Kentucky, Oklahoma, and Tennessee have given all the Southern Regional Education Board (SREB) states a new tool to help focus their colleges and universities on state needs. These three states have created plans for their higher education institutions by drawing on leadership from a broad range of state agencies. They identified state needs and helped their higher education agencies to identify the ones in which colleges and universities could play a part. Then the higher education leaders in each state developed a public agenda for higher education that keeps them--and colleges and universities--focused on their obligations to the state. This is a process and a plan that holds great promise for even more states. This report describes how this works. This report also provides the latest information on key indicators of the "Challenge to Lead" goals on the quality and efficiency of colleges and universities: graduation rates, faculty salaries, and research and development. The following are appended: (1) SREB State Plans and Public Agendas for Higher Education; and (2) SREB State Higher Education Accountability Reports. (Contains 6 tables and 6 figures.)