Plansmith Blog

Survey Results: Strategic Planning for Community Banks

Posted by Jim Fugitte on 7/21/16 2:21 PM
Find me on:

Most say strategic plans end up on the shelf!

Plansmith Corp. recently conducted a survey of CEOs and CFOs on the role of community bank strategic planning within their organization. It was not surprising to learn that 90% said they have a strategic plan, but a closer look revealed some interesting statistics on the implementation of their plans. 

To start, almost all of the banks with a plan said the examiners asked for it during their last exam, but that wasn't necessarily why they have one. In fact, the majority said they actually developed the plan for business purposes: they felt a strategic plan has value in helping the bank make better business decisions. As a side note, the FDIC just released a video aimed at board members in which they highlight strategic planning for banks as a key element of a strong corporate governance program - more on that in a subsequent post.

Subscribe to Our Blog!


Within the strategic planning process, community bankers graded themselves as

  • best at identifying target markets
  • less effective at committing resources to the plan and tracking progress

But in both this survey as well as subsequent phone interviews, bankers were consistent in rating themselves poor in execution. Tragically, strategic plans tend to end up on the shelf.

Why is that? My wife was a public school teacher and she referred to their school planning meetings as happy talk. Well, duh, life gets in the way. As one banker told me: when a sizable loan goes bad at a large bank, it’s referred to the troubled asset department – at a community bank it goes to the CEO's desk.

You can find dozens of sites online promising execution effectiveness. If you just install this user friendly software then everyone in the bank can have a dashboard to follow which inspires execution. I believe tools and dashboards are good ones but there are two things they don’t do, which determine the successful execution of a plan.

First is Leadership

If the executive team, beginning with the CEO, isn’t completely committed to the plan objectives, then there is little chance of execution. Sure, a few things will work out simply because you identified them in the process, and if they slap you across the face later you’ll respond; but the organization will quickly default to everyday concerns rather than strategic planning objectives.

Large banks put executive compensation plans around their strategic planning objectives; however, these often result in good gamesmanship rather than good execution.

Second is Persistence

You have to be dedicated to the strategic plan and its objectives. If circumstances change they must be dealt with immediately because the plan is top of mind every day. Well managed manufacturing firms conduct weekly meetings to look at progress to objectives. Red, green, and yellow highlights tell the team quickly what’s on target and what’s not. Weekly may be too often for a community bank but monthly at least with a deep quarterly dive.

After all, most of us do what’s inspected rather than what’s expected.

Click for a free infographic on the detailed results.

Topics: strategic thinking, ceo, bank strategy, strategy, community bank, community bank strategy

Subscribe Now!

Posts by Tag

See all

Recent Posts