STRATEGIC PLANNING PROCESS TOPICS

PLANNING CALENDAR

Discussion: Most of us have a daily, weekly and/or monthly calendar because it helps us visualize and keep order in our day. The same is true for your various planning activities.

You should schedule time every year for a review and assessment of your planning for each critical component of your planning cycle. While the above graphic depicts several important topics, this needs to be your list of critical and important topics. And it may change from year to year.

By scheduling in specific time periods, it provides order for you and your team - they know when the topic will be discussed, can request input from others and prepare the discussion material for the review. It does not need to be overly complex and complicated - simple is preferred.

You will find that this will create a more disciplined and action-oriented approach to your long range planning and assist in setting strategic priorities.

MISSION, VISION & CORE VALUES

Your leadership team should define or refine your Mission Statement and Vision Statement and your Core Values - Culture and Talent need to be at the forefront.

SWOT ANALYSIS

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.

CURRENT ASSESSMENTS

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, digital 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.

FINANCIAL PROJECTIONS

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?

RISK ASSESSMENT

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:

  1. Statement of Mission, Vision and Core Values

  2. Summary Statement of Business Strategy

  3. Current Assessments:

    • Culture and Talent

    • Markets and Customers

    • Local, Regional and National Economies

    • Financial Position, including Loan Quality and Capital

    • Regulatory and Legislative Environment

    • Human Resources: Culture, Capabilities, Employee Team, Management

    • Technology, digital, cybersecurity

    • Risks

  4. Summary of SWOT Assessment

  5. Planning Scenario Narrative:

    • Baseline ("Most Likely")

    • Pessimistic

    • Optimistic

  6. Identification and Assessment of Key Issues and Risks

  7. Goals, Objectives and Key Initiatives

  8. Financial Projections

CONTENTS OF STRATEGIC PLAN