Globally higher education currently operates in a highly volatile and uncertain environment, with frequent shifts and pivotal changes as the norm rather than the exception.

This new strategic context brings to the fore a set of interconnected challenges for Australian universities.

To borrow from world-renowned strategist, Roger Martin, “strategy is a set of interrelated and powerful choices that positions an organisation to win.” In this light, understanding the dynamic backdrop against which universities make strategic decisions is the sine qua non to crafting a winning, executable strategy that ensures a university’s long-term sustainability.

Strategy, in this sense, becomes a scientific game of hypothesising about the future world and addressing the crux of a university’s challenges as we venture into uncharted territories (as Richard Rumelt emphasises). Strategy requires both foresight and adaptability, combining rigorous analysis with creative, bold thinking. If there is a sector that should excel at this, it is undoubtedly higher education.

Key factors shaping the new strategic context include:

• Regulatory change: The Accord’s implementation including, managed growth targets, changes in migration strategy, and the introduction of international student caps, among others. 
• Evolving market dynamics: intensifying global and local competition and the entry of non-traditional players like BigTech.  
• Fourth Industrial Revolution: rapid technological advancement is reconfiguring the world of work, as well as the world of study—with learners’ expectations about higher education shaped by their interactions elsewhere in the economy.
• Geopolitical shifts: universities have found themselves at the epicentre of socio-political debates, navigating complex global dynamics while serving multiple and diverse constituencies abroad and at home.
• Economic pressures: inflationary trends, rising interest rates, and cost-of-living crises—impacting student demand and universities’ bottom line (e.g., erosion of margins).
• Demographic trends: declining fertility rates, a phenomenon posing serious future socio-economic challenges.
• Crisis in institutional trust: falling levels of confidence in institutions, signalling a departure from the societal organisation as we know it.

In addition to these externalities, Australian universities face significant internal challenges that impact their ability to generate and capture new value for their communities and stakeholders:

• Poor strategic differentiation: a high degree of homogeneity defines the Australian higher education sector (as opposed to other contexts like the United States). This poor differentiation limits the unique value (competitive advantage) each university can offer to students, staff, and the broader community—ultimately constraining the sector’s collective impact.
• Eroding social license: Australian universities are experiencing a decline in public trust and perceived relevance among their communities. On this topic, please see this Future Campus article.
• Disempowered academic workforce: a growing sense of disempowerment among the academic workforce at the forefront of delivering on universities’ core missions. The withering of academics’ agency in the decision-making processes that drive a university’s agenda severely impacts productivity and student engagement and contributes to the erosion of universities’ social license. Engaged students can only be the outcome of a thriving academic workforce.
• Teaching/Research balance: academics face competing/conflicting priorities and potential trade-offs in quality between research and teaching. While efforts to reward educational excellence have partly addressed the undervaluing of teaching, and are a step in the right direction, more deliberate discussions about holistic measures of academic success would see universities better fulfil their mission. 

Naturally, the breadth and depth of these challenges presents a risk of decision paralysis. University leadership finds itself at strategic crossroads, grappling with critical questions, such as: where to go from here? Which ‘strategic piece’ should be moved first? What set of interconnected decisions will unlock the greatest value in the shortest term, unleashing a domino effect of positive outcomes? Put simply, how can universities address such unprecedented complexity? 

Earlier this month, Tim Winkler put forward a synthesised, actionable approach to address revenue gaps through what could potentially be referred to as the immediate ‘strategy triad’: retention-renting out-reinvention. Adding to this, we put forward the idea of executional discipline as a renewed imperative for Australian universities in the new operating environment.

Executional Discipline as an Imperative

Universities must prioritise building and strengthening their executional capabilities if they are to optimise their operations and realise the value outlined in their ambitious decadal and medium-term strategies. In an era of complexity, the ability to execute effectively may well be the defining factor in a university’s success, sustainability, and renewed social license to operate. We argue executional discipline is a performance lever in itself.

While specific data for the university sector is non-existent (a gap that presents an excellent research opportunity), studies from the corporate world suggest that between 70 and 90% of strategies fail—not due to a lack of vision or boldness—but due to poor execution. Given the complex structure and multi-stakeholder makeup of Australian universities, there is no reason to assume they perform any better in this regard. 

Financial Costs of Poor Strategy Execution

If deemed a priority, universities can easily calculate the financial costs of poor strategy execution to find additional opportunities for resource reallocation, a critical action in a constrained financial environment. Examples include:

• Duplication of effort, leading to inefficiency and lower productivity.
• Resources wasted on strategic initiatives that no longer deliver value (a common challenge in higher education, where exit strategies are often deemed a ‘failure’), or peripheral programs of work.
• Missed deliverables and/or delayed achievement of outcomes.
• Inability to seize emerging opportunities (losing potential strategic partnerships, missed opportunities for strategic investment, etc.).
• Inability to drive innovation at scale as an outcome of successful strategic delivery.

Addressing these gaps could provide tangible, actionable opportunities for universities to address immediate revenue shortfalls.

Hidden Costs

In addition to financial costs, universities must consider a range of hidden costs in this new strategic context:

• Erosion of competitive advantage: poor and failed execution can lead to lost market position and missed opportunities for differentiation (e.g., losing ground in research disciplinary advantage, community impact, rankings position, student recruitment, etc.). Over time, this can lead to a weakened institutional ability to retain and attract top academic talent.
• Impact on organisational culture and performance: poor and failed execution breeds a pervasive sense of disillusionment across any organisation. Misaligned resources, lack of integration across siloes, ever-reappearing transformation programs are likely to negatively impact productivity and innovation. Over time, the cumulative effect is a decline in staff morale and an increased fatigue among a university’s community, creating a suboptimal environment for future strategic thinking and action.
• Reputational Damage:  the gap and inconsistency between stated strategic goals and operational realities (executional gap) can impact on external stakeholder engagement and trust. When a university fails to deliver on its published strategic promises, it risks damaging its standing in the higher education environment. An example of this is community partnerships, which may weaken as stakeholders lose confidence in an institution’s ability to follow through on commitments (including Indigenous agendas, commitments to Reconciliation, environmental targets, and other key societal priorities). 
• Regulatory Consequences: inadequate execution of strategies related to quality assurance, research integrity, or financial management, among others, can lead to serious regulatory issues. In the new context, TEQSA and ATEC may scrutinise institutions more closely.

By recognising and addressing both the financial and hidden costs of poor strategy execution, universities can develop more comprehensive and effective approaches to translating their ambitious goals into tangible outcomes. It is through executional excellence that universities can not only address immediate challenges but also secure their long-term sustainability, renew their social license to operate, and continue to create meaningful value for the communities they serve.

We want to hear from you about your experiences, ideas, and challenges in strategy execution within higher education. Our aim is to bring Australian universities together on a journey to enhance how we conceptualise and practice strategy execution, addressing our unique sectoral challenges.

Dr Alejandra Gaitan Barrera, Senior Strategy & Transformation Manager at Macquarie University and Doris Tong, Associate Director, Strategic Initiatives at the University of Canberra. The article represents their personal views only and does not purport to reflect positions of either university.