What Do Student Debt and Strategy Execution Have in Common?

on June 3, 2012

It is estimated that 37 million Americans have student loan debt totaling $870 billion. Some estimates place the total student-debt bill at over $1 trillion, and it now eclipses total U.S. credit card debt.  There are 1.8 million students today with loans which represent 94% of all students.  In 1993 only 45% of students had loans.  While loans can top $200,000, and often translate into payments of $1,000 a month after graduation, the average student leaves school with a $23,000 bill.  The financial pressures of graduating with debt has caused three out of ten students to move back home after getting their coveted degrees.  Graduate after graduate now tells stories of spending half of their monthly salary on debt payments which means that they can’t afford other necessities like rent, transportation, etc.  Yearly higher education tuition increases of 3 – 5%, and a literal capital expenditures “arms race” to build bigger and better facilities that promote hotel-quality rooms, gourmet food, and world-class gyms and spas, are causing people to ask – is it all worth it?

Pete Thiel, the PayPal co-founder believes the bubble that hit the dotcom and the housing market is now about to hit higher education.  “A true bubble is when something is overvalued and truly believed.”  We either don’t want to, or can’t see how to, connect the dots of reality.  Like the housing bubble, the education bubble is about security and insurance for the future.  Theil makes the interesting point that in any good bubble, consumption masquerades as investment.  Combine the issues of escalating student debt, rising tuition costs, an out-of-control capital arms race for facilities, a reduction of available incoming students, looming student-loan bankruptcies, anemic job growth forecasts, and parents’ reluctance to take on graduate roommates… and it is not that hard to see that this bubble is about to burst.

So, what does student debt have to do with strategy execution?  It is all about elevating your thinking and seeing the big picture as an interconnected system so that you can both see and understand what external forces are causing to happen, deciding what you want to make happen, and avoiding asking what just happened. Anticipating the future is a key success factor for all organizations, profit and non-profit.

In the corporate landscape, when people see and anticipate the three big pictures of their business, they clearly understand how to connect the dots on the driving systems of their future.  They can lead the execution of change rather than be left holding the busted bubble of change.  These include understanding THE MARKETPLACE (the why) and all the driving forces of change from competitors, customers, technology, regulation, pricing, cycle time, and market commodization and new formation.  THE STRATEGY (the what) includes the critical responses we have chosen to place our bets on for the future in the ever-changing external environment that will render some players as winners and losers.  THE OPERATIONALIZATION OF THE STRATEGY (the how) is all about the way that we will execute the new strategy which includes changes in habits, practices, routines, processes, and behaviors that will bring to life the new strategy.

The bubble can burst in higher education or your business; the key is seeing the big-picture possibilities before they become so obvious that it’s too late.

Comments

Thinking

Training and Skill Building
Developing Leaders and Managers
Implementing Strategy