Strategy and operations in financial aid: you can't have one without the other. Here's why.

An excellent strategy, poorly executed, will almost always fail. This is particularly true in financial aid offices, where timing, top-notch service delivery, and effective processing can be just as important as the financial aid offer itself.

As one Canadian higher ed administrator recently observed, "Americans view financial aid romantically. It's all about how much you love them." Therefore, in financial aid the delivery of the message can be as important as the message itself. Especially at this time, when institutional dollars are scarce and the mandate on campus is to optimize net tuition revenue, institutions cant afford to lose students because of operational mistakes made when implementing strategic initiatives.

Just how do strategy and operations sometimes become decoupled? Here are half a dozen possible scenarios--ones to avoid.

1. Forgetting to involve operational staff in strategic planning sessions.

You have a brilliant idea for a new scholarship program that will involve asking high school counselors for nominations of students in the fall of their junior year. The recruiters have been trained to talk about it when they do high school visits. Your marketing director has prepared a new webpage, brochure, and letter to counselors to ask for nominations. But no one thought to include staff from IT or operations to determine how this information will be captured in the student system to facilitate communication with counselors and students and, ultimately, financial aid packaging. As a result, the new program is poorly implemented, names are lost, and packages are inaccurate.

2. Failing to consider timing.

You have conducted sophisticated price sensitivity analysis to establish the ideal level of grant for different subpopulations that will optimize enrollments and net tuition revenue at your institution. The strategic thing to do is to consider all aid, regardless of source, when building the need-based package. However, no one thought to change the dates for music auditions, which are held annually in early April, or the institution's scholarship competition weekend, which is always scheduled in late March. Consequently, in order to strategically target need-based aid, the financial aid office delays packaging those students who are eligible to compete for merit and performance awards until after the competitions. As a result, the awards for the most desirable students are sent weeks or even months after the arrival of the FAFSA--long after other institutions have sent their awards.

3. Allowing administrative convenience to take precedence over customer service or strategic positioning.

Operationally, all financial aid offices would like to have complete and accurate documentation before awarding aid in order to avoid the necessity of making changes. So some institutions require that students complete the verification process by submitting tax returns, household size information, etc., before they will issue an aid offer. However, strategically, if primary competitors are sending preliminary letters with minimal documentation, they will have a competitive advantage over the school that waits.

Similarly, some aid offices would like to wait until classes begin before certifying loan eligibility--to avoid having to return funds for students who failed to enroll as planned. While this may streamline operations for office staff, it negatively affects cash flow to the institution, and it also provides poor service to students who may be counting on refund checks to pay for books or off-campus housing.

A final example: When the aid office requires an additional form to gather information from students already captured elsewhere in the information system (such as major or time status), but which is not readily available to financial aid. Obviously a far better solution is to develop data feeds to the financial aid system, rather than adding a step for students.

4. Poor planning for "one-stop shops."

More and more institutions are strategically bringing together interconnected offices, such as financial aid, bursar, and registrar, under a "one-stop shop" with the intention of improving customer service. However, if operations are not carefully considered, this strategic initiative has the potential to deteriorate rather than enhance service. Some examples:

* The space identified to house all the operations in the "one-stop shop" was away from the main campus, where no student parking was available.

* The merger of three offices into a one-stop shop resulted in one very long line, rather than three medium-sized lines, during peak volume times.

* Insufficient cross training meant that, during busy times, students who had only a quick question for one of the areas in the office would stand in the "wrong" line and be told to stand in the other line for assistance.

Because of these operational challenges, some institutions are opting for a "virtual" one-stop shop, rather than a physical one, in which students are able to "serve themselves" via enhanced web capabilities.

5. Insufficiently testing system efforts.

When operational testing of strategic systems initiatives is insufficient, significant problems can arise. For example, one of our clients was excited to be moving to a document-imaging system linked to process-flow software, which triggered "to do" lists for staff based on the receipt of key documents. Everything worked well in initial tests and everyone was excited about this transition to a "paperless" office.

Then the system began to handle large document volumes. Front-desk staff found it took several minutes to pull up the documents of students waiting with questions. Students and staff were both very frustrated and service deteriorated. Moreover, counselors who had to work with the documents to perform verification and packaging found many of them unreadable and had to sift through piles of paper documents to complete verification.

Similarly, many financial aid offices are moving to e-mail for student communication. Ideally this strategic initiative can not only save money but also ensure critical messages are delivered in a medium more likely to receive a student's attention. However, e-mail communications have their own set of operational challenges. For example:

* One institution sent an e-mail blast reminding all prior-year aid applicants to resubmit the FAFSA. But this communication was sent before the office was able to import FAFSAs for the next year, so the office did not screen out students who had already filed. The volume of calls from students concerned that their form had been lost was tremendous.

* Another institution used Flash to augment an e-mail message without checking to see how the campus's e-mail screening mechanisms handled Flash. As a result, the e-mails were labeled as "junk."

6. Poorly mixing centralization versus decentralization.

Strategic decisions about what operations and services to manage centrally, and which to leave at a more "local" level, can have a huge impact on service delivery; market responsiveness, and regulatory compliance. Some graduate schools, for example, have their own aid offices while others rely completely on a central aid office.

When an institution has many small aid offices serving different subpopulations, there are often concerns about whether all of the staff members are equally well trained and aware of federal and state regulations affecting aid. On the other hand, when very different populations are being handled by one office, service can suffer. Centralized processes, for example, may not work equally well for students studying on semester and quarter systems.

The best solution is often a mixture of centralized processing/monitoring with local packaging/counseling. The biggest problems arise when the various strategic and operational issues are not thoroughly considered in choosing the organizational model to implement.

Clearly, disconnects between strategy and operations can result in worse service than if no new initiative had been introduced. The answer, however, is not to stick with the tried and true, but rather to make neither strategic initiatives nor operational decisions in a vacuum.

HOW TO IMPLEMENT NEW STRATEGIC INITIATIVES

When implementing new strategic initiatives Mike Bartini, director of Financial Aid at Brown University (R.I.), suggests that administrators take these steps: COMMUNICATION

* Inform all interested parties at the institution, especially students affected by the change, and ask for their input.

* Have others on your management team review the plans.

* Work to build consensus among all your colleagues.

SCHEDULING

* Develop a visual that can easily identify all needed activities in a specific period of time.

* Share the calendar with all staff.

* Use the calendar to drive topics for upcoming staff meetings.

TESTING

* Test automated and even non-automated processes before the final plan is approved.

* Include all possible scenarios in the testing plan, but focus on the most likely occurrences.

BUDGETING

* Ensure proper resources are there; no set of plans should be developed without them.

* Continuously monitor resources to learn if you are ahead or behind on a project, or on or off budget.

Kathy Kurz and Jim Scannell are partners in the enrollment management-consulting firm Scannell & Kurz. They can be reached via their website, www.scannellkurz.com.