12/18/2012 04:28 pm ET Updated Feb 17, 2013

When Is Disruptive Change Good for a College?

In last week's post, I wrote on the need for a comprehensive redesign of the collegiate business model. The numbers don't work, the model typically addresses incremental budget adjustments at best, and the bureaucratic "mom and pop" shops who administer the budget at many colleges inhibit broader cooperative partnerships that can hold down costs and open the campus to new relationships beyond the college gates.

There are two culprits. The first are administrators who assume their responsibilities only partially prepared for the job. The second are trustees who sit as stewards and who often allow business practices to occur that they would not sanction in their day jobs. Boards often fall back on an assumption that higher education plays by its own rules, even when these rules no longer make sense.

For these reasons, college and university governing boards must become more sophisticated in anticipating which business models will provide the most opportunity to differentiate and support the academic program. These models must enable faculty who incubate great ideas but lack an understanding of the financial mechanisms, protocols and bureaucracy to implement them. The inability to translate faculty needs into administrative support to "close the deal" stops much of the best innovation occurring at college and universities dead in its tracks.

So, let's agree that higher education institutions need new thinking. There is a fundamental danger if trustees believe, however, that they possess unique power to initiate disruptive change without broad consultation. Trustees, well intentioned or otherwise, can do great damage to institutional momentum if they treat the college as a petri dish experiment sanctioned by business school case studies.

Trustees should never use a business approach for political or philosophical purposes without appreciating the risk to the standing and reputation of the institution. In a world in which so many on a college campus went "all the way" educationally, using the business case study currently in vogue to mandate changes can be dangerous. While it may legitimize the intellectual credentials of trustees who cannot compete with the faculty in academic standing, it's still a bad idea. The institution may not even be able to assess the damage done to it in higher education. The costs of disruption poorly executed can be disguised but are incalculable.

That having been said trustees have an enormously valuable role to play, especially if they are enlightened enough to recognize that they must approach college governance without an agenda. Trustees must begin with an understanding of governance and what it means in a college or university setting. They have three established roles: executive oversight, financial stewardship, and the responsibility to craft a climate for the president to succeed. Administrators manage the operation of the institution. The faculty governs the academic program. In the best institutions, parents, alumni, staff and students -- often babysat as outliers -- are consulted and their viewpoints are incorporated into policy design.

The point is that each has complementary governance responsibilities. While communication can never be fully transparent -- at least in the eyes of some -- it is a laudable goal. Good communication creates, in fact, the perfect climate for disruptive system change. The best strategy -- embodied in a useable strategic plan -- breeds productive disruption and is widely embraced because the college community is educated on the possibilities, aware of the dangers, and emboldened by the promise that disruptive change offers. It can simultaneously reinforce and adjust the value structure of the institution.

The best advice to the trustees is to make sure that their established roles are well defined, efficiently administered and regularly assessed. Beyond that, trustees must create a dashboard system by which metrics can be established and viewed over the long term and comparatively to other colleges and universities. They must be designed comprehensively to create a full picture and provide an early warning system should problems arise. Metrics must be established in relation to one another. Beyond that, trustees should not sweat the small stuff. It's why the administration is part of shared governance.

Where the best boards can spend their time is looking productively and opportunistically at the future. Trustees can bring great ideas through the college gates. They understand broader economic trends and can educate the rest of the college community about the intersection of research, values and adaptability. Many of them are experts already. Presidents cannot single-handedly make a college more nimble, agile and open to new ideas. It's akin to the old General Electric commercial that touted "we bring good things to light." It may well be that the success of a college will depend on the ability of its board of trustees to use its time wisely to adapt disruptive change without agenda to a college and university setting.