Failing to Think Big Holds Us Back

One of the results of aversion to risk and fear of failure, for both individuals and organizations, is a world in which we rarely pursue audacious goals or visions. In fact, those who do are truly outliers.

Relatedly, we are typically socialized in professional contexts to be “realistic” rather than daring in our thinking and strategizing. Interestingly, on the other hand, we are frequently incentivized to pursue aggressive performance goals, often confusing those with bold strategic goals. Even when we are successful with big stretch goals related to performance, however, those successes are short term and, by themselves, usually do not support sustainability.

I’ve been facilitating strategic visioning and planning activities for about 15 years, both in organizations I have led and those for whom I’ve consulted. One reason I have always pushed for bold thinking is that when we edit ourselves while we’re still brainstorming, we dramatically limit the possibilities, and of course, our future achievements as well. The reason to think big is not so that we actually achieve our most audacious goals (although that can happen). The value is that we do great, previously unachievable things simply through the process of going beyond what we thought was possible or likely. The most daring goals also tend to be about things that are bigger than the daily grind and thus ensure that we are engaged in pursuits that are also bigger than ourselves. By aggressively moving the goalposts, by definition we broaden what’s possible to achieve on the playing field. One way I achieve this kind of thinking is by building in a component of strategic planning that I call, “crazy talk.” It is an opportunity specifically designed to elicit the most outlandish ideas. The editing comes later and I always try to ensure that at least a couple of the crazy talk concepts make it into the plan. Unfortunately, due to the cultural pressures against bold thinking, I often find myself swimming up stream!

As an example, not long ago, I was leading a senior leadership team through a strategic planning process and they found it really difficult to talk about being the leader in their field, being much more comfortable with being a leader. They were down right perplexed when I asked them in what ways they could change the world. First, they had never been “set free” to think like that, but secondly they were burdened with the fear of setting goals that were frankly not likely to be achieved. We spent some time discussing this and it became clear that they felt it was “safer” to commit to a path that they were more likely to achieve, even if that meant a much less compelling or even sustainable future. Their concern turned out to be quite rational when I discovered that their Board of Directors was equally cautious! This is unfortunately common in contemporary organizations.

This same phenomenon limits us individually as well. In another recent conversation in which I was interviewing for a potential chief executive role, I made the comment that a core motivation for me personally was for my professional efforts to actually make the world a better place. One of the interviewers skeptically replied that my objective might be a little impractical!

We all know intuitively that the greatest innovators and entrepreneurs and strategists are not driven or hemmed in by practicality. Most of what is truly creative and sublime in this world would not exist if the creators had been “realistic” and “practical.” Giving ourselves license to dream, regardless of our specific role in an organization, not only increases the likelihood that our contributions will bring far greater value, but it will also increase our own personal sense of accomplishment and purpose.

Thinking big has significant implications for leadership as well. In slower change, less complex, and less volatile operating environments, more conservative, status quo thinking is quite defensible. In the world in which most leaders operate today, however, those who think boldly, embracing risk and an audacious vision for the future are the “game changers” that most organizations need. Thinking big does not guarantee success, but it does tend to inoculate us against a slow death from doing the same things the same way until we have to turn the lights off for the last time.

Of course, as leaders we must also honor big thinking in those around us as well. As noted in a previous article, we must create environments that support innovation, which, by definition, requires that we give everyone in organizations the freedom to think boldly. As Eric Schmidt, co-founder of Google has said, you need to position your employees to be thought leaders. In fact, over time, far more innovation comes from the large number of people that make up most of an organization than from the C-suite.

Because so few organizations truly support bold, audacious thinking, those that do have a genuine competitive advantage. Whether you are engaged in developing strategic paths to the future or supporting innovative solutions for pressing ongoing challenges, game changing breakthroughs require the courage to think big—to dream about how things might be if we simply unshackle ourselves from the typical organizational constraints against creativity and risk.

Treating People Well Pays Dividends over the Long Run–And It’s the Right Thing to Do

Every day we are presented with opportunities to interact with the people in our professional lives. This includes subordinates and supervisors, colleagues, customers, vendors, business partners, etc. Over time, all of these interactions add up to how others see things like our reputation, management style, and temperament. This “body of work” is also how people judge things like honesty, integrity, kindness, character, and other traits.

We generally do not think about this at the time of each interaction. Likewise, it is not possible to behave exactly how we want to every time. Sometimes a lack of time or stress or multiple demands get in the way of how we would prefer to act. However, on balance, we determine who we are via how we behave. Over time, the sum total of our interactions paints a pretty clear picture for those around us. This is as much about values as it is about leadership, which is not surprising since personal values influence how leaders see the world and thus the same values influence the decisions they make, including how they treat people around them. In fact, leadership without values is a frankly dangerous proposition.

