An Overview of Common Sense Management

We want our organizations to succeed. Colleges and universities are in business to teach students, to conduct research, and to provide service to their constituencies. In order to prosper, we must acquire the support and resources our institution needs to fulfill its mission. We measure success by how well we accomplish our mission.

What is Common Sense Management?

Common sense management is an approach you can use to create a favorable future within which your institution can prosper. To create this favorable future, you must involve your stakeholders (i.e., anyone with a vested interest in achieving your institution’s mission) in envisioning the most desirable future and then in working together to make this vision a reality. The key to common sense management is to understand that people communicating and working together will create this future, not words written down on paper.

Common sense management does not replace traditional management activities such as budgeting, planning, monitoring, marketing, reporting, and controlling. Rather, it integrates them into a broader context, taking into account the external environment, internal capabilities, and your overall purpose and direction.

Common sense management is congruent with the quality movement’s emphasis on continuous improvement. Indeed, the emphasis on anticipating the needs of students and other educational stakeholders is a critical component of market research. Certainly colleges and universities that adopt a total quality assurance philosophy will be better prepared to meet the challenge of educating and training a workforce capable of competing in the global economic marketplace.

Common Sense Management is Something Your Institution Can Do

Common sense management is not really complicated or difficult to implement. A well-planned process will not require an inordinate amount of time. In fact, you can launch a process in a one- or two-day workshop. Our contention is that as long as you are willing to commit to long-term thinking and decision making, you have the skills needed to carry out the process, one that will produce many concrete benefits.

In this chapter we present the five-step common sense management model, and in subsequent chapters we elaborate each step. As you consider the model, keep in mind that common sense management is not just these steps. While the tasks or operations described in these steps are essential to the process, common sense management is, in reality, something more. It is the development of a strategic mind set by faculty and staff to use on a day-to-day basis in every aspect of their work.

The Strategic Mind-Set

Effective common sense management requires that faculty and staff share a way of thinking, or a "mind-set," described below.

Understand the importance of being open-minded in seeking and using information to make decisions

Because facts are "snapshots in time," representing a picture of your institution or the environment at one point in time only, you must continually update them, analyzing and synthesizing so that they become part of your information base. Strategic decisions are made on the basis of these facts, and not on the basis of emotional preferences or on what people would like to be true.

Because there is so much information available, you must become adept at sorting out the information that is important for your strategic decision making from information that is not important. How? Select only that information that indicates changes in the environment that may affect the direction (or programs) of your institution, or that may affect stakeholders. Recognize that facts or speculation about the future are especially valuable for common sense management. Note that trends may generate counter-trends, and that both must be considered your analysis.

Recognize and use opportunities.

One reason common sense management involves continual scanning of the outside environment is that this environment is always changing. External changes mean new opportunities (and new threats). To be successful, discover and take advantage of new opportunities and ameliorate the implications of new threats. This means that you are flexible, not wedded to a set of strategies or action plans that you cannot change.

Be imaginative and innovative

Common sense management focuses on the future, often in the absence of "facts." It requires you to imagine alternative futures and to suggest the best courses of action. You and your colleagues must be imaginative, innovative, and willing to take risks.

Involve people through communication and consensus building

Insisting on sharing information and ideas is essential. You will recognize that any person in your institution may be the first to spot a new threat or opportunity in the environment, or to have an idea that will improve strategy. Others must listen to this person, or else the information or idea will be lost. Common management is a system that helps people to listen.

Another common sense management essential is that faculty and staff must reach some agreement on and commitment to the institution's strategic direction and strategies. They must generally agree that the mission and vision for the future are worth working toward. They must also agree that if they work together on certain broad steps, or strategies, they are likely to achieve this vision. One way of reaching this agreement is to involve in some way, as far as possible, all those who will be affected by strategic decisions in the decision-making process.

Keep people focused on the most important issues

Colleges and universities typically have a lot of demands made on them. They can be pulled in dozens of directions. For example, community college administrators sometimes complain that their institutions are expected to be "all things to all people." Express in your mission statement what you are in business to do and whom you serve. This statement should lay the foundation for an inspirational vision of your institution. Recall the mission of the civil rights leaders--social integration--and Martin Luther King’s vision of this mission in his "I have a dream speech."

Once stakeholders agree on the mission and vision, you can focus on those issues that are the key to success in carrying out the mission and achieving the vision. Strategies will be built around these issues.

However, recognize that the changing environment can bring new issues. If a new issue is sufficiently important, you may have to respond to it, and this may mean altering a strategy.

