Planning - 1In chatting with a financial institution CEO recently, they said they were going to cut doing a strategic planning session from their budget in the upcoming year. Why? The board felt they needed to control expenses and not doing a planning session (or using a facilitator to do one) was one way to save money.

While my response on the phone was cordial, when I hung up the phone I wanted to scream. “Are you kidding?” I get the importance of the bottom line and meeting your budget. But not planning for the future because you want to save a few bucks in the present is shortsighted. In fact, it’s ludicrous.

Is there a cost to planning? Of course. You might go off-site or out of town. You could hire a facilitator. You have to pay for a few meals. Those expenses add up and depending on the group size, location and facilitator those totals may not be cheap. You may even be in financial situation where examiners are hammering you to cut corners in every possible way (including with strategic planning).

But let’s be real clear: there is a cost to NOT doing strategic planning:

  • When you don’t plan, you have no future
  • When you don’t plan, you have no direction
  • When you don’t plan, you fall into mediocrity
  • When you don’t plan, you focus only on the emergencies and crises
  • When you don’t plan, you eventually become a branch of another institution (think merger)

As a strategic planning facilitator, am I biased on this point? Of course! But I’ve seen this principle time and time again in organizations I’ve worked in and in ones with which I’ve consulted: the most successful banks and credit unions commit to strategic planning on a regular basis no matter what the external environment is like. In good times and in bad times.

You could even make the argument that if you are having financial challenges, that is the most important time to conduct a strategic planning session.

I asked a board member of a very successful credit union why they were bringing in a facilitator from the outside to conduct their planning session. Their growth numbers were high, their average consumer age was low and they were a top performer among their peers. Things were going so well, why did they even need to do a planning session?

His response: “The reason we are performing so well is we committed many years ago to ALWAYS do a planning session every single year—no matter what. We believe that is the secret to our success. Every year we carve out time to focus on our strategy.”

Planning requires a cost. But not planning—in the long run that’s even more expensive.

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