The unfortunate truth is that there are people in the professional world who have enjoyed “success” (usually financial), even though they have hurt people in the process, sometimes quite purposefully. On the other hand, when we talk about legacy as I have in other posts, being a rich “SOB” who trampled other people’s lives is something that even the rich SOB probably does not aspire to. Another way to think about this is the old axiom about what you want on your tombstone. When our time here on earth is all over none of us wants our legacy to be that we were a jerk. On the contrary, since we can’t take anything with us, material success at the expense of other people is worse than a hollow victory—it’s a moral failure. This also applies to how we treat those with less leverage or power than we have in any given interaction. Kwame Anthony Appiah, in a recent Ethicist column in the NY Times Magazine, was responding to a reader about how an employee was being terminated when he noted, “It’s particularly important to respect your ethical obligations to employees when they have no legal recourse.” This is a critical point. He is saying that leadership decisions (and how we treat people) must come from an ethically defensible place especially when we have the power to do whatever we want.

In the end, we are better off and those around us are better off if we have consistently treated people well and fairly; if we have taken the time to listen; if we keep our ego in check; if we take an interest in their issues and their success. We are better off for two reasons. First, treating people around us well and fairly tends to motivate them and engender commitment, which makes us more successful. Second, and probably more importantly, if you have genuinely treated the folks around you well and you have done that over time, those same people will be supporters when you need it most. Those same people will go the extra mile precisely when you need them too. And it will come from the heart.

A Critical Key to Your Leadership Success: Keeping Your Best People

As organizations and operating environments become more complex and the success of leaders becomes more tied to what their employees accomplish rather than to their own technical skills or task completion, building and retaining human capital is becoming central to the viability and success of all leaders (and the valuation of your organization). And, unlike technology or equipment or fiscal capital, human capital (and teamwork) is a competitive advantage that cannot be commoditized. If you care about your own success as a leader, you’ll care about keeping your employees and particularly your best people! If you need a financial argument, replacing employees can cost as much as 200% of their annual salary.

There is a spectrum of commitment to employee retention across organizations, with some basically ignoring retention as a purposeful activity and others investing significant effort and resources. What is interesting is that most employers and bosses misunderstand what employees actually value most. As a result, even where there are employee retention efforts, they often focus on the wrong things. Most typically organizations believe that compensation and benefits are core to employee retention. While the research confirms that employees need “adequate” compensation and appreciate good benefits, actual employee retention (or turnover) is usually driven by other factors. And it seems that we fail to get this right early on because over 30% of new hires quit their jobs within six months! Likewise, at any given time, about 25% of all employees are “retention risks” and it turns out that managers usually don’t even know who’s at risk!

What the research shows is that while employees will leave an unfulfilling job for improved compensation and benefits, those are actually lower on the list of importance of what they want from work than other items. Most studies put compensation anywhere from number 4 to 8 on employee lists of priorities.

So, what should you do to keep more of your employees?

Assuming that compensation and benefits are “adequate,” your leadership focus needs to be on the work environment and the work experience. There will always be turnover, but it’s become clear what factors can limit the loss of employees over time.

Crunching lots of data, Facebook recently found that people stayed with the company when the following three things were true: They enjoyed their work, they used their strengths more often, and they believed they were growing professionally. All of these factors superseded compensation and benefits. As Lori Goler, Head of People at Facebook says, “If you want to keep your people — especially your stars — it’s time to pay more attention to how you design their work.”

Although there is some variability in the research, there is also a strong consensus about what factors support employee retention over time. The most important variables tend to be:

  • Flexibility and Autonomy
  • Appreciation/Recognition
  • Professional Growth and a Visible Career Path
  • Engagement and a Sense of Purpose
  • Compensation and Benefits
  • Rewarding Relationships
  • Job Security
  • Work/Life Balance*
  • Ethical, Transparent Managers

*The notion of “work-life” balance is also often misunderstood and is addressed in another article.

Even though the prioritization is often somewhat different from individual to individual, compensation almost always shows up in the middle of the list or lower. As a manager, while you must compensate people equitably, it is liberating to know that your retention efforts tend to be less about money than most people think. On the other hand, creating an environment and work experience that will retain your people is a lot harder than just writing bigger checks!

The good news is that much of your effort toward employee retention also applies to other leadership imperatives around healthy organizations, empowering employees, sustainability and a number of other things you need to be doing anyway. And, in the end, improving retention is a win-win proposition that provides a positive, re-enforcing cycle for everyone involved.

