The U.S. higher education sector faces significant risk due to a convergence of uncertainties that include regulatory changes, demographic shifts, technological disruption, and declining public perception of its value.
Yet many institutions invest precious resources in strategic plans that are obsolete in 18 months because the plans are not helpful when facing high levels of uncertainty.
What is needed now is planning that enhances strategic agility by describing, exploring, and learning from multiple views of the future. Scenario planning provides this capability by helping organizations envision alternative futures and use those futures to make more informed decisions in the present.
Despite its benefits, scenario planning is not widely used across higher education. Portland State University, Mira Costa College and California State University, Long Beach are a few of the exceptions that have sought to develop strategic foresight capability, to include scenario planning, across their institutions.
As a result, those who have participated in these initiatives have developed a longer-term perspective and a more systematic way of thinking about uncertainty. This has strengthened institutional resilience and expanded the range of strategic opportunities institutions are willing to consider.
Scenario planning is not a prediction
Scenarios are stories about the future, not predictions, that present what could happen in the future in a way that is coherent, plausible, and consistent. They are tools for imagining how the future could be different due to how uncertain factors might unfold.
Scenarios typically focus on long-term futures (10-plys years), but they can also be effective when organizations face disruptions or potentially rapid changes. For example, during the COVID-19 pandemic, institutions had to make quick decisions about online learning, campus closures and shifting student needs.
In these and similar situations, short-term scenario planning could have provided valuable insights.
Although scenarios are stories about the future and require imagination, they are grounded in research informed by scanning. Scanning typically examines a wide range of areas using frameworks like STEEPLE, which looks at social, technological, economic, environmental, political, legal, and ethical factors.
Examples of what is discovered during scanning include technological factors such as the emergence of a new platform that significantly expands AI’s performance of administrative tasks or environmental factors such as sustainability policies that require institutions to invest in green campuses or carbon-neutral operations.
Scanning broadly and continuously using a framework such as STEEPLE avoids overlooking factors that may impact one’s organization or sector but do not at first seem relevant. Too often, institutions rely on what leaders happen to notice, what vendors pitch, or what peer institutions act on. STEEPLE can address these issues.
Capturing ‘critical uncertanties’
During scanning, you look for trends, such as those related to demographics, and weak signals, which are indicators of change that are not widespread but could become so in the future. Trends and signals help you identify broad drivers of change, the underlying forces of change that are causing the trends and signals.
The most uncertain and impactful drivers of change, called “critical uncertainties,” uncovered during scanning inform the development of scenarios. Examples of critical uncertainties include whether skills-based hiring will reshape the credentials that are used for hiring decisions or whether the degree will remain central to hiring decisions, and whether public confidence in higher education will continue eroding or rebound.
The relevance of these critical uncertainties may differ for different types of institutions and different elements of the higher education sector that include nonprofits and accreditors.
One of the most useful approaches for scenario planning is the 2×2 matrix. It employs the two most critical uncertainties by plotting their extremes on a grid. Consider a 2×2 matrix using employer hiring practices (credential-based vs. skills-based) and public trust in higher education (high vs. low).
This creates four different scenarios, which provide four potential futures to explore:
- High trust/credential-based hiring
- Low trust/credential-based hiring
- High trust/skills-based hiring
- Low trust/skills-based hiring
This approach provides insights on how two key uncertainties, such as those identified above, might interact and shape the future. Scenarios should be created by team members from across the institution so there is widespread understanding of the forces shaping the future and different possible futures.
Low trust/skills-based hiring
In this future, employers have made a significant shift to skills-based hiring, valuing portfolios that demonstrate skills, micro-credentials, and employer-developed assessments over traditional degrees. At the same time, public confidence in higher education has continued to erode due to concerns about cost and career readiness.
In this environment, alternative education and training providers capture significant market share. Traditional institutions find themselves competing on price while struggling to articulate distinctive value. Enrollment in four-year programs declines while demand for short-term, job-focused credentials surges.
What comes next after creating scenarios?
Leadership teams should stress-test their strategies against each future, asking:
- Would our current strategic plan succeed in this scenario?
- Where are we vulnerable?
- What early warning signals of the future becoming reality should we monitor?
This analysis reveals strategic blind spots and identifies opportunities for hedging bets across multiple futures. By analyzing all four futures, institutions rehearse possible changes before they occur, reducing the likelihood of strategic surprise.
The analysis of scenarios should inform refinement of strategies to strengthen resilience and invest in potential opportunities reflected in the scenarios. The scenarios can also help leaders and their teams recognize early signals of movement toward one scenario or another, enabling faster adaptation than institutions that only examine one future.
Because of its importance, scenario planning and strategic foresight more generally should be a key element of higher education leaders’ toolkit. Although it may seem challenging to take on scenario planning given all that is going on, there are small steps leaders can take to begin.
Dedicate 30 minutes during a meeting to identify three critical uncertainties facing your institution. Encourage your teams to scan using STEEPLE and share relevant weak signals they have noticed.
Schedule a 90-minute scenario workshop using the 2×2 martix to explore two critical uncertainties. These modest steps build organizational capacity for the strategic agility institutions need.
Although there is significant uncertainty facing the higher education community, it does not have to result in paralysis. Scenario planning offers a way to anticipate and adapt by exploring multiple possible futures. This strengthens resilience and offers opportunities to thrive in uncertainty.
The views in this article are those of the author and not the views of the United States Military Academy, United States Army, or United States Department of Defense.
