Are you missing out on the benefits of a strategic financial plan?

Consider whether your long-term strategy results in your desired financial performance.

If you’ve ever wondered if you’re doing enough in your strategic process, there is a highly beneficial piece that is often overlooked. Strategic plans commonly look out three to five years, yet financial plans are much shorter term. That means that long-term strategies are created without connecting them to potential long-term financial effects, which is a missed opportunity.

Looking out short-term doesn’t cover most of the impacts of a longer-term strategy, such as expected increases in membership resulting from more sophisticated usage of data or additional loan growth from planned geofencing capabilities. To be clear, this is not a long-term budget. It’s the result of a non-siloed, collaborative effort where management thinks through what implementing the strategic directions and initiatives could cost over time as well as what they could produce, be it member growth, loan growth or just remaining relevant without any expected boost in revenue. While finance is typically involved in modeling the numbers, this should not be thought of as a finance function; it’s a collaboration.

The question to answer is, Does the strategic plan result in our desired financial performance?Let’s take the method for answering this question in phases:

 

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