Isn't That Rich Podcast

Strategic planning is crucial for any business aiming to navigate the complexities of its environment and achieve long-term success. Our CEO, Charlie, recently shared valuable insights on how we approach strategic planning at Farmers State Bank. Here's a summary of our conversation, focusing on the key elements and processes that make our strategic planning effective.

Why Strategic Planning Matters

Charlie emphasized the importance of having a strategic plan, likening it to a map that guides the organization towards its goals. Without it, businesses risk wandering aimlessly and failing to achieve their objectives. At Farmers State Bank, we've been using a one-page strategic plan since 2017, inspired by Verne Harnish's "Mastering the Rockefeller Habits." This concise document is not just a formality; it's a living document that we keep visible and update quarterly to reflect our evolving circumstances and objectives.

The Process

1. Offsite Planning: The first step in our strategic planning process is making time to get away from the office. This reduces interruptions and allows for focused, uninterrupted discussions. This year, we held our strategic planning sessions in Atlanta, away from the usual office distractions.

2. Inclusive Participation: Involving a diverse group from various departments ensures that different perspectives are considered. This year, we included representatives from every department, from executive team members to tellers. This broad participation helps uncover issues that might not be visible at the executive level alone.

3. Pre-Planning Sessions: Before the official strategic planning day, we held preliminary sessions with a larger group. These sessions provided a comprehensive view of our strengths, weaknesses, opportunities, and threats (SWOT analysis), and set the stage for more focused discussions during the main event.

4. Review and Reflection: A significant part of our planning involves reviewing the previous year's strategic plan. We assess what worked and what didn't, allowing us to learn from our successes and mistakes. This reflective process is crucial for making informed adjustments and improvements.

Tools and Techniques

1. SWOT Analysis: A classic but essential tool, the SWOT analysis helps us understand our internal strengths and weaknesses, as well as external opportunities and threats. This comprehensive analysis is performed by splitting participants into teams to ensure a wide range of insights.

2. Tops and Smarts: To ensure our strategic goals are actionable, we break them down into "Tops" and "Smarts." "Tops" are the three most important goals for the bank, while "Smarts" are the specific actions needed to achieve these goals. Each top has an executive member responsible for its completion, with clear deadlines and regular check-ins to monitor progress.

3. The BHAG: Our plan includes a Big Hairy Audacious Goal (BHAG), which sets a long-term vision for where we want to be in 20 years. This overarching goal keeps us focused on our long-term aspirations, while our one-year and three-to-five-year goals ensure we have a clear path to get there.

Flexibility and Adaptation

A strategic plan must be flexible. The COVID-19 pandemic taught us the importance of being able to adapt our plans to changing circumstances. By keeping our strategic plan visible and regularly reviewing it, we can make necessary adjustments in real-time, ensuring we remain on course even when faced with unexpected challenges.

Key Takeaways

1. Make Time for Planning: Set aside dedicated time for strategic planning away from daily office distractions.
2. Involve Diverse Perspectives: Include representatives from all levels and departments to ensure a comprehensive view.
3. Keep It Visible: A strategic plan should be a living document, regularly reviewed and adjusted as needed.
4. Set Measurable Goals: Use tools like Tops and Smarts to break down goals into actionable steps with clear accountability.
5. Be Flexible: Adapt your plan as circumstances change, ensuring it remains relevant and effective.
6. Think Big: Don't be afraid to set ambitious goals. A BHAG can inspire and guide your long-term vision.

By following these principles, businesses can create strategic plans that not only guide their day-to-day operations but also set them on a path to long-term success. Strategic planning is not just about setting goals; it's about creating a dynamic roadmap that evolves with the business, helping it navigate challenges and seize opportunities.