As the economy improves and our confidence inches upward, many Gonzo bankers are replacing their recession survival strategies with renewed growth strategies. It’s time, once again, to grow the business! It’s time to expand into new marketplaces, to freshen our products and services to attract new customers and greater percents of wallet. Who knows? An acquisition or two may even be in order.
But it’s a new game. The market is different than it was, and shifting back into growth mode will require some changes. Are we ready? Do we have everything we need to shift gears from survival to expansion? Let’s take a look at a few of the key areas.
Is everybody using the new playbook? Planning processes are often antiquated. Many organizations gather together to create the big hairy audacious goals (BHAGs) and then each department retreats back to its silo to put together divisional and department plans – in a vacuum. What each executive heard in the BHAG discussion may translate differently to the department plans, which cause them to be out of sync with one another.
Organizations that plan well will huddle together to update the corporate strategic plans and also make sure that the divisional and department plans are in sync. Best practice banks will:
- Proactively extend the planning effort deep enough into the organization to be visible to nearly every employee.
- Evaluate the old plan and purge anything that is no longer valid but keep some appropriate remnants for continuity.
- Communicate the new plans being sure to point out the major changes, shifts in strategy and discontinued items.
- Avoid situations such as I.T. still pinching pennies while Lending is expecting a new loan origination system and Retail wants CRM.
Is the starting lineup in top shape? The team that got the bank through the recession may not be the same team that can get it to the next level. During the recession we needed leaders who played a better defense than offense. We needed masters of thriftiness, financial management and lean organizations. But in growth mode those particular skills and focus may need to be retooled. Growth typically requires investment, different thought processes and creative strategies to actively engage the market. Some management teams have recognized that different talent will be needed to shift gears back to growth mode.
Will the Incentive Plan keep the MVPs off the Free Agent list? A lot of talent stayed put through the recession – preferring to keep the stable, tenured job versus making a move that loses seniority and status. But with an improved economy and institutions across the country retooling and staffing up, the enticement to change jobs is greater than it has been in years. Progressive leadership teams are identifying their A teams and making sure they’re locked in.
Are the bank’s systems candidates for the Hall of Fame? During the recession, many of us minimized investments and stretched our expenditures as long as we could. We added an extra year or so to the lives of our computers, refreshed our existing products rather than rolled out new ones and delayed software upgrades. As a result, we are now working with aging infrastructure that’s coming off of lease and support, strategic systems that may be a few releases behind and losing support, and even systems whose market-leading vendors may no longer be the market leader or even still in business. Now would be the time to develop a plan to update or replace these systems to remain competitive and high performing.
Are last season’s all-stars still on the starting roster? Not all innovation was stymied during the recession. Mobility expanded giving consumers much greater access to services than ever before. Services such as remote deposit capture have enabled virtually any bank to serve any customer in any market. Branches and ATMs are no longer the prerequisite to support the full service deposit customer. Payment innovations are allowing small businesses and consumers to accept cards without merchant accounts. Internet lending is now commonplace as consumers shop the entire country for the best rates. Banks that support these emerged products and services have a distinct advantage over those that don’t. Banks that haven’t yet written these and others like them into their strategic plans should be asking themselves, “Why not?”
Which play to call next? New plans will no doubt generate more ideas than existing resources can support. What determines which initiatives get the green light? Governance is the discipline behind approving and implementing the projects, products and effort that support the bank’s strategic goals. Poor governance actually works against even the best strategic plans – no matter what the goal. It allows waste and activity but not necessarily progress. It allows the mediocre idea to take resources away from exceptional ones. On the other hand, good governance get things done. It maximizes the efforts of our limited resources, culls the great ideas from the good ones, shuns digression and promotes transparency. Priorities are clearly communicated and the team is focused on a common goal. Effective governance drives winning results.
Getting back in the growth game may require some changes and difficult decisions among many management teams. Updating plans, evaluating talent and making investments will require consensus and leadership. Do you have everything you need to succeed?
Original Post: http://www.gonzobanker.com/2012/10/getting-back-in-the-game/