Although seemingly counterintuitive, there is a very large gap between strategic planning and actually making a strategic decision. One of the goals of strategic planning, for any business, is to help provide a clear direction for growth. This “clear direction” is meant to, hopefully, aid in the decision-making process. To get to point A, the company needs to do steps X, Y, Z. A tad simplistic, sure, but consistently credit union decision-makers gather on an annual basis and devise a strategic plan which will then, in theory, shape how management and employees make their day-to-day decisions on the next year. The reality, however, is that there seems to be a massive divide between the goals set in a strategic planning session and how actual day-to-day decisions are made. This article will discuss several reasons why a credit union may set out in one direction and end up in another.
Time to Upgrade the Process
In fall 2005, Marakon Associates, in collaboration with the Economist Intelligence Unit, surveyed senior executives from 156 companies worldwide with sales of $1 billion or more. They were asked how their companies developed long-range plans, and how effectively they believed their planning process drove decisions.
The result: the timing and structure of strategic planning were obstacles to good-decision making.
This information is not new to business consultants, ourselves included, who have worked with clients struggling with these very issues. In fact, we suspect that because the traditional planning model is so cumbersome and out of sync with the way executives want and need to make decisions, top managers all- too-often sidestep the process entirely or just “go thru the motions.”
Constrained by the annual strategic planning cycle, executives and managers will either choose to avoid decisions linked to the process, or work around the system. In either case, the result is a marginalization of the strategic decision-making process.
Another obstacle is time. The annual schedule often does not give managers enough time to employ new strategies, or to make the adjustments that the strategic plan may require. Nor does it account for decisions that need to be made quickly based on changing market conditions (Mankins & Steele, 2006). Because managers need to be able to adjust quickly to both internal and external conditions, the annual process impedes those needed fast decisions, and by extension, much-needed fast action.
The Elephant in the Room
Another obstacle widening the strategic planning-decision making gap: people are people. Often, when middle management is working alongside high-level executives, there is a tendency to overlook the obvious problems – or rather, employees are hesitant to point out mistakes made by their bosses.
Executives, in large companies, are not typically involved in the day-to-day operations of the business, so they do not directly see the effects of their decisions on their employees. Most executives are looking at a broader view of the company and rely on management to tell them when there’s an issue. The problem is that managers usually don’t. Think Shakespearean messenger who fears beheading for being the bearer of bad news.
Although somewhat understandable, by not confronting the issues directly, operations are hindered and potential growth is diminished. This “Elephant in the Room” issue is one that executives and high-level management must overcome in order to be able to meet or exceed goals and promote growth.
The Silver Bullet
You’ve often then heard there’s no such thing as the proverbial silver bullet. However, when it comes to strategic planning, it is called project management. Project management shouldn’t just a be a skill that you expect all your management to possess. Project Management (PM) should be a cornerstone of your credit union’s culture. PM often starts with a well thought out business case justification that usually includes some type of cost calculation associated with Return On Investment (ROI). Once these measures are established, it is up to the project manager to ensure that on-time, on-budget performance is maintained. A strong PM process is key to the success of your strategic plan. . By hiring an experienced project manager, your credit union is one step closer to delivering better services and optimizing performance, long-term.
Take a Look Back
In reviewing your credit union’s 2013 strategic plan, how close are you, as you enter Q3, to meeting the expectations set at your last strategic planning session? By paying closer attention to the effectiveness of your process, increasing employee involvement, and improving internal communication between different levels of management, you will be better equipped to set and meet your strategic plan for growth.