Strategy, Part 3: Small Bets, Pilots, & Strategic Practice

How research leaders get good at placing bets, running experiments, and building the discipline that strategy actually requires.

Diagnosis is necessary. It is not enough. At some point a leader has to stop analyzing why the system produces planning artifacts instead of strategy and start doing something different inside the system they actually have. That transition, from understanding the problem to practicing the alternative, is where most change efforts in higher education stall.

The reason is not a lack of motivation. It is a lack of a practical starting point. Strategy as a concept is not actionable. Strategy as a set of deliberate bets, run as experiments, evaluated honestly, and connected to system-level direction - that is something a leadership team can actually do on a Monday morning.

This piece is about how to build that practice. Not the theory of it. The mechanics.

Trade-Offs and Bets: Making Strategy Visible

The most important shift in moving from strategic planning to actual strategy is deceptively simple: stop describing what you value and start describing what you are betting on. These are not the same thing, and the difference between them is the difference between a pillar and a choice.

A pillar says: we value research excellence, community engagement, student success. Every institution says these things. No one is betting against them. They require nothing and reveal nothing about where the institution is actually placing its energy and attention.

A bet says: we are investing here rather than there, for these specific reasons, with these expected outcomes, and we will know in twelve months whether the assumptions were right. A bet is falsifiable. A pillar is not. That falsifiability is not a weakness but exactly what makes a bet strategically useful.

When trade-offs and bets are made explicit and shared openly, several things happen that cannot happen in a pillar-based planning process. Faculty and staff can see why resources flow where they do, which reduces the sense of arbitrary or opaque decision-making. The assumptions behind each bet become visible and therefore challengeable, which means the organization is doing real-time strategy rather than defending a document. And people can connect their daily work to a specific directional choice rather than to an abstraction, which changes how they make decisions when no one is watching.

A strategy that lives only in a document cannot be executed. A strategy that everyone understands, including the bets it requires and the trade-offs it implies, can be.

Small Bets: How to Stay Appropriately Uncertain Before Committing

Higher education's instinct when facing a significant challenge is to either reactively launch a comprehensive initiative or deliberately take a wait and see position. Both responses lack curiosity and are ways of avoiding the harder discipline of placing a small, deliberate bet, running it as an experiment, and learning from what it actually produces.

Small bets work because they reduce risk while generating real evidence. They give staff the chance to adapt processes and build confidence before anything is scaled. They create organizational permission to learn in public - to try something, discover it needs adjustment, and adjust it without that adjustment being treated as a failure of leadership.

In practice a small bet looks like this: a specific hypothesis, a defined scope, a named person accountable for running it, a clear set of signals that will tell you whether the hypothesis is holding, and a decision point; a date by which the organization will honestly assess what was learned and decide whether to continue, adjust, or stop. That last element is the one most institutions skip. Without a genuine decision point, a pilot becomes a codified, permanent program, the evidence never gets evaluated, and the learning never feeds back into anything.

One important nuance: small bets are how you stay appropriately uncertain in the strategy phase, when you are still deciding which direction to commit to. Once a bet has been evaluated and a direction chosen, the discipline shifts. Flyvbjerg's research is clear on this - the organizations that execute well are not the ones that stay flexible throughout. They are the ones that are open and experimental before commitment, and then disciplined and focused after it. Small bets are not a license for perpetual pivoting. They are a mechanism for making better commitments. 

Pilots as Strategic Probes

A pilot is not just a test of whether something works. It is a strategic probe, specifically, a way of learning something specific about the organization, the environment, or a set of assumptions before committing resources at scale. The distinction matters because it changes what you measure and what you do with the results.

A pilot run as a test asks: did this work? A pilot run as a strategic probe asks: what did we learn about our assumptions, and does that learning change anything about our direction? The first question produces a verdict. The second produces intelligence.

Running pilots effectively requires a few disciplines that are largely absent from how higher education typically manages initiatives. The hypothesis has to be stated explicitly before the pilot runs, not inferred afterward from whatever happened. The metrics have to track operational and behavioral signals, not just outputs and prestige indicators. Cross-functional perspectives need to be included early, because the constraints that will determine whether something scales are almost never visible from within a single unit. And the lessons have to be documented and actually fed into the next decision, which requires someone with the authority and the accountability to do that work.

