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 strategic planning?

1)    The plan is a list of goals.

Increase core deposits by $30 million. Hire two new lenders. Open a new branch in Podunk. Install a new CRM. Those might be critical numbers or key initiatives—but they are NOT strategies. And they may not even be the right critical drivers or initiatives. So what was the point again? Goals are NOT strategies. And without the strategies that optimize and unify your approach, quite frankly, those goals have a weak chance of happening at all.

2) The plan is not focused on your next most-profitable customers.

The plan is not built around the psychographics of the few most-profitable niche markets, and it’s not designed to optimize results from the get-go because the strategies, key metrics, and key results are all generic. You don’t want generic. You want focused. If you haven’t tightly defined your key markets—and most banks, even when they try, fail to understand what psychographics really are and how tight these niches need to be—you have a house built on sand.

3) The plan does not inspire improved performance.

Think about it. If you go to the troops and say, “Hey, we want a 1.25 ROA this year,” are the cheers deafening? Probably not. Do your values inspire, or do you have tired, unenlightened values like “integrity, hard work, and blah blah?”

If your values are like the values of any other bank, you’re in big trouble. Nobody is going to get them, and they sure aren’t going to live by them. If your Big Hairy Audacious Goal doesn’t scare the heck out of them, even as it inspires greatness and a deep desire to get moving—well then, what’s the point?

Without inspiration, nothing great happens. Put yourself in the shoes of a front-line employee or a middle manager. How excited would you be with your company’s plan if it has tired values and a list of goals with no strategies to make them happen?

We have just began to scratch the surface. Next week we will go over the final four methods to guarantee your strategic plan will be a success for next year.