Extraordinary Banker™
Extraordinary Banker™ Issue 6, 2007
By Roxanne Emmerich, CSP, CMC

It’s that time again—time for planning next year. Do NOT blow this opportunity! It could be the most powerful plan you’ve ever created and executed.

Here are 13 pitfalls almost every bank made last year and will make again this year. Don’t be one of the many.

#1. Believing that Success Yesterday Means Success in the Future

It doesn’t. Nuff said.

#2. Playing “Not to Lose”

An almost sure-fire way to lose the game is to play “not to lose.” The only way to win is to play to win. Many banks respond to challenging circumstances like turtles in the path of an eighteen wheeler, pulling in their necks in hopes that their turtle shells will protect them. Lotsa luck with that strategy.

These are not the times to play “not to lose.” Those who have been completely focused on cost control over the last few years have little chance of ever catching up on the opportunities for profits they decided to forgo. Unfortunately for them, they’ve put themselves in a place where there isn’t any more to cut AND getting back in the revenue game is even tougher because they’ve lost their competitive edge. The result? An awful lot of turtle soup in the fast lane.

#3. Using A Bankrupt Strategic Planning Model

If you’re not wearing bell-bottoms to work, you probably shouldn’t have a 1970s strategic planning model either. Most banks continue with their mission statement/SWOT analysis/blahblah- blah process. The problem is that this approach didn’t even work when bellbottoms were in – and it works far worse in these highly-demanding times.

#4. Not Solving the Deposit Debacle

In total, deposits now fund roughly 64.5 percent of assets—the lowest level in history. Too many banks have taken an “Oh well, that’s how it is” stand – and they’re about to have their hinders served up on a platter.

Having a powerful deposit-gathering machine is the foundation of profitable banking. That said, paying up for deposits is not the answer.

Having people who know what they’re doing to collect all of your clients’ deposits is the answer. This is where the wise outpace the sleepers.

#5. Accepting Narrow Net Interest Margins as the Way It Is

Most banks have surrendered to the notion that tighter net interest margins are the way of the future. But others have actually increased their margins and are commanding premium pricing regularly.

Don’t bother having a strategic planning session for 2008 if you aren’t going to spend valuable time differentiating yourself in powerful ways and creating an ironclad plan to increase net interest margins. You must be superior to command superior pricing. Period.

Saying you have “great customer service” is the delusion that most banks believe will position them above the others. Great customer service is the absolute minimum requirement to play the game with any success – but it is too fluffy to be taken seriously as a reason to pay more.

Think with more clarity.

#6. Accepting Failure too Readily

The only kind of managers who should be employed in your organizations are those who never say, “Here’s why we can’t” but recite as their mantra, “How can we?” If economic conditions and industry conditions are an excuse for lackluster performance, tell that to the leadership team of Southwest Airlines. They’ll stick their fingers in their ears and recite, “I’m not listening. I’m not listening.” It’s what they’ve been doing for over 30 years without a down quarter while their competitors perished and fought in bankruptcy court.

Stop buying failure as an acceptable response and you’ll stop receiving it.

#7. Relying on Superstars Instead of Superstar Systems

If you want to do something productive this year in your strategy sessions, take an hour to determine the key systems that need to be crafted and followed impeccably to bring in high-volume, high-profit clients as well as key systems to better penetrate your current clients. Build the checklists and processes to make sure those systems happen every time.

#8. Having a Strategic Plan with Everything but Strategies

Your strategic plan needs to have at least 30 strategies in it. My estimate is that more than 95 percent of banks don’t even have one strategy in their strategic plan.

Bill Gates was recently asked what his strategy was for the future of Microsoft. He said, “We don’t have one. We have hundreds.”

Coming up with strategies and applying them to areas of your organization would be a powerful use of time in your strategic planning session.

#9: Being Unwilling to Shift Priorities

At every stage of your development, your organization needs to make a substantial shift in priorities. In fact, your strategic planning process should include quarterly strategy meetings where you identify key strategies for that quarter along with solid plans to execute. Your market and opportunities shift far too quickly for there to not be a solid process to make changes at least quarterly to seize the moment on changes.

#10: Focusing too Little on Culture

Culture is IT. Without a powerful culture, you can be a brilliant strategist, a brilliant marketer, and be brilliant at execution, and you still won’t have a good run at it.

If you don’t spend time talking about how to make your culture stronger in your meeting, you have corked your golden goose. Don’t be surprised when the egg count drops.

Any strategic plan without solid strategies on how to make the culture even more alive and powerful will lack the gas in the tank.

#11: Not Understanding You’re in the Sales and Marketing Business

EVERY thriving business knows they are in the sales and marketing business and happen to be in their industry as well. Banks who understand that they are in the marketing and sales business—and that they happen to do it in banking—will surpass their misinformed competitors every day.

#12. Not Focusing on High-Profit Accounts

Business is really quite simple. There are only two ways to have growth and growth of profits at the same time and in any measurable way. One way is to sell big-ticket deals. The other is to sell low-ticket deals in bulk.

If your people are busy in “response mode”—opening up accounts for little old ladies with blue hair and feeling busy doing that—you’re in big trouble. Don’t misunderstand. Somebody has to take care of those small accounts. But if your people focus on Doris and Mildred to the exclusion of those highly-targeted business opportunities, they just plain won’t get the biggest and most profitable deals—and your cost of doing business will remain too high.

#13. Following the Herd

A dear friend of mine said it best: “Roxanne, you have to understand, we bankers, we’re just like sheep. If the lead sheep walks to the end of the cliff and steps over, the rest of us line up and step off, too.” Banks are more focused on opening new locations than they are on optimizing those they have by making sure their products and services per client average over six and keep increasing. All I can say to that is baaaaaaaaaah.

Make sure your strategic planning session this year is meaningful and guaranteed to make a powerful and positive shift in your organization. A one-page strategic plan that hits the key areas and is packaged with a can’t-miss accountability system will put you ahead of the pack. Don’t miss this chance—make this year’s plan the best ever!

Click here to download Issue 6 (pdf format)