The top 10 strate­gic plan­ning mis­takes and how to avoid, fix them

Do you go into your an­nual ses­sion with high hopes but come out feel­ing like it was time wasted? Ex­perts share tips for how to get the most out of this process.

Credit Union Journal - - Special Report - BY MICHAEL BARTLETT

FROM PIE-IN-THE-SKY IDEAS WITH NO con­crete ac­tion items to make them a re­al­ity, to let­ting one per­son’s cult of per­son­al­ity dom­i­nate, there are scads of things that can de­rail a good strate­gic plan­ning ses­sion. Credit Union Journal asked a num­ber of strate­gic plan­ning ex­perts one de­cep­tively sim­ple ques­tion: what are the most com­mon mis­takes made dur­ing strate­gic plan­ning, and how to avoid them or fix them?


Al­most ev­ery ex­pert CU Journal talked with made note of this one. “An­nual dreamy dis­cus­sions about the next big pie-in-the-sky idea with­out can­dor around strate­gic progress and fu­ture readi­ness,” is how Sam Kilmer put it.

The se­nior di­rec­tor for Cor­ner­stone Ad­vi­sors in Scotts­dale, Ariz., said the best rem­edy for this is to en­sure there are reg­u­lar fol­low-up dis­cus­sions af­ter the big an­nual strate­gic plan­ning ses­sion. “Th­ese dis­cus­sions need to fo­cus on strate­gic ex­e­cu­tion and hard-nosed con­ver­sa­tions about re­source align­ment ver­sus strate­gic im­pact,” he said.

Mark Sievewright, fi­nan­cial ser­vices con­sul­tant, founder and CEO of Sievewright and As­so­ciates — and a fre­quent strate­gic plan­ning fa­cil­i­ta­tor — agreed, not­ing that if he was a credit union board mem­ber or leader and there were no tan­gi­ble out­comes from strate­gic plan­ning ses­sions, he would be “very dis­ap­pointed.”

“I pro­vide a sum­mary of the dis­cus­sion points and what was agreed to,” he said. “Plan­ning ses­sions need to fo­cus on strate­gic is­sues for the credit union, both pos­i­tives and neg­a­tives. Af­ter the ses­sion there needs to be a cap­ture of what was dis­cussed.”

And that “cap­ture” and fol­low-up needs to go be­yond just the ini­tial sum­mary. Sev­eral ex­perts all sug­gested that the strate­gic plan — or at least dif­fer­ent as­pects of it — should be re­viewed; quar­terly or pos­si­bly even briefly dur­ing reg­u­lar monthly board meet­ings, de­pend­ing on the scope of things be­ing re­viewed.

More­over, it’s called “pie in the sky” for a rea­son. That’s why build­ing some trade­offs into a strate­gic plan is also a good idea, Sievewright sug­gested. “Most credit unions can­not pur­sue each and ev­ery new tech­nol­ogy,” he said. “Or, a credit union might see an op­por­tu­nity to open six new branches, but it can­not af­ford to open all six at the same time, so it has to choose which one or two to open first.”

Su­san Mitchell, CEO of Las Ve­gas-based credit union con­sul­tancy Mitchell, Stankovic & As­so­ciates, called this one the sin­gle big­gest mis­take CUS make dur­ing strate­gic plan­ning. “Good in­ten­tions are not enough,” she said. “Vol­un­teers need to be given met­rics for mea­sure­ment of re­sults and the abil­ity to cre­ate what-if sce­nar­ios to pro­vide guid­ance that has value.”


Some­times, it’s too much data, other times, it’s a mat­ter of too many pre­sen­ta­tions and not enough di­a­logue, but either way, one com­mon strate­gic plan­ning prob­lem is getting bogged down by too much in­for­ma­tion.

“I see plans that are overly com­plex, which means they will be dif­fi­cult to de­liver on,” said Mike Schenk, vice pres­i­dent of re­search and pol­icy anal­y­sis and se­nior econ­o­mist for the Credit Union Na­tional As­so­ci­a­tion. “A lack of com­mu­ni­ca­tion leaves mem­bers and em­ploy­ees un­clear on the plan. Se­nior staff gets in­volved in the process, but it needs to be com­mu­ni­cated all the way down to the lower lev­els of the or­ga­ni­za­tion on an on­go­ing ba­sis. Let peo­ple know what the or­ga­ni­za­tion is try­ing to achieve so they can be fo­cused on that. Mar-

“Th­ese dis­cus­sions need to fo­cus on strate­gic ex­e­cu­tion and hard-nosed con­ver­sa­tions [on re­sources and im­pact].” — Sam Kilmer, Cor­ner­stone Ad­vi­sors

Learn how to pre­vent and re­solve th­ese top er­rors

ket­ing needs to be in­volved in the process so the mar­keter can mar­ket ef­fec­tively. Be­ing aware of the de­tails is crit­i­cally im­por­tant.”

