~ Russell Roberts[i]
To get what we want, we must also give something up. It’s basic to the human experience – we cannot “have it all” 100% of the time. (It’s also the source of the curious idiom, “you can’t have your cake and eat it, too,” because if we eat the cake, we don’t have it anymore.) The economic term for this is “opportunity cost”: the tradeoffs that must be made in order to achieve a goal or obtain something we want. This concept is among the core principles of both economics and academic leadership. Often, opportunity cost is a simple exchange of money for a product or service. We don’t usually think much about the impact of small transactions like filling the car’s gas tank, but every decision we make is accompanied by a set of related options we did not select and the impacts of these choices within a web of interdependent factors. Academic leaders must be constantly aware of this principle, because each decision, large or small, will have multiple consequences. For instance, if we want to add a new course, someone needs to teach it. If it will be taught by a current faculty member, then another faculty member will have to shoulder the responsibility for one of the courses that the professor who is assigned to the new course taught previously. If the new course requires hiring a new faculty member because no one in the department possesses the necessary expertise, the cost of that professor’s wages will have to be included in a budget. However, budgets are finite, so any increase usually requires a corresponding decrease in another area. Where will the money come from? Furthermore, bringing a new person into an organization will also have non-monetary impacts such as potentially changing the interpersonal dynamics of the department. All of these factors and more are inseparable from the decision to add a new course to the schedule.
Opportunity cost is not limited to monetary factors, just as fiscal responsibility is but one aspect of our job as academic administrators. It extends to every aspect of the organization and the people within it, from our oversight of faculty development, to our interactions with community members, to the vision we cast for the organization – it encompasses all of the strategic trade-offs we make each day, often without even being consciously aware of their impact. Therefore, learning how to manage the complex and varied opportunity costs of academic leadership requires the application of four key strategies: prioritization, strategic planning, pragmatism, and resourcefulness.
Prioritization begins by accepting two realities. First, we cannot meet each of our responsibilities optimally each and every day. If we’re focusing on completing Task A, then Task B (and C and D) will remain un-done. The key is to ensure that our attention shifts from day to day, not spending too much time on one thing at the expense of another. If, today, we choose to address a faculty concern, then tomorrow we deal with the analysis of recent trends in enrollment. The day after that, we focus on meetings with new faculty members. Of course each day will be filled with multiple activities and we must give our attention to more than one task, but it’s exceptionally difficult to continuously devote 100% to every area all of the time. Prioritization forces us to determine where it’s most advantageous to focus our energies, and maintaining a logical rotation of priorities helps ensure that each one receives attention in due course.
This brings us to reality two: we cannot do everything alone. When it’s not possible to devote the personal time or attention a problem will require, we must find someone who can carry that responsibility on our behalf. Administrators need a core group of trusted individuals who work collaboratively to advance the organization’s mission and vision. Prioritization is crucial here as well. Some tasks should remain the provenance of the leader, such as any time we’re called upon to be the face and voice of our organization, when we need to interface with upper administration, or in matters where we must exercise the authority of our position to achieve a goal. Other tasks can and should be handled by other people whom we trust. We have to apply our best judgment to the decision of whether to complete a task ourselves or trust another individual to take care of it, just as we determine the sequence in which tasks will be accomplished. Some priorities demand our immediate attention, while others are less pressing. Knowing what to do, when to do it, and by whom it must be done is crucial to organizational success. Conversely, thinking that we can do everything alone and all at once is a recipe for disaster. Planning and prioritization ensure accountability and prevents lesser responsibilities from falling through the cracks or being subsumed by more pressing matters.
An academic strategic plan is the outcome of our prioritization efforts. It formalizes who’s responsible for achieving different priorities, clarifies roles, and establishes benchmarks for accomplishment and schedules for when different tasks must be done. A sound strategic plan removes doubt and confusion, replacing them with clarity and shared purpose. Strategic planning should occur at a minimum of two levels. First, a long-range plan maps out where the organization should be five or more years into the future, setting challenging goals that inspire collective effort. Second, it should also encompass short-term goals with step-by-step measures for their achievement, defined by attainable objectives and concrete benchmarks providing evidence of progress.
