Many bank managers of small-business and middle-market groups are being told to meet higher sales goals under lower budgets, meaning more is expected of a sales staff that is typically the same size or smaller than last year's.
All too often, salespeople's goals and incentives are ill-defined and poorly supported. Our experience indicates that sales success depends in large part on senior management's developing and communicating a clear and consistent strategic message to employees and customers.
A former employee of an Internet company told us that when he raised this issue with senior management, he was told, "We don't have time to worry about strategy." This outfit has since shifted its marketing focus more than twice and at best faces an uncertain future.
Few banks would dismiss the need for a strategy, but we often find that not enough banks articulate one. Too often, managers overuse terms such as "relationship" while failing to define a value proposition or determine if they can actually deliver what they promise customers.
A strategic review gives a bank the opportunity to reject the concept of being all things to all customers. It incorporates making selections about the products and services sold and the target markets served; it requires a frank assessment of core strengths rather than glossing over problems or mediocre offerings; and it leads to a better grasp of priorities and goals.
Some managers think this entails arduous work and fear that it can lead to an indictment of senior management and personnel upheaval. Others worry about deflecting focus from customers to the point that they might feel ignored and drift away.
Our view is that the value far outweighs potential drawbacks. Formulating a sound strategy can eliminate marketing waste, clarify priorities, make sales teams more cohesive, and provide a useful feed into the credit-decision process.
This does not have to take half a year and bog your company down. An accelerated six-step process over two months can uncover issues that need to be addressed, assign responsibilities, and provide better direction. In many cases, a relatively short and focused exercise - aimed at clarifying what differentiates your company from another provider and why a customer should work with you rather than a competitor - will suffice.
One: Create a small leadership and decision-making team. Several years ago one of our projects began with the client's creating a 12-member steering committee. By the end, the committee had expanded to 20 - it was unwieldy to begin with and counterproductive in the end. The tendency to reach out to many employees for consensus should give way to in-depth discussion and demonstrated leadership. A group that really wants to make decisions should have three to five members, no more.
Two: Agree on key issues. Once the steering group is formed, it has to get focused on the most pressing strategic problems that have to be solved. Each department will have unique issues, though they will have some things in common. Quickly narrowing a list of issues into top-priority action items is crucial.
Three: Talk about getting input from various sources, including employees and customers. The steering group should agree up front on input it believes is most valuable in making its decisions. What type of analysis about industry best practices does it require? What key metrics need to be reviewed? What information from the customer, either already in-house or not, has to be assessed?
Four: Agree on initial objectives. Once it has a rough outline, the steering group needs to agree on preliminary solutions. This can be as concise as a statement about the key segments that the group will serve, the value proposition to be offered, and the goals for the business. Behind that summary, however, the team needs to develop its details and rationale for the decisions made.
Five: Test internally and externally. Before a strategy is cemented it must be tried out with internal and external audiences, and the former group should include the people most involved in executing the strategy. For example, in the small-business world the internal audience would probably include not only small-business personnel but also representatives of the branch system, alternative delivery groups, and human resources, among others.
During this phase the leadership team's involvement will be essential to keeping the project on course. Again, a small group has to make the final strategic decisions.
Six: Refine and execute. Well-planned execution is also crucial. We have seen many plans get endorsed by senior management and left to die on the shelf. Lack of management willpower and follow-through had a big role in such failures.
We recommend that on day one of the project, management designate an implementation czar. This person will probably require a full-time commitment for the first few months and can then shift to part-time, and he or she should report directly to the highest levels of the bank.
For most businesses, a strategic review will take no more than six to eight weeks from the kickoff meeting to initial implementation, if leadership is focused. Of course, it can take longer depending on the depth of the analysis required and other variables.
Mr. Miller is the president of Clarity Advantage, a consulting firm in Acton, Mass., that specializes in sales management. Mr. Wendel is the chief executive officer of Financial Institutions Consulting in New York.