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Strategic Planning Equals Roadmap to Success

By: Chuck Marshall and Kenneth Friedel

With compressed interest margins and over-regulation, owning and operating a bank requires strategic planning for long-term success. A bank’s best competitive advantages are in creating a strong strategy, a clear vision and an engaged staff. A comprehensive, challenging, specific, engaging and detailed strategic plan can set a bank apart from the competition and place it on the path to success.

How Do I Begin?

You cannot determine a direction without an understanding of where you have been, where you are and how you got there. This situational analysis serves as a baseline for that process. Gather data from across the banking system — lending, deposit operations, human resources, facilities management, compliance, the ALCO process and the external environment, including feedback from external directors and key customers. All this should happen before the planning meeting.

Who Should I Include?

Identify constituents and stakeholders who can participate and benefit from the outcome. A rule of thumb: People who actively participate in the process are more invested in the outcome. Consider involving directors, senior management, officers, staff and, in some capacity, your key bank customers. Each group can provide crucial insights into issues and offer solutions from their perspectives. Instead of including everyone in the planning meeting, consider involving them in interviews, focus groups, team meetings and targeted surveys.

How Do I Create a Vision?

The vision statement reflects the long-term, desired future of the organization. Creating this vision requires you to step “outside the box” and think about what is possible to build the best future for the organization. Don’t allow short-term thinking to restrain you. The main focus of this process is determining your destination. For example, a vision statement such as “The preferred bank for tech-savvy entrepreneurs and small businesses in the mid-state area,” describes an opportunity to provide expanding services to customers who are more driven by convenience than by price.

Where Does a Mission Statement Fit in?

A mission statement should more clearly define the overall purpose of the organization — the clearer the mission, the easier to implement. “Our mission is to provide state-of-the-art banking services at a profit to our small-business customers and their owners.” This statement will guide a variety of decision points and choices. Mission statements help shape behaviors and values you want to promote within the organization.

What Part do Goals Play in This Process?

Include three to four long-term goal statements that help define success of the vision and mission statement. These goals help align staff and keep them working together amid the flurry of competing priorities. For example: “Growth – We will continue to expand market share in the small-business sector, focusing on businesses that value technology and ease of access to their banking services.” Based on these goals, the next step is to develop measurable objectives.

What Two Steps are Continually Overlooked in the Planning Process?

Results-oriented owners and managers often move directly from the creation of specific measureable objectives to developing strategies or action steps that drive the organization to accomplish the objectives. What’s missing? We suggest you take time to brainstorm and identify potential critical success factors and potential barriers to achieving each objective. Oftentimes, identifying success factors spurs the discovery of barriers; however, they may not always be related. For an example, click here for a table.

By identifying success factors and barriers, you will develop more specific, actionable and effective strategies.

To Facilitate or Not to Facilitate

A facilitator will add value to the strategic planning process if you believe your selected group will arrive at better results than what leadership already knows, and you:

Actively engaging participants in each step of the planning process will generate freedom of thought, buy-in and the potential to take the organization — and its people — places it has never envisioned. Consider this example, “I have an idea based on your idea, that came from her idea, which started with his question.” A facilitator can empower a team to create a powerful vision for the organization by asking the right questions and providing appropriate activities.

Do not use a facilitator if confidence is lacking in the participants or if a substantial part of the outcome (and/or the input) is already decided. If goals and strategies are pre-determined or set by one or a few individuals, a facilitator will not add value to the planning process.

What Results Should I Expect?

Expect the planning process to be a living, breathing part of the bank. Do not do it one time and put it away. Make it a living document that you use and update on a regular schedule.

Expect to include outside directors; it is better to plan with them than without them. In theory, that is why you made them directors.

Expect results and accomplish more. The planning process allows you to prioritize. Choosing goals and objectives is often not about what you choose to do, but what you strategically exclude and choose not to do.

The financial landscape continues to be some of the toughest terrain to navigate. Remaining on auto pilot will not help you reach your goals. Leaders and stakeholders must chart a course that reaches the appropriate destination while dodging the regulation pot holes along the way. A successful strategic planning process can be the key to starting fast and finishing strong.

Charles J. (Chuck) Marshall is a banking consultant with Kennedy & Coe. Kenneth Friedel is a manager and consultant in the Financial Institutions Group at Kennedy & Coe. Both are based in Wichita, Kan. Contact them at 316-685-0222.

Copyright (c) September 2013 by BankNews Media