Case study - navigating growth in higher education

Strategy Execution Life Cycle?– All six phases of Guberno’s strategy execution lifecycle

Background context?– Guberno’s client was a post-graduate higher education provider that has a privileged market position in the Australian higher education system, repeatedly being recognised as the leading institution in Australia in its focus learning areas by international ratings agencies. While overall the industry segment was experiencing strong growth, the needs of learners were shifting to more continual lifelong learning to meet the needs of a rapidly changing workplace. In addition, new education providers were emerging and traditional competitors were able to expand their geographic reach leveraging the capabilities of new digital learning technologies – with both trends adding to competitive intensity in the market.

Strategic Challenge?– Despite growing demand, increasing competitive intensity was challenging the financial sustainability of this premium higher education provider. In addition, a range of market indicators were suggesting reducing distinctiveness in the eyes of learners. In an industry sector subject to disruptive technologies, there was strong internal tensions around where to focus limited resources for greatest impact. The learning provider had strategically invested growth resources into building its digital capabilities and a range of learning products were in early stages of commercialisation and market testing. While a large portion of existing revenue was sourced from traditional longer term degree products, there was uncertainty around the resilience of these intense effort/early career degree products relative to shorter and multi-modal executive education learning products taken progressively by learners over a career life cycle.

Strategic Activities?– Guberno worked closely with the leadership team of the learning provider to progress through a structured strategic thinking process that involved the following key activities;

• Detailed review and synthesis of the changing internal and external landscape and the implications for the learning provider and higher education trends.
• Detailed review of optionality around the possible strategic positions for the learning provider and its relative competitive advantage relative to other competitors.
• Alignment around a preferred strategic positioning and the implications in regard to activities and capabilities of adopting the preferred strategic positioning.
• Clarification around the purpose, vision and ambition for the learning provider and alignment around the four core strategic objectives to deliver against the future aspirations.????

These activities were given effort by sub workteams and given focus by milestone leadership workshops where the workteams would report back progress. The process engaged the Board in sgtrategy working sessions on two occasions to assist in shaping the emerging strategic blueprint.

Outcomes?– The process delivered a high degree of leadership alignment around the vision, ambition and four key strategic objectives to deliver against them. Importantly, the process delivered an integrated framework for thinking around the learning providers’ product portfolio which reinforced the synergy between the different component parts of the learning provider. The strategy was presented and directionally supported by the Board. The leadership team is in the process of translating the strategic blueprint into detailed business, capability, and financial planning for full endorsement by the Board.

Key Learnings – For much of my career, I have worked and supported for-profit commercial organisations and this case study was the first assignment in a not-for-profit – albeit commercial – organisation. Not-for-profit adds strategic complexity as it elevates a range of social impact metrics to sit alongside profitability at the top of the performance metric tree. Achieving alignment amongst diverse stakeholders proved more challenging when preferred activities had a differential impact on a broader range of high-level performance metrics. It is particularly problematic if activities lead to conflicting impacts on the performance metrics – e.g. if greater near term social impact comes at the cost of improved profitability that is needed to fund greater investment in longer term measures to increase the magnitude of social impact.

Secondly, this case study reinforces a more enduring set of strategic growth principles in that strengthening the core business provides the economic engine to build out new capabilities in adjacent activities (and not the other way around). If adjacent growth activities have a reinforcing benefit to strengthening the core then even better as it can fuel a virtuous cycle of distinctive competitive advantage and growth. In competitive strategy it is worth remembering that your growth adjacency is more than likely another competitor’s core activity and so thinking about why and how you have a right to win is key.