Many companies are now completing their strategic plans for the coming year. If you are in that position this may be an opportune time to pause and do a quick ‘big-picture’ review.
When preparing a complex planning document it’s easy to get consumed by the details of individual sections. You may lose perspective on whether the document really focuses on core strategic issues. Here’s a checklist of things you may wish to consider before finalizing your draft.
1. Focus: inward or outward?
Does the plan come across as being inwardly-focused on the company’s needs? Or outwardly-focused on customers’ needs?
Inwardly-focused plans implicitly ask the question: “How can we make things better for us?”. They may stress opportunities to increase product sales, improve income or lower costs. They may emphasize behind-the-scenes issues such as risk & compliance. These discussions may occur with little reference to the characteristics of company’s customer base. Or fail to recognize how the needs and usage patterns of key customer segments have been evolving.
In contrast, an outwardly-focused plan centers around the need to create compelling customer experiences. It is data-driven, based on actual usage patterns and feedback from customers. The goal is to be able to offer customers meaningful solutions to their financial needs, and to make it easier for them to do business with your company. From a technology perspective that may include addressing customer-facing systems. It likely will also include back-office enhancements to streamline and digitize internal processes. The goal is to make it as easy as possible for customers to do business with you.
This focus on the customer is likely to lead to greater engagement, retention, growth and profitability. Customer expectations continue to increase, as does competition from traditional and non-traditional players. This makes an outwardly-focused plan is far more likely to lead to long term success.
2. Vision for the future.
Many companies understand the need to digitally transform their operations. They wish to create new customer experiences, and integrate digital technologies into new business processes. Crafting a clear vision of what the end result will look like is important for success.
The vision should also include a clear definition of your business strategy and focus. Where will you excel by creating profitable business niches? How will you create meaningful value propositions for key customer segments that will differentiate your company from competitors?
A well-articulated vision for the future will make it easier to understand the goals to be achieved. This will help direct and inspire the efforts of everyone in the organization.
3. Strategic initiatives.
Strategic plans usually end with a long list of ‘projects’ or ‘initiatives’ that emerged from the planning process. These form a roadmap to what to pursue during the coming years. But it is not at all uncommon that the list contains many non-strategic projects.
It is useful to sort through the list and flag those initiatives that support achieving the company’s longer term strategic vision. The others likely fall into categories related to compliance, operations, facilities improvements, hardware/software upgrades, etc.
These projects all compete for resources, and will have different time horizons, degrees of complexity, strategic value and potential long-term pay-backs. Breaking the project list out by broad categories will allow management see the proposed allocation of resources towards achieving long term strategic goals versus those that are more related to ‘business as usual’.
It can also provide clarity on how to prioritize projects based on what will provide the greatest future benefit for the company and its customers.
4. Responsibilities and resources
Are responsibilities for carrying out the various elements of the plan identified? Many initiatives – particularly as they relate to digital transformation – depend on collaboration across divisional lines. This will require planning and coordination. Who has responsibility for the end result?
Has the plan also given careful consideration to the staff resources needed for implementation? Many projects need people with high levels of technical skills. If you don’t have the necessary expertise on staff, it is critical to determine how you will get the needed skillsets.
5. Success metrics
Each major project should define what ‘success’ looks like, and also have some metrics identified to help measure it.
Examples of success metrics might include: reductions in average account opening times, customer satisfaction scores, improved customer cross-sales and profitability, higher levels of digital adoption, shifts in the demographics of new customers, etc.
Develop a tracking system before each project begins and include current statistics as benchmarks. The tracking of changes of metrics can prove the value of the project and give insights into the return on investment. This can also improve decision-making going forward.
Conclusion
The above are a few key high-level points to think about as you complete your strategic plan. As you consider these it can be helpful to also get comments from people who were not involved in the plan preparation. Or have someone from outside the company review it and provide objective feedback.
One final observation: strategic plans should not be static documents that you review and update on just an annual basis. Ideally your plan should be revisited throughout the year as real-world events change. The banking world is dynamic and constantly changing, making it important to build in the flexibility to alter priorities in response to changing market and competitive factors.
