Education's Many Stakeholders

Education's Many Stakeholders

Educational administrators are increasingly recognizing what businesses have long understood: customer satisfaction matters

With the economic stranglehold many universities and colleges are experiencing, IHE leaders now see that both student happiness on campus and later success in the workplace are critical to the economic future of their educational institutions. Satisfied students and working graduates lead to, among other things, individuals who: feel good about themselves and their alma mater; can service their enormous student debt; generate interest in their academic home among prospective students; and become donors.

While colleges and universities generally do not refer to their students as "customers" (at least not publicly), there is recognition among most institutions that they must do more than educate students in the classroom. The institutions need to focus on the whole student experience. A quality academic experience, no matter how thoughtfully conceived, is not enough.

Well-educated but miserable students may transfer to another institution, taking their tuition dollars with them. Even if the dissatisfied students stay and graduate, they will not feel institutional allegiance. Prospective gift-giving will evaporate.

Taking a page out of business management strategies, many institutions have participated in student satisfaction surveys and have brought in experts to train departments dealing directly with students to be more "consumer friendly."

But, these efforts alone are not enough in today's competitive and costly educational environment, as a small but increasing number of institutions have come to recognize.

Academic institutions need to expand their definition of "customer" beyond on-campus students. They need to recognize and incorporate into their thinking--both within and outside the classroom--other key stakeholders in the academic enterprise: parents, communities, and employers. Satisfying this new triumvirate of interests is not simple and requires that those within institutions change how they approach their day-to-day activities.

Thinking more expansively about stakeholders is easier said than done. Most educators like their ivory tower, and many faculty members would rebel at the notion of administration interfering with what goes on in the classroom. Some fear that they will be providing personal nurturing and menial job training in lieu of rigorous academics. They worry that the very values they hold dear--respect for the theoretical, academic intensity, autonomy--will be undermined. Perhaps faculty members also worry about whether they have the know-how to teach what might be demanded of them in a new environment.

Although academic institutions have been loath to employ business strategies into their operational thinking (at least until quite recently, as David Kirp demonstrates), there is one approach that begs to be transported into the academic arena--business stakeholder analysis (BSA). BSA is a useful tool for learning how to think more expansively about stakeholders, and then actively to incorporate these newly identified stakeholders into the corporate decision-making process without sacrificing institutional values.

Parents are very interested in the educational institution, but have little influence on the enterprise.

Generally speaking, stakeholders are individuals or entities who stand to gain or lose from the success or failure of a system or an organization. Stakeholder theory suggests that businesses need to pay attention to stakeholders by focusing on those who affect or are affected by its products or services. Stakeholder analysis creates a framework within which businesses identify, evaluate, and then incorporate these interests into their decision-making processes. Well-structured consideration of expanded interests leads to better planning, new and creative initiatives and improved resource allocation--all of which promote organizational success and curb failure.

The first step of business stakeholder analysis is identifying the relevant stakeholders. These include people and entities within and outside the business itself. For example, a business that produces consumer products cares about its customers but also its suppliers, its prospective customers, its employees, and its community.

In an educational institution, a stakeholder analysis would start by identifying the obvious and well-known stakeholders: students, faculty, and administrators. But the assessment would not stop there. Educational institutions at both the undergraduate and graduate levels would need to consider, among others, their alumni, the parent body, the community where they are located, and the entities--both public and private--that will be employing their graduating students. Ideally, educators would also consider the ultimate consumer of the employer's products; for example, a law school would consider the ultimate consumer of legal services in addition to the law firm itself, and a medical school would consider the patients in addition to the hospitals.

In the second phase of stakeholder analysis, business leaders prioritize among the stakeholders by assessing both their relative interest in and influence on (power within) the organization. Imagine a chart with a vertical axis of interest (high at the top and low at the bottom) and a horizontal axis of influence (high at the right and low at the left). With its resultant quadrants (high/high, high/low, low/high, and low/low), a business can literally chart its stakeholders. From a business perspective, while all stakeholders appear on the chart, those with both the greatest interest and influence are of the highest priority. Those with the least interest and least influence may be worth cultivating prospectively but need not have a mainstream role in business planning.

Consider several examples. Employees' families arguably have high interest in the business of their family member but low influence. This signals the importance of communicating with this constituency but not necessarily involving them directly in the enterprise. In contrast, customers (the ultimate end-user of the business's product) may have both high interest in and influence on this particular business since their views directly affect the businesses (and their own) success. Their views need to play a central role in planning.

The interest/influence chart can be transported into the educational arena. Parents increasingly have a great interest in the educational institution their child is attending but little influence over the enterprise. Similarly, the local community has considerable interest in but little influence on the enterprise. These placements signal the importance of educational institutions increasing their communication with these constituencies and perhaps considering ways to involve them more fully within the on-campus life of the institution.

