Jim Mabry, the Managing Director of Keefe, Bruyette & Woods, recently shared with a HORNE audience his view of the current window of opportunity that exists for banks looking to go public. He highlighted that there is broad interest within the investment community for high growth community banks. The catch to this window of opportunity (as outlined in the historical graph on bank initial public offerings) is that it is unpredictable. In fact, it could be gone within the next year.
Mr. Mabry’s point is a good reminder that a well-defined corporate strategy is vital for capturing competitive market advantage. In general, it’s not enough to host an annual strategic planning meeting. To succeed in this shifting market, banks require an active strategy that is regularly evaluated for buy-in across the organization to keep everyone focused on the common goal.
My colleague, Laura Brown, draws a smart analogy between chess and corporate strategy. She explains the importance of thinking four steps ahead. More importantly, however, she reminds us that simply listing those four steps isn’t enough. You never really know what your competition is going to do, so you must make sure your strategies are informed and flexible.
It is no wonder so many banks find themselves asking “what if” questions when they realize that they have missed a window of opportunity to seize market share. Strategy is more than a plan. It is a forward-thinking culture dedicated to learning and collaboration, where team member experiences and expertise are valued and cultivated.
The excellent McKinsey & Company article, “Mastering the Building Blocks of Strategy,” outlines seven key attributes of a great approach:
Frame – What are the right questions?
Diagnose – Where and why do we make money?
Forecast – What futures do we need to plan for?
Search – What are the potential pathways to winning?
Choose – What is our integrated strategy?
Commit – How do we drive change?
Evolve – How do we adapt and learn?
I particularly like the way they conclude with the point that, “when senior executives invest the time and effort to develop a more thorough, thoughtful approach to strategy, they not only increase the odds of building a winning business but also often enjoy a positive spin-off: the gifts of simplicity and focus, as well as the conviction to get things done.”
Where is your leadership team investing their time? Is your bank actively looking for the next window of opportunity or are you content to dream about the what if? Create a culture focused on growth and collaboration to reap the benefits of what the market has to offer.