Saturday, April 24, 2010

"Without vision, the people perish."

Is it not politically correct to quote the Bible? There, I did it anyway. The title of this post was lifted from the Book of Proverbs. Bankers must not be Bible readers. Clearly, most banks’ vision is to be “just another bank”. Right?

Vision clarifies the kind of bank you want to be. It is a future, hoped-for state. I am not stating something esoteric, you can read it on Wikipedia (see link). Yet when vision is brought up to most bankers, they roll their eyes and look at me like I have two heads. Marsico must be from the Marketing Department!

Today my 11 year old had a soccer game 90 miles away from home. To determine how to get there, my wife looked up the address of the field, we plugged it into our GPS, and set out to get there. But we in banking have different ideas. We don’t determine our destination. Instead, we get in the car, drive, and hope we happen upon a soccer field where, coincidentally, the rest of the team stumbles upon. We don’t identify our destination, yet we set about a strategy to get somewhere.

Where, I’m not sure. My guess is to the holy grail of banking, the “General Bank”. Don’t laugh, there once was a bank named General Bank in Los Angeles. At least they were honest. Should your bank’s name be General Bank?

Erika Anderson, the founding partner of Proteus International, a personal and business strategy firm, identified strategy steps in her book, Being Strategic, as follows:

Define the challenge; then

Clarify what is;

Envision the hoped-for future;

Face what’s in the way; and

Determine the path.

Bankers embrace all facets of the above in most strategic planning sessions I have attended or facilitated, except for that pesky “envision” part. But if we skip this step that Erika has so aptly identified, how in the world do we face what is in the way or determine the path. Determine the path to what? These steps are interdependent and if we are to evolve the community banking industry to be more relevant to customers and communities, we have to develop a long-term vision for our bank.

One method to create a vision was done by Xerox in 2000, under then-new CEO Anne Mulcahy. She assembled her senior management team and asked them to write a press release describing how various constituencies (i.e. customers, employees, shareholders) talked about the company, and date it five years forward. From this exercise, Xerox mapped their way from a death spiral to a return to relevancy.

One thing to avoid in clarifying your vision is a satisfy-all-constituency statement. Your vision statement should not only identify your future, hoped-for state, but bring clarity to decisions made every day by your employees. Stating you want to be the “best of class” community bank without specifically identifying what that means is, well, meaningless. I suppose this is why eyes roll when I discuss vision. Just because it has been done badly in the past, doesn’t mean we shouldn’t do it. A strategic plan should be your GPS. Your GPS is worthless without telling it where you want to go. Your vision is the address. Are you navigating without a destination?

- Jeff


  1. I think I agree w/ the gist of what you're saying, but I am getting a little confused with the terminology. Specifically, how you're distinguishing vision/mission/strategy/tactics.

    Regarding driving to your kid's soccer game, you really didn't have a "vision" of where to go, you got directions. The objective was get to the game, the tactics were take this this route, turn left here, turn right there. Not sure how that relates to vision.

    Personally, I think banks would be better off to just define what strategy is and isn't, and what their strategy is and isn't.

    It never ceases to amaze me that industry observers will pat a bank on the back for something like launching an iPad app without any consideration of whether or not that app supports or enhances the bank's strategy.

    Same thing with social media efforts.

    Having a strategy (or a vision, I guess) requires being committed to that strategy even if others get more press for their efforts.

  2. Ron, sorry for the confusion; allow me to clarify.

    Suppose our bank is Schmidlap National Bank (a ficticious bank created by Paul Nadler, the late Rutgers professor and American Banker columnist), and the Board and Senior Management determined that their future hoped-for state was to be widely known as Schmidlap's best business bank. This would be their vision. Hopefully, there would be some metrics to measure their progress toward the vision.

    Now, to move the bank towards this vision, they chart their path. This may result in three strategic objectives:
    - To achieve expertise in SBA lending, and becoming an SBA preferred lender;
    - To excel in small business cash management services;
    - To develop a workforce with particular expertise in small business financial advisory services.

    There would be specific executable initiatives below each of these objectives. What I perceive as a real industry challenge is that banks are not identifying the type of bank they want to be.

    If Schmidlap adopted this vision, where would the marketing department focus? How about charitable donations... To the local little league or the local chamber of commerce? There are a myriad of other day-to-day decisions that would be made in the context of achieving Schmidlap's vision to be known as the town's best business bank. Without this clarity, daily decisions will also lack focus and may not be consistent with moving the bank forward. I fear financial institutions don't make this choice, and therefore gravitate to be "general bank".