What We Can Expect for the Future of American Higher Education

I have written many articles on the current state of U.S. higher education, with a focus on the nearly decade long contraction in enrollment and the related downsizing in the number of colleges, particularly private institutions, in the United States. While there are opportunities for powerful innovation within higher education and many institutions will survive in one form or another, the golden era of U.S. higher education as we understood it is simply over. The financial model is broken in a majority of institutions, public sentiment in general about higher education has turned negative, state funding continues to decline, and students themselves have determined en mass that the value proposition of five or six figures of debt is no longer viable. It’s not necessarily that the future of higher education is bleak per se, but that post secondary education will be markedly different, with clear winners and losers. As a result, if nothing fundamentally changes, the outlook for higher education will include:

  • Many fewer colleges and universities (and traditional degree programs)
  • Chronically underfunded and downsized “mid-tier” public institutions
  • A growing disparity between a small minority of super wealthy elite institutions and everyone else
  • The rise of several mega universities with six figure enrollments.

Of course, there will continue to be colleges and universities that look familiar and operate in largely traditional ways, but there is a finite and shrinking space in the higher education ecosystem for those institutions (and the degree programs that sustain them). Part of what is driving the “shrinking space” is what the Education Design Lab refers to as the Learner Revolution, which is the shift away from degrees and toward skills based competencies, combined with a decreasing tolerance for debt and inability to fit a degree into the constraints of life. As an example, research by the Education Advisory Board (EAB) found that graduate certificates have been growing at six times the rate of master’s degrees. There are similar examples within undergraduate education as well. And, in a paradigm-shifting trend, some industries are also beginning to invest substantial resources in ab-initio training, thereby circumventing post secondary institutions as the go-to source for employees. This is impacting career and community colleges now, but will move into more traditional higher ed space soon, materially affecting institutions delivering bachelors and graduate degrees in the near future.

The simple reality is that there are not enough students who can or will pay enough tuition to support the actual costs of operating all of the college campuses in the country  as they function today. The average tuition discount rate in private institutions is now over fifty percent (meaning colleges are collecting less than half the published tuition rates from students)! This reality is particularly acute in small, tuition dependent liberal arts institutions with less than 1,000 enrollments. There is a baseline overhead of direct and indirect costs below which, regardless of efficiency, colleges cannot operate as colleges. The smallest enrollment institutions, without material endowments or other revenue streams, cannot spread all of their fixed costs across such a small number of tuition paying students.

On the public side of higher education, we are at a point in many states where it probably is not correct to even use the term “public” as it relates to how those institutions are supported financially. Across all state, 4-year institutions in general, a minority of funding now comes from taxpayer appropriations. In some cases, it is less than 10%. Under the circumstances, there is a minority of public institutions that have developed robust, non-taxpayer revenue sources and, in effect, operate as private universities, despite their governance obligations to state oversight. At the other extreme are some second tier publics that are technically insolvent and are only functioning due to borrowing, downsizing, deferred maintenance, and delayed accounts payable, among other unsustainable tactics. Some institutions in the middle will maintain enough enrollment and other funding to continue operating, but stuck in a sort of higher ed purgatory, without the political support, reputation and alternative revenue streams necessary to thrive.

So, where do we go from here?

First, we must accept that, like any other industry, higher education has finally succumbed to actual market forces. For decades U.S. colleges and universities broadly avoided the realities faced by organizations in the “real world,” evading the imperative to innovate, relying on borrowed money (by students and the institutions themselves), and assuming that faith in the value of higher education would sustain the unsustainable. The good news is that, as happens in other industries, market forces ultimately reward those who do, in fact, innovate and who present a compelling value proposition to consumers. Outside of the most exclusive and elite institutions, there will be a group of more nimble, customer focused, and relevant post-secondary education players, unencumbered by much of the anachronistic thinking that has kept the bulk of American higher education stuck in the last century. Those institutions will thrive despite, or perhaps because of, the hard realities in contemporary higher education, but only if they are purposeful about being different in ways that address the “learner revolution.”

In addition to the scenario described above, we will likely see

  • A few cataclysmic situations with public institutions (see the University of Alaska) and overall downsizing of mid-tier public institutions
  • The end of “public” universities as tax payer funded entities
  • New, less-tuition dependent financial models
  • Improving equilibrium between supply and demand
  • A smaller private college sector, both for profit and not for profit
  • Significant contraction and disappearance of many vocational programs in both career colleges and community colleges (as industry assumes entry-level training)
  • Fewer liberal arts colleges, particularly those with enrollments below 1,000 students
  • Fewer four year degree enrollments as a percentage of post-secondary students
  • Growing obsolescence of the “degree” as the gold standard credential
  • A shift to “professional” programs, even in liberal arts institutions
  • A shift to competency based and other more relevant and efficient delivery models
  • Increased applications of technology and “big data” in everything from enrollment to services to instruction
  • Partnerships that re-define higher education
  • Expanded, non-university post-secondary options

While the future is, in some ways sobering, it also reflects a significant opportunity for higher education to embrace imperatives that it has long avoided relative to innovation, value proposition, access, accountability, and sustainability that will strengthen the institutions that have the foresight to act. In fact, those institutions have an opportunity to thrive while re-inventing higher education for the reality of today rather than the increasingly irrelevant thinking of the past. We can choose to see the current situation as a glass half empty or half full, but what is clear is that higher education as an industry is in the midst of a forced reckoning that will result in something that looks much different going forward.

