We’ve all been in meetings that weren’t exactly productive. You know how it goes…
Only part of a successful strategic plan lies in the plan itself. A good plan, just like a recipe, is important. But any good chef will tell you, choosing the right ingredients is only half the challenge. The rest lies in executing the recipe properly.
So, how can your bank or credit union make a better strategic plan?
Here are some simple tweaks to the ingredients and execution of your strategic planning recipe.
As a company passionate about the value of planning, we have our own strategic plan. Like most, we would gather for a few days every year to review our mission and vision, discuss our market opportunities, develop objectives, determine action plans, and assign responsibilities. But, I am ashamed to admit, just like many companies we never really executed as well as we should for a number of reasons.
We’ve heard these questions hundreds of times. “Why do we need a strategic plan? We already have a budget.”
Instead of developing a plan for their organization, many banks and credit unions operate using their budget. The budgeting process is already in place, line items are easily moved from one year to the next with minor changes based on anticipated revenues and initiatives.
So why isn’t this a good idea?
I have been in the banking industry since 1979, and on March 22, 2018 I received a copy of something that I never thought I would see that made me say out loud, “It’s about time!”
It was a letter to Members of the Illinois Congressional Delegation. The content of that letter was to express strong support for bill S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act. What surprised me was that it was signed by the presidents and CEOs of 4 financial trade associations, comprised of both banks and credit unions.
From my very first job at 15, I knew I had management potential. I was always able to coordinate a variety of projects at once. I often compare myself to a circus act. You know, the one that keeps the plates spinning on sticks at one time? Now known as "multitasking."
I’ll Take BOSS for $1,000, Alex
Answer: “Because the OCC says so.”
What is “Why should I care about strategic planning?”
More specifically, Thomas J. Curry, Comptroller of the Currency says so.
Risk Profile, Strategic Planning, Risk Appetite – all this and more in the Supervisory Insights April 2016 edition and its companion video released in July. Remember when these were all discussed independently? Examining each within the Corporate Governance Program is now the new hot button with regulatory agencies.
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.
Compliance
The cost of regulatory compliance, declining product prices, and technological threats from new entrants all narrow the path to future profits. Even if the yield curve improves, these threats will force community banks to search harder to improve earnings. It can’t be done on the fly; only strategic thinking and careful planning in the context of your market and the opportunities available will be successful. Would you coach a Super Bowl team without a playbook? Probably not.