AUBURN UNIVERSITY STRATEGIC PLANNING PROFILE OF THE ENVIRONMENT July 2006 Messina & Graham DRAFT FOR DISCUSSION

AUBURN UNIVERSITYSTRATEGIC PLANNING

PROFILE OF THE ENVIRONMENT

July 2006

Messina & Graham

DRAFT FOR DISCUSSION

Contents

Messina & Graham

I. Overview of Strategy-Development Process

II. Profile of the Environment• Pervasive Trends

• Forces Affecting Higher Education

III. Implications of Environmental Trends for Auburn

IV. Near-Term Steps

Appendices• Discussion Notes for Section II – Profile of the

Environment• Information Sources

2

I. Overview of Strategy-Development Process

Messina & Graham

1.SITUATION

ASSESSMENT

2.OPTION

GENERATION

3.OPTION

EVALUATION

4.STRATEGYSELECTION

5.EXECUTION

• Profiling the environment

• Profiling Auburn - Main campus - AUM

• Identifying strategic challenges and opportunities

• Candidate strategic objectives and directions

• Rationale for each option

• Detailed assessment of each option

• Comparison of options

• Rationale

• Full description, including goals and action initiatives

• Implementation plan, responsibility assignments

• Progress measures, review milestones

• Adjustments and adaptation

3

Messina &

Graham

1.SITUATION

ASSESSMENT

2.OPTION

GENERATION

3.OPTION

EVALUATION

4.STRATEGYSELECTION

5.EXECUTION

PROFILINGTHEENVIRONMENT

PROFILINGAUBURN

• Main campus• AUM

• Pervasive Trends


• Student Enrollment• Research• Public Funding• Private Giving

Implications forAU Strategy

Assessment ofStrengths, Weaknesses,Opportunities, Threats

StrategicChallenges

andOpportunities

Step 1: Situation Assessment

4

PERVASIVE TRENDSFORCES AFFECTINGHIGHER EDUCATION

• Globalization

• Information Revolution

• Natural-Resource Demands and Environmental Strain

• Aging Populations and Increasing Minorities

• Enrollment Growth

• Affordability Challenge

• Demands for Quality Improvement

• Efficiency Imperative

• Diverse Perspectives on the University in the Twenty- First Century

II. Profile of the Environment

Messina & Graham

5

Pervasive Trends

Messina & Graham

GLOBALIZATION

• Transforming worldwide commerce and employment• Generating global competition for knowledge work

• Information technology, telecommunications, connectivity• Dramatic and ubiquitous impacts

• Aging populations in developed countries• Rapid rise in U.S. minorities, especially Hispanics

INFORMATIONREVOLUTION

NATURALRESOURCES

DEMOGRAPHICS

• Demand increasing because of global economic and population growth• Environment under strain

6

Globalization Transforming Commerce and Employment

Messina & Graham

Example – Motor Vehicle Production in Alabama and Georgia

Source: Alabama Economic Outlook, 2006; The Atlanta Journal-Constitution

PLANT CLOSINGS

1990

2008

2008

GM

GM

Ford

Lakewood, GA(opened 1927)

Doraville, GA(opened 1946)

Hapeville, GA(opened 1947)

PLANT OPENINGS

1997

2001

2002

Mercedes

Honda

Hyundai

Tuscaloosa

Lincoln

Montgomery

2003 Toyota Huntsville

2009? Kia West Point, GA

By 2007, Alabama will have 19,000 motor vehicle manufacturing jobs,more than triple the 2003 level

7

Global Competition for Knowledge Work

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- Harvard University’s Derek Bok

“Our college graduates face increasing competition from

ambitious, intelligent young people overseas, eager to

claim whatever skilled work can be digitized and outsourced

to distant places around the globe”

- The Washington Post, May 15, 2006

“[Overseas] tutors, who communicate with students over

the Internet, are inexpensive and available around the clock,

making education the newest industry to be outsourced to

other countries”

