More than any year in generations, 2020 has brought a wave of uncertainty to the marketplace. But it has also spurred an innovative, thoughtful response from businesses across industries – especially financial services. As banks and credit unions take on the strategic planning process in this watershed year, they do so with a new vision toward customer and member service, branch management and even disaster recovery. 

In Part 1 of this blog post, we highlighted two key areas of focus for strategic planning in 2020: technology and operations, and delivery channels. Now we’ll look at employee and leadership development and setting financial targets.

Strategic Plan Components

Employee Development

The pandemic has not only significantly affected the personal stress levels of financial services employees, it also has created disruption in their work lives. Employees are expected to work remotely and interact with accountholders in new ways while dealing with the fear of contracting the virus through public interaction. Banks and credit unions are using their staff in ways that were not imaginable even as recently as Super Bowl LIV in early February.

Raddon surveys various financial institutions’ employees to learn their sentiments toward their employers. The following chart shows that employee satisfaction is driven by understanding the vision and direction of the institution and how the employee’s job affects the financial performance of the organization. To help mitigate some of the stress employees are experiencing, senior leaders should communicate more regularly the vision of how the institution plans to get through this uncertain time.

N = 8261

As institutions continue to work with employees after the pandemic subsides, they need to focus on giving staff the skills to deal with change and stress, interact with accountholders, and manage accountholder relationships. All areas of the organization need to be cross-trained, given direction, measured and coached to develop accountholder relationships – not just those who directly deal with customers and members each day.

Financial institutions are learning a lot during the pandemic about employee motivations, reactions and temperament. They should use this knowledge to minimize disruption during good and bad times. Cross-training is essential. The ability to redeploy staff to areas like the call center is critical.

Institutions also need to continue to train and coach staff in how to ask “high gain” questions while working with accountholders. By gaining insights into accountholders’ financial needs, staff can effectively recommend the right products and services to address them.

Also important, institutions should evaluate their employees’ ability to work remotely from their homes or other locations, as well as review current hardware, technology and teleconferencing availability to determine any additional training needs.

Management and Board Development

Financial institutions’ leaders and Boards of Directors are also working within new guidelines due to the pandemic. Like the employees they manage, leaders are learning how to oversee their institutions with remote employees and a greater reliance on electronic channels to deliver services and products to accountholders. Boards of Directors are also learning how to govern their institutions in a virtual environment.  

The focus for strategic planning sessions should reflect the lessons learned and establish new strategies for a time of crisis. Top consideration should be given to how the institution plans and uses technology in a more comprehensive manner. Ongoing training and employee motivators become even more important when managing in a virtual environment, and the strategic plan should effectively and efficiently address both.  

Much like the employees, the Board of Directors must be prepared to function in a virtual capacity. Financial institutions should review current hardware, technology and teleconferencing availability and determine any additional training needs for board members.

Financial Targets

Planning for future economic environments is tricky in the most consistent of times, but during unprecedented times like these, it can be perilous. No one can predict the future, but they can plan for it. Financial institutions should cast as wide a net as possible for assumptions like interest rate environment, deposit and loan demand, and credit environment. Stress-testing capital can help ensure the institution’s planning does not lead it astray.

Given that level of variability, financial metrics must continue to focus on driving successful accountholder relationships. No matter the business model, accountholder relationships drive financial performance. Financial metrics should center on the depth of relationships based on product usage, balances, related services and activities.

The pandemic has given banks and credit unions a detour, but they must find their way back to the path to drive into a successful future. Leaders of financial institutions need to keep their thoughts toward the future and how to accomplish their long-term goals and objectives.