Digest No. 02 - March 2017

Campus Leadership and the Entrepreneurial University: A Dynamic Capabilities Perspective

Leih, S. and D. Teece. 2016. “Campus Leadership and the Entrepreneurial University: A Dynamic Capabilities Perspective.” Academy of Management Perspectives, 30, 182–210.


In this article, Sohvi Leih and David Teece focus on the role of university presidents in positioning their universities for success through evolutionary fitness. Evolutionary fitness entails making necessary changes to give a college or university a competitive advantage and enhance its long-term performance. The authors contend that evolutionary fitness requires campus leaders to recognize opportunities, set priorities, execute wisely, and transform quickly. Put differently, evolutionary fitness requires dynamic capabilities that move institutions of higher education beyond excessive attention to political and social pressures, financial stability, efficiency, and accountability.

Leih and Teece put forth a Dynamic Capabilities Framework to gain insight into how campus leadership may engage in evolutionary fitness. The authors used the dimensions of this framework as a lens to view the actions of campus leaders at two highly regarded research universities: Stanford University and the University of California, Berkeley. They chose these two high-performing universities to demonstrate how they attained their stature through distinctly different paths. Stanford, in particular, constitutes a good choice because of its emergence from a regional university to an elite national university.

Sensing, seizing, and transforming comprise the three core dimensions of the Dynamic Capabilities Framework. Each of these core dimensions stipulates functions for campus leaders to perform. Table 1 of the article lists these functions for each of the three core dimensions. CIC presidents will find the details of this framework particularly useful. For sensing, campus leaders need to identify global trends; recognize opportunities that increase access to funding, endowment gifts, and talents; and recognize threats to enrollment, faculty retention, and quality of services. Examples of functions pertinent to seizing include the implementation of processes that support new academic activities, acquire needed resources and manage expenditures, and foster a climate of entrepreneurship. Changing the campus culture, forming partnerships with unconventional constituents, and eliminating programs and departments with records of poor performance constitute the functions of transforming.

The authors used case study methodology to view the actions of presidents at Stanford and Berkeley. They used three primary sources of data: interviews, archival documents including oral histories, and media reports.


Leih and Teece organize the findings of their case study analysis using the three core dimensions of the Dynamic Capabilities Framework. Examples of findings follow; CIC presidents are encouraged to read this article, and refer to Table 2, for more details on application of the Dynamic Capabilities Framework.

Sensing. Leaders at Stanford recognized trends and opportunities and dedicated institutional resources to enact their strategy. In comparison, Berkeley leaders were less able to achieve consensus on threats and opportunities rendering sensing activities less likely.

Seizing. At Stanford, consensus on the strategic direction of the university between its board of trustees and campus leaders enabled it to perform functions of the seizing dimension of the Dynamic Capabilities Framework. Campus leaders rapidly responded to the identified opportunities. Faculty members and students at Stanford were uninvolved in these functions. In comparison, campus leaders at Berkeley were accountable to the regents of the University of California system and to its
faculty members. Thus, seizing actions by campus leaders at Berkeley were constrained by stakeholders who were unaware of how the university main-tains and expands it resources.

Transforming. Campus leaders at Stanford engaged transforming activi-ties such as seeking a national and global reputation rather than regional one, engaging in curricular and pro-grammatic reforms, developing “steeples of excellence,” and increasing the endowment of the university. Although the authors did observe some trans​formative actions by campus leaders at Berkeley, they assert that Berkeley’s leadership did not quickly recognize opportunities and begin the transformation.


Leih and Teece posit “strong dynamic capabilities will bring evolutionary fitness to the campus. Ordinary capabilities bring only technical/operational fitness” (p.187). Presidents of CIC colleges and universities will find both the Dynamic Capabilities Framework and the findings pertaining to the three core dimensions of this framework useful in their efforts to set a strategic direction for their campuses. These tools would be useful to position the institution for success during turbulent times facing independent colleges and universities. Moreover, CIC institutions seeking national reputations and enhanced institutional stature will find the actions of Stanford University particularly useful.

In addition, the components of the Dynamic Capabilities Framework could be used in an assessment of the college or university either to determine its evolutionary readiness or as basis for institutional improvement. Although the authors view the role of faculty members in institutional governance as a constraint on evolutionary readiness, CIC presidents may choose to encourage the participation of faculty members in the transformation of their institutions.


Sohvi Leih is assistant professor of management in the College of Business Administration at Loyola Marymount University.

David Teece is professor of global business in the Haas School of Business at the University of California, Berkeley.


The following references are recommended for readers who wish to learn more about strategic leadership.

Aleste, J.W. 2014. Revenue Generation Strategies: Leveraging Higher Education Resources for Increased Income. Hoboken, NJ: Wiley Publishing.

Ramsden, P. 1998. “Managing the Effective University.” Higher Education Research and Development, 17(3), 347–370.

Seigel, D.S. 2014. “Responsible Leadership.” Academy of Management Perspectives, 28(3), 221–223.

Teece, D.J. 2007. “Explicating Dynamic Capabilities: The Nature and Microfoundations of (Sustainable) Enterprise Performance.” Strategic Management Journal, 28, 1319–1350.