Strategic Planning?

GEORGIA BANKING SCHOOL

May 2016

Let’s develop a Strategic Plan of Action

• One of the best lessons kids learn about video games is that standing still will get them killed faster than anything else. J. Little

• If you don’t know where you are going, you might wind up somewhere else. Yogi Berra

Objectives of this session: OBJECTIVES FOR THIS COURSE

•To understand the value of a strategic plan of action

•To provide a road map for the future of your bank

•To determine priorities for allocating resources

•To help retain and attract new employees

•To satisfy the regulators

“More than ever before, the best strategies are irrelevant if they take too long to formulate.” Professor Dr. Kathleen Eisenhardt:

• Every company or initiative that needs to succeed in the connected economy

• Regardless of size or scope, plans are necessary for any organization

Copyright 2005, Instant Strategist 5 Why did so many dot-coms fail in the 90’s? • An imbalance amongst the three elements that are required in any successful strategy in the new economy. – Technology – Human behavior – Time

A way to pursue your vision by leveraging actions that will produce the desired outcome. • One that contains the basic elements of motion; a destination (where), a road map (how), and the means of getting there (what).

It’s not just sales It’s not just marketing It’s not just operations

These are all components to target only when combined together will they make up a strategy

Copyright 2005, Instant Strategist 8 Strategy--Follow the logic Say you need to go on a trip - First decide where you are going Second decide how will you get there (drive, fly etc.) Third decide on what needs to be done (buy tickets, pack etc.) When planning a vacation, do you know where you are going?

Branch Strategy Branch Strategy

Branch Strategy

Core Strategy Core Strategy

Start-up Company Large Company

•A strategic plan is NOT a business plan Strategic plans focus on the “where” and “how”, Business plans only focus on the “what”

•It is a top-level document, precise, and practical by conveying your ideas in an understandable way

Management is overwhelmed with daily tasks and “crises du jour”.

It is time consuming and can be confusing. There is a lack of knowledge and understanding on what needs to be done.

• We have entered a new stage in our evolution--the connected economy. • We are all becoming inter-connected and everything moves much faster. • Reaction and response time is shrinking.

STRATEGIC PLANNING

Types of Strategic Posture - Single product - Niche - Expansive growth - Developmental growth - Product innovation - Diversification

•Make it easy to understand and follow •Make it practical •Make it quick to implement •Make the process flexible and adaptable

• Each stage “rests” on the prior one.

• If the foundation is faulty (invalid) so is the rest of the structure.

• The foundation supercedes the structure.

PHASE 1 - Determine where you are now PHASE 2 – Decide where and what you want to be PHASE 3 – Establish a strategy to achieve your target

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

• Assets or valuable resources that exist within your organization and among your stakeholders. • Build upon you strong points and stay focus on these areas.

• Liabilities that exist within your organization and among your stakeholders. • Areas that need improvement before it breaks or continues to affect the group.

• Favorable or advantageous combinations of circumstances that provide the organization with the chance to explore new directions or areas.

• Possible dangers that could threaten the viability and future of the organization. • Competition and technology are common examples of a threats affecting small business owners or organizations.

• The most effective way to construct a strategic plan is to follow the same way in which the human brain thinks and operates. This process has three main stages: • First, determine what you want to do. (Vision) • Next, figure out how you are going to get there. (Mission) • Finally, work out the details. (Action)

Vision, focus on 3 to 5 years Rarely

Sometimes Mission, review annually

Often Action, review quarterly

Copyright 2005, Instant Strategist 24 Vision Where do you want to go? • Defining the vision for your company is the first step in the strategic planning of any successful initiative. • Review the SWOT.

Vision

A mental picture of what your company or organization should look like, feel like, and be seen in the future by its stakeholders.

At Sea Island Bank, our vision is to be the finest financial services company in Southeast GA.

26 VISION Visioning Exercise

• How does your organization differ from what it was a couple of years ago? • What positive changes have occurred? • How were they achieved? • What opportunities did you embrace? • What did you offer to your customers?

• You can use a competitive advantage in your branding, as well as in your marketing, sales, and promotional programs.

“ Be the company that everyone wants to work for; everyone wants to do business with; everyone would want to own”.

Mission How will you enable your vision?

• Now it is time to decide on how you are going to get there • Describes your future direction

Mission

• Think of your Mission as a road map to plan the route to your selected destination.

• Blue Cross/Blue Shield is a comprehensive managed health care insurance company that manages the quality of health care, service, and the costs of its offerings to individuals and groups. To serve customers effectively, we offer a portfolio of products and services, with emphasis on managed care.

ACTION What do you need to do? • The third and final phase lists and prioritizes all the objectives you need in order to fulfill your mission.

• The best way to start is to review the SWOT Analysis to determine categories of focus. • For example:  Loan issues  Operational issues  Technology  Marketing ideas

Activity Responsibility Date Outcome Operational John Smith October 1 (To be filled out later) Technology Dan Ray November 1 Marketing Kim Mock January 1 Financial Wayne Johnson 4th quarter

• To validate this stage, ask yourself the following question:  Did we list the activities in order of priority, so activities with the most importance appear first? • If you answered no, please go back and revise. If you answered yes, continue to the next stage.

• To validate this stage, ask yourself the following questions:  Have we discussed this activity with the assigned person?  Is the assigned person qualified to perform this task?  Did the assigned person indicate that he or she could perform this task by the due date?

• To validate this stage, ask yourself the following questions:

 Did we assign firm dates for completion of each activity?  Do the assigned dates correspond to each other?  Can everyone agree on meeting date to review the action plan?

• To validate this stage, ask yourself the following questions:  Are the measurement criterion appropriate to each assigned task?  If measuring criteria is an event, does it correspond with the due date for the task? • If you answered no to any of these questions, please go back and revise. If you answered yes, continue to the next stage.

• The most important financial aspects of your organization: revenues, capital needed, and your projected income.

Your organization can be even more successful by taking the time to develop a strategic plan of action.