Bad Habits: The Best Way to Ruin Your Strategic Planning

"If you don’t talk about what you mean by change, then you’re never going to get a shared understanding of change.”  -Todd Feldman

Bad habits can kill innovation at even the most strategic and forward-thinking businesses. A company that can’t break free of its bad strategic planning habits will always be running an unwinnable race where the finish line moves farther and farther away.

James Robert Lay recently discussed strategic planning habits with an expert on the topic, Todd Feldman, on the Banking on Digital Growth Podcast. Todd is the founder and president of Rocket Factory, a business transformation company that has gained fame for its systematic approach.

Why Financial Brands Fumble Strategic Planning

In his work with systematic strategic planning, Todd has seen companies fail for numerous reasons. One of the most common reasons is that top executives keep all of the most important information to themselves and force everyone else to work on a “need to know basis.”

This means during times of innovation and change, essential frontline workers don’t have access to the information they need to succeed. As a result, there’s no buy-in or lasting stickiness to the change.

On top of all this, companies often fail at strategic planning for the simplest reason of all: It’s just too hard. It takes too much time, feels too stressful, and everyone just gives up.

James Robert heartily agrees with this sentiment and says it can be a result of executives presenting lower-level employees with a finished plan rather than incorporating them into the planning process. When the execs finally share their shiny new plan and say, “Ta-da!” the employees feel too checked out to care.

Breaking Down Barriers With the Mental Model

Mental models are ways of perceiving the world and they’re enormously helpful when you’re trying to help people cope with change. Executive teams in the financial industry can use mental models to understand and accept complex new concepts.

For example, think of your mental model of a dog. If you grew up with friendly dogs, your mental model of a dog is that it’s something to love, play with, and maybe even roll around on the ground and giggle with. But someone else was traumatically bitten by a dog as a child. Their mental model of a dog is that it’s a dangerous thing, so stay away.

You can’t meet with a group of executives and assume they all automatically have the same mental models. They’re approaching you with a wide variety of backgrounds, perspectives, biases, assumptions, and more.

To get everyone on the same page, you need to find alignment on the shared mental model of change. If you don’t discuss change and decide what it means to the group, you’ll never succeed.

Todd recommends using diagnostic tools and mental models that help groups of people determine their perspectives, address behavior, and finally make meaningful progress on accomplishing strategic objectives. Below are some mental models for financial brands.

Thinking From the Product’s Point of View

Systematic strategic thinking requires people to open their minds and begin to explore things from a deeper, more insightful point of view. This could be difficult for traditional financial thinkers, so here’s a mental model inspired by a group of researchers at Cornell University’s Cabrera Research Lab.

When approaching a new financial services product, try to understand it from the product’s perspective. If, for example, you’re introducing a new loan product, look at the world from the loan product’s perspective. It might sound odd, but this type of thinking inspires creativity and innovation. 

What would the loan product’s perspective be on serving one of your members?

Which obstacles would it encounter?

What would worry it?

What would make it feel successful?

Extinguishing Fear With the Smoke Test

There’s more fear in business than we realize until we think it through. There’s fear of losing our jobs, fear of embarrassment from failure, fear of our coworkers’ judgment, and fear of letting our families down. Even the most successful CEO in the world is probably full of fears, like fears of being vulnerable or failing to be as successful as the year before.

These fears are limiters to change and innovation. When a company is full of fear, everything they do and every decision they make is always hamstrung by fear.

Related Content: The 4 Fears Stopping Your Team's Digital Growth

Todd recommends conducting SmokeTest Scenarios, a series of questions that reveals whether a little smoke indicates a much bigger, burning fire. Ask small questions that could lead to larger issues.

For example, start with the question, “Do we hire outside our industry?” If the answer is no, from there, you can ask why you require a financial services background for new hires. Then you can question whether someone from another industry - perhaps an industry that already experienced severe disruption - might be a good hire. 

In this case, the initial hiring-outside-of-industry question is the puff of smoke that leads to the inferno of your burning issue: You need insight from people outside the financial services world. See how this leads to better strategic thinking?

Systematic Thinking and Simple Rules

Success with strategic planning is often found through implementing simple rules that everyone can understand. Todd likens it to doing “the wave” at a stadium. Each person knows all they have to do is stand up and wave just after the person next to them does it. Individually, people are only doing a small amount of work they can handle, but together, they create a huge and amazing effect.

Only when you give people simple, clear boundaries can they operate successfully. They need a framework they can understand within a vision they can achieve. 

Keep in mind that the boundaries a company creates - its systematic strategic plan - shouldn’t come from a top-down, command-and-control approach. People will naturally feel resistant if the top executives just say, “This is the plan. Now follow it.” Involve the people in the process to ensure the outcome is something that’s not only achievable, but they want to achieve it.

Going Beyond the Buzzwords of Innovation

Todd has seen too many financial brands focus on the buzzwords of digital transformation and fail to make meaningful strides forward. That’s often because innovation becomes the responsibility of a single person or department that exists off to the side of the main business.

When a company fails to fully integrate innovation into its organization, it’s almost impossible to accomplish its most essential aspect: sustainability. Financial brands must create a sustainability plan that’s about more than the basic buzzwords and jargon of innovation. 

Write your strategic plan down on paper, but also make it a living, breathing plan that human beings can embrace and enjoy every day. Build it into the very fabric of your organization.

Todd says one of the smallest but most powerful first steps you can take is to practice thinking without constraints. Then systematically add the constraints back in and see what happens. 

Does your financial brand have a huge, nagging problem?

Approach it from a constraint-free perspective and think, “If we didn’t have any constraints from regulators or the budget, what would we do?” 

Have an open-ended discussion about this with your colleagues and front-line workers. Practice constraint-free thinking to see which types of fresh ideas bubble to the surface. You might be surprised by the wild and creative ideas you hear.

This kind of thinking is what it takes to overcome obstacles in the financial industry and build true strategic sustainability. It’s how some of the world’s most successful financial brands - including your competitors - will be keeping transformation alive and sustaining it for decades to come.