Strategic Planning: Can Goals be Bad?
Banks failing, real estate loans made to people who do not and did not have the means to repay them, institutions using derivatives without fully understanding the risk – what happened? Were executives trying to meet their goals? Did these goals enable them to qualify for significant bonuses? Did this achievement of short-term goals lead to long-term instability?
Many of the financial institutions currently in distress did not pay heed to the warnings of a real estate bubble. Instead many institutions developed plans to keep the top line growing in spite of the increasingly risky nature of the borrowers and the overvaluation of the underlying collateral. Could this have been prevented?
Well, hindsight is 20-20, but the lessons here are important and should be a part of your strategic planning process:
1. Evaluate external forces – (is there a bubble?) Are your goals consistent with the external environment?
2. Are top line growth goals in line with long-term stability and perhaps survival?
3. Are you not investing in key projects in order to make the top line?
4. What will the consequences be if you do not invest? Will it impact your long-term growth?
a. Will your phone system go down if you do not invest?
b. Will you have a safety issue if you do not continue with training?
c. Will you have inadequate staff for the upturn if you do not replace key positions now?
5. Are you taking on customers who are a time sink in order to make your top line?
As your team weathers these turbulent times be sure you set realistic goals that not only allow you to survive the downturn, but also position your team for the upturn when it