Here's the plan: don't be intimidated when creating a strategic blueprint for your bank. Strive for an uncomplicated approach--with a simple outcome.

Author:Bernstal, Janet Bigham
Position:Strategic Planning

There's an old saying that if you don't watch where you're heading, you'll wind up where you're going. It's a good forewarning for anyone seeking the road to success, but particularly appropriate for a bank culture without a practical, easily applicable strategic plan.

"Community banks are all over the landscape with strategic planning," claims John Owens, director of financial services for the Fort Lauderdale office of RMS McGladrey Inc., a company that provides consulting to the financial services industry. "Some feel four hours a year is enough planning, and others have written plans bagger than the Atlanta phone book."

On average, though, most community banks spend less than 30 minutes a month discussing strategy. Owen believes that's because many people are inherently frightened of strategic planning and avoid what they think is a complicated process. But the most effective plans, he says, are the simplest.

"What they provide is focus, and focus is power," says Owens.

First, he's adamant that you must involve the board of directors.

"One of the challenges, and one of things board members are responsible for by regulation is strategic direction," he says. "It also ensures they're on the same page."

The key elements of a bank's plan should revolve around your knowledge of the bank. In other words, understand your people, your processes and your market.

"Ninety percent of community bank presidents would tell you that their employees are the bank's most important asset," says Owerts. "Yet most don't have performance management systems, train only on-the-job and spend very little time on corporate cultural surveys."

Also, he says, employing only the most efficient processes will lead to better staff morale, and ultimately help you deal with your customers in the best manner.

As for the competition, it's not enough to be on top of their rates, you need to know where they're going strategically. And above all, keep focused on your plan.

"That doesn't mean it should be written in concrete or you'll miss strategic targets of opportunity," says Owens. "But you should go back to it often and really know the plan."

Northeast Bank, Minneapolis

The leadership team for Northeast Bank in Minneapolis, Minn., keeps their bank's strategic plan from collecting dust by meeting and reviewing it quarterly.

"Different people on the team have responsibility for certain action plans, so we constantly do updates," explains Sue Sjoselius, senior vice president of marketing. "That information is driven back down through the organization via newsletter, employee meetings, etc., so everyone is really aware of what our strategic plan is about."

That wasn't always the case. Sjoselius has worked for Northeast, a community bank with three locations and $300 million in assets, for 19 years. There was usually an annual planning meeting and goal setting. But it wasn't until the year 2000, when they hired RMS McGladrey Inc., that they developed a more systematic approach.

"Now it's not just 'Oh, let's grow the bank this much,'" says Sjoselius. "It's looking at the total systems of the bank, from the customer all the way through."

Initially, there were several weeks of in-depth market research and employee focus groups. The team used that data and the consultant's...

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