Common sense management is a very fluid, flexible, on-going process. It is a "people" process. It depends on what is going on in the minds of people and on their agreement to work together to execute institutional strategy, and not on what is written down on paper. This is why it is often said that it is the process, and not the plan, that counts. Of course, there can be, and usually is, a written plan, which is a vehicle for communication. But in a well-managed institution people understand that the future is not really going to be precisely what the plan proposes when it is originally developed. This is because of the many changes that will occur between the present and the future. Indeed, the future is not predictable because events occur that you do not expect, or do not occur when you do expect.

For example, the Gulf crisis in early 1991 resulted in some faculty, staff, and college students being called to active duty. The crisis was also blamed for pushing the U.S. into a recession, which, in turn, affected colleges and universities. The point is, a political event in the mid-East can affect a community college in Iowa. You will learn to recognize such events that can alter those assumptions that drive the plan. As we will discuss later, there are procedures and methods to anticipate such events.

To respond to these changes, you must regularly review your plan and modify your strategies and tactics as may be appropriate for continued forward movement toward vision achievement.

To summarize briefly, common sense management is a powerful process to create a successful future. It is an avenue toward success and toward developing organizational resources you need to be successful. It requires developing and using a strategic mind-set. The strategic mind-set values and uses information, takes advantage of new opportunities, is imaginative and innovative, stresses communication and consensus-building among your stakeholders, and focuses on the issues that are most important for your institution. It is a process to manage change rather than be managed by it. Finally, the five-step process we describe in this book is a proven tool for managing strategically. You must address each of these to institute an ongoing common sense management process.

The Common Sense Five-Step Model

If you, your colleagues, and your stakeholders tune into the changing environment and position your institution to take advantage of new opportunities, think creatively about possibilities, share their ideas, and agree on a vision and strategies that will achieve that vision, you are well on your way to having a well managed organization.

The problem is how to build this organization. This is where our five-step model comes in (See Figure 1-1). The five steps in this model represent building blocks. Keep this in mind: The product you seek at each step is not a written report. It is a strategic mind-set of the senior leadership, indeed the whole organization.

Figure 1-1. Common Sense Management.

We present the five common sense management steps in a logical order, one that seems easiest to follow. But the truth is that many times you will not go through these steps in the order we show. You may start in the middle and work backward and then forward again. You may repeat steps. You may do more than one step at one time. If you understand that the goal in going through these steps is to develop a strategic mind-set in your institution—to get people to think and to act strategically--then exercising your common sense, you will understand that the order of the steps is not really important.

Common sense management is iterative—at the same time your colleagues are developing and evaluating strategies, they are going back to the information-gathering steps in order to learn more about the changing environment and institution.

Gathering data about the external environment and gathering data about your organization is the first step of common sense management.

Market Research—Step 1

This first step is in reality, two information gathering activities. You begin with a systematic and rigorous analysis of the external environment. A key premise of common sense management is that direction setting must be made on the basis of what has happened, is happening, and may happen in the world outside with a focus on the threats and opportunities these external changes present to your institution.

The external environment includes broad social, economic, environmental, political, and technological trends and developments as well as industry or geographic specific trends and developments. The external environment analysis also includes identification of your competitors (e.g., educational providers like Disney, Microsoft, and cable companies, as well as other educational organizations) and other competition (e.g., for a state university, other pubic agencies).

You begin external analysis by scanning your operating environment (its marketplace). The scan helps identify broad social, economic, political, and technological trends, events, and developments—past, current, and future—that may impact your institution. You develop a list of major assumptions—significant trends you project will continue in the future. You specify how these assumptions will affect your institution. Will they present threats, opportunities, or both?

External analysis may also include scenarios describing alternative futures. These might be simply "better or worse case" alternatives to the trends identified in the scan, or they might comprise a variety of alternative cases that deal with specific developments.

The second information gathering activity pertains to your institution itself. You must understand why your institution has succeeded in the past, what it will take to succeed in the future, and how it must change to acquire the necessary capabilities to succeed in the future. To do this, first evaluate your institution's capacities—its management, program operations, and its resources—people, money, facilities, technology, and information.

In this step, also review your position in the marketplace and assess current capacities and future needs. Compile a list of the strengths and weaknesses you believe will have the greatest influence on your institution's ability to capitalize on opportunities and mitigate threats.

