Financial institutions with effectively developed and executed strategic plans have a clear competitive advantage, but such institutions are all too limited in number. Leaders often cite the lack of appropriate data and tools as a reason that strategic initiatives lose momentum amid the daily “fire drills” in financial institutions.

To create a strategic plan that maximizes the use of relevant data, leaders must focus on being appropriately prepared before the planning process starts. In part one of this series, I discussed the importance of the planning process as a performance accelerator. In part two of this blog, I explore how to enhance your success with strategic plan execution by preparing to plan.


Preparing to Plan

In our recent CFO Survey, 93 percent of leaders of participating banks and credit unions indicated that their organization should do more to leverage financial and operational data to inform strategic decisions. To accomplish this, traditional planning processes must be adapted and retooled to ensure that data-driven planning occurs.

The basic building blocks of the planning process include:

  • Identification of institutional goals
  • Analysis of the institution’s competitive differentiation
  • Determination of how to achieve institution-wide alignment on business goals
  • Identification and prioritization of initiatives that will have the greatest impact on achievement of those goals

Having accurate and readily available data to support these activities will facilitate smooth identification, review, prioritization, and execution of strategic initiatives. Stepping back from daily activities and stressors to find space to think more strategically can be challenging for most leaders. But when decisions can be data-driven rather than relying on hunches and good guesses, the payoff is clarity about a financial institution’s strategic direction, and a set of clear, prioritized goals grounded by accurate financial and operational data.

Data that will be required during the strategic planning process will need to be aggregated from multiple sites and sources in financial institutions, such as branches, mobile sites, and various other systems. Data then must be transformed into meaningful information that can be used to model scenarios and inform the institution’s strategic decisions (see Figure 2). Appropriate software tools will be needed to gather and evaluate relevant data. While this approach may not be initially envisioned as part of the planning process, access to appropriate data—and the ability to properly analyze the data—are key to ensuring that financial institutions deliver appropriate value to investors, customers/members, employees, and the larger community.


Benefits of Data-Driven Planning

The benefits of having the appropriate tools and data in place to support the data-driven planning process include the following:

#1 — Planning that inspires innovation

Somewhere in the process of assessing the data, an “aha!” moment may occur. By taking time to stretch thinking and look at data from different angles, innovation can occur that may shape or change existing strategy and goals.

#2 — Stronger alignment with goals

A strategic planning process provides the structure to help teams achieve consensus on organizational goals. When leaders across the organization understand and are committed to common goals that are established using data and analytics, collaboration to achieve those goals has a much better chance of occurring.

#3 — More stakeholder focus

Data-driven strategic planning facilitates understanding and prioritization of an organization’s stakeholders and target market using a common data source. When stakeholder needs have been evaluated and discussed, and consensus is reached on the strategies and associated tactics for meeting those needs, financial institutions are more likely to keep their stakeholders front and center in their organization and communicate with them more effectively.

#4 — Better allocation of resources as the plan is being implemented

After engaging in data-driven strategic planning, organizations are able to allocate resources to align with the goals agreed upon in the plan. Setting strategic priorities naturally filters the resources, such as budget dollars and headcount, to the goals and areas deemed most important to the success of an organization.

#5 — Consistent definition and measurement of success

Strategic planning requires that organizations agree on how success will be measured in quantifiable ways that rely on accurate data. What exactly does the organization want to achieve, and by when? Which metrics will demonstrate progress toward these goals? Determining these benchmarks early on makes it easier to track progress as the plan is implemented, and helps an organization recognize when it has successfully reached a goal or when progress has slowed and may need a course correction.


What’s next?

Based on better understanding of how traditional planning processes must be adapted and retooled to ensure that data-driven planning occurs, the third and final blog in this series will explore various steps of the planning process.