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The Comm




Why Traditional Strategic Planning

Methods May Be Harming Your Bank

By Ancin Cooley Synergy, Banking Consulting Inc.

lthough seemingly counterintuitive, there is a very

large gap between strategic planning and actually

making a strategic decision. One of the goals of stra-

tegic planning, for any business, is to help provide

a clear direction for growth. This “clear direction”

is meant to, hopefully, aid in the decision-making

process. To get to point A, the company needs to do

steps X, Y, Z. A tad simplistic, sure, but consistently

decision-makers gather on an annual basis and

devise a strategic plan which will then, in theory,

shape how management and employees make their

day-to-day decisions on the next year. The reality,

however, is that there seems to be a massive divide

between the goals set in a strategic planning session and how

actual day-to-day decisions are made. This article will discuss

several reasons why a bank may set out in one direction and

end up in another.

Time to Upgrade the Process

In fall 2005, Marakon Associates, in collaboration with the

Economist Intelligence Unit, surveyed senior executives from

156 companies worldwide with sales of $1 billion or more.

They were asked how their companies developed long-range

plans, and how effectively they believed their planning pro-

cess drove decisions.

The result: the timing and structure of strategic

planning were obstacles to good-decision making


This information is not new to business consultants, our-

selves included, who have worked with clients struggling

with these very issues. In fact, we suspect that because the

traditional planning model is so cumbersome and out of sync

with the way executives want and need to make decisions, top

managers all- too-often sidestep the process entirely or just “go

thru the motions.”

Constrained by the annual strategic planning cycle,

executives and managers will either choose to avoid decisions

linked to the process, or work around the system. In either

case, the result is a marginalization of the strategic decision-

making process.

Another obstacle is time. The annual schedule often does

not give managers enough time to employ new strategies, or

to make the adjustments that the strategic plan may require.

Nor does it account for decisions that need to be made quickly

based on changing market conditions (Mankins & Steele,

2006). Because managers need to be able to adjust quickly

to both internal and external conditions, the annual process

impedes those needed fast decisions, and by extension, much-

needed fast action.

The Elephant in the Room

Another obstacle widening the strategic planning-decision

making gap: people are people. Often, when middle manage-

ment is working alongside high-level executives, there is a ten-

dency to overlook the obvious problems – or rather, employees

are hesitant to point out mistakes made by their bosses.

Executives, in large companies, are not typically involved

in the day-to-day operations of the business, so they do not

directly see the effects of their decisions on their employees.

Most executives are looking at a broader view of the company

and rely on management to tell them when there’s an issue.

The problem is that managers usually don’t. Think Shake-

spearean messenger who fears beheading for being the bearer

of bad news.