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4 min read

Three Tips for Agile Planning in 2020

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Banking executives should take a page out of the software industry playbook and adopt an agile approach to planning.

If the first half of 2020 taught financial institutions anything, it’s that they must be nimble enough to adjust to change on short notice.

Our understanding of the pandemic and its economic consequences has greatly improved from just a few months ago, but we’re still woefully unprepared for proper long-term planning. For context, FedEx has some of the best data and forecasting analytics in the world, yet it apparently doesn’t feel confident enough to provide an earnings forecast for a year that’s already half over.

The wide range of possible outcomes for the next 12 to 18 months has me reflecting back on lectures from my computer science professors, who explained that the concept of “agile software development” had been gaining in popularity because it was producing better results in less time. Part of the appeal, as written in a famous manifesto, was the value of “responding to change over following a plan.”

Getting 10 or more leaders in a room for a full day to map out long-term strategic plans right now is wishful thinking at best. Rather, financial institutions should take a page out of the software industry playbook and adopt an agile approach to planning. To this end, executives who apply these three agile strategic planning principles in this year of uncertainty will be in the best possible position when the fog of war finally clears:

1. Get ahead of tough questions

Aside from the fact the regulatory examiners expect to see sincere and continuous planning effort, there has arguably never been a more important year for strategic planning. It’s important to proactively address tough questions and ensure management has support from the board as key financial metrics nosedive. To get started, here are questions applicable to just about every financial institution in the country:

  • How has the pandemic affected existing strategic priorities?
  • What do earnings look like in a recession with margin pressure, a lack of consumer lending, looming mortgage forbearances and increasing loss reserves?
  • Can current digital and other remote capabilities support growth and a competitive customer experience?
  • How will our board of directors support critical investments in the face of dwindling profits and shifting capital management priorities?

2. View planning as a continuous conversation

One principle of agile software development is, “Regularly, the team reflects on how to become more effective and adjusts accordingly.” This is especially important for two reasons. First, the uncertain economy (local lockdowns, variability in industry impacts, etc.) warrants multiple conversations and increases the chances that several micro-adjustments will be necessary as part of any plan. Second, virtual planning meetings have become common but are difficult to sustain for an entire day. Do everyone a favor and split the agenda across multiple meetings. Each meeting can have a specific focus, supporting analysis and expected outcomes. This not only keeps engagement high, but it also forces the team to be accountable for follow-ups and reinforces the continuous conversation.

3. Leverage new tools

Even the NFL Draft – a famously over-the-top extravaganza – evolved to a virtual format this year. In doing so, the NFL shattered viewership records, embraced the chance to explore new opportunities and identified enhancements it will carry forward. Similarly, Cornerstone Advisors has enjoyed the benefits of virtual tools. For example, software-enabled group breakouts allow for seamless collaboration. They also make it easy for facilitators to join any conversation without hunting for teams who think the resort pool is the best meeting location (not that I’m speaking from experience). Another tool is real-time polling, which can gauge and confidentially reveal participant sentiment and prioritization. These tools make hybrid sessions an attractive option for both in-person and virtual attendees.

Focus on Emerging Stronger

Agile planning through shorter, more frequent sessions may not be needed in the post-pandemic “new norm,” but the usual planning cycle is clearly inadequate. As much as I miss strategizing world domination (or at least community banking domination) with a room full of smart business leaders, we need an approach that will permit flexibility and quick decision making. Thankfully, most long-term banking priorities remain intact and were even accelerated in some cases. But community banks would be wise to shift resources to double down on operational efficiencies and digital investments. This is the industry’s best opportunity to hit the proverbial gym and:

  • Get real about branch optimization
  • Digitize the customer experience and back office operations
  • Supercharge customer self-service capabilities that will bring down the average cost of interactions
  • Transform the contact center from a support capacity into a growth center focused on new business production

Maintain the Agility Going Forward

Consider the amount of inertia the typical financial institution has historically faced to accomplish any major project. Now consider how much was accomplished in such a short period of time this year. Entire companies were set up to work remotely in a week’s time. Paycheck Protection Program lending was stood up from nothing within a couple of weeks. Customer documents were converted to only require electronic signatures within a few days. How were so many slow-moving organizations able to rapidly implement significant changes that previously took several months?

  • Executives had a narrow list of priorities. Teams “of yore” weren’t battling with a long list of projects that exceeded capacity to execute. Low priority initiatives were put on the back burner until high priority tasks were complete.
  • Employees had a great understanding of the priorities. Everyone in the company knew why these projects were important and understood the desired outcomes. They also widely understood the obstacles to success, which accelerated decision making and improved the quality of the solution.
  • Teams were willing to act fast and adjust faster. Institutions were more willing to put out an imperfect solution because it was a dramatic improvement over the current option. More importantly, there was an expectation that incremental improvements could be made – and quickly – after a minimum viable product was available.

Being agile has been necessary for basic survival over the last several months, but it would be wasteful to not maintain the newly developed execution muscles. An agile approach to planning this year will focus on emerging from a pandemic-induced recession stronger than before. The takeaway is that banking leaders not limit these behaviors to times of crisis, but rather apply lessons learned as they adopt and maintain a nimbler planning cycle going forward. The results will far better position GonzoBankers to achieve aspirational goals in the long run.

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