Imagine a strategic planning process that allows for the right strategies proven to lower risk, improve profit, and build a sustainable system that creates predictable organic growth that actually was implemented and exceeded.
You don’t have to imagine.
That system exists, and it works. It’s used by the highest performing banks in the country—the ones with ROAs over 2 and net interest margins over 5.
Of course, while other bank executives are busy talking about margin compression as a reality in the “threat” section of their SWOT analysis, you need to create strategies to make sure it never becomes your reality.
Here’s the problem…
Almost every bank is dead wrong with their strategic planning approach. While they continue with the barely-breathing strategic planning model of “mission, values, SWOT, and goals”—the model in the 1970s—savvy banks are utilizing a highly effective accountable think-tank strategic planning process. It’s like the difference between going to war with a flimsy stick or a stealth bomber.
Here are 9 questions you must ask before you develop your next strategic plan:
1) Is everything in your plan […]
Last week I discussed the hard truth behind most banks’ strategic plans: they lack…well, strategy.
Let me quickly recap last week’s fails to avoid before diving into the next four.
1) The plan is a list of goals, and does not list the strategies on how to obtain those goals.
2) The plan is not focused on your next most-profitable customers. You target generic, you get generic.
3) The plan does not inspire improved performance. Without inspiration, nothing great happens.
Now let’s discuss the next four fails to avoid if you want your strategic plan to be a success next year.
4) The plan fails to bond the executive team.
Most executive teams aren’t operating as teams. They are a group at best, or a fractured team with divergent interests and a fair amount of built-up resentments.
5) The plan lacks intentional congruence.
Ninety-eight percent of the plans I review have no intentional congruency. Do your critical numbers tie in to your Big Hairy Audacious Goal? Does your yearly theme match the key results? Do your key initiatives align with […]
Let’s be frank: Most banks get no real value from their strategic planning process—just a list of unimaginative goals with none of the revolutionary thought needed to transform results, and very little hope of even getting beyond the book on the shelf. If that sounds familiar, don’t be embarrassed. You’re certainly not alone. Having talked with thousands of bank executives over the last few years—including many who are running high-performing banks—I can’t tell you how often I’ve heard the strategic planning process described as “something we have to do” instead of what it should be: something that they know will quickly transform their results to a much higher level.
That approach is like joining a weight loss program that allows only one food—doughnuts. You can eat fewer of them, but don’t expect to lose any weight. Strategic planning only moves from “have to” to “get to” when it becomes rapid-fire, when people are willing to walk through walls together to make it happen, and when it powerfully inspires them to believe that great things will actually happen as a result. So, what are the 7 tragic errors banks make in […]
We’ve all been there. The car salesman slides the paperwork across the desk at you, pointing at the signature line. Just this one last step, he says, and there’ll be no way out.
At least that’s how it can sound to the customer as she wipes her sweaty palms, wondering if she’s doing the right thing, wondering if she’s considered everything, wondering if she’s taking too big of a…
Risk is the dark underbelly of every opportunity, our mother’s voice warning us that there’s no free lunch, P. T. Barnum chuckling about a sucker born every minute. Suddenly the salesperson is the snake in the Garden, hissing “How ’bout them apples?”—and Eve is sliding her checkbook back into her purse and looking for the exit.
The best thing any business can do to earn the trust of a potential customer is reversing the risk. All agreements entail some degree of risk. If you as a business can make it clear that all of the risk will be assumed by you, not by the customer, you’ve removed the last real roadblock to the relationship. If you can […]
Even though it was 20 years ago, I remember it like it was yesterday. One of the attendees at a bank CEO conference came up after my speech and began to lecture me. “There’s one distinction you’re missing, Roxanne. We bankers, we’re like sheep. The first one marches up to the ledge and falls off, and the rest march in step screaming Baaahhh! as they fall one by one over the ledge. You have to stop believing bankers actually think for themselves!”
Since then, I’ve watched that scenario play out too often. “Geez, let’s all get a bank into a grocery store before somebody else does. No time to do a profitability analysis. Let’s mortgage homes at 105 percent…that will be fun. Hey, anybody for a behemoth amount of brokered deposits? That’ll be easier than teaching our people to not be order takers, eh?”
So how do you grow in a time when loan demand has shriveled up? It’s time to get wise. A recent new client of ours made capturing more low-cost deposits their top initiative. They had been at 120 percent loan-to-deposit. Ouch. Within four months, […]