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?
Simply put, organizations don’t accomplish major goals by operating off a budget.
They tend to do what they’ve always done and add initiatives as they become necessary or when a competitor makes a move. We understand it can be difficult to set new courses for your business and even more difficult to execute on those plans, but in our experience as community bankers and a successful business, we’ve found strategic planning to be an essential part of success.
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Here are four of the ways a strategic plan is critical to helping you grow.
1. Strategic Plans help set direction and priorities for the future.
As Zig Ziglar famously said, “If you aim at nothing, you will hit it every time.” For most organizations this means they’ll end up missing out on growing and serving more clients, because they don’t know what they’re trying to accomplish.
Unlike budgets which rely heavily on what has happened in the past, strategic planning sets the vision for where your bank or credit union is going in the future. It also makes key priorities clear, so the entire organization knows what is most important, even when there's a lot going on.
2. Strategic Plans get everyone on the same page.
Budgets can keep a department focused on what is important for its members, but they don't indicate how its work contributes to the bigger goal. When everyone on your team knows what is most important, every department begins to see how its work is a part of the larger picture.
Even if the CEO or board knows where it wants to take the organization strategically, the rest of the team will default to focusing on their own internal responsibilities unless there is a plan. Goals are missed, frustration mounts, and everyone wonders why things aren’t going better.
3. Strategic Plans make decision-making easier.
With so many new techniques and innovations, many organizations jump from idea to idea without ever finding out what works. Budgets only let you know if you have the money to test a new initiative. They don’t tell you what to focus on.
If a strategic plan is in place, it becomes much easier to say no if a new initiative doesn’t help the organization achieve its strategic goals. Teams then become laser focused on doing those things that will have the biggest impact instead of trying something new every week.
4. Strategic Plans drive (and measure) results.Unless you know what you want to accomplish, it’s difficult to identify how well or poorly you are doing. Certainly the P&L can let you know if you’re missing the mark financially, but to figure out what is contributing to the losses and make sure you get moving in the right direction, your organization needs a plan.
Aligning the team around a common vision, creating the right tasks and responsibilities, and agreeing on how success will be measured, increases the likelihood goals will be met.
Already have a strategic plan, but not feeling confident about executing it?
Click here to take our free quiz and discover the strengths of your plan and the areas that might need some improvement.
Interested in learning more about strategic planning and how it drives success for top banks and credit unions? Click here to schedule a discovery call now!