An internal organizational assessment is useful only if it is both objective and subjective. To be objective, compare your institution with similar and competitive, successful schools to pinpoint what appear to be critical success factors, that is, those elements or attributes that distinguish success from failure. To be subjective, elicit the opinions of key constituents on your institution's competencies, shortcomings, and likely future position.

Direction Setting—Step 2

Your institution must have a mission, or reason for being. But more than this, you must have a strong and precise vision for its future. This is a strategic vision—an idea of where your institution is going and what it is to accomplish. A vision creates an image of the institution as seen through the lens of its mission. (Insert Figure 1-2)

Developing a strategic vision requires that key stakeholders—governing board members, faculty, administrators, staff, students, and supporters (e.g., alumni)—have information about the internal workings of your institution and about the outside forces that affect it. You use this information not only to develop strategic vision, but also to determine the most critical issues you must address if you are going to achieve this vision.

Information gathered in the external analysis and internal assessment steps provides the basis for you to review your institution's mission, set a vision and goals, and identify strategic issues. Mission review is the foundation and authority for taking specific actions. Goals are broad statements of what your institution must do or accomplish to attain its vision. Strategic issues are the internal or external developments that could affect your institution's ability to achieve stated goals.

Three criteria are used to identify critical strategic issues: (a) The impact they could have on your institution, (b) the likelihood that they will materialize, and (c) the time frame over which they could develop. Limiting the list of issues to a manageable number (three to seven) greatly enhances the chances of securing the commitment and resources necessary to act effectively on them.

Successful direction-setting helps ensure that your institution's mission and goals:

• Are compatible with your institution's capabilities and complement its culture
  
• Foster commitment and cooperation among key constituencies
  
• Maximize the benefits inherent in external opportunities and minimize the liabilities inherent in external threats
  
• Enhance the institution’s position relative to critical success factors (i.e., those organizational elements that distinguish success from failure)

Agreeing on mission, deciding on a strategic vision and goals, and determining critical issues comprise the direction setting step of the common sense management process.

Strategy Development—Step 3

Once you and your colleagues agree on the direction you want your institution to take and the issues you must address to get there, you must develop strategies of how to get there. This is the third step in the common sense management process.

Strategies are the documented, broad courses of action that define how to deal with critical issues. They result from the development and evaluation of the alternatives available.

Generally, if the critical strategic issues you select are truly important, and if the vision statement reflects your institution's fundamental priorities, the strategic plan should—with periodic updating—endure major changes for many years. However, today's complex and rapidly changing environment may require you to alter the plan sooner than expected. This is where the common sense management process is both integrative, bringing all management activities under one umbrella, and iterative, cycling through the steps of the process as changing conditions warrant.

Good strategies reflect all of the following:

• They are creative and flexible, reflecting input from all your institution's important constituencies, both internal and external.

• They are consistent with your institution's direction as expressed in its mission, vision, and goals.
  
• They position your institution so it can capitalize on its greatest strengths and opportunities and mitigate the effects of the most serious threats and weaknesses.
  
• They are action-oriented and can adapt—while remaining effective—to a variety of conditions.
  
• They are broadly disseminated to ensure the commitment, cooperation, and continuous involvement of all key constituencies.

A strategic plan consists of selected strategies along with the statements of mission, vision, and goals. In common sense management you use the strategic plan to guide strategy implementation and outcome assessment. The important thing to remember is that you have now begun continuous process of renewal to maintain institutional success in a rapidly changing environment.

Strategy Implementation—Step 4

Common sense management is more than just developing strategic plans. It involves managing your institution strategically. From day-to-day, you and your leaders must manage your organization so that your strategies are implemented. It is a team process.

Implementing strategies calls for development of the right organizational structure, systems, and culture, as well as the allocation of sufficient resources in the right places. Organizations generally plan for implementation in their annual and multiyear operational plans. Responsibilities for implementation flow down to the individual and upward to the chief executive as well as across the institution.

Strategy Implementation—the execution of specific courses of action—is the most crucial step in the common sense management process. It tests your institution's competencies most severely.

While strategy implementation is the fourth step in our five-step model, successful implementation begins early in the process, because it requires "up-front buying in" of key constituencies. Therefore, it is essential to involve in some way, from the very beginning of the process, individuals and groups who will help to carry out the strategic plan.

Strategy implementation also requires ongoing motivation. Providing feedback showing individuals and groups how their work has helped achieve objectives is important. The plan must remain a highly visible driving force within your institution. Implementation of the plan must become an integral part of day-to-day operations. It is not something extra to do; it is the thing to do. As such, it is the impetus for motivation, recognition, and reward.

