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How can you get the highest value from the time and effort spent on annual strategic plans? Most financial institutions will invest significant energy conducting business unit and corporate strategy reviews in preparation for their annual budget, but few senior executives believe this process delivers sufficient pay off for the time invested. The most frequent complaint: lots of business updates on past progress, but too few implementable new initiatives that will really drive the business forward.

 

How do the best performing organizations do it?

 

  1. Avoid incrementalism, the “last year plus 10%” syndrome. Start with the goal you aspire to achieve, and work backwards to determine the strategies required to accomplish it. The most effective organizations don’t just identify and fix known problems — they identify the future results they desire and create solutions to achieve them.
  2. Once you have made the commitment to change, be realistic. You can’t make the changes necessary, or assign the resources required, without an objective assessment of the market opportunity, financial potential, internal capabilities and resources required.
  3. Remember that focus is the essence of strategy. It’s not just what you decide to do, but also what you decide not to do. In most organizations the greater problem is usually deciding which good ideas are of lesser value and should not be implemented, or which current activities should be stopped in order to re-direct resources to insure that higher value opportunities have appropriate resources.
  4. It’s all about execution. Fortune reports that only 10% of strategies are effectively implemented. The best performing organizations implement rapidly and effectively. They recognize that a good plan effectively implemented is far superior to a great planning document which is not a living part of your business. Identify accountabilities for key objectives and make sure they are on track. Update your plan regularly to insure it is relevant and effective — after all, your business is not static but dynamic and changing.
  5. Identify risks. Do a “pre-mortem” – step into the future and write the obituary, the reasons why the plan failed. Then establish strict controls over the risk factors you identified.
  6. Communicate, communicate, communicate. Everyone needs to know what the goal is, what their part is in accomplishing the objective, and how effective the organization is in achieving results
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