Sales Marketing
Why Almost Every Bank is Dead Wrong With Their Strategic Planning Process
By Roxanne Emmerich, CSP, CMC

It’s been around for decades. The old strategic planning model. You head to the retreat center. Wear khakis. Revise the mission statement until it reads “To be a leading provider of financial services in a four-county area with outstanding customer service, high-quality products, and above rate of return to our stakeholders.” THEN, after that useless exercise, you do the SWOT analysis and create the list of goals with deadlines.

Mission accomplished. Only one problem: it doesn’t work. And when it does, it doesn’t work nearly as well as it needs to work to have the breakthroughs that are necessary to stay miles ahead of your competitors.

What’s wrong?

1. No questioning of the questionable.

We always plan too much and always think too little. (Joseph Schumper)

It only takes one really great idea to push you ahead into a league where you’re not competing on price and you’re attracting business “in the flow.” Unfortunately, maybe 1 out of every 200–300 bank exec teams will muster an idea like that.

Instead there will be a regurgitation of the old ideas with incremental improvements added on a rocky foundation. No new thinking, and no new results.

2. No clear understanding of what REALLY drives shareholder value, and the best ways to get there.

It seems everyone wants to lose weight and is looking for the “magic pill.” The diet industry is a multi-billion dollar business that continues to grow. Thousands of companies and millions of people are in pursuit of that “magic pill.”

What if I told you I have the magic pill? Here it is: Eat less and exercise more. That’s it. Simple. Easy. Fewer calories going in—more calories going out. Works every time.

But that’s not nearly as sexy as eating French croissants filled with chocolate and then starving for days and creating a glycemic index “wack out” that puts you at risk for diabetes. Nor is it as fun as eating bacon, eggs, and steak while giving up all carbs, thereby creating cumulative and dangerous stress on your liver.

Humans are sometimes tempted to look for a “story” of what might work, versus following the rules of what always works—and is better in the long run for their well-being.

There are some hard-and-fast “rules” of business that have a substantial predictability of success or failure (e.g., don’t water down your brand; your differentiation must be dramatically different, must matter to the customer and be stated as an overt benefit for it to justify higher pricing; healthy culture precedes sustainable profits)

There are rules of business that, when followed, work. When they are broken, they almost always create negative effects. Without knowledge of those rules, financial institutions can look smart by creating a plan that seems sound on paper, but because it violates irrefutable rules, disaster is hiding in the bushes.

3. No strategies in the strategic plan.

It seems ironic to think of a strategic plan without any strategies in it, but read a few dozen strategic plans and you’ll quickly find that a defined strategy is as hard to find as thermal underwear in Hawaii. I’ve reviewed strategic plans for hundreds of banks, and most of those plans have been completely devoid of strategies.

The strategy is the “how”: how to deploy your resources to create the results you want. Without the strategy, the chances of creating that result are mostly based on luck. And if the results are achieved, they’re accomplished with a much higher level of effort than is actually necessary.

4. No list of obstacles for each strategy, and no breakthrough plans for each obstacle.

Let’s say you decide to “train your people to sell product bundles for mortgages” as one of your strategies. There will be some obstacles: the package bundle hasn’t yet been created, you don’t know which products you can discount in the bundle without putting overall profit for that client account at risk, you don’t know which market will respond, you don’t know how to present the bundle so it’s a no-brainer, AND your people are terrible at cross-selling. So how do you both train them and motivate them to use this strategy effectively?

If you don’t create strategies to overcome every one of the obstacles, you probably won’t break through them—and if you do, it will take you longer because you’ll need to regroup as you hit each obstacle.

5. No clear structure or implementation deadlines.

Which people are best-suited to handle the various aspects of the process? When is the baton passed? Where are the checkpoints? Who is the overall project manager for the initiative? How will that manager report status, and to whom? These are just a few of the details that, when thought out and specified, will make a project flow with greater ease. (Warning: You’ll need to get your drama dose from watching soap operas because there won’t be many surprises happening at the office anymore.)

Ideas are great, but I’ll bet on the team that can execute the best.

These are just a few of the often ignored and dramatically important elements of a plan that rocks. If you want dramatically better results, first dramatically improve the strategy in your plan.