The Most Disruptive Change in Higher Education Since WWII Is Here And It’s Not What You Think

I recently completed a research project for Career Education Colleges and Universities (CECU) designed to determine the industry perspective on in demand knowledge, skills, and abilities (KSAs) that might be missing in graduates when they enter the work force. The project focused on the eight industries with the highest percentage of employees who have graduated from career colleges—anywhere from roughly 40% to over 90% of all employees in a given field.

While the research provided important insights into in demand KSA gaps, it also revealed a potentially profound trend in industry today: the move to conducting their own entry-level training for new employees.

Industry has invested in “on the job” training for existing employees for many decades. That is not new. And as the pace of change, particularly related to technology has increased, the need for more frequent and more in-depth training has also grown significantly. However, in a paradigm-shifting trend, some industries are also beginning to invest substantial resources in ab-initio training, thereby circumventing post secondary institutions as the go-to source for employees. The new trend poses a potential existential threat in the short term to vocational-technical/career colleges and it is wide ranging. The longer term threat extends to all of higher education.

College based training for automotive and diesel mechanics, allied health, aviation and trucking, plumbing and welding, IT, and other fields are at genuine risk as many employers have made the calculation that adding entry-level training as a cost of doing business is cheaper than enduring unfilled positions, competing for college graduates, and re-training upon hiring. Probably of greater importance, they get a known quantity and quality of guaranteed employees with proprietary training upon completion of their own, internal training programs.

In the automotive sector, BMW, Advance Auto Parts and Carquest, Toyota, and others are investing hundreds of millions of dollars collectively to build training facilities across the country that will serve as employee pipelines into their own companies. Large health care systems are operating in-house health science programs to train nurses, surgical technologists, medical imaging techs, medical assistants and other clinicians to staff their hospitals and clinics. Airlines and trucking companies have built their own educational infrastructure to train pilots, mechanics, and truck drivers. In many cases the training is free, requires no out of pocket expense, or debt is paid off by the employer, and in other cases the students get paid to go to school! Even unions have created paid apprenticeship programs where students learn to be pipe fitters, welders, and electricians at zero tuition cost, while earning apprentice wages.

Why are employers getting into the education business?

As Bill Conley, Head of Admissions for Bucknell University noted in a recent Chronicle of Higher Education article, “For too long, colleges — public and private, liberal arts and research-driven, rural and urban — have operated as if they’re solely in the higher-education business rather than in the broader postsecondary-education sector.” As a result, industry has chosen to incur the “hassle” and cost of the work traditionally done by community and career colleges because they can control the curriculum, customizing it in real time, in most cases without any accreditation approvals or regulators or boards looking over their shoulders, while filling their own hiring pipelines. The biggest advantage is simply speed. They can also deliver highly proprietary training that meets very specific employer needs. Fields with the lowest barriers to entry have gone first, but over time, this phenomenon will spread to higher-level post-secondary education and well beyond vocational programs. For example, the BMW STEP program, delivered at multiple regional sites, trains mechanics to work on BMW automobiles, with BMW technology, in BMW dealerships serving high-end BMW customers. Ultimately, the millions in cost is a bargain for their business model. Even in cases where industry has to jump through regulatory hoops such as in health science with boards of nursing, airlines with the FAA, or professional organizations that control licensing, they are still finding it preferable to use their own training/work sites and resources to custom train practitioners, virtually all of whom will go to work for the same companies upon graduation. Moreover, unlike colleges and universities, employers already have the exact equipment, technology, practice protocols, site supervisors, and clinical settings that graduates will work with on day one after program completion.

In most cases, these in house industry “colleges” require that students agree to work for the employer for a specified period of time after graduation. In the case of trucking, for example, students typically earn their Commercial Driver’s License (CDL) at the expense of the company by agreeing to drive for at least a full year exclusively for that company. Compared to potentially overwhelming debt, agreeing to work in a job you want to begin with, even if your choice of employer is temporarily limited, is a value proposition that typical colleges cannot come close to competing with. For the companies themselves, even if they lose modest numbers of employees after the contract period, they are still ahead by building a custom trained and loyal workforce, already socialized to employer values and norms.