Outcome Assessment—Step 5

One important system you need to support the plan is an outcome assessment system. You need this to know if the plan is being carried out and if it is achieving the anticipated results.

Outcome assessment is the comparison between actual results and the desired results. It keeps the planning and implementation phases of the management system on target by helping adjust strategies, resources, and timing, as circumstances warrant.

In this step, you monitor how well your organization is using its resources, whether or not it is achieving desired results, and whether or not it is on schedule. Usually, the monitoring and reporting system is continuous, with periodic output reviewed by teams, while major evaluations are conducted on a semi-annual or annual basis. A dual benefit of outcome assessment is that it subjects the your plan to discussion and testing in the context of the real world and provides the basis for personnel rewards and benefits.

To summarize, common sense management is an on-going process that helps create a most desired future. The five steps of the process are tools to help you and your colleagues communicate and work together toward accomplishing a shared strategic vision. The glue that holds these steps of strategic management together is leadership. Leaders involve people from the top to the bottom of the organization in the common sense management effort. Leaders help people be innovative and share their ideas. Leaders keep attention focused on the strategic vision. They also shape the institution so that strategies are carried out. This means devising suitable organizational structures, allocating resources, developing favorable organizational cultures, and using appropriate information, control and reward systems.

The Benefits and Costs of Common Sense Management

Benefits. Common sense management helps an institution to be successful, to achieve its mission and its future vision. It does this by deploying organizational resources so that they will push or pull in other resources that your need to accomplish the mission and future vision.

To illustrate, the Wahoo State University Planning Team notices that there is a trend in a given field for a major shift in educational training because of changes in technology. And they notice that the normal applicants are not available for a given field. In a field where traditionally 18-24 year-olds enrolled, they find that the majority of enrollees are now 35-44 years old, with a different experiential base and with different expectations.

Do they need to tailor their programs for these students differently?

The external world changes. You must be alert to these changes so that your curriculum and your pedagogy match the changes in technology and/or a changing student clientele. Our purpose is to assist you in making these changes in a systematic and rational fashion.

Common sense management's main benefits are that it:

• Clarifies your purpose or mission for today and its vision for the future
  
• Focuses on critical issues—issues you must address to achieve the institutional vision
  
• Helps you and your and your colleagues to recognize the need to make broad, long range decisions about responses to priority issues, and to make the best short term decisions possible, given an uncertain future
  
• Deploys resources to support strategies that address priority issues, and helps you compete for new resources
  
• Builds stakeholder commitment around a strategic vision and strategies
  
• Keeps the institution in position to be responsive to an ever-changing environment

The major benefit of common sense management, then, is that it helps your institution become successful by focusing on where you want to go (strategic vision) and the alternative pathways (strategies) you can take to get there. It helps you choose the best pathway and deploys resources so that you can go down this pathway (implement the best strategy). By choosing the best pathway, you should be able to redirect current resources and/or to generate the new resources needed to fuel continued movement toward your preferred destination (strategic vision).

There are other benefits. By reaching out to stakeholders and to the general public, you can improve your institution’s image and enhance stakeholder and public understanding. This is good public relations, which also helps build support among these groups for your vision and strategies. Employing common sense management will assist you in developing your institution’s reputation as forward thinking, knowledgeable, and flexible; as a cutting-edge 21^st century institution.

Costs. Using common sense management has some obvious costs—costs related to faculty and staff time, data compilation and analysis, meetings, production of reports and materials, leadership involvement, and so forth. However, it need not be an expensive process. Level of costs depends on the sophistication of the process and the need to purchase services (e.g., consultants) to make the process happen. The benefit is that, properly executed, common sense management will develop new resources.

Carrying Out the Process

Most educational leaders start the process with the market research step of gathering information—external and internal analyses—and go through these either consecutively or simultaneously. This step, along with the next two—direction setting and strategy development—represent the strategic planning part of the common sense management process. It helps to think of them as comprising a compass—an instrument that helps you find your direction. Gathering information to find your direction (market research), determining the direction you want to go in (direction setting), and then deciding what courses will get you there (strategy development) is the process that will set you on your way.

The last two steps of the process—strategy implementation and outcome assessment—involve actually carrying out the tasks and activities that will get you there.

What links the compass (the model) and the journey (implementation)? Leadership! Leaders provide the ideas and the communication that join strategic formulation to implementation. The purpose of this text is to assist you in how to use the common sense management model in developing and communicating creative, proactive ideas that will support you and your colleagues as you meet the challenges of the 21st century.