The organization that runs pilots this way learns faster than its environment changes. That is a genuine competitive advantage in a period when the environment is changing faster than any planning cycle can accommodate. 

Connecting Bets to System-Level Direction

Small bets only create lasting advantage when they are connected to a broader directional choice. A portfolio of disconnected experiments produces interesting data and nothing more. A portfolio of bets aligned around a specific strategic question produces the kind of accumulated learning that changes how an organization operates over time.

This means each pilot or initiative should be explicitly connected to a strategic question the leadership team is trying to answer. Not a pillar - a question. Are we better positioned to differentiate on experiential learning or on research translation? Can we build the operational capacity to support a significantly more complex grant portfolio, or do we need to stabilize before we grow? What would it actually take to make our compliance function a competitive asset rather than a cost center?

When bets are framed around questions like these, the results of pilots feed directly into strategic decisions rather than accumulating as interesting but unconnected findings. Successes become models for scaling with clarity about why they worked. Failures become lessons that prevent more costly missteps downstream. Over time the organization builds something valuable: a track record of honest learning that faculty and staff can see and trust.

Strategy is not a document produced once and defended thereafter. It is a practice - a continuous cycle of asking, betting, learning, and adjusting. Building that practice is the work.

Building a Culture of Strategic Practice

The mechanics of bets and pilots are relatively straightforward. The harder work is building the organizational culture that makes them possible, and that is fundamentally a leadership behavior problem, not a process design problem.

Transparency is the foundation. When trade-offs are visible and the reasoning behind bets is shared openly, faculty and staff develop a shared mental model of where the institution is going and why. That shared model is what allows distributed decision-making to be coherent. People make better local decisions when they understand the broader direction well enough to apply it without asking permission for every judgment call.

Engagement follows naturally from transparency. When people can see how their work connects to a specific directional bet rather than to an abstract value, the work feels different. The connection between daily effort and institutional direction becomes concrete rather than aspirational.

Adaptability - the capacity to respond to shocks and new opportunities without losing direction - is the cumulative result of the first two. Organizations that practice strategy through bets and pilots are not more agile because they have fewer commitments. They are more adaptable because their commitments are better understood and more honestly evaluated. When something needs to change, the change can happen without chaos because everyone understands what is being changed and why.

None of this happens automatically. It requires a leader who models the behavior, who makes bets publicly, shares the reasoning, acknowledges when assumptions were wrong, and adjusts without treating adjustment as defeat. That behavior, sustained over time, is what actually shifts a culture from planning theater to strategic practice. It is also, not coincidentally, what makes an institution genuinely interesting to work in.

Further Reading

How to Decide  |  Annie Duke, 2020
Duke's practical framework for making better decisions under uncertainty, drawn from her background as a professional poker player and decision researcher. The chapters on resulting - judging the quality of a decision by its outcome rather than its reasoning - are directly relevant to how higher education evaluates its strategic choices. Essential reading for anyone trying to build a culture of honest learning.

How to Science the S**t Out of Business Problems  |  Sam Cole, The Testing Ground, 2025
A concise and practical treatment of how to apply experimental thinking to organizational problems - how to state hypotheses clearly, design tests that will actually tell you something, and avoid the most common ways that pilots get run without producing useful learning. The most operationally specific piece of writing on this topic available.

How Big Things Get Done  |  Bent Flyvbjerg and Dan Gardner, 2023
The data on why large initiatives fail and what modular, iterative execution actually looks like in practice. Particularly relevant to the argument in this piece about the difference between staying appropriately uncertain before commitment and maintaining disciplined focus after it. Flyvbjerg's concept of the outside view is also the foundation for the thought partnership argument in Part 2 of this series.

The 5 AI Tensions Leaders Need to Navigate  |  Hinds and Sutton, Harvard Business Review
A useful framework for thinking about AI not as a standalone strategic bet but as a set of organizational tensions that require deliberate choices about where to lean in and where to hold back. Relevant to the AI as amplifier argument in Part 3 of this series and to the broader question of how to place bets in a rapidly changing technological environment.