The role of employers is not so easily addressed. Their placement in designated quadrants--likely low interest (on the part of the employer) and low influence (within the academy)--may accurately reflect an institution and employer's current thinking. But, that placement may not be optimal. Surely the employers of recent graduates (whether from undergraduate or graduate school) are stakeholders. In a perfectly synergistic environment, prospective employers would have both high interest in and influence on educational institutions. This is how they will ensure the graduates they hire will be well-prepared for the workplace, and employers will be not be required to provide additional and expensive retraining. Correspondingly, academic institutions will recognize and value employers who both hire and are happy with their graduates and immediately include them in institutional thinking.

However, a high interest/high influence characterization places employers in a quadrant where they are most likely not presently placed. Many employers would suggest quite rightly that they have little influence on the educational enterprise although, in a real sense, they--the employer--are a critical customer. To be fair, many employers have shown little interest in educational institutions, preferring to do their own training. Correspondingly, academic institutions, with the growing exception of some professional schools and other schools with extensive externships and other outreach programs, have not exactly welcomed employers as key participants in the academic enterprise. What students do on campus (both within and outside the classroom) is generally divorced from their prospective work environment.

This approach needs to change, even within traditional liberal arts institutions. If a graduating student is unemployable or only employable with extensive retraining, then the educational institution, in essence, has failed. The employers will be disturbed--as will the students and their families. Stakeholder analysis signals that both employers and educational institutions are missing their important interrelationship. If educational institutions have a better sense of what employers want in their future employees and businesses have opportunities to share their needs and obtain graduates who are better workers, then both enterprises benefit. Employers should, then, move from being in the low interest/low influence quadrant into the high interest/high influence quadrant. To fit there comfortably, both groups must change.

With priorities established, stakeholder analysis turns to understanding the stakeholder interests within each quadrant, often through detailed interviews with them. After careful evaluation, stakeholder analysis actually moves to incorporating the gathered information into the design and function of the business enterprise.

Don't assume the skills employers want are antithetic to a thoughtful educational enterprise.

In the business context, stakeholder analysis might include market research, such as interviewing customers to determine what the customer wants and needs in a new product, or what would make an existing product work better. In other words, instead of companies pre-guessing what their customers want, they ask them. Suppose the customers disliked the size of a kitchen product; it did not easily fit under shelves or in cabinets. A business with this information would re-design its products to meet customer needs and in so doing, perhaps garner a greater market share and an advantage over its competitors. Moreover, customers that sense that businesses are responsive to them will be more loyal purchasers.

Applying this approach to the academic institution, start with the role of parents. Suppose an institution interviewed select members of the parent body to determine what would most benefit them in terms of their child's educational experience. The results could produce changes in how parents are treated on campus and the communications they receive between visits. It could influence the content of events for families at orientation, lead to the creation of family days during the semester, and foster frequent communiques and e-mail access to applicable administrators so questions can be answered and natural concerns assuaged.

Educational institutions could also start listening to employers. Given the diversity among employers and the wide-ranging jobs into which graduates will be placed, this is no small task. But, it is worth understanding what employers want in their employees and then seeing if those skills are ones that can be integrated into the academic experience without undermining the academic enterprise. It is certainly premature to assume that the skills that employers want are antithetic to a thoughtful educational enterprise.

Suppose, by way of example, that employers want employees who are computer literate, and who can read and assess data, cull out important information, and write clearly and persuasively. In addition, perhaps employers want employees who are comfortable with multiple cultures and diverse languages. Employers may also be seeking employees with strong oral communication skills. Perhaps employers want graduates with excellent research skills, too.

Rather than guess about employer needs, educational institutions should inquire about them. Once armed with the data, institutional leaders can assess how those skills might be incorporated into the classroom and campus experience. Just imagine introducing a greater number of oral, rather than written, final examinations if verbal communication skills were highly valued in certain fields.

Obviously, not every class can teach every skill that every employer wants. Nor should it. But, educational institutions that listen to employers and are willing to think through with them how needed skill sets can find a home within the academy will have accomplished several critical goals. They will have created graduates who will be gainfully employed. And, they will have created relationships with employers who are willing to employ their students, as well as willing to work with educators to achieve a match between what academia can provide and what the workplace demands.

As has occurred repeatedly in business, success comes to those who identify, learn from, and involve their stakeholders. Educators should take their cue from business' successes. It is time to identify, listen to, and involve more stakeholders in the academic enterprise and to do so continually.

To adapt an old saw, best to learn the lessons of business success so they can repeat themselves in the educational arena.

Karen Gross is a professor of law at New York Law School and a senior consultant with Keeling & Associates, an educational consulting firm. Pamela Godwin is president of Change Partners, an executive coaching and leadership consulting firm, as well as board member of UnumProvident Corporation; she was formerly president and COO of GMAC Insurance Personal Lines Agency Division.


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