Executive summary. Only strong and sustained strategic competitive advantage and distinctiveness allow for the margins necessary for investments in innovations and quality development. Strategy, therefore, is a core element of accreditation systems. Today, with AI capable of producing a decent strategy paper within minutes, the focus can even less be the paper itself. To cope with the increasing dynamics of context and competition a shared implicit strategy together with a clearly laid out and understood strategy process that consistently weighs opportunities and threats are necessary. Schools thereby have to develop the capability to say no in a non-destructive way.

In an increasingly competitive global market within higher education institutions, strategy is a key element to attaining business school excellence. The dynamics of competition, along with technological advancements, particularly in artificial intelligence, require schools and accreditors to shift to a more dynamic, process-oriented approach to strategy. A look behind the strategy paper to address the real strategic dilemmas is required.

Strategy is a cornerstone of any accreditation system. EQUIS Standard 1 requires a school to, ‘give a broad description of the strategy for the coming years’. From the random sample of 17 peer reviews the author has chaired over the last eight years, roughly 20% of approximately 80 areas of concern or areas needing improvement from the previous accreditation cycle or eligibility process were related to issues of strategy. Examples include lack of distinctiveness and positioning, defining KPIs, aligning investment budget, defining key areas of strength, coherence to research, and programme, faculty and related strategies.

AI technology has fundamentally changed the ‘pen and paper’ aspect of strategic planning; a decent strategy paper can now be produced within minutes whereas previously it may have taken many months. A previous strategy, a market report, or the institution’s SWOT analysis can be uploaded within seconds to inform a school-specific strategy. KPIs are delivered upon request. A trial conducted on March 11th using specially trained GPT (Scientific Entrepreneurship) produced an impressive and comprehensive standard business school strategy including distinctive focus areas, such as causal inference and strategic decision-making, together with KPIs like alumni involvement in mentoring and – not surprisingly – the requirement of an annual $2 million investment in digital infrastructure. The strategy proposed by AI, although impressive and well formulated, was, however, somewhat generic and inconsistent in certain respects.

Traditionally, the focus in many accreditation systems and peer review team (PRT) evaluations was on the more formal aspect of strategy. The school’s strategy was ‘the paper’, which PRTs wanted to see and discuss. This made complete sense at a time when the higher education sector began to adopt the concept of (explicit) strategy in a relatively stable and still predominantly national market environment. But what is the essential quality of a strategy at a time of increasingly international competition in higher education? What are the requirements of an effective strategy process when a superficially convincing strategy can be produced within seconds by AI? An organisation, whether public or private, must have the capability of generating financial surplus for investment in often risky (strategic) projects to enable ongoing innovation and development. Generating surplus is impossible in ‘complete’ competition with homogeneous generic products. Distinctiveness, allowing for a kind of ‘monopolistic’ niche is necessary to set prices independently or legitimize higher subsidies.

Distinctiveness can be based on strategic success positions such as unique market positioning or specific competencies, e.g., focus areas of research or pedagogical concepts. Strategic success positions are rooted in and must be translated into sub-strategies for programmes, research, executive education, students/faculty and professional staff, digitalisation, etc. Strategies have to be understood and shared throughout the organisation to allow for alignment and the focus necessary to succeed.

Today, in times of rapid change and disruption, a dynamic concept of strategy is needed. In line with Mintzberg, strategy must be understood as developing over time, as the result of a continuous stream of implicit and explicit decisions on new opportunities and adjustments or indeed the cancellation of intended strategies. ‘Strategising’ as discussed also by Nickerson and Argyres, and the ongoing evaluation along with discussion on sources of future potential success, as well as possible challenges is necessary. Since not all wonderful ideas and new opportunities can be embraced, developing strategy can also mean saying no. Strategy therefore requires handling the conflicting interests and ideas of internal and external stakeholder groups. Narratives and shared stories about the evolution and strengths of an organisation can support strategising and its implementation.

A dynamic concept of strategy is more than a mere paper. The paper can be the expression of the explicit strategy and the result of formal decisions as a snapshot at a specific time. But the emergent strategy and the result of ongoing strategising, can, will, and perhaps even should differ from the originally intended strategic plan presented in the ‘paper’.

EQUIS therefore has clarified its stance on ‘strategy’ in the latest addition to Standard 1 on Context, Governance and Strategy as follows: “EQUIS embraces a pluralistic approach to strategy development whether led by a school’s management team or embedded in the empowerment of teams – or units – to cultivate strategy across the school. Strategic planning processes may set over-arching objectives to provide direction for the school, while recognising that they may also need to adapt to dynamic contexts.” The focus thus is more on consistency and the strategy process. While schools enjoy the flexibility of how they work with and formalise ‘strategy’ it is more about the core of strategy work – how the school is addressing, discussing, and handling conflicts arising from the need to make decisions to create and maintain distinctiveness amidst constantly evolving opportunities and possible threats.

There is hardly a ‘right’ or ‘wrong’ with decisions in a strategy process since the eventual outcome will only be visible in years to come. Embarking on a – with today’s perspective – ‘wrong’ strategy might have deleterious consequences in the short term, however this may be an unavoidable side effect of innovation. To be effective strategy work must be consistent with previous strategies and values.

Therefore, evaluation of strategy is not just looking at ‘the paper’ and judging whether it is ‘right’ or ‘wrong’. It is about how an organisation strategises and manages typical dilemmas such as:

• Broad impact and distinctiveness: Business schools in a time of disruption and growing societal gaps must fight for their legitimacy within different stakeholder arenas. There is, therefore, a tendency to engage in an increasing number of initiatives to appeal to evermore stakeholder groups. Thereby, schools may not only overstretch resources, from finances to management capacities, but also risk diluting their brand positioning – thus losing the distinctiveness necessary for strategic success.
• Openness for new initiatives and the need to stay focused: Times of change always offer new opportunities. Openness and creativity are part of the core DNA of any academic institution. Schools therefore need proper ‘filter’ mechanisms which should not be purely bureaucratic processes or budget constraints. Deliberate decisions based on a common understanding of success factors, which may have resulted from conflicting viewpoints are needed. It is instructive to consider the whys and wherefores in cases where a school appears to have turned down an opportunity.
• Top-down leadership and bottom-up engagement: In expert organisations, decentralised knowledge to inform strategy, and decentralised engagement to implement strategy, are key. For higher education institutions, in addition to internal groups like students, faculty and professional staff, external stakeholders like alumni and the world of practice must be involved. However, strategising needs leadership to inspire and guide search, to moderate conflicts and make decisions.
• Aligning with industry standards and being distinctive: Globalisation of relevant markets leads to standardisation of, for example, faculty career or graduation requirements. Digitalisation itself through platforms like learning frameworks drives the standardisation of core processes. Standardisation has two sides. It facilitates cooperation such as student exchanges, but limits the experience of difference.  While schools must align with those standards to be compatible, they must also decide where they may perhaps want to deviate to retain consistency with their strategy and support their distinctiveness.

These dilemmas can and should be openly addressed in the process of strategising within schools and can serve as inspiration for questions on strategy by PRTs. Thereby schools and PRTs might make use of AI-generated generic strategy to challenge and inspire their work.