Now is the time to start planning

Bankers often think of strategic planning in the fall, sometimes in conjunction with the annual budgeting process, but I want to encourage you to think about strategic planning now. If you want to conduct strategic planning successfully this fall, you really need to begin preparing now.

A good strategic plan will articulate where your bank is now, define where it wants to be in the future, consider how your bank is going to get there, and identify the tools the bank will use to measure its progress. Running any bank is a journey and you wouldn’t undertake any serious journey without some planning and a map.

You might think you know where the bank is now, but it is important to verify. A good strategic planning process might include surveys and interviews with key stakeholders. Include staff, shareholders, customers and even prospects. If you take this part of the process seriously, I am certain you will learn something about your bank.

Now, where do you want to go? Situations vary, and they all can influence the long-term strategy most appropriate for your bank and your goals. If your bank is owned by one individual or one family, your bank’s goals may be different from the bank owned by a large group of stockholders. Is your bank 20 years old or 120 years old? Is the bank located in a rural area or metro area? Is there competition, or is your bank the only financial institution in town? Answers to all of these questions will influence your thinking about your goals.

The “How are you going to get there?” part may be the most challenging. This is where you want to look at potential partnerships with vendors, schools, community organizations, municipalities, trade associations, etc. Traditional partnerships with the chamber of commerce and Rotary are fine, but don’t be afraid to consider options like a web-based lender, a factoring company, or a specialty finance company. And think about the markets you serve. Are there underserved or emerging markets where your bank could make a real difference?

In order to have a way of answering the “Are we there, yet?” question, measurement tools are necessary. How will you assess the progress the bank is making toward its goals? Profitability is certainly one important measure, but there are others, such as market share, brand recognition, credit quality or share price.

Nothing important happens without planning. If you want to substantially improve your bank, it’s going to take years. Take the strategic planning process seriously and get started today.