Ahh, strategic planning. That fun time of year when every bank and credit union gathers its key leadership team and stakes-out a roadmap for the future. Goals are discussed, dreams are debated and (hopefully) most folks leave the table feeling heard and that at least a portion of their agenda was captured in the plan.
After facilitating hundreds of strategic planning sessions for banks and credit unions, a number of commonalities come to the surface. One of which is the following — growth is not a strategy.
Don’t get me wrong. Growth is important. Growth is largely why we have strategic planning sessions. But growth, in and of itself, is not a strategy. Neither is saying something like “our bank\credit union will reach $X in assets by year-end.” “We want to grow XYZ” as a bullet point in your strategic plan looks good but will likely achieve little when viewed in this skewed light.
Growth, while not a strategy, is a goal. Your bank or credit union can’t afford to confuse the two. Strategic planning sessions are designed to whittle the ideas down to a top handful to which everyone can agree. You can certainly assign a set amount (things such as loan volume, total number of members/customers, ROA, etc.) as a goal, but again, this is not a strategy. The strategy involves the steps your team must clearly define that help achieve the goal.
A goal, you see it the top of a ladder; strategy is represented by the individual steps. One is worthless without the other.
For example, if your bank or credit union assigns total loan volume to strategy status, you must subsequently delineate a clear and achievable set of actions you will take in order to achieve this goal. In this example, the loan volume (growth) is not a strategy but rather a goal/initiative. Simply slapping this down on paper and feeling good about it later will not help you achieve the goal. This is where your strategy comes into play. How will you achieve this loan volume? With what specific, measurable and achievable resources? Who or whom will drive this initiative? What is the budget you can allot towards this initiative? Do you have the operational capacity to achieve this initiative? Questions like these (and many others) define and drive strategy.
Using an experienced and results-oriented facilitator during your strategic planning session is a great way to help push your bank or credit union to new heights and ensure you’re not simply jotting down numbers and aimless goals in place of true strategy.
The office. For many workers, this is the place you get to around 8 AM and don’t leave until 5 PM (or after) every day, pretty much five days a week. Love or hate it, the office is the place many of us spend the majority of our time any given day.
While having a job and an office to go to every day is a terrific thing, familiarity can breed contempt. That’s why it’s important to consider moving your strategic planning session off-site rather than hosting it somewhere at your credit union facility.
Here are a few additional reasons why taking your strategic planning meeting off-site is a good idea.
- A new location will generate new ideas. Sure, not every credit union is going to send its management team to the Bahamas, but even going to a conference room across town gets you out of your familiar surroundings and can help attendees develop new ideas.
- A new location will lessen distractions. If you keep your strategic planning meeting at your credit union facility, odds are you encounter daily interruptions. Instead of devoting themselves to contributing to the strategic planning session, attendees are tempted to spend time checking emails, returning calls and interacting with other employees. When you take your strategic planning session off-site, these distractions aren’t nearly as much of an issue.
- A new location will build camaraderie. Since you are meeting at the credit union, you are on anyone’s pre-designated “turf.” Office location, seniority and old-fashioned territoriality are no longer a factor. Every strategic planning session attendee, from the first year rookies to twenty-plus year veterans, are on the same playing field.
While taking your credit union strategic planning session off-site generally comes with an increased investment and requires additional time and planning, the above reasons (and many more) offset those expenditures. When you’re talking about something as important as your growth and development plan for the next five or ten years, a relatively small matter like an off-site session makes good sense.
Okay, great. So you’ve had a strategic planning session. Everyone sat around a big table, talked a lot, shared ideas, got down in the weeds about controversial topics and maybe even worked with an outside moderator.
You’ve got your plan, printed in full color on glossy paper, bound in folders and in the hands of each participant.
Terrific. Now what? A key part of your strategic planning session actually happens after everyone leaves the table that day. This key element is answered by a simple question — who the heck owns this thing?
That’s right — who owns your strategic plan? Is it your bank or credit union president? Members of the board? Maybe your marketing/branding expert or even someone in business development?
The answer is — everybody owns your strategic plan. Your strategic planning team absolutely must walk away from the table with the understanding that everybody involved, from the CEO/president down the organizational chart, has full ownership of this puppy.
Why is this important? Without everyone embracing their ownership of the strategic plan, it’s much more likely to fail. Certainly, key elements of your strategic plan (such as specific initiatives with time-frames and parties responsible) fall more squarely on individual folders. However, the overall plan (and its success or failure) is the responsibility of everyone on the strategic planning team. No one can be the “fall guy” or sacrificial lamb if parts of the plan should falter. Conversely, no one person should get all the glory and accolades if parts (or all) of the plan succeed.
Strategic plan ownership requires initiative, honesty and buy-in. Make sure everyone around your strategic planning table understands his or her stake in this process. And make doubly sure they understand that (once all the cussing and discussing is done) they are 100% part-owners in the entire plan.
Get your attention? Good – I hope so.
Now that you have had a moment to catch your breath, let me explain.
British statesman Sir Winston Churchill said: “Plans are of little importance, but planning is essential.”
You’d be hard-pressed to find truer words in the strategic planning process arena.
Your strategic plan, once hammered out and put on paper, is really nothing more than a tool for direction, a compass for your bank or credit union to follow in shifting winds. Too often, bank and credit union executives come out of the strategic planning process completely fixated upon that which is on paper. Guess what? Times change. The markets change. The ripple effect of an interconnected global economy means a drop in the bucket in Beijing can be a tidal wave once it reaches Bakersfield.
