Create the capacity for change
Higher education institutions are operating at the edge of their capacity. Every dollar is committed. Every team is stretched. Every process is strained. In that environment, finding room to evolve feels impossible. Institutions that never create capacity for change are not resilient and become brittle. If you’re waiting for the perfect time to transform, it will never come. Here’s how to break the cycle.
In brief
- Institutions that cut too aggressively eliminate the very capacity needed to evolve, creating a cycle that's hard to escape.
- Breaking that cycle requires getting ahead of resource reallocation decisions before a crisis forces them.
- Sustaining progress means building decision-making structures and dedicated time that turn improvement from aspiration into practice.
The efficiency paradox
There’s a paradox at the heart of how institutions respond to financial pressure. The natural response to a budget crisis is to cut costs, eliminate redundancy, and streamline operations. Done right, this is necessary and responsible. Done wrong, or without strategic deliberateness, it creates an institution that is lean in harmful ways. As Managing Director Jennifer Ramey explains, “You can't cut, grow, or spend your way out of disruption. It's a combination of those things — of how you reallocate the very limited resources you might have to your institutional plan and success.”
When every person, every process, and every dollar is fully committed to keeping current operations running, there is nothing left to invest in change. No bandwidth for improvement initiatives. No capacity to implement new technology. No time for leaders to think strategically rather than operationally. The institution becomes highly efficient at doing what it has always done, but is unable to do anything differently. In a world that won’t hold still, that often means a direct path to closure.
The institutions that avoid this trap intentionally guard capacity, even under financial pressure. Some resources must be held in reserve, explicitly and deliberately, so that institutions can respond to what they don’t know is coming. Leadership teams can get caught trying to spin 10 plates more efficiently so they can take on an 11th, but sometimes the answer is to stop spinning one plate entirely. That’s a hard thing to do. It requires honest reflection and tough decision making. However, it’s the only way to free up the real capacity that meaningful evolution requires.
The first step: Know what you’re working with
Before an institution can move forward, an honest picture of its financial and operational standing is essential. This sounds obvious, but it’s more difficult than it looks. Many institutions operate with fragmented data, inconsistent reporting across departments, and strategic plans that sound compelling but haven’t been stress-tested against financial and operational reality. Effective financial resilience starts with clean data and clear assumptions. What are your enrollment projections, and how confident are you in them? How do cost structures adapt to different revenue levels? Where are the areas of positive financial health, and where are there structural vulnerabilities? These aren’t just CFO questions; they’re cabinet- and board-level conversations that need to happen openly, regularly, and with the full executive team in the room.
Three realities that stall continuous improvement
These realities tend to undermine even the most well-intentioned efforts at building resilience:
- Continuous improvement means continuous decision making. Without a leadership structure that enables timely financial decisions and holds people accountable for making them, good ideas accumulate without ever getting implemented. Over time, that backlog does more than slow progress; it erodes culture. When people repeatedly see their ideas go nowhere, they stop generating and sharing them. The path of least resistance becomes accepting a flawed status quo rather than pushing for something better. Establishing the decision-making infrastructure is often one of the most important elements of building resilience.
- Perfection is not the goal, and waiting for it causes paralysis. Some institutions are rich in ideas but poor in execution, not because of a lack of will, but because of an unwillingness to commit without certainty. Effective improvement requires leaders who know when they have sufficient information to act, who can weigh financial risk without being immobilized by it, and who recognize that delaying a decision is itself a decision with consequences. The goal is not a flawless choice; it is a well-reasoned one made in time to matter.
- Continuous improvement is a job, not just a philosophy. Wanting to improve your financial outlook is not enough. If people are not given protected time and real capacity to experiment, ambition stays aspirational. The enthusiasm many staff and faculty have for exploring new tools and approaches rarely translates into action when every hour is already spoken for. Carving out that space deliberately is not a luxury; it is what separates institutions that talk about change from those that make it.
Reallocating before you’re forced to
One of the most effective ways to create capacity for change is to get ahead of resource reallocation rather than waiting until crisis forces your hand. This means taking a hard look at where resources are currently committed and asking candidly whether those commitments still serve the institution’s strategic direction.
Academic portfolio strategy is a prime example. Many institutions are still investing in programs that no longer reflect market demand, student interest, or institutional strength, while simultaneously underinvesting in areas with genuine growth potential. The same pattern appears in administrative structures, technology systems, and service delivery models. Every dollar that’s being spent maintaining something that doesn’t serve the future is a dollar that can’t be invested in building it.
This kind of reallocation requires discipline and fortitude. It means making choices that feel like cuts but are investments in the institution’s capacity to evolve. It means prioritizing aggressively and communicating those priorities clearly. The institutions that wait for a crisis to force the decision will make the same choices, just with fewer options and less time.
Technology as a capacity multiplier, when implemented correctly
Technology is one of the most powerful levers for creating capacity. Modernized infrastructure, automation, and AI-assisted workflows free up human time and redirect staff toward the judgment-intensive work that requires their expertise. AI-assisted accounts payable, for instance, can handle routine invoice approvals automatically, flagging only exceptions.
The institutions that get this right typically start small, piloting in one area, measuring the time and cost impact, and then scaling what works. The goal isn’t to automate everything at once; it’s to build confidence in the model and demonstrate early wins that justify broader investment. On the resilience side, AI’s greatest contribution may not be efficiency at all; it may be foresight. Predictive analytics can surface early warning signals in enrollment trends, student retention, and financial performance, giving leaders time to act before a challenge becomes a crisis. That kind of proactive intelligence is exactly what over-stretched institutions need most.
The role of the board, the budget, and the long view
Building institutional flexibility requires bringing the right people into the conversation, including the board. Trustees can be significant assets in a transformation effort: they bring an external perspective, professional expertise, and the ability to open new doors. That potential is only realized when boards are genuinely and consistently informed about the institution’s financial mechanics, strategic direction, and trade-offs. Boards that receive only good-news summaries can’t provide the guidance that difficult moments require.
Budgeting practices matter, too. Annual budgets set and left static for 12 months give leaders very little ability to correct course when conditions change. Rolling forecasts that are updated regularly and based on actual performance data give institutions the financial agility to redirect resources in real time rather than waiting for end-of-year surprises.