In a recent blog post (Strategic Planning in Banking: What a Joke), Ron Shevlin noted the following:Strategic Planning - 3

“Q. What do a lot of banks and (especially) credit unions do every year at strategic planning time?

“A. They go through the charade of defining a “strategy” for the next 12-24 months, often based on some overly simplistic and misguided SWOT analysis.

“The end result of this “strategic planning” effort is a list of initiatives that are supposed to produce strategic value, direction, and competitive advantage.


As usual, Ron is absolutely spot-on. As I’ve said previously, it’s time you throw out the SWOT. But getting back to Ron’s post, why is much of what financial institutions do in strategic planning a waste of time?

Because too many of those so-called strategic plans fail to have the proper planning horizon. The planning horizon refers to how far out you are developing strategies and solutions. Here’s a hint: it’s more than a 12-month list of tactical steps.

Visionary CEOs and executives think long-term. Many years—like three to five.

Of course, the push back I get is that too much can change in that timespan and that the financial services industry is moving too quickly to make any plans longer than about twelve months.

But as Tim Harrington, president of TEAM Resources, said about strategic planning, “You can’t plan for everything, but you can plan for the most important things.” That works when applied to the planning horizon as well. You can’t plan for everything that could possibly happen in the next three to five years. But you can absolutely plan for what is most important to your bank or credit union.

So how can you lengthen your planning horizon? Here are a few tips:


  • Focus on who you are—In other words, don’t think about what you want to do. All you will walk away with is a giant to do list. Rather dive deeply into your bank or credit union’s soul. What is your brand? What is your value proposition? What are you values? Do the answers to those questions align with your strategy for the next several years?
  • Examine trends—You can’t begin to lengthen your planning horizon unless you know what the trends are going to be. As Wayne Gretsky once said, “I skate to where the puck is going to be, not to where it has been.” As credit union and banking executives, you need to know what the trends are going to be in the future. Where is payment systems headed? What demographic trends are going to shape your community in the next five to ten years? How is technology going to change banking? The more up-to-date you are on the trends, the more you are expanding your planning horizon.
  • Think about your legacy—This is especially important if an aging board is involved in your planning session. Do you want to leave a to-do list or do you want to leave a legacy for your credit union or bank?
  • Stop thinking about next year—In the financial services area we run our organizations from quarter to quarter. Whether it’s managing to the call report or answering to investors we focus on short-term fixes rather than long-term solutions. We budget year to year so we plan year to year. So anytime someone brings up next year in your planning sesion, push them to think about the subsequent years instead.

So don’t call your planning session a long-range session if your planning horizon only goes twelve months.