8

Global Competition for Knowledge Work

Messina & Graham

Example – Aerospace

ACTIVITIES PERFORMED OFFSHORE FOR U.S. COMPANIES

• Aircraft and spacecraft research and development, engineering, manufacturing, testing, technical support

• Software development and testing

• Airliner maintenance, modification, repair, spare parts

• Pilot training, flight simulation

• Airline reservations and customer service

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Source: Boeing, IBM, Aviation Week

Natural Sciences and Engineering Graduates

Degrees Per 100 24-Year-Olds, 1975 and 2000

Messina & Graham

Source: National Science Foundation, 2004

2.5

* 2001 data

Japan

United States

Germany

Canada

United Kingdom

Taiwan

3.0

3.5

3.6

4.0

4.5

5.8

9.5

10.6

10.8

11.0

13.2Finland

France

Taiwan*

South Korea

United Kingdom*

Sweden

United States(Rank = 15)

11.1

1975 2000

10

Science and Engineering Graduates

In Thousands, Year 2000

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1,200

Asia Europe United States

850

500


11

Science and Engineering Articles

U.S. Share of World Total, In Percent, 1988 - 2001

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3835

31

1988 1994 2001


12

Information Revolution

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Worldwide Numbers of Cell Phone and Internet Users, 2000 and 2005

Source: International Telecommunications Union; InternetWorldStats.com; OECD; Pew Internet and American Life Project

2.1 billion

727 million

+ 189%

2000 200532 percent ofworld population

1 billion

353 million

+ 183%

2000 200516 percent ofworld population

CELL PHONES INTERNET ACCESS

Broadband access250 million

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Impact of the Information Revolution on Universities

Messina & Graham

• Online and video courses• Distance tutors, electronic slates• Simulations• Distractions

• Multi-site, cross-disciplinary collaborations via video interactions

• Increased outreach, information availability, access• Expert consultations

• Creation of virtual communities based on common interests• Weblogs

• Sophisticated planning and resource- management tools• Detailed information-sharing among institutions• Online and automated processes, surveys

INFORMATION REVOLUTION

• Digital information processing (computers, digital cameras, etc.)

• Rapid information transfer (Internet, broadband telecommunications, wireless)

• Information management tools (software, web search, platforms)

TEACHING ANDLEARNING

RESEARCH

EXTENSION

COMMUNITIES

ADMINISTRATIONAND OPERATIONS

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Distance Learning

Messina & Graham

- The Wall Street Journal, May 9, 2006

“Online enrollment is skyrocketing . . . . By early 2008, one out of

10 college students [is expected to be] enrolled in an online

degree program”

15

Messina &

Graham16Source: The Washington Post, May 16, 2006

Distance Learning

World Oil Consumption

Millions of Barrels per Day

Messina & Graham

Source: U.S. Energy Information Administration

21

63

1960 1970 1980 20201990 2000 2010

47

67

77

95

111

17 2841

52

EmergingEconomies

17

52

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Graham18

Environmental Strain

Source: The Washington Post, May 31, 2006

Aging of U.S. Population

Dependency Ratio: Population Over Age 65as a Percentage of Population Age 20 - 64

Messina & Graham

Source: U.S. Census Bureau

21 22

28

36

2000 2010 2020 2030

19

Messina &

Graham20Source: USA Today, May 25, 2006

Increasing Financial Burden

Growth in Hispanic Population

Hispanics as a Percentage of Total U.S. Population

Messina & Graham

Source: U.S. Census Bureau

1416

1820

2005 2010 2020 2030

67 65 61 58Percent White

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Implications of Pervasive Trends for Universities

Messina & Graham

GLOBALIZATION

• Ensuring competitiveness of graduates• Increasing students’ international awareness

• Multiple challenges and opportunities in teaching and learning, research, extension, and administration and operations

• Enriching lifelong learning• Embracing greater diversity

INFORMATIONREVOLUTION

NATURALRESOURCES

DEMOGRAPHICS

• Teaching and learning, research, extension and operations opportunities• Examples: alternative energy sources, conservation, agricultural technologies