But be­ing aware of the right de­tails is even more im­por­tant, he added, not­ing he sees plans that get fo­cused on el­e­ments that aren’t rel­e­vant, which can lead to mak­ing un­re­al­is­tic as­sump­tions and goals.

“Some credit unions will de­cide to con­vert to a com­mu­nity char­ter and as­sume they will grow, and later they find out it is not that easy,” he of­fered. “You need to ex­am­ine how you are dif­fer­ent from your com­peti­tors, know what your com­pet­i­tive ad­van­tages are or how you are go­ing to dis­tin­guish your credit union, rather than say you want to get to $1 bil­lion. If you cover all of th­ese bases, you are 90 per­cent of the way there.”

And it can all start be­fore any­one has even sat down in the room, noted Sievewright, who said there ac­tu­ally is such a thing as too much con­tent.

“You don’t want to have too many locked-in, for­mal pre­sen­ta­tions sched­uled,” he of­fered. “You want to have more en­gage­ment and di­a­logue be­tween the par­tic­i­pants, not just peo­ple lis­ten­ing.”

Part of the prob­lem, how­ever, is that fre­quently the in­for­ma­tion in­un­da­tion is the re­sult of the board mem­bers ac­tu­ally re­quest­ing vo­lu­mi­nous fi­nan­cial re­ports and the like, Kilmer added.

“Vol­un­teer board mem­bers whose lives are packed with busi­nesses, com­mu­ni­ties and fam­i­lies will not want to take such a chunk out of their life be­fore be­ing pro­duc­tive and en­gaged,” he as­serted. “We are in a fi­nan­cial in­dus­try, but we can­not con­fuse fi­nan­cial ac­count­ing with man­age­ment ac­count­abil­ity. This usu­ally means less re­port­ing, but giv­ing your di­rec­tors re­ports that are more im­pact-ori­ented. This could in­clude vi­su­als where ma­te­ri­al­i­ties clearly pop and are de­signed to pro­voke chal­leng­ing con­ver­sa­tion.”

While charts and dash­boards are some­times seen as “dumb­ing down” the data, Kilmer ar­gued that good vi­su­als spark good con­ver­sa­tions.


There’s one on ev­ery board and man­age­ment team. The one who will dom­i­nate ev­ery dis­cus­sion. Or the one who will pooh-pooh any idea that’s not his or her own. Or the one…well, it turns out, some­times, there’s more than one dis­rup­tive per­son­al­ity that winds up de­rail­ing a strate­gic plan­ning ses­sion.

The rem­edy: bring in an ex­pert, neu­tral fa­cil­i­ta­tor.

In fact, bring­ing in a good fa­cil­i­ta­tor can pre­vent or fix any num­ber of prob­lems, said ex­perts, most of whom fa­cil­i­tate strate­gic plan­ning ses­sions for a liv­ing.

But what about when the fa­cil­i­ta­tor ac­tu­ally is the prob­lem?

“I hear sto­ries where the fa­cil­i­ta­tor ex­erts too much con­trol and ac­tu­ally af­fects the out­come of the meeting, or on the other hand ex­erts too lit­tle con­trol and there are not enough voices rep­re­sented in the dis­cus­sion,” Sievewright re­lated. “In the lat­ter case, a small num­ber of folks dom­i­nate the dis­cus­sion.”


Carrie Hunt, EVP of gov­ern­ment af­fairs and gen­eral coun­sel for the Na­tional As­so­ci­a­tion of Fed­er­ally-in­sured Credit Unions, said the big­gest mis­take a CU can make dur­ing a strate­gic plan­ning ses­sion is not re­ally know­ing what “strate­gic plan­ning” means. Hunt said the point is to set the over­ar­ch­ing goals for the in­sti­tu­tion for a set pe­riod of time, usu­ally 3 to 5 years into the fu­ture.

