The CEO, marketing and strategy--and how they all fit together.

• Position: ABA Resources

When he became a bank CEO in the 1970s, Dennis McCuistion didn't know anything about marketing or strategy. "Like many CEOs, I was the best loan officer they could find, so I was made the CEO." The good news was that he learned about strategy fairly quickly. His bank's loan portfolio had a problem: Forty-two percent of the portfolio was classified! The bank's focus was on one thing only: survival.

From the 1970s until the early 1990s, survival was in fact the major goal of commercial banks. And if you were in serious trouble, as McCuistion's bank was, then it wasn't difficult to focus on what needed to be done. Today most banks are not in serious trouble due to problem loans. In fact, they've been making more money than any time in the history of banking. So what's the problem?

"Most CEOs I talk to are concerned about what I call 'hypercompetition.' What that means simply is that there is more competition of the traditional and nontraditional kind than ever before in history." This trend is exacerbated, of course, by the almost daily changes in technology.

A consultant on strategy, sales and lending issues, McCuistion will be one of the keynote speakers at the ABA Marketing Conference, September 22-24, at Loews Miami Beach Hotel, Miami. His topic will be the relationship between marketing and strategic planning.

McCuistion quotes management guru Peter Drucker on the three fundamental questions that need to be asked in connection with business strategy:

* What is our business?

* Who is our customer?

* What does the customer consider value?

Another strategic planner, Ben Tregoe, says that the primary role of strategic planning is "to define what business the organization should be in." McCuistion contends that, once you define what business you should be in, then virtually everything else has to do with marketing. Specifically today, it has to do with determining not only who the customer/client is, what they want and need, and what they consider value, but it also concerns how to differentiate oneself from the "hypercompetition."

McCuistion says that in many years of facilitating strategic planning sessions with financial institutions all over the country, he is unimpressed with how little the marketing department is asked to contribute to strategy. He recently reviewed the ABA publication entitled, "A Collection of Community Bank Strategic Plans." He found about 20 strategic plans in banks up to $400 million in size. "What I did not find in...