Some programs for which employees have historically been trained in community and career colleges will become rare or even cease to be offered at the college level in the foreseeable future and will shift broadly to industry. Examples are likely to be truck driving, lower end allied health and even some nursing programs, and automotive technicians. Some types of computer programming, certain aviation roles, and vocational trades such as electrician, welding, and plumbing are also likely to shift broadly out of vocational schools and into industry. The same could happen for HVAC, culinary arts, hospitality, and manufacturing over time. What the current trends also suggest is that this phenomenon does not have to be limited to technical and vocational training. Similar models could be applied by industry to engineering, what are now graduate level health care positions, accounting, finance, HR, management, and other “professional” roles. This is particularly so if industry chooses to pair the training with apprenticeships and forgoes “liberal arts” curriculum as well. As an example, Amazon has created a free, in-house education program in computer engineering, which traditionally would have only been the purview of higher education. While industry will not be able to accommodate every student now served in post-secondary education institutions, they will “cherry pick” the most capable individuals, leaving schools with a smaller and even more challenged student body than they have today.

It was once thought that online education would be the jarring disrupter in higher education. That has not come to pass. The true disruptor may be something as simple as industry deciding that incurring the cost of educating the employees they want, the way they want, provides too great an ROI to pass up.

What are colleges and universities to do?

The only way institutions of higher education can counter this trend is to offer a better value proposition, to students and employers, than employer based education does. Based on current trends that will require profound change within colleges and universities—an industry and culture that, with rare exceptions, are not particularly known for innovation. The good news is that based on the many in-depth conversations I have had with industry for the in demand skills research cited earlier in this article, employers are very open to, and even enthusiastic about, deep collaboration with educational institutions. Those institutions that aggressively pursue such partnerships, with a willingness to take ground-level direction from industry, will enjoy a powerful competitive advantage within the higher education ecosystem and will at least stand a chance of generating the necessary value proposition to compete with industry led education programs.

The Higher Education Contraction Is No Where Near the Bottom. Does Your College Have a Plan?

Over my career as an educational leader and consultant, I have developed many operational models for just about every functional area in a college or university. I’ve done that simply out of necessity as a chief executive and now have a substantial list to choose from. We can provide a free assessment of many game changing options for your college or university. One example is based on increasing the likelihood that a given school is among the group of institutions of higher education (IHEs) that survive and thrive the industry contraction vs. those that don’t.

In just the last five years, more than 1,200 college campuses have closed across the U.S., both for profit and not for profit. At a minimum, hundreds more will merge, close, or reorganize in the next decade, with the 800 or so private, not for profit colleges with enrollment of less than a thousand students being at greatest risk. In fact, helping colleges liquidate after closure has become a small growth industry in higher education. The good news is that we already have a baseline understanding of what successful institutions are doing and others will have to do, in order to survive and thrive. Every college and university has attributes and characteristics that are unique, both favorable and unfavorable, that influence what specific strategies and an overall plan look like, but there are some fundamental, shared requirements for the majority of IHEs that are at some level of risk. A sample list is below.

  • Have Alternative and High Margin Revenue Streams
  • Incur More Variable than Fixed Expense
  • Are Differentiated in the Market
  • Give Students What They Want
  • Have Programs that Require College for Employment
  • Pursue Value-Added Partnerships
  • Have Finance as a Core Competency
  • Are Really, Really Good at the Basics
  • Possess a Culture for Success (Innovative and Entrepreneurial)
  • Have Dynamic Leadership

In my experience the biggest barrier to success, or even survival, in the current environment is internal: Denial. In many of the more than 2,000 college campuses that have already closed going back to 2010, there was no meaningful acceptance of the crisis, let alone a comprehensive plan to survive, until the doors closed for the last time. In some cases, schools flailed around, cutting costs or juicing marketing, but they did not fully understand their situation and did not have a plan to address it. The biggest external barrier looming on the horizon is the growing trend of industry offering entry-level education and training on their own and simply ignoring colleges and universities as the source of their employees. That is the subject for another post!

The most basic elements of the survive and thrive plan require that an institution:

  1. Conduct a deep dive assessment of where there are gaps between what needs to be true both structurally and culturally to succeed versus what is actually true.
  2. Engage in a purposeful effort to identify, then prioritize what missing components will be assertively addressed (usually based on agreed upon ROI).
  3. Develop an enterprise level action plan to ameliorate the most pressing missing components.

This exercise often takes place in the context of an overall strategy review as well. The truth is that there is nothing mysterious or highly technical about the process. However, it is time and people intensive. Institutions that are transparent, willing to embrace risk, open about the breadth and depth of their challenges, and motivated to meet them head on, will dramatically change their likelihood of surviving and thriving. Those that remain in denial or are slow to act, will dramatically compromise their likelihood of success.