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• Globalization









Profiling the Environment

Messina & Graham

23

U.S. College Enrollment

Millions, 1990 - 2014

Messina & Graham

Source: National Center for Education Statistics, 2004

14 14

1720

1990 1995 2000 2005

Projected

2010 2014

15

19

+12%from 2005to 2014,

with regionaldifferences

24

Tuition and Median Family Income

Inflation-Adjusted, 1980 – 2000, 1980 = 100

Messina & Graham

Source: Vedder, Going Broke By Degree, Table 1-2

1980 1985 1990 1995

FAMILY INCOME

2000

TUITION

TUITION 100 130 157 203 253

FAMILY INCOME 100 102 109 110 122

100

125

150

175

200

225

25

Net Cost of Attending Public Four-Year College

Percent of Family Income, Year 2003 - 04

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Source: The College Board

47

26

18

11

Lowest($19,100)

Second($46,100)

Third($75,000)

Highest($136,000)

Family Income Quartile

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Demands for Quality Improvement

Messina & Graham

Representative Critiques of Undergraduate Education

• No universally accepted objectives and standards defining an undergraduate degree

• Few measures of learning outcomes or teaching effectiveness

• Innovation and experimentation in teaching approaches not broadly practiced or even highly regarded

• Little drive for performance improvement and organizational learning across the enterprise

• Poor understanding and sharing of best practices among institutions

“The moment has surely come for America’s colleges to take a more candid look at their weaknesses and think more boldly about setting higher

educational standards for themselves”

- Harvard University’s Derek Bok

27

Efficiency Imperative

Messina & Graham

Example – University of Maryland System

ASSESSMENT

“We currently operate under amodel in which educationalexpenditures at colleges anduniversities across the countryare rising by about 4.5 percentto 5 percent annually. In anation with an entrenched 3percent inflation rate, this isnot sustainable over the longterm, no matter what oursource of revenue.”

- William Kirwan, Chancellor

RESPONSE

• “Systematic examination and reengineering of all our academic and administrative processes”

• “Increased faculty classroom responsibilities, expanded online educational opportunities, consolidated back- office operations . . .”

• “$40 million in cost savings realized so far”

Source: The Presidency, Winter 200628

EFFECTIVENESS ANDEFFICIENCY INITIATIVE

Diverse PerspectivesOn the University in the Twenty-First Century

Messina & Graham

Illustrative Contrasts

PURPOSE OFUNDERGRADUATE

EDUCATION

MODEL

TEACHING

LEADERSHIP

• Liberal (broad) education • Skills-building for employment

• Residential campus

• Interactive learning, innovation in teaching approaches• Standardized content

• Online, distance learning

• Tried-and-true teaching approaches• Individual course development and delivery

• Community of scholars with guidance by an academic leader

• Business enterprise led by a CEO

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TRADITIONAL ALTERNATIVE

Diverse Perspectives on the University

Messina & Graham

Purposes of Undergraduate Education

PURPOSES(BOK)

• Ability to communicate• Critical thinking• Moral reasoning• Preparing citizens• Living with diversity• Living in a more global society• Breadth of interests• Preparing for work

KEY ATTRIBUTES(U.S. COMPANIES)

• Leadership• Teamwork• Problem-solving• Time management• Self-management• Analytical thinking• Global consciousness• Basic communications skills

GOALS(NATIONAL POLL)

• Sense of maturity, ability to manage on one’s own• Ability to get along with people different from one’s self• Problem-solving and thinking ability• High-technology skills• Specific expertise in chosen career• Top-notch writing and speaking ability• Responsibilities of citizenship

Source: Bok, NASULGC

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Implications of Higher-Education Trends for Universities

Messina & Graham

ENROLLMENTGROWTH

• Focusing on enrollment objectives

• Ensuring diverse access

• Implementing proven business practices to reduce cost growth

• Innovating and experimenting with new curricula and teaching approaches• Measuring performance in learning and teaching

