An Internal Analysis of Carnegie Mellon's Recent Growth

This week’s focus on internal analysis had me considering a comment from a professor: “Growth tends to create complexity, which can weaken an organization.” We were actually talking about the new construction on Carnegie Mellon’s campus. That stuck with me because I had assumed our growth was a positive thing (and job security). After reading The Coherence Premium by Paul Leinwand and Cesare Mainardi (Harvard Business Review; June 2010), I realized that strategic growth was more nuanced and that Carnegie Mellon was probably doing it right.

The coherence test is a determination if an organization is focusing on their strategic internal capabilities as opposed to external positioning that looks attract but may not pay dividends. Access to capital and an adjacent market may feel like a good combination, but the article points out many organizations have lost money and prestige on failed ventures. I argue that Carnegie Mellon’s recent expansion in campus infrastructure, academic center creation, and hiring sprees are successfully passing the coherence test in the four ways mentioned by Leinwand and Mainardi.

1.      ..  "The plan strengthens the organization’s competitive advantage.” Most of the growth on campus is centered around Carnegie Mellon’s top schools and departments. Significant upgrades to departments supporting engineering, computer science, policy, business, and theatre are adding buildings and personnel that will further boost their already highly ranked programs. Carnegie Mellon recognizes where they hold a competitive advantage, so they are doubling down to further hold their positioning and create additional value. This also allows them to create future opportunities to challenge leaders in the disciplines where they are ranked, but not #1 (yet).  
2.         “The plan focuses strategic investment on what matters.” While there is continued growth in some of the aforementioned departments, Carnegie Mellon is being strategic across the board on their investments. They recognize their strengths. There is no reason to attempt to build a top-tier botany program or German language department, because that is not where their expertise lies. Likewise, they won’t be starting a medical school or law school anytime soon. The resources are flowing back into their strengths and creating more value.
3.         “The plan produces efficiencies of scale.” Carnegie Mellon is known for being cross-disciplinary. Their growth strategy includes creation of new centers mixing things like AI, policy, and engineering that will play off their strengths. This helps create efficiencies of scale on the university level. A push to find and foster these connections across departments help align priorities and reduces friction allowing stronger growth.
4.         “The plan creates alignment between strategic intent and day-to-day decision making.” Higher education can move fast and programs can be downgraded when priorities switch or faculty get poached. Carnegie Mellon is maintaining their presence in very high-profile fields by following strategic initiatives and using those guiding principles to determine all decisions. This creates an atmosphere where faculty and staff can feel like their projects are a university focus and that growth in their individual departments are making a unified impact across the campus.