Vision, Strategy & Leadership

Transcription

1 Vision, Strategy & Leadership Standard National Bank Revisited Graduate School of Banking Louisiana State University 2013 John Hairston - Hancock Bank john.hairston@hancockbank.com

2 Course Outline Review the Concepts of Corporate Vision. Application of Corporate Vision to Standard National and the Attendee s Organization. Application of Corporate Strategy to Standard National and the LSU GSB Attendee s Bank. Techniques of Leadership. Guest lecturer, Shane Loper.

3 Remember the Standard National case? * They lost their way forgot why they existed and what they believed in * Unclear strategy, conflicting tactics * Dee Donaldson is tasked with presenting the right path to the Board of Directors * Dee tells the board they must restate their culture, insure all associates understand and accept it, then chart a new envisioned future * The board signs up for Dee s challenge * The Oh-S*** Moment

4 What are the components of Vision? Core Ideology Envisioned Future

5 What are the components of Vision? Core Ideology * Core values * Core purpose Envisioned Future * Very long term goals (BHAGS) * Vivid description

6 Core Ideology Answers Two Essential Questions Core Values: What does our organization believe in? Small number of essential, enduring tenets No external justification, only intrinsic value Core Purpose: Why does our organization exist? The organization s reason for being The idealistic motivation for the actual work The actual achievement of the collective associates (which they could not do alone)

7 What are the components of Envisioned Future? BHAGS Big, hairy, audacious goals year timespan Vision level goals, not budget or short term Vivid Description Vibrant, engaging description Translation of vision from words into images The picture fitting what the organization looks like when the BHAGs are reached

8 Standard National Bank Core Ideology Core Values Core Purpose

9 Standard National Bank Core Ideology Core Values 1. Honesty and Integrity 2. Commitment to Service 3. Teamwork 4. Strength and Stability 5. Personal Responsibility Core Purpose To help people and communities exceed their financial goals

10 Standard National Bank Envisioned Future Big, Hairy Audacious Goals Vivid Description

11 Standard National Bank Envisioned Future Big, Hairy Audacious Goals 1. To be the largest bank in Louisiana 2. To be the most profitable privately owned bank in Louisiana 3. To have the unquestionably best community bankers in every market we operate 4. To be considered the most innovative community bank in Louisiana Vivid Description Standard National will be the greatest success story in Louisiana banking, evidenced by customer and community testimonials. We will be recognized as the bank who created immense value for our customers and communities, and as the single largest business influence to creating a better quality of life in Louisiana.

12 What are the components of Vision? Core Ideology * Core values * Core purpose Envisioned Future * Very long term goals (BHAGS) * Vivid description

13 Core Ideology Answers Two Essential Questions Core Values: What does our organization believe in? Small number of essential, enduring tenets No external justification, only intrinsic value Core Purpose: Why does our organization exist? The organization s reason for being The idealistic motivation for the actual work The actual achievement of the collective associates (which they could not do alone)

14 What are the components of Envisioned Future? BHAGS Big, hairy, audacious goals year timespan Vision level goals, not budget or short term Vivid Description Vibrant, engaging description Translation of vision from words into images The picture fitting what the organization looks like when the BHAGs are reached

15 Your organization s Core Ideology Core Values Core Purpose

16 What are your Core Values and Purpose? Please share with the class.

17 Your Organization s Envisioned Future Big, Hairy Audacious Goals Vivid Description

18 What are your BHAGS & Envisioned Future? Please share with the class.

19 How do we construct Strategic Objectives? Financial Associate Customer Business Process

20 How do we construct Strategic Objectives? Financial (corporate) 1. Grow and maintain independence or dress it up to sell? 2. If independence is important, what earnings level is required to maintain that privilege? 3. How much do we pay shareholders, reserve for extra capital, or reinvest in growth? 4. If we plan to growth, do we have enough capital? If not, where do we get it?

21 How do we construct Strategic Objectives? Financial (for your business unit) 1. Profitability targets ROE, ROI, ROAC, Net Income? 2. Growth targets balance sheet or fee income, leverage, mix, trajectory? 3. Financial productivity, per FTE or dollar of expense? 4. Expense per dollar of assets or accounts or revenue? Financial (for you as an independent contributor) 1. Balance sheet expressed in terms of customer segments? 2. Revenue expressed by source? 3. Margin, spread, profitability of your book of business?

22 How do we construct Strategic Objectives? Associate (Employees) 1. Targeted experience and expected development targets? 2. Investment into each associate? 3. Performance management methodology how much is quantitative versus qualitative? Grade on a bell? Forced ranking, top to bottom? 4. What is acceptable voluntary turnover, or percentage of open position you expect to be filled from within?

23 How do we construct Strategic Objectives? Customer (corporate or unit) 1. What customer segments do you want (and not want)? 2. What do the target segments want? How do you know? 3. What customers do you have versus customers you want? 4. What do desirable customers think about you (and your competitors? 5. Are you differentiating between markets when it comes to customers?

24 How do we construct Strategic Objectives? Business Process (corporate and unit) 1. What is the value proposition deployed to attract/retain the target segments? Do we have gaps in the markets where we expect to pursue target customer segments? 2. What products/services must we provide given those gaps? 3. Where do we get those customers? Current markets, new markets, virtual markets? What if external changes has made pursuit of some customer segments in some markets non-sensical? 4. Does the expected balance sheet, leverage, and revenue per dollar of expense match to my sales plan? 5. If I hit the sales plan perfectly, do my assumptions on the get from each targeted customer match my financial expectations? 6. Do my incentive plans match the targeted customers and financial expectations?

25 How do we measure Execution? How do you measure all these objectives to identify progress or lack thereof? A STRATEGIC OBJECTIVE MUST BE MEASURABLE! If you cannot measure the objective, then it is an idea, not a strategic objective. When you set strategic objectives for your area, make sure you can measure them.

26 Summary Core Ideology, or Culture defines why we exist, and what we believe? Envisioned Future describes where we are headed, and what we look like when we get there. Core Ideology and Envisioned Future comprise Corporate Vision. People are the key to success. They must understand and embrace Corporate Vision less they fail to reach their potential.

27 Summary Strategy is no accident; it is the culmination of measurable objectives. Financial Associate Customer Business Process Execution is the relentless pursuit, measurement and tuning of the strategic objectives. Leadership is how you, as executives of your organization, pull all these key concepts together.

28 Vision, Strategy & Leadership Standard National Bank Revisited Graduate School of Banking Louisiana State University 2013 John Hairston - Hancock Bank john.hairston@hancockbank.com