“We find some credit unions get more into tac­tics for a short pe­riod of time rather than the goals they are try­ing to achieve,” she said. “One ex­am­ple would be a credit union talk­ing about how it would im­ple­ment a new core con­ver­sion, rather than say­ing, ‘We are go­ing to im­ple­ment a core con­ver­sion in three years’ and then putting to­gether a team to ac­com­plish this. Think­ing about tac­tics in­stead of strat­egy gets the whole process mired down, which makes it easy to lose fo­cus.”

Once again, a good fa­cil­i­ta­tor can help with this.

“The fa­cil­i­ta­tor will keep peo­ple talk­ing about how to make sure the credit union grows over a pe­riod of time,” Hunt ad­vised. “Most credit unions talk about a 3-year to a 5-year win­dow, and some talk about an even longer win­dow.”


Turns out the suc­cess of a strate­gic plan­ning ses­sion can hinge on what hap­pens be­fore any­one even sits down at the ta­ble. Not hav­ing an agenda, not dis­tribut­ing in­for­ma­tion to be read ahead of time are im­me­di­ate red flags, Sievewright said. Good pre-work, he said, al­lows par­tic­i­pants to hit the ground run­ning.

“Un­less the credit union says, ‘no thank you,’ I al­ways ask that there be some pre-read­ing,” he ex­plained. “I share ar­ti­cles I value highly, on such top­ics as tech­nol­ogy or serv­ing cus­tomers bet­ter. I am a fan of [Credit Union Na­tional As­so­ci­a­tion’s En­vi­ron­men­tal Scan (E-scan)], hav­ing been a con­trib­u­tor to that for sev­eral years. I of­ten will dis­trib­ute the chap­ter I worked on, and if I have enough copies, the whole E-scan.”

Of course, some­times the prep work ac­tu­ally is the prob­lem, if the prep work is sim­ply a re­hash of what has gone be­fore.

Dr. Brandi Stankovic, a Las Ve­gas-based credit union con­sul­tant with the firm Mitchell, Stankovic & As­so­ciates, said the big­gest mis­take CUS make is “do­ing the same thing in the same place and go­ing af­ter the same goals ev­ery year.”

Ac­cord­ing to Stankovic, what hap­pens in too many cases is the board of di­rec­tors OKS the same plan ev­ery year.

“There is not an ef­fort to go in, see what is rel­e­vant, and then shake things up,” she warned. “The strate­gic

plan is re­quired for reg­u­la­tory re­view, and CEOS typ­i­cally are in­cented for fi­nan­cial per­for­mance, so the plan is checked off the list and then the credit union goes back to try to hit fi­nan­cial num­bers.”


Like many other spe­cial­ized in­dus­tries, credit unions can eas­ily be­come too in­wardly fo­cused — either specif­i­cally on them­selves, or on the in­dus­try as a whole, rather than look­ing at not only them­selves and their di­rect com­peti­tors but ex­pand­ing be­yond that scope to look at other in­dus­tries and more.

To com­bat this, Kilmer sug­gested credit unions kick off their process by bring­ing in out­side per­spec­tives.

“Then, they should start their plan­ning meet­ings by dis­cussing their mem­bers, the mar­kets they serve and thor­oughly cover ex­ter­nal de­vel­op­ments in­clud­ing the over­all and lo­cal econ­omy, their com­pe­ti­tion, tech­nol­ogy, de­mo­graph­ics, and risks,” he ad­vised. “Be sure to open and close the days in your strate­gic plan­ning ses­sions with dis­cus­sions of mem­bers and ex­ter­nal mar­ket de­vel­op­ments.”

An­other way to tackle this is by re­cruit­ing new blood for both the board and man­age­ment team — but that is not al­ways an easy task, ac­cord­ing to John Pem­broke, pres­i­dent and CEO of Credit Union Ex­ec­u­tive So­ci­ety.

“There is a war for tal­ent go­ing on be­cause of the short­age of tal­ent,” he said. “There is an ag­ing of the work force, an im­prove­ment of the econ­omy driv­ing growth and lower lev­els of un­em­ploy­ment. Th­ese fac­tors bring a need to at­tract tal­ent and re­tain the in­di­vid­u­als that are al­ready in your or­ga­ni­za­tion.”

Ac­cord­ing to Pem­broke, it is es­ti­mated the cost of turnover is three times the an­nual salary of cur­rent work­ers. “In the next plan­ning cy­cle there needs to be a plan to at­tract, de­velop and re­tain tal­ent,” both in terms of ex­ec­u­tives and di­rec­tors.

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