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? What are the bottlenecks stopping you from an easy-to-follow and implement strategic plan?
There are five key bottlenecks where banks seem to trip the most.
BOTTLENECK 1: No questioning of the questionable
It only takes one 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.
BOTTLENECK 2: No clear understanding of what REALLY drives shareholder value, and the best ways to get there
Humans are sometimes tempted to look for a “story” of what might work, versus following the rules of what always works.
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.
Look for the last three strategic planning bottlenecks in next week’s blog post.