GETTING YOUR BANK ON THE PLANNING TOUR

This may be heresy in banking circles, but we have to admit we find pro golf boring to watch in person. We sat for 10 min. watching Jim Furyk sniff, squat, squint, take soil samples, get the meteorological forecast and analyze satellite photos before hitting a 10 foot chip. Worse yet, we had to be completely silent while Furyk did this. We watch brain surgery on the Health Channel and note that there is a fair amount of talking. Obviously, golf requires a little higher level of concentration. This is not to say that the PGA Tour is good for nothing - on the contrary. We recommend that bankers use the PGA Tour as a metronome to their strategic planning. A common problem in planning is that most banks wait until the 4Q to hold their sessions. Some great ideas come up, but few get researched and before everyone knows it, the holidays have arrived and the time table slips. Momentum is lost either directly, due to other priorities like making current year budget or indirectly, as there is not enough time or resource to properly review alternatives (such as running ALCO scenarios). As a result, most banks lay up well short of their strategic initiatives. Strategic planning isn't a 1 time event, but rather a year-round activity. The best banks treat strategic planning as if it were part of their lifestyle. Here is where the PGA Tour provides direction. Planning should take place in short meetings, lasting less than an hour, over the course of the year. In fact, there should be a meeting every time there is a PGA Tournament, which is either weekly or every other week. The Tour is composed of roughly 43 separate weeks of events starting in January and ending with the Walt Disney Classic on Nov. 1. Most strategic sessions should be management level meetings, with the exception of two. During the Masters in April, the Board should get together offsite for the sole purpose of giving management input on strategic direction. This is the time to think big and brainstorm the question – Where should the bank be in 5Ys? From that input, management should come back with a short-list of semi-vetted recommendations (including a risk/reward equation for each) for the next Board Offsite (just in time for the U.S. Open in June). After the Board approves the strategic initiatives for the next 5Ys, management is then tasked with coming up with tactics, an implementation plan and task force in time for the PGA Championship in early August. These approved tactics are then refined and incorporated into a draft budget by the President's Cup in late Sept. This should leave bankers enough time to complete a final budget for the Nov. board meeting, just as the Tour goes to Orlando. Like the Tour, the month of December can be more relaxed and focused on celebrating the holidays. The quality of strategic planning separates good banks from great banks. Devoting more time to the process not only yields better results, but it also ingrains the process into the fabric of the bank. As this year's PGA Tour season kicks off with the Sony Open in Hawaii, consider revising the process. Who knows, bankers may be able to find solutions to funding, loan competition and fee income within the time it takes Tour pro Brian Gay to tee off.