Your strategic plan absolutely must include the fluidity to adapt to the only inevitability in the business world — change. You simply cannot look at your strategic plan like your television remote control; in other words, something with which you can tap a button and make the world bend to your will. It just doesn’t work that way. Using that analogy, a better way to look at your strategic plan might be like the dial on the radio. Don’t like the station you’re listening to or is it coming in fuzzy? Reach for the dial until you find something you like better of that comes in crystal clear.
One of the greatest values of strategic planning is not the document itself but the time in which your team puts into it. Those days facing each other across the table are invaluable when it comes to confronting differences, acknowledging past successes and failures as well as hammering out some kind of general consensus about the future of your credit union.
Your bank or credit union must have a strategic plan in order to move forward. What that plan requires to succeed, however, is flexibility in its planners when the inevitable change hits the fan. Perhaps the best way to cap off every strategic plan is with the famous Boy Scout motto, “be prepared.” Be prepared for the unknown. Be prepared for change. Be prepared for your strategic plan to require considerable updating the day after the ink dries.
But you know what? This is a good thing. Adaptability is a linchpin of a successful evolutionary process. If your bank or credit union becomes so bogged down in the printed page of the strategic plan, it is far less likely to bounce back to rapidly changing elements in the financial services world entirely outside its control.
Strategic planning, in other words, is not a destination. It is a journey.
Accomplishing something complex without a plan can be challenging – especially running a business. Yet, some financial institutions have never created a strategic plan. Imagine trying to build a house without a blue print. That’s pretty much what these financial institutions are doing. They are trying to build a business and a brand without any type of plan to guide them.
Strategic planning, when done well, is extremely effective. It provides specific direction, defines strategies to support that direction and helps the organization determine how to spend money and allocate staff effectively.
Strategic planning not done well is a different story. Usually, ineffective planning happens when leaders fall into certain traps or subscribe to common myths about the right way to do planning.
Myth: We just have to get through the next few days and planning will be over
Truth: Strategic planning is an every-day affair
Your strategic plan should be in action every day your financial institution’s doors are open for business. That doesn’t mean you are sitting in a daily meeting planning strategy. It means you are carrying out the goals and actions defined during your annual planning session. It means your board is reviewing those goals and actions monthly or quarterly and holding management accountable to the strategy developed during that annual session.
Strategic planning often fails, not because the strategy is unsound, but because nobody bothers to follow-through with the strategy once the planning session is over. That’s when the real work begins. That is when you put ideas into motion. If nobody at your financial institution does this, there’s no point in planning at all.
Myth: Planning is only for executives or managers
Truth: Proper planning involves every employee
Executives and managers may make the final decisions, but they can’t possibly decide what is in the best interest of your financial institution, its employees and its customers or members without input from those people. It just can’t happen.
Ask employees what processes work and what needs improvement at your financial institution. Encourage them to offer solutions. If your strategy includes something massive like replacing your core processor, involve the people who use that system in discussions prior to your planning session. Find out how a major change will impact their jobs. Consider the time needed to train them on a new system. All of that ties in to your strategy. The more input you receive before you make a decision, the more support you will get from employees when it’s time to implement that decision. Making decisions in a vacuum slows progress and often hinders it altogether.
Myth: Your strategic plan must remain top secret.
Truth: Communicate your strategy and goals to every employee at your financial institution.
Employees cannot execute your strategy if they don’t know what the strategy is and how their jobs contribute to it. Everyone’s job description and goals must tie back to your strategic plan in some way. If it doesn’t, you don’t need them.
Communicate your strategic plan to every employee. Do it in a big meeting or delegate managers to communicate with the people who report to them. Each employee needs an explanation about how their job ties to your financial institution’s strategy. Their performance and goals should directly support some part of the plan, and that is how they should be evaluated on their annual performance reviews. Everything should tie together.
Construction workers cannot build a structurally sound house with a solid foundation unless they all have access tothe same blueprint and understand their role in the project. The same is true of your financial institution’s strategic plan. Get input. Communicate plans to your employees and remember that planning done well is planning that happens every day your doors are open for business.
The end-goal of a strategic planning process includes a set of clear objectives. It is these strategic initiatives that guide your bank or credit union moving into the next several years. However, poor objectives can just as easily kill a strategic plan and render your investment wasted.
What are poor objectives? What are the things your strategic planning team must avoid when it comes to objectives at its next session? Consider the following:
- Unclear objectives. You want up-front and easy-to-read language in your objectives. Now is not the time to wordsmith and impress everyone with your vocabulary. Your objective must be clear, driven by action verbs and book-ended by start and end dates.
- Un-led objectives. If a ship or plane start a journey without a seasoned captain, they are unlikely to make it very far. Your strategic planning objectives are the same. To succeed, they must have a leader. This could be a single leader or perhaps a small team of leaders, depending on the objective. Lack of leadership for your objective condemns it to failure before it can start. If no one leads it, no one is responsible for it and if no one is responsible for it no one will care.
- Un-reported objectives. Putting your objectives down on paper is just a start. Making sure they have a leader (or leaders) is a next step. In order to be truly successful, however, your strategic objectives must also include regular reporting. After the strategic planning session itself, ensure that leaders of specific objectives understand they are responsible for reporting back to the team on the status of their objectives. Failing to do this is like pushing a raft onto the rapids and putting your trust in the rocks and rushing water. The end result won’t be pretty.
Since well-defined objectives are the desired outcome of a strategic planning session, it makes sense to give them a terrific head-start on their journey towards completion. This includes making sure they are complemented by things like clarity, leadership and regular reporting.