The plan is never finished. Strategic Planning is a process that never ends. Banks should revisit their strategies every 12 to 18 months. Bankers should ask these questions to reassess internal attitudes and the outside world:
- What have we done successfully?
- How has the competition reacted?
- What is different in our environment?
- Should we continue on current path or make changes?
- Are any failures due to poor strategies or poor execution?
For strategic planning to succeed, management and the Board must view the process as an ongoing commitment—not an exercise to satisfy regulators.
Management and Board must reach consensus. Poor communication between a bank’s management and its board can present hurdles. If these two groups do not have a shared vision, strategic planning has little chance to succeed. Therefore, it is crucial to engage both groups in the planning sessions.
Many voices must speak. A CEO and one or two people may complete a strategic plan without involving any of those who execute it. The plan will be impractical, and managers will have no personal investment in its success. Banks should search for ways to let employees share in the rewards and risks inherent in the development of strategic plans. This may mean rewarding performance using bonuses or incentives, stock plans and other alternatives to pure salary.
Follow-through is essential. A frenetic management style can create difficulties. The CEO and board may eagerly develop a strategy, but lose interest when it comes to monitoring progress and overseeing implementation. As soon as the first crisis comes along, they forget about the planning.
Power to harness change creatively. Strategic planning cannot predict the future. You cannot predict exactly when a quake might hit your institution—or its size and duration. With strategic planning, you can make wrong decisions as well as right ones. But strategic planning will help you learn your institution’s strengths and weaknesses and discover how your resources can be marshaled to help your bank survive and thrive. Strategic planning strips change of its power to frighten and immobilize bankers. It offers executives the power to harness change creatively.