Next, we must approach leadership pragmatically. Both vision and idealism are necessary to our forward momentum, but because every decision an administrator makes has a cost, we must temper our outlook with practicality. This includes accepting that our choices will spark resistance. No innovation, no evolution, no growth occurs without opposition. The members of our organizations tend to prefer the status quo and some will vociferously object to any proposed change, even when the situation is dire. Accepting this fact and handling it pragmatically allows us to both anticipate the negativity that we are going to encounter and also to learn from those in opposition to us. Critics serve an important function in pointing out the deficiencies in our plans, giving us the opportunity for revision and refinement. We will probably not be able to change the minds of those determined to cling to the status quo or to resist change, but our challenge is not to earn their endorsement – it’s to reach a point where the organization we lead is better than when we began. Pragmatism allows us to make a clear-eyed assessment of a situation, to anticipate likely outcomes and challenges, and plan a course of action that allows us to navigate the maze successfully.
Finally, resourcefulness allows us to work within institutional structures but not to be constrained by them. Perhaps no human institution is as tradition-bound, complicated, or difficult to change as higher education, yet leaders need not be confined by its apparent inflexibility. Applying an entrepreneurial mindset to the challenges we face allows us to find a path through what at first appears to be an impenetrable forest of obstacles. Even as we accept the economic reality that to gain we must be willing to lose, we should remain adamantly unwilling to settle for defeat until all possibilities have been exhausted. An entrepreneurial mindset seeks opportunity, fueled by vision but facilitated by a spirit of resourcefulness. Where can we find the resources we need among those that already exist within the institution? Can we re-purpose, revise, transform, or utilize existing resources differently? Can we identify community or corporate partners who might help us reach our goals? Most importantly, resourcefulness is about finding opportunities that we can build upon to improve the organization we lead. Institutional legacies, histories, or traditions – “But this is the way it’s always been done!” - prevent us from perceiving these prospects. Resourcefulness helps us to find a way around this obstacle, allowing us to consider situations from a fresh perspective and to envision new ways to meet the challenges we face.
The principles of economics don’t apply to higher education because of its high cost or financial complexity. They apply because higher education is a human institution and therefore follows economic patterns that have been observed, analyzed, and applied for generations. Recognizing and applying these to our practice of leadership allows us to identify strategies that will foster to the greatest success for our organizations. Therefore, prioritization, strategic planning, pragmatism, and resourcefulness empower us to engage in continuous improvement of both the institutions we lead and our own expertise as academic administrators.
AXIOM: To maximize their organization’s success, academic leaders should remain aware of the opportunity cost of their decisions, engaging all available approaches and assets and taking a pragmatic stance that incudes strategic planning and prioritization along with resourceful identification of opportunity.
[i] Roberts, Russell (Feb. 5, 2007). Getting the Most Out of Life: The Concept of Opportunity Cost. Library of Economics and Liberty. http://www.econlib.org/library/Columns/y2007/Robertsopportunitycost.html
Taylor, T. (March 15, 2013). How Successful Leaders Prioritize – Examining the Steps to Successful Tasking. Dale Carnegie Training. http://www.dalecarnegiewaynj.com/2012/03/15/how-leaders-prioritize-examining-the-steps-to-successful-tasking/
Strategic Planning in Higher Education: A Guide for Leaders. Center for Organizational Development and Leadership. http://oira.cortland.edu/webpage/planningandassessmentresources/basicassessmentresources/RutgersPlanning.pdf
Gunelius, S. (April 15, 2010). Are You a Pragmatic or Idealist Leader? Forbes. https://www.forbes.com/sites/work-in-progress/2010/04/15/are-you-a-pragmatic-or-idealist-leader/#532db0e83e67
Baldoni, J. (January 13, 2010). The Importance of Resourcefulness. Harvard Business Review. https://hbr.org/2010/01/leaders-can-learn-to-make-do-a
McCadden, S. (January 10, 2011). Shared Responsibility: Advantages of Creating a Team of Leaders. Remodeling. http://www.remodeling.hw.net/business/operations/shared-responsibility-advantages-of-creating-a-team-of-leaders