A common and heartbreaking observation I frequently make is how many institutions are so head down in the daily grind that they are either incapable of taking the time and making the effort to positively influence their future or they simply aren’t willing to make the investment. A shocking number of institutions, in effect, choose a slow death with a known, declining process and risk avoidance rather than embracing a path that, although potentially out of the collective comfort zone, might just ensure a long and prosperous future.

Change Management Has Become a Core Leadership Requirement: A Few Things You Need to Know

In a previous article I suggested that the current demands on executive leadership have become so deep, broad, and complex that it is basically impossible for any one person to possess all of the competencies required of contemporary organizations and operating environments. As a result, I further suggested that we are probably better off focusing on a narrow set of competencies and traits that are essential to effective leadership. One of those—and possibly the most critical at this point—is change management. The reason for that is because contemporary environments are so dynamic that much of what a leader does on a day to day basis is to identify and manage initiatives, strategies, projects, etc. that all represent change of one kind or another. It is change management itself that ties most of a leader’s efforts together. This phenomenon has been in play for at least a few decades, but the rate of change and the volatility of change are qualitatively different and more challenging now than in the past. One key reason for this is that technology is an accelerant of change and a disruptor of the status quo. I will address that in detail in a subsequent post.

So, what are the implications of this reality for leaders and what do you do about it?

First, both individuals and organizations are inherently stressed by change itself. In other words, just the presence of change elicits reflexive stress responses from people individually and from organizations collectively. Because of that reality, it is important to limit the depth and breadth of change within our control that anyone or any organization must absorb at one time. This can be really challenging for leaders who possess a bias for action. We often evaluate ourselves based on how much activity we are driving, how many strategies are in play, etc. While understandable, a much more productive approach in the current environment is to very carefully and purposefully prioritize initiatives or strategies based on the relative return on investment (not just monetary) and/or criticality of each initiative. Because there is a limit to what people and organizations can effectively absorb relative to change, both leaders and their organizations are better off if they engage in fewer distinct initiatives at a time, but get more value (and successful change) out of the ones they choose.

Second, because of the first point above, it is critical to realize that the success of virtually any initiative or project is as dependent on the extent to which it is viewed as a change management challenge, as are the actual strategies and resources connected to the execution of the project itself. As such, leaders must build a change management plan into the process of executing on the initiative or project or strategy.

Lastly, we frequently talk about “change management” as this thing that happens rather than a thing we do. Leaders must approach change management itself as a formal process with best practice steps and components in the same way they would address conflict resolution or budgeting or strategic planning, etc. It is beyond the scope of this article to present an entire change management process, but you can see an example here.

In short, it is extremely unlikely that leaders can be effective today without understanding that change management is core to just about everything they do and that because of that reality, leaders must be as purposeful about managing change as they are about executing on any strategy, project or initiative deemed critical to organizational success.

The Single Greatest Change Required for Contemporary Leadership: It’s About People

I have written several articles about how the required knowledge, skills, abilities, and traits for successful leadership have changed, rather dramatically, over the last 15 to 20 years. One article included more than two-dozen ways in which the new leadership model has evolved! But the single greatest shift in what is required from leaders today is the required focus on people and “people issues.” There are many reasons for this, both internal to organizations and externally, related to profound societal changes as well, but the bottom line is that success as a leader today is more about effectively understanding and working with people than ever before. And this has happened at the same time that human capital and teamwork in organizations are collectively a more critical resource and competitive advantage than ever before. In fact, according to the Gallup organization, tangible assets have dropped in S&P market value from 68% in 1985 to an average of 13% today. What this means is that less than 15% of a company’s value today is tied to assets like technology or equipment and 85% is tied to human capital! As a result, the cost of leadership failures related to people are also higher than it has ever been!

Moreover, although contemporary, strategic leadership includes many “new” skills and attributes that apply to leading in complex, uncertain, high-change environments, effective people leadership has become so foundational, that its absence compromises other ways in which leaders may be exceptionally competent. In other words, being a brilliant strategist or having deep business acumen may be nearly irrelevant if one cannot effectively connect with and empower the people in an organization. To be fair, organizations have always benefitted from leaders with strong people skills. That is not new. What is new is the centrality of that need and the growing complexity of “people issues” that leaders have to effectively address.

So, what are the key elements of people leadership?

Many of these elements are affective and intuitive and have almost never been central to leadership development. They are as much personal traits as they are skills, and include things like empathy, emotional/cultural intelligence, authenticity, and vulnerability, which is itself a prerequisite to courage.

In this context, knowledge of organizational dynamics and human psychology may supersede knowledge of finance and operational expertise, which only a few years ago would have been “heresy” in the leadership cannon. And possibly more importantly, effective people leadership requires that that the leader be dedicated to and purposeful about his or her own human needs and well-being!

