Publications & Resources
March/April 2008
Focus: Building Franchise Value
Managing the Change Your Bank Needs to Grow
By John Haney
Remember that great project that was going to change the bank, bring in new customers and create a product that everyone was going to need? How many of those fond memories include a lackluster final result? This problem is unfortunately common, and the organizational characteristics that lead to this experience are readily identifiable. The good news…they can also be overcome.
The highest performing banks that succeed at growing organically not only execute deftly on these organizational characteristics, they continuously improve on them. In doing so, they foster a culture and organizational focus that create long term success and profitable growth.
Complementary Strategic and Technology Plans
Naturally, your strategic and technology planning processes complement each other, but to what extent? These key planning initiatives deserve attention because of the impact they make on the strategic and daily operations of the bank. A few key executives should serve on both committees, and they will carry forward the vision from the strategic plan to the technology planning group. For each project defined in either plan, test whether the technology supports the bank-wide strategy by asking the following questions:
- What is the goal of the project?
- Is that goal in line with the strategic goals?
- What will it cost, and when and how will it achieve ROI via expense reduction and/or fee income?
- Who will deliver this project, and what daily work will they have to give up?
Track the answers to these simple questions, and you will see the benefits of a joint strategic and technology planning process.
Regular Communication to and from the Executive Team
Establish frequent and regular and communication between the technology planning group and executive management. Executive involvement helps to sustain project focus and simultaneously reminds executive management of the bank’s realistic capacity to implement new projects.
Place some responsibility for understanding bank-wide challenges with the technology planning group by creating an environment in which key operations/technology managers partner with business line, marketing, and sales managers to identify opportunities to improve performance and more fully utilize technology. Well developed, consistent and supported communications sustain momentum, provide support in the face of organizational or individual resistance or reluctance, maintain project focus and limit scope creep.
The Change Team
Marketing and sales have historically been conspicuously absent from the strategic and technology planning groups. What role should they play? In many industries, marketing executives work closely with business line and sales managers to identify new products that fit the existing client base and new client segments that have a need for existing products. Utilize marketing as a central point that collects data from customer channels, transaction and usage information, competitive information, and market data from sales, lines of business and operations/technology. Marketing should also be primarily responsible for analyzing the collected data, sharing it with the management and executive teams and working jointly to identify opportunities to grow and innovate.
Measured Plan Implementation
Sales and risk management have recently begun adopting scorecards or dashboards (tools traditionally reserved for finance and accounting). These adapted tools help planners to communicate to the various levels of management.
As an example, project managers will identify key success factors for a new project early in the implementation phase, along with the corresponding front-line and delivery metrics that directly link to those success factors. Throughout the project, anyone with access to the scorecard can quickly see the project’s level of success. Line managers can include the scorecard when coaching their teams, and the executive team should review and assess the scorecarded performance as part of regular management practices.
Post Project Evaluation
Managing change is itself a dynamic, iterative process, one in which we constantly strive to improve our ability. A leading practice is to assess performance at the completion of a project. Take the time to ask: What went well? How can we reinforce what worked? What should we change or avoid next time? Post project evaluation is not about placing blame, but rather about finding ways to refine and improve. In today’s banking environment of compressed net interest margin and threatened economic slowdown, bank executives must not just adapt to change, but must actively seek out those changes that allow their organizations to thrive and grow.
John Haney is regional territory manager for Brintech in
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