To Open or Not: Case Study in Strategic Decision-Making

How can college leaders come to such different decisions about reopening their campuses? Because we all have blind spots in our decision-making processes, and need to strive to mitigate them, Paul Friga writes.

August 14, 2020
 
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My campus is not alone in having a battle about the decision to bring back students to campus, although the decision has already been made and students are back. Arguments for the reopening stress the need to move the students forward in their academic journeys, unsatisfactory results with remote instruction in the spring and financial implications of lost enrollments, decreased tuitions, and idle facilities.

The obvious factors in favor of a move to virtual instruction include the health risk consideration of exposure to COVID-19 of students, faculty and staff, and community members with the influx of large numbers of students living and socializing in close proximity. This is the perhaps the biggest decision university leaders have ever made given the fact that lives are at stake and financial impacts are dramatic.

How could it be that very intelligent decision-makers arrive at different conclusions on the same question?

The answer is because we are human. As such, we are subject to blind spots and heuristics in decision-making based on our unique past experiences. The framework I created and use in my course on strategic decision-making may help shed some light on explaining the phenomenon and proposing mitigations to improve the process.

My framework, entitled "BLIND SPOTS," summarizes the factors that lead us to flawed decision-making.

B -- Bad Money After Good. A leader makes a public statement and feels the need to stick to that position, and even increase commitment, despite being faced with disconfirming evidence. In our situation, this could be a decision to open campus in the summer when it was expected COVID-19 would be curtailed by the fall.

L -- Limited Frame of Reference. Each of us is a result of our cumulative experiences. The value of teams and diversity is the recognition that none of us have experienced it all. We should be seeking many different and informed perspectives in this process.

I -- Invalid Assumptions. Many times data used in decisions are wrong and sometimes assumptions are "taboo" and not to be questioned. The data on COVID-19 in August indicate that in many states outbreaks and hospitalizations are at an all-time high. Additionally, quick economic calculations may appear to support that opening will be more positive financially, but this may actually not be the case when you add in the costs associated with significant efforts to open safely, negative impact on the economy if the virus grows, and the cost of litigation associated with opening; not to mention reputational impacts should things go badly with re-opening.

N -- Non-Statistically Significant Conclusions. Every one of us uses heuristics to make fast conclusions, often without true statistical evidence. An example of this could be to conclude that all universities can successfully open if a few are able to do it.

D -- Deal Maker's Curse. A desire to "win" can drive actions that are not strategic. One example is posturing or suggesting that individuals are "stronger" and earn their "personal freedoms" if they don't wear a mask.

S -- Self-Focus Over Organization. From time to time, leaders get caught up in their own stature and recognition rather the good of the organization. We need to constantly consider the health and well-being of our students, faculty, staff and community members and check egos at the door.

P -- Problem Framing. We often forget to ensure that we get the key question and issues right before making a decision. In this case, some leaders may have shifted to "How do we open?" from "Should we open?"

O -- Overconfidence. If you don't think you suffer from overconfidence, you likely suffer from overconfidence. Do we really think that we are in a position to "beat" the virus on campus?

T -- Tendency to Avoid Loss. Our general risk aversion nature leads to inertia and a desire for the status quo. This has held some academic institutions from making the sorts of innovative and gaming-changing moves that are really needed in higher education.

S -- Sending Good News Bias. A fear of negative reaction causes people to be hesitant to share bad news or contrary opinion to leaders. This is unfortunate because that is the best information to be sharing. In this case, it could be estimates of deaths on a campus from a statistical perspective.

So how do you mitigate the impact of these natural and very common tendencies? In my class, I suggest the following remedies, which may also help with this decision-making process and those in the future.

  • Rely on Evidence. This is not a time for intuition or ego-driven approaches; use good data.
  • Involve Diverse Opinions. Listen to your faculty, staff and students.
  • Play Devil's Advocate. Have members of your team argue for the opposite position.
  • Seek Analogies. What is going on in other industries and sectors, including K-12?
  • Ignore Sunk Costs. Only consider new investments vs. returns, forget past time investment.
  • Recognize Blind Spots. Humbly realize that we all suffer from these blind spots but can improve!

My goal with this article was to offer ideas to improve the decision-making process related to this difficult topic. That being said, I have my own blind spots and would welcome a broader and collaborative dialogue on this topic. I know that our leaders are trying their hardest to make good decisions and, whichever way we go, we will need to then work hard on doing our best to provide the best experience for our students and explore ways to transform our universities with the long-term in mind.

We can do this.

Bio

Paul N. Friga is a clinical associate professor of strategy at the University of North Carolina at Chapel Hill's Kenan-Flagler School of Business and co-founder of ABC Insights, a consortium of universities working to make higher education more efficient and effective.

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