AFFORDABILITYCHALLENGE

QUALITY IMPROVEMENT

EFFICIENCYIMPERATIVE

21ST CENTURYUNIVERSITY

• Re-examining vision and mission• Redesigning business model to adapt to dramatic change

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• Globalization









Profiling the Environment

Messina & Graham

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III. Implications of Environmental Trends for Auburn

Messina & Graham

Pervasive Trends

• Ensure implementation of technologies that enable cost and quality improvements

TREND / IMPLICATIONSPOSSIBLE AUBURN RESPONSE (ILLUSTRATIVE)

GLOBALIZATION

• Competitiveness of graduates

• Students’ international awareness

• Raise performance expectations for students and measure results

• Develop new approaches to undergraduate education

• Increase international course and language skills offerings and requirements

INFORMATION REVOLUTION

• Challenges and opportunities across the enterprise

33

Implications of Environmental Trends for Auburn

Messina & Graham

Pervasive Trends

• Advance teaching and research in alternative energy sources, conservation, agricultural technologies

• Promote energy-efficient building design and operations

• Explore distance learning for specific markets (e.g., alumni, seniors)

• Prepare for challenges resulting from growth in Hispanic students

NATURALRESOURCES

• Opportunities across the enterprise

DEMOGRAPHICS• Enriching lifelong learning

• Embracing greater diversity

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Messina & Graham

Forces Affecting Higher Education

• Strengthen image of value to compensate for possible reduction in applicant pool

• Constrain expense growth through improving efficiency and applying technology

• Increase resources available for need-based aid

ENROLLMENTGROWTH

• Focusing on enrollment objectives

AFFORDABILITYCHALLENGE

• Ensuring diverse access

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Messina & Graham


• Raise performance expectations for students

• Innovate and experiment with new teaching approaches, including beyond the classroom

• Focus on learning objectives and measure results

QUALITYIMPROVEMENT

• Developing innovative teaching and learning approaches

• Measuring performance in learning and teaching

36



Messina & Graham


• Perform a comprehensive review of cost elements and processes

• Implement focused technology solutions that reduce costs

• Examine approaches to help enable the faculty to become more productive in their teaching and research activities

EFFICIENCYIMPERATIVE• Implementing proven business practices to reduce cost growth

37



Messina & Graham


• As a key building block for creating a twenty-first

century vision for Auburn, perform an assessment of

the University’s strengths and weaknesses, and profile

the opportunities and threats it faces (“SWOT”

assessment)

21ST CENTURYUNIVERSITY

• Re-examining vision and mission

• Redesigning business model to adapt to dramatic change

38


IV. Near-Term Steps

Messina & Graham

• Individual follow-up discussions with Board members

• Interactions with deans and faculty

• Profiles of Auburn Main Campus and AUM

• Assessments of strengths, weaknesses, opportunities, threats (“SWOT” assessments)

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Messina &

Graham

1.SITUATION

ASSESSMENT

2.OPTION

GENERATION

3.OPTION

EVALUATION

4.STRATEGYSELECTION

5.EXECUTION

PROFILINGTHEENVIRONMENT

PROFILINGAUBURN

• Main campus• AUM

• Pervasive Trends


• Student Enrollment• Research• Public Funding• Private Giving

Implications forAU Strategy

Assessment ofStrengths, Weaknesses,Opportunities, Threats

StrategicChallenges

andOpportunities

Step 1: Situation Assessment

40

Key Elements of a Strategy

Messina & Graham

DISTINCTIVENESS

RESOURCECOMMITMENTS

EXECUTION

• Special attributes and their sources

• Differentiation that confers relative advantage

• Consistent with vision and mission

• Choices about allocating scarce resources

• Fact-based decision-making

• Coherent set of initiatives

• Implementation plans, responsibility assignments

• Progress measures, review milestones

• Adjustments and adaptation

41

Documents

AUBURN UNIVERSITY STRATEGIC PLANNING PROFILE OF THE ENVIRONMENT July 2006 Messina & Graham DRAFT FOR DISCUSSION