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-
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.