, listed at Appendix B; our general knowledge of the sector’s planning processes; and a selection of the literature which provides the academic background to strategic management and which has evidently influenced the development of practices in HEIs. (We have drawn particularly on the following studies: Stacey, R ‘Strategic Management and Organisational Dynamics’ Pitman; Johnson, G and Scholes K ‘Exploring Corporate Strategy’ Prentice Hall; Warner, D and Palfreyman D ‘Higher Education Management’ Society for Research into Higher Education and The Open University; Smith, R J ‘Strategic Management and Planning in the Public Sector’ Longman)

    Use and content of the guide

19. The guidance is primarily designed for heads of institutions and their senior management teams. Appendix E outlines the role of governing bodies in the process. We hope that senior management teams will wish to:
    • review the guidance collectively
    • draw the guidance to the attention of governors, particularly Appendix E
    • use the questions in Appendix D to review their current approach
    • report the results of that review to the governing body.

    Terminology

20. Most terms used in the guidance are self-explanatory. Where there may be ambiguity we have defined our meaning in the glossary in Appendix C.

    Overview of the strategic planning cycle

21. Strategic planning is the part of the strategic management process which is concerned with identifying the institution’s long-term direction. It is a continuous, cyclical activity with three main phases:
    • planning - researching and analysing strategy and plans, generating ideas and choices
    • documentation - documenting the plans
    • implementation and monitoring - taking action to achieve the agreed goals, and monitoring progress or non-achievement in order to adapt the future strategy.
22. Some universities and colleges set out these phases in more detail in a timetable for their annual planning cycle. Such a disciplined process helps embed awareness of what planning is about, and to strengthen communication, expectations and consultation. However, a mechanistic approach can stifle creative thinking and provide an obstacle to flexibility and opportunism. Hence one key phase is the open generation of ideas and choices.
23. The process leads to a number of outputs, including:
    • a long-term plan, referred to as either the strategic or corporate plan, which includes the overall strategy and sets out the long-term objectives and how these are to be achieved
    • an operating plan or statement which distils the actions required in the year ahead;
    • actions necessary to effect implementation
    • monitoring reports and information which highlight progress or the lack of it.

    Figure 1 The strategic planning process

    

24. In most institutions we visited in preparing this guidance, there was an evident commitment to strategic planning at the corporate level. Those responsible for planning recognise that it is quite likely that the institution’s long-term objectives will not be achieved exactly as stated, because unforeseen changes in the internal and external environment are inevitable and may require the objectives to be revised. There is no virtue in sticking doggedly to a plan which has been overtaken by events. It is essential for all institutions to retain the flexibility to adjust as circumstances change, so that they can exploit unexpected opportunities and respond to unforeseen threats. Consequently, there needs to be frequent review of the overall direction to take account of, and adjust to, actual and potential changes to the organisation or its environment.
25. This inevitable fluidity does not mean there is no point in planning. Both governors and senior managers believe that the process remains valuable because it forces systematic analysis of the organisation and its environment, and because it generates a sense of ‘stretch’ by setting future direction and goals.
26. Some senior management teams have found it helpful to distinguish between:
    • a set of long-term, high-level principles for the direction in which they intend the institution to develop and the characteristics they intend it to have, looking ten or more years ahead
    • a set of objectives covering a shorter period — perhaps three to five years — for implementing those principles
    • an operating plan for the actions to be taken in the short term to achieve the objectives.
27. This distinction recognises that, given the rate of change in higher education and its environment, there is an artificiality in determining objectives too far ahead. But that makes it more important to have a collectively agreed and explicit sense of the direction of travel. As circumstances change, the institution can then respond in a coherent way which consistently serves to further its chosen direction, rather than reacting in an ad hoc way to the opportunities and risks that arise.