Decision Making: The Art of the Tradeoff
As technology application, new partnerships and industry pressures continue to impact our offices, the decision-making process that guides resource allocation has much to do with making tradeoffs. For example, automation options abound resulting in challenging choices concerning how to orchestrate the web-based and/or interpersonal service option. Possible strategic alliances result in choices concerning the retention or contract of services. Alternative revenue and budget pressure result in limited choices to meeting all strategic goals. The result is that making good trade-offs is a critical management ability, but what skills are necessary to increase chances of making more right decisions than bad decisions? Perhaps “tension management” is an increasingly valuable skill in today’s rapidly evolving financial aid operation. Recent studies suggest the following are important management considerations when dealing with inherent tensions within the organization.

Perception vs. Reality
Access to real-time and relevant data is critical to meeting the financial aid needs of both internal and external customers. We are relying more and more on semester specific data to effectively guild enrollment management and service goals. The trouble is there is often a perception gap concerning the launch of new systems. Managers will focus on the efficiency and service benefits of technology, while employees can feel threatened by the job evolving nature of automation. The result is a tension between the perception and reality of automation, and if not addressed, this tension can limit operational effectiveness.

The key to managing the inherent tension between perception and reality for technology implementation is a commitment to formal structure in the management process. For example, review the innovative Goal, Question, Metric (GQM) improvement process which highlights a formal structure for quality improvement. In this model, goals are identified, operational questions put into context and quantitative metrics provide a measurement to determine effectiveness. This is a top down structure that allows for management goals to be achieved. On the other hand, there is a need for structure that accounts for the customer perspective. This method of data mining is called attribute focusing (AF), which brings structure to an end-user perspective. Combine GQM and AF methodologies and you now have a structure to manage new technology implementation taking into account various measures (Basili et al, 1998). The value of the approach is not to determine which approach is the best—each provide structure in different ways. The value here is creating an approach that accepts the tension as inevitable, even necessary. The inherent and potentially costly tension between reality and perception now becomes a competitive advantage.

Trust vs. Mistrust
Collaboration is the cornerstone of the modern financial aid operation because integrated enrollment functions and innovative partnerships require constant transfer of both knowledge and service. Financial aid administration is no longer a tedious functional specialty, but a vital service that engages both institutional and customer needs before, during and well after program enrollment. The trouble is financial aid is an inherently complex and fragmented business. Schools, partner companies and individuals can have diverging goals. The result is a tension between various degrees of trust and mistrust concerning collaboration, work-team involvement and even overall mission. If not addressed, this tension can limit the scope and depth of vital collaboration between those involved.

The key to managing the inherent tension between trust and mistrust is collaboration. Of all the different players that impact financial aid administration, it is unlikely that all will agree on one universal application for the best way to administer aid. Add to that the trend of partnering with organizations that maintain other missions, it is clear that collaboration is essential. After all, the financial aid representative is the trusted agent for parents and students. Research shows that a careful balance, even the enthusiastic embrace of a trust and mistrust tension, is beneficial. In terms of performance, group functioning, and product development, tension is most useful (Lewicki et al, 1998). The trust and mistrust tension has also been shown to positively impact conflict resolution, contract negotiations and organizational dynamics.

Tradition vs. Change
Transparency of operations is critical for effective financial aid administration. Our business is not well understood by outsiders, yet it is now made even more complicated by new web-based customer touch points and innovative partnership agreements. Both internal and external customers are growing increasingly interested in understanding the nuances that impact price formation. On one hand schools are relying more on tuition revenue, yet students are growing increasingly savvy concerning the choice of their educational provider. Financial aid administration is an important brand extension, and therefore steps must be taken to make the business more transparent.

The key to developing transparency is utilizing the forces of tradition and change to promote a tension between the two. Leaders of non-profit institutions debate and struggle with managing organizational traditions and pending change. Perhaps nowhere better does this dynamic play out than within the office of financial aid. Tradition pays a very important role for managers since the past is used as a guide for present conduct. Research shows that one of the reasons institutions of higher education continue to thrive is because of a devotion to tradition. Yet research also shows that change is needed, and technology application is forcing the issue into prominence. The value of managing tension here is to create organizational transparency. Maintaining the department capability to measure internal functioning against external challenges will create a useful tension that can in fact be managed on a daily basis (Salipante & Golden-Biddle, 1995). The end result will be an operational capability and product offering that both capitalizes on traditional strengths and embraces the opportunities of change.

(Real time data & software management)
Basili, M.G., Mendonca, M. G., Bhandari, I.S. & Dawson J. “An approach to improving existing measurement frameworks.” IBM Systems Journal, Vol. 37, No 4, 1998.

(Transparency & nonprofit leadership)
Salipante, Paul F. & Golden-Biddle. “Managing Traditionality and Strategic Change in Nonprofit Organizations.” Nonprofit Management & Leadership, Vol. 6, No 1, 1995.

(Collaboration & active learning)
Lewicki, Roy J., McAllister, Daniel J. & Bies, Robert J. “Trust and Distrust: New Relationships and Realties.” Academy of Management Review, Vol. 23, No. 3, 1998.