Evolutionary Business Planning For Lenders – Part Four – Final
Which Would You Prefer, To Be Uninspired or Inspired?
Its 8:51 Saturday morning and I just sat down with a hot cup of tea to write the final blog in the Taking an Evolutionary Approach to Business Planning. I am feeling very peaceful and grateful for my life. Before I get into the subject of business plans, I want to discuss how important it is these days for us to find ways to feel grateful in our lives. Our world today is filled with threats, chaos, turmoil and injustices. Our lives are pressure packed and exhausting. There are so many things in life that deplete us emotionally, physically, spiritually and energetically, it is imperative we find ways to fill ourselves and to feel grateful. Any activity that is connected to a personal passion brings us joy and gratitude. When was the last time you allowed yourself the time to enjoy something you are passionate about? Sometimes we can connect to our gratitude with the smallest, simplest act such as when we look at our children sleeping soundly in their beds, or when we take a moment to really take in the beauty of nature just outside our window.
The gratitude I feel this morning comes from being able to share with you information that if utilized, will cause your bankers to think differently and therefore act differently. This information will make a difference in the lives of every lender, relationship manager and branch manager in your bank! Knowing that I might have made a positive impact on the life of another human being provides me the opportunity to fill gratitude.. Enough on gratitude…at least for the moment.
Which Would You Prefer, To Be Uninspired or Inspired?
As we know words are very powerful. Words can hurt us and bring us down or they can inspire, excite and infuse us with new possibility. We have talked at length in this series about the lack of intention, energy and interest that is invested by lenders when creating their annual business plans. We have talked about how invaluable the business planning process can be in helping lenders to solve their production challenges or showing them how to achieve their annual goals by working smarter rather than harder. You would think lenders would be inspired to leverage the business planning process for their own personal gain, but they are not. Let’s face it, the words “business planning” aren’t very inspiring, hey just aren’t. Intellectually, we know business planning is useful. But energetically those words just don’t have any juice.
Many years ago we decided to change the name of our business plan template and business planning process used with clients.. Our goal was to invoke a greater level of inspiration and a deeper level of engagement and inquiry in the business planning process. Now to be completely transparent, changing the name of our business plan and business planning process didn’t’t typically change a lender’s level of commitment to the business planning process. For some it did, but for most it didn’t. What did change lender’s level of engagement with the business planning process was when their CEO and sales manager change their engagement and commitment level towards the business planning process. Then and only then was there significant change in the commitment level of lenders.. The business plan template is not the key, the commitment and expectations set by bank leaders is the key.
Why Is The Business Plan Called An “Ideal Year of Business Blueprint?”
Again, words are powerful for their ability to create a vision. Different words create different thought processes which create different behaviors and ultimately different results! We chose to call our business plan a “blueprint” because a blueprint is a document that is created to intentionally build something such as a house, an office building or any type of structure. The blueprint mirrors the vision and intention of the property owner to construct a particular structure. Consider that a lender’s portfolio is something that gets constructed and built over years and decades.. With this fresh perspective, that a portfolio is something that gets built intentionally (as opposed to randomly), we see that very little intention or strategy is used by lender’s to build their portfolios. Their portfolio represents a hodge-podge collection of different sized customers from a wide range of industries. Please hear this very important point; this is not a discussion of good and bad. I am not judging that one type of portfolio is good and another type of portfolio is bad. This is however a discussion of cause and effect and of consequences to our actions.
In every bank, there are always a healthy percentage of lenders who struggle to generate new business because they are “chained to their desks” with renewals. Typically these are renewals very small credits less than $500,000. Often a lot of these credits are $50,000 to $250,000 lines of credit that are barely drawn upon. Does this sound familiar? It makes no sense to have a seasoned lender who is being paid, $100,000 to $200,000 plus be buried in small renewals. Many banks transfer these small credits to lesser experienced lenders, but a lot of banks don’t. Sometimes lenders inherit small credits from the portfolios of other lenders so the burden of renewing small credits cannot be helped. Most of the time, this dilemma was created by the lender over years because the lender wasn’t very discerning with their time, or the types of deals they worked on and brought to the bank. In these lenders’ minds, “some production is better than no production” and “some activity is better than no activity.” With this mindset, these lenders have chased and closed deals with very little consideration for the long term consequences of their actions. Remember what I said, this is a discussion of cause and effect and consequences to our actions!
What Does An “Ideal Year of Production” Actually Look Like?
Every physical thing we have in life was first a vision in someone’s mind and then it was constructed. The cup of tea I am drinking from this morning was first a vision then constructed. My desk and chair were mere images in some designer’s mind, then it was constructed using a type of sketch, spec sheet or blueprint. You see where I’m going here? The name of our business plan is “2016 Ideal Year of Business Blueprint” because we want lenders to envision the qualities and characteristics of what an ideal year of sales production looks. What are the types and sizes of companies they are going to call on? What are the minimum and ideal sizes of deals they are going to work on? What are their quarterly production targets? What are their blogly activity goals? In which markets and niches are they going to prospect? What trade associations are they going to join? There are many considerations and decisions from which a lender can then create a “blueprint” which mirrors their vision of what an ideal year of sales production looks like. After this important step, they can go forward and intentionally construct their ideal year rather than letting luck and the winds of chance play such a large role in their annual sales success. We are breaking new ground here folks! This isn’t how business plans are constructed and used in most banks! But it could be!
Throw Enough Sh*t on the Wall and Some Is Bound To Stick
The business development and sales actives of far too many lenders could be characterized as a shotgun approach. Far too many lenders have the belief that if they throw enough sh*t on the wall some of it will stick. Business plans get created with no real effort or intention. Once approved they are usually filed away till the start of the next year and the lender charges forth into the new year with little if any focus, strategy and discipline. Is it any wonder 50% or more lenders, relationship and branch managers don’t hit their annual sales goal? I have complete confidence that if your lenders employ just a few of the recommendations presented in the Taking an Evolutionary Approach to Business Planning blog series, their production will improve.
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