STRATEGIC PLANNING PROCESS TOPICS
MISSION, VISION & CORE VALUES
Your leadership team should define or refine your Mission Statement and Vision Statement and your Core Values.
SWOT analysis may be "old school", but there is significant value to this planning exercise. There are a variety of ways to approach this step. You may start with last year's SWOT results and discuss any changes or reaffirm. You may have each member of leadership prepare ahead of your offsite planning session and compile the results for discussion. And you can set up a "speed" SWOT during your offsite with four easels or whiteboards (one each for Strengths, Weaknesses, Opportunities and Threats) and have your leadership members move through each category for five minutes or so to jot down their views.
The key to any successful planning session is a clear evaluation of your current state or environment. You need to know where you stand. How are your markets and customer base doing? What is the state of your local, regional and national economies? What is the nature of the current regulatory and legislative environment for your markets and organization? What is your assessment of your management, employee and human resources? How are you performing financially? What is the level of your IT and technological capabilities?
Your leadership team should carry out a discussion of what your operating environment will be like over the next five years. What are your assumptions regarding population and demographic changes? Will the economy be growing - and how fast? Or is there a recessionary environment that needs to be factored into these assumptions? What are your loan, deposit and funding assumptions? What is your baseline assumption on the direction and level of interest rates? Are there any areas where increased capital expenditures or operating expenses will occur? These discussions on the next five years are very important as your focus in the typical budgeting process has only a one-year time horizon. You should catch necessary future investments in this process - especially for technology.
You need sufficient assumptions so your finance team can prepare financial forecasts for later review. These assumptions should describe your most likely view of the next five years.
BASELINE PLANNING SCENARIO
At the planning offsite, you should have your finance team prepare a preliminary view of your next five year financials, based upon current trends and any known items. These projections can add to your discussion on assumptions for your strategic plan and provide an early indication of what to expect in the future.
Following your planning offsite, your finance team should be prepared to incorporate these baseline business and economic assumptions into a five-year financial forecast.
A risk assessment is a critical element of your strategic planning. What are identified risks that you are or will be facing over your planning horizon? Are there emerging risks that could develop? How do you evaluate your strategic direction, given these known and emerging risks? What is your risk appetite and your risk philosophy and is your strategic plan consistent with those views? What risks can be reasonably quantified?
Preparation is key to a successful offsite planning session. The day should be outlined with an agenda and allotted times. There may be key issues for discussion that you would want the leadership team to be prepared to discuss. Develop a list of those issues, assign someone to prepare a brief summary of the issue and send out to your leadership team at least one-week in advance. Finally, designate a member of your leadership team as the moderator for each topic.
Here are items that may be on your list:
Preliminary financial projections
Regulatory and legislative developments
Local and national economic forecasts
Five-year technology plan / issues
offsite planning preparation
The following can serve as a starting point for your preparation of your written Strategic Plan:
Statement of Mission, Vision and Core Values
Summary Statement of Business Strategy
Markets and Customers
Local, Regional and National Economies
Financial Position, including Loan Quality and Capital
Regulatory and Legislative Environment
Human Resources: Capabilities, Employee Team, Management
Summary of SWOT Assessment
Planning Scenario Narrative:
Baseline ("Most Likely")
Identification and Assessment of Key Issues and Risks
Goals, Objectives and Key Initiatives