At its core, people leadership is about achieving success through others. It is ensuring that human beings in the organization feel valued, heard, respected, and empowered to embrace risk—to be safe to show their own vulnerability—and that the organization supports collaboration and teamwork. It is about relational skills rather than operational skills or “business acumen.” And it requires exceptional patience, kindness, and sensitivity to the humanity that each individual employee brings to an organization.

How do leaders build these traits and competencies?

One hard reality is that some individuals are simply not good candidates for the kind of leadership that is necessary today. Although a strong, ego-driven, directive style was desired in leaders a generation ago, that is actually demotivating and alienating to many employees today. Likewise, those with poor self-awareness, but strong technical skills, may have been able to achieve performance objectives a generation ago, but are not great leadership candidates today, because self-awareness is central to emotional and cultural intelligence, which are both essential to people leadership. Having said that, as with many other skills and attributes, if one is motivated enough, he or she can learn just about anything and can change behavior as well. What might that look like in the context of becoming a more effective people leader? It starts with self-reflection, which itself is quite different than traditional leadership development, which has historically been based on skills development rather than personal self-actualization.

Here are some good ways to start:

In short, some of us are naturally better wired to meet the challenges of the single greatest change in contemporary leadership: leading people to create success through others. For some of us, the required traits, skills, and behaviors are more of a stretch. Regardless, anyone with the proper motivation can progress along the continuum to more effective and powerful leadership in today’s complex and often volatile, people-centric environment. It requires a lot of self-awareness and self-reflection, but it also confers great benefits on us personally, so it is a win-win!

In the Eye of the Storm: Despite Unprecedented Threats and Increasing College Closures, Almost No One Has a Plan

Due to the nature of my work, I have many, in-depth conversations with people in universities, on boards, within accreditation and professional organizations, recruiters, higher education vendor-partners, publishers, investors, regulators and others that provide a very deep and broad view into the realities of higher education today.

Although more institutions of higher education (IHEs), particularly private institutions, are finally coming around to the realization that something is going on, and it’s not good, there is a remarkable shrugging of shoulders about what is, for many schools, an existential crisis. Even using overly conservative predictions based on current closure rates (1,200 colleges closed between 2014 and 2018 across all sectors), at least several hundred more colleges and universities will fail in the next ten years. And that number does not include the many more “walking dead,” that will technically be open, but insolvent. While the student debt crisis gets most of the media attention, institutional debt has increased by nearly 65% in the last five years and now exceeds two hundred billion dollars—and the impact will get much worse as institutions must divert more and more precious cash to debt service in the face of declining enrollments and revenue.

What most IHEs do not seem to understand is that the current reality is neither temporary nor superficial. As Bill Conley, Head of Admissions at Bucknell University noted in a recent Chronicle of Higher Education article, “Higher education has fully entered a new structural reality. You’d be naïve to believe that most colleges will be able to ride out this unexpected wave as we have previous swells.” A combination of demographics, economics, increasingly negative societal opinions and growing alternatives to higher education have fundamentally changed the post-secondary landscape.

It seems that institutions of higher education are unique in their collective powers of denial. Only a few years ago, nearly 800 colleges and universities were suddenly at risk of closure when their accreditor was sanctioned by the U.S. Department of Education. The sanction provided for roughly 18 months before the accreditor would be shut down and its accredited institutions would no longer qualify for federal financial aid. A few months into the crisis, I spoke with 23 member institutions and only one had any kind of actionable plan for moving to another accreditor—and they all knew with certainly both the timeline and the outcome! The only reason many of those institutions are still operating today is because there was a court stay against the closure.

Similarly, I was recently working with a private university and after reviewing financial statements (balance sheet, P&L, and cash flow) with their CFO, it became clear that not only were they in the fourth year of a substantial revenue decline, but that on any given day they had only a few weeks of operating cash on hand. In subsequent conversations with board trustees, it became clear that they did not fully understand the situation, and as a result, the board level priorities and planning were completely disconnected from the reality faced by the university. This disconnect is a painfully common situation in higher education.

All of the institutions that have reorganized, merged, and closed in the last several years offer a harsh reality check of what happens when senior administration and/or boards either don’t know what is going on, or know what’s going on, but don’t have a plan. It is inevitable that some substantial number of colleges and universities will not survive the current contraction and that number is at least in the hundreds if not much higher. One thing that will set apart those who will survive and thrive from those who will struggle and fail is the simple fact of having a plan!

