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Look to the future – not the past – for future success

October 22, 2012
Read Time: 0 min

John Oliver

The key to a financial institution’s future success is recognizing that an evolving market translates into a need for proactive, continuous planning from the bottom-up, says John Oliver, President of Laurel Management Systems, Inc. In Part I of this guest column, Oliver elaborates on the importance of whole-system planning.

Strategy development to ensure future relevance: Recognition

By John Oliver

Financial institutions need to determine a market-driven strategy, and plan to implement and execute that strategy to evolve with the evolving needs of their customers. In over 80% of regulatory enforcement actions over the last four years the strategic planning efforts of institutions have been criticized as inadequate. While consumer needs have evolved over the last 20 years, many financial institutions have employed a strategy of “let’s stick to the basics” which has actually translated to “we’ve always done it this way so we must be good at it.” However, institutions need to adapt their strategies with the market’s changing needs to remain relevant.

Several well-recognized factors have led to some of the most challenging conditions financial institutions have ever faced. These include:

  1. The disintermediation of the traditional financial services sector
  2. The dramatic increase in competition
  3. The consolidation of institutions
  4. The increasing willingness of customers to “shop around” for their financial needs
  5. The commoditization of our products

We are in an over-banked society which will likely dictate a “survival of the fittest” environment. Across the corporate world we see the demise of formerly successful organizations as their business models fail to evolve with changing market needs because of complacency. Similarly, a reactive financial institution with no effective strategy-development process will only be able to contend with changes as they occur. It is critical to proactively and continuously plan for future success. 

Genuine strategy-development cannot be viewed in abstract, conceptual terms. It must be a bottom-up process that starts with market needs and involves every employee of the organization. Whole-system planning is the only proven methodology of achieving practical, measurable strategies that actually impact the marketplace. Holding an annual retreat at which the leaders of an organization are expected to arrive at brilliant solutions that haven’t occurred to them for the rest of the year demonstrates inadequate leadership. Perhaps the greatest demonstration of leadership strength comes from those individuals who are willing to hold their business model up to scrutiny and question its future relevance.  

A great starting point for quality strategy-development and whole-system planning is to recognize it as a necessary and ongoing process; it must be embraced by all levels of the organizational culture. Quality strategy development is hard work and means asking tough questions. By its very nature it requires a willingness to consider change, that dreadful word which many feel is contrary to human nature. 

Financial institutions are suffering through an escalating crisis of diminishing relevance. Only by truly understanding evolving market needs can any organization take control of its destiny and stay relevant in its defined market. Stepping back and re-evaluating your strategy through a planned, thought-out process is a great start.


For more information on developing strategies to meet the market’s changing needs and recognizing factors have led to challenging conditions for financial institutions, read this free whitepaper: Bank Examinations: Balancing CAMELS Ratings

John Oliver has worked in the financial services sector for over forty years. Laurel Management Systems, Inc. (, which is based in Southern California, specializes in strategy-development process implementation for community banks and credit unions. He can be reached at [email protected].

About the Author


Raleigh, N.C.-based Sageworks, a leading provider of lending, credit risk, and portfolio risk software that enables banks and credit unions to efficiently grow and improve the borrower experience, was founded in 1998. Using its platform, Sageworks analyzed over 11.5 million loans, aggregated the corresponding loan data, and created the largest

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