170 Strategic Leadership
as its core competencies, assets, capacities, vulnerabilities, and deficiencies. The
insights about the most significant threats and opportunities will be determined
through a process of relational thinking that systematically connects the most
important external trends and internal characteristics. The interpretive process
is highly collaborative and integrates the insights and judgments of a variety of
participants in the strategic conversation. It is driven by quantitative informa-
tion (comparative benchmarks, strategic indictors, and the environmental scan)
and qualitative perspectives (identity, mission and vision, strengths, and weak-
nesses) that lend themselves to the integrative task of interpreting and defining
the institution’s basic strategic position. For threats, the primary concern is to find
structural situations in the environmental scan, like the affordability of tuition,
that touch on basic organizational vulnerabilities. Conversely, opportunities, such
as the creative use of technology, match an institution’s capabilities with a defin-
ing feature of the context. From a strategic perspective, the aim is to locate those
threats that disable or frustrate the institution’s ability so that it can respond
effectively to change, as well as those opportunities that enable it to dominate its
environment and the competition.
Matrix Analysis
Some students of strategy suggest that this task of sorting out opportunities
and threats (and strengths and weaknesses) can best be done by the use of a
cross-impact matrix that asks participants to rate the influence of factors in
the environmental scan on the institution’s key performance indicators, which
are essentially what we have called strategic indicators. Rowley, Lujan, and
Dolence (1997) explain a procedure to create a matrix with a horizontal axis
that records major factors in the environmental scan, and a vertical one that lists
key performance indicators. The task for participants in the process is to give a
numerical weighting to the influence of environmental factors (governmental
policies, high inflation, population increases, etc.) on the key performance indi-
cators. The different weightings offered by individuals are then averaged and
analyzed in terms of standard deviations, and conclusions are drawn about the
institution’s most significant threats and opportunities. The process, adapted
from Rowley, Lujan, and Dolence (1997), is represented in table 8.1.
The attempt to do integrative thinking about threats and opportunities through
cross-referencing trends and organizational characteristics is sound, but the quan-
titative calculus is problematic. To be successful it has to be understood as but one
step in a process that finally depends on rational analysis, dialogue, and judgment.
It may well be useful as a way to start a strategic dialogue about threats and oppor-
tunities but should not be the primary or exclusive way to conduct the inquiry.
The reasons are obvious. It is artificial to display external forces in a table that
presents them as isolated events or trends, when in actuality they are always sys-
temically related to one another. It is equally artificial to try to dissect their impact
on a list of separate strategic indicators that are themselves related to one another