Magazine article The Presidency

Adapting to Challenges

Magazine article The Presidency

Adapting to Challenges

Article excerpt

Strategic financial management is being redefined as a result of the existing and emerging fiscal challenges facing our nation's more than 4,000 colleges and universities. The announcement of the planned closure of Sweet Briar College (VA), as well as the release of the U.S. Department of Education's heightened cash-monitoring list, represent just two recent developments in this evolving landscape.

It is evident that a convergence of many forces of change has required institutions to think differently about financial management during times of economic turbulence. The peak of the Great Recession signified an initial catalytic factor that required some institutions to consider a wide array of alternative business strategies and budget management techniques in order to survive in an era when "business as usual" quickly faded for higher education. Similarly, senior campus officials continue to navigate the recent advances in digital technologies and innovations in teaching and learning that have paved the way for new approaches to delivering higher education-all of which have fiscal implications for colleges and universities. Finally, many of the traditional financial challenges for today's institutions continue to endure, such as public disinvestment in higher education, endangered campus endowments, and rising tuition. These issues and many more represent today's world of strategic financial management in higher education.

Regardless of the specific factors that impact the financial landscape of higher education, leaders are rethinking how institutions are managed in the midst of this increasingly uncertain fiscal environment. Leadership during times of budgetary distress is especially challenging within the culture of academia. Viewing the institution through a diverse set of leadership frames when financial resources are at risk, as well as building an effective leadership strategy for change management, are critical steps toward navigating this organizational challenge. One such frame that provides a functional model for addressing the phenomenon of fiscal distress is that of "adaptive leadership."

Developed by Ronald Heifetz, founding director of the Center for Public Leadership at Harvard University's John F. Kennedy School of Government (MA), adaptive leadership provides a road map for helping leaders navigate the most difficult problems in a sustainable manner. According to this theoretical model, leaders often encounter two types of organizational challenges: Some problems faced by leaders are technical in nature and can be resolved when an expert or authority figure applies a straightforward, traditional solution to the issue at hand. Heifetz argued that technical responses often cause difficult problems to persist because leaders allow their constituents to become too dependent on the authority of administrators or senior leaders for the answers. In the end, they avoid the true challenge of changing the mind-set and values of the institution from the inside out. Applying acrossthe-board budget reductions or simply eliminating vacant positions, for example, may represent technical fixes in response to budget challenges at a college or university. In the case of fiscal distress, though, institutions that apply only technical solutions to long-term financial pressures do not take full advantage of the opportunity to develop a shared vision within the university and align the campus community around sustainable solutions.

Alternatively, adaptive leadership occurs when people or groups with differing values are mobilized to face problems and challenges as a collective unit. …

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