Let data drive strategy

The key performance metrics scorecard provides the literal link between strategy and execution.

by Mary Beth Sullivan, Mary Ellen Georgas-Tellefsen, CU Management

Either by design or default, all financial services companies have a strategy. Some organizations spend considerable time, money and resources analyzing opportunities, assessing competitive position and developing comprehensive strategic plans. Others have no formal process, relying on an institutional understanding of what the company is and focusing exclusively on managing day-to-day results against established budgets.

Although process does not determine strategic excellence, the degree to which there is alignment between strategy and execution does impact performance. At the end of the day, a company’s strategy is determined by the sum total of the decisions made and actions taken by management on a daily basis. Providing guidance and a framework for the entire organization to use to make decisions is one of the great accomplishments of a successful strategic planning effort. Strong performers make decisions consistently within a solid framework. Weak performers lack this discipline, making decisions randomly and, certainly, independently of any overriding strategic principles. The result is often a hodgepodge of marginal offerings, disparate market positions, inefficient operating environments, internal conflict, higher risk profiles and a lack of any real competitive differentiation.

The definition of a good strategy is one that is appropriate for a particular institution’s market position, financial structure, risk parameters and, most importantly, ability to execute against key strategic principles and imperatives. In our view, successful strategic planning has four critical components:


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