Top 5 Strategic Planning Pitfalls

With the 4th quarter of 2013 in full swing most leaders at institutions are busy planning on how to fill up next year’s calendar with strategic initiatives that will result in added growth, revenue and outcomes that exceed goals. While I still strongly advocate for strategic planning to be an on-going process along with rolling budget projections the reality is that most mid-sized credit unions don’t have the resources or the discipline to make this happen. Therefore I thought it was the perfect time to share my experience and lessons learned in what to avoid in delivering a plan that is actionable, realistic and will achieve the intended results.

While the list could be much longer I’ve boiled it down to what I believe are the top 5 most common and harmful mistake to avoid.

  1. Trying to do too much – big surprise here, huh? I’ve seen it and heard it countless times before yet it never ceases to amaze me how much people think they really have to accomplish in order to be successful. A couple elements come into play with this potential hazard. First, what some people believe to be strategic is many times just another task that needs to be accomplished. Whether it is a new regulatory compliance mandate or a system upgrade, these chores should be considered for resource allocation purposes but rarely do they fit the bill as strategic. Second, every department thinks they need to have something listed on the plan in order to justify their existence and the corresponding expense that will make its way into the budget. How about for once recognizing a highly functioning, top performing area of your credit union by not requiring them to re-engineer what seems to be working well and risk the fate of diminishing returns? My rule of thumb – one letter size page (front and back) should be sufficient to capture a challenging, yet achievable plan.
  2. Front loading the Plan – Sure, we’re all anxious to get 2014 off to a flying start and at least in the Midwest it’s a slower time of the year. However, what does the rest of the organization have on its agenda? What I typically see from those organizations whose departments tend to focus vertically and don’t collaborate well with others horizontally is everyone wanting their projects slated for Q1. This builds in ample time for those unseen delays were completion takes place just prior to the masses departing on those well-deserved summer vacations. This is an opportunity for the organizations leaders to emphasize what the priorities truly are and withhold funding and resources for the secondary initiatives until those heavy strategic drivers are implemented and adopted. I’ve seen plans where the second half of the year is a barren wasteland. It happens because experience tells us scope creep and project delays will keep us busy throughout the year. Be realistic about what you can accomplish and when. Take the time to consider the logical sequence of events and plan accordingly. If the items are truly strategic and merit implementation make certain you have the right resources and time to focus on them.
  3. Failure to address the real problems – How many times have we wished organizational dysfunction away by hoping that forced collaboration will be the miracle cure to heal personality clashes on the leadership team? Has it ever worked? What about those underperforming business units, branches or products which seem to escape critical scrutiny year after year? The purpose of the plan isn’t to solve these problems but to identify them, somehow quantify the level of importance and if its a big enough issue then get it out there in black and white so the right people will take notice. The real leaders in your organization will be the ones who (constructively) raise these issues and are tenacious enough to keep bringing them up until they are given the appropriate attention and action they merit. The superstars will not only have the fortitude to bring these issues to the forefront but have well thought out solutions that take into account all of the factors required for successfully bringing the issue to a close. The sin of omission here by trying to avoid the difficult conversations has perhaps more potential than any other pitfall to derail even the best intentioned and thought out plan.
  4. Ill-conceived goals or metrics – just because it’s easy to measure or track doesn’t mean it’s what you should base your success on it. While this seems simple with the multitude of data so easily available today getting the stakeholders to agree on the right data source, input and variables can be an exercise in aggravation. For those key institutional metrics which may end up on a balanced scorecard tied to incentives and bonuses getting this right is critical. For me the hardest challenge was to find results that would always be a win for the organization. Too often gains in one area of the institution come at the expense of another. Any measure where the denominator utilized is your number of members is only worthwhile if your membership is growing as well. At times what seems to be the right thing for the organizations net income can be a result of penalizing the individual members. To get the right goals in place that can drive and sustain an organizations success takes time and effort, along with a willingness to make hard choices and stick with them regardless of outside circumstances. The most important thing here is an understanding of why this goal is important, followed closely by a thorough understanding of what all goes into impacting the outcome.
  5. Reluctance to seek professional help – I’m not referring to the medical community or even utilizing consultants to assist with the planning process (although I would be more than happy to provide this service). What I see here is that generally when credit unions decide to expand their service offerings their tendency is to either develop or utilize in-house “expertise”. They do the former by networking with other credit unions that have created similar offerings and are willing to share their experiences. They create the latter by inferring certain disciplines will transfer over into other areas. I’m sorry but consumer mortgage expertise doesn’t a commercial real estate lender make. Nor does having audit experience qualify one to run the risk management function. I know there are exceptions but I’ve been in on too many conversations where exactly this kind of “logic” has prevailed. I think that it bears repeating that something worth doing is worth taking the time and engaging the resources to do it right (the first time). The insight and practical experience gained from someone who has been there and knows the potential drawbacks can be invaluable. Perform the due diligence, spend the money – hire the proven experts and hold them accountable. You will be glad you did.

One last comment and then I’ll wrap it up. My biggest annoyance with those consultants who provide services to create strategic plans is just that – they only help create the plan. Their services typically end there. The board & management team are left to implement and execute. That’s why I started CU Succeed – to not only work collaboratively with institutions in creating a world-class vision, mission and business plan – but to leverage my understanding of the issues and real-life experience in assisting them achieve the desired results.


About cu succeed llc

C U succeed, llc provides strategic advisory and management consulting services to assist mid-sized financial institutions succeed in today’s most challenging business climate. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - It is the conception of its founder, Jeff Meyer, who left a highly successful career as CEO of 3Rivers Federal Credit Union (Fort Wayne, IN) to establish the firm. For over two decades Jeff was a principal leader and chief instigator in establishing 3Rivers reputation as one of the most progressive and well respected financial institutions in the Midwest. During his tenure the credit union grew over 600% to $740 million in assets in 2012. 3Rivers consistently remained a safe, sound and highly profitable institution during all of this time, yet of most importance to Jeff was the culture he was able to create among both the membership and the team members (employees). It was as a result of Jeff’s strategic vision and relentless focus on achieving results that such accomplishments were achieved. By consistently questioning and challenging the status quo he was able to develop an environment where individual development was expected, change was embraced and profitable growth was a requirement. Through being able to identify & gather members’ needs and meeting them with simple, yet effective solutions the organization was able to create unique, positive member experiences. Now you can put Jeff’s extensive experience, understanding of the industry and unique perspective to work for you.
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