I have written previous articles describing what we already know about schools that are thriving now. The model is not a mystery, but execution is key—and having something to execute is even more fundamental. Part of my consulting work is partnering directly with institutions to determine the delta between what needs to be true vs. what is actually true in those institutions in terms of surviving and thriving going forward–and this includes both operational strategies and organizational culture and behaviors that support success in ambiguous, complex, high-change environments. Unfortunately, as with the accreditation crisis mentioned previously in this article, the vast majority of IHEs either do not fully understand the current existential reality and/or they do not have any actionable plan to deal with it. Some simply misconstrue a “need to grow enrollment” or “cost cutting” as a plan. It is not. On the other hand, for those colleges and universities that are enlightened and do have a plan, that simple fact alone is a huge competitive advantage going forward.

Why Humility and Vulnerability Are Core to Strength and Courage—And Essential for Today’s Leaders

I have written multiple articles on leadership, and in particular, how previous leadership models are becoming less effective and even potentially detrimental in contemporary organizations. I have referenced new elements of leadership that are not only quite different behaviorally, but also look and feel different from a values perspective as well. In fact, as contrary to traditional leadership models as it sounds, humility, vulnerability empathy, and self-awareness are the most critical personal characteristics a leader can have today.

Why is this?

We have been socialized to see vulnerability as weakness, which is the exact opposite of what is true. Humility and vulnerability are at the core of strength and courage. Vulnerability is the courage to take a risk, to put yourself out there, when you can’t control the outcome. Humility is the strength to admit that even if you’re the CEO, you don’t have all the answers, and that you need help to succeed. In fact, any random three people in an organization, working as a team, will consistently make better decisions and do better work collectively that even the highest performance individuals and leaders. Emotional intelligence (EQ) requires deep self-awareness and empathy, and because leadership is becoming more about effectively understanding, supporting, and empowering people in organizations, EQ has become central to leadership efficacy.

To be clear, this is not just an opinion about the value of vulnerability, humility, and emotional intelligence for leaders today. It is based on nearly 20 years of research by Dr. Brené Brown, with tens of thousands of subjects. It is some of the most compelling and convincing psycho-social leadership data available today. It also happens to be common sense.

Unfortunately, however, as operating environments get more volatile and organizations struggle to achieve performance objectives, executive leaders and boards tend to “double down” from a place of fear, defaulting to absolutely wrong, reactionary decisions. They look for leaders with strong, “executive” personalities and styles who can take a “firm hand” in the organization, tasked with reducing complexity, limiting change, centralizing control, and going “back to basics.” Or, more simply, they just do what they’ve always done and choose leaders that look familiar. This is a huge mistake because complexity and volatility are now intrinsic to operating environments—they are not variables that can be controlled by leaders—and trying to slow down change is a fool’s errand regardless. On the contrary, organizations today need people experts, who can empower entire organizations to innovate—which also happens to be the best strategy for keeping up with change. Or, as Eric Schmidt, co-founder of Google puts it, you need to position your employees as thought leaders. Very few game changing ideas at Google come out of the “C-Suite.”

Likewise, the solution to improving performance in unstable settings, where the goal posts keep moving, is turning as many people as possible into passionate, courageous entrepreneurs with the autonomy to address challenges on the fly; it is not going back to the basics of centralized control.

In short, organizations are made up of people, and those people are more stressed, anxious, and emotionally fragile than at any previous point since industrial psychologists began studying it—and this is where emotional intelligence in particular comes in. Ignoring this reality is just plain dumb—and it applies to leaders as well! Getting the greatest value out of human capital is no longer about processes and procedures. Leveraging human capital today is about ensuring that the people in organizations have a sense of purpose, feel respected, appreciated and safe, can fail without fear, have excellent development opportunities, work together in highly effective teams, and have space to be the human beings that they are. That includes supporting vulnerability in employees as well. Why? Because without vulnerability (risk taking), there is no creativity. Without tolerance for failure, there is no innovation. Without creativity and innovation, organizations cannot survive and thrive in the current environment.

As Dr. Brown notes, the importance of these attributes have been understood for years. The challenge is that most of us simply haven’t had the courage to conquer the stigma and have a real conversation about vulnerability. For those who do, it is transformational.

Footnote

As noted in a previous article about the evolving model of leadership, no leader or person is binary. It is true that leaders are far more likely to be successful in contemporary organizations if they “rumble with vulnerability” on their way to courage, but that does not mean that other knowledge, skills, and abilities are no longer necessary or helpful. For example, operational expertise and financial acumen are valuable and will support a vulnerable, emotionally intelligent leader. Given a choice, following a best practice model for a given functional area or project is preferable to “winging it” or applying a poor practice. Effective, ROI based allocation of resources is preferable to “first come, first served” until the money is gone. The reality, however, is that as important as some of these skills are, they are simply “price of entry” attributes for leaders today. The value-add is found in the new elements of the evolving leadership model—and those are also generally the difference between success and failure for leaders today.