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5 Strategic Planning Mistakes to Leave Behind This Year

In the dynamic landscape of community banking, strategic planning is the compass that guides institutions toward their goals. However, even with the best intentions, strategic missteps can hinder progress and inhibit success. As we embark on a new year filled with opportunities and challenges, it’s crucial for community banks to identify and rectify common strategic planning mistakes. Let’s explore five pitfalls that should be left behind in the rearview mirror as we navigate the road ahead.

1#: Thinking Short-Term

In the whirlwind of day-to-day operations, it’s easy to get caught up in immediate concerns and lose sight of the bigger picture. Yet, strategic planning is all about envisioning the future and charting a course to reach long-term objectives. One of the gravest mistakes a community bank can make is neglecting to think beyond the next quarter or fiscal year.

“The challenge that some community banks face is that they’re making decisions today that could impact the long-term goals of the bank,” said ICBB CEO Derek Hetherington on The Correspondent podcast. “They find that five years down the road, they made decisions five years ago that put them in a less favorable position. Then they’re forced to accept whatever is available to them.” 

To avoid this pitfall, it’s essential to carve out dedicated time for long-term strategic thinking. This involves analyzing market trends, identifying emerging opportunities, and envisioning where the bank wants to be in five, ten, or even twenty years. By fostering a culture of forward-thinking, community banks can adapt more effectively to evolving customer needs and industry dynamics.

2#: Skipping Data Collection

Data is the lifeblood of strategic decision-making. Yet, some community banks fall short in gathering and leveraging comprehensive data to inform their planning process. Relying solely on intuitional or anecdotal evidence can lead to flawed strategies and missed opportunities.

To overcome this challenge, community banks should invest in robust data collection and analysis capabilities. This includes gathering data on customer preferences, market trends, competitor actions, and internal performance metrics. By harnessing the power of data analytics, banks can make more informed decisions, identify untapped market segments, and tailor their offerings to meet customer demands effectively.

3#: Excluding Staff and Customer Feedback

Effective strategic planning isn’t a solitary endeavor—it’s a collaborative effort that requires input from various stakeholders, including employees, customers, shareholders, and community members. However, some community banks make the mistake of confining strategic discussions to a select group of executives or board members, excluding valuable perspectives from the equation.

“Board members and executives tend to be really good at understanding your opportunities and your threats, but nobody knows your strengths and weaknesses better than your customers and your employees,” said Eli Barber, ICBB’s CFO, on The Correspondent podcast.

To avoid this pitfall, community banks should adopt a more inclusive approach to strategic planning. This involves soliciting feedback from frontline staff who interact directly with customers, engaging with shareholders to understand their expectations and concerns, and involving community leaders to align strategic goals with broader societal needs. By fostering a culture of inclusivity, community banks can cultivate a sense of ownership and collective commitment to the strategic vision.

4#: Foregoing Succession Planning

Leadership continuity is critical for the long-term success of any organization, yet many community banks neglect to plan for succession adequately. Whether due to complacency or the assumption that key personnel will always be available, failing to groom future leaders can leave banks vulnerable to disruptions and talent shortages.

To address this challenge, community banks should prioritize succession planning as an integral part of their strategic agenda. This involves identifying high-potential employees, providing them with mentorship and development opportunities, and creating clear pathways for advancement within the organization. By nurturing a pipeline of capable leaders, banks can ensure seamless transitions and sustain their momentum in an ever-changing marketplace.

5#: Being Unresponsive to Opportunity

In today’s fast-paced business environment, agility is key to staying ahead of the curve. However, some community banks fall into the trap of rigidly adhering to their strategic plans without remaining open to new opportunities that may arise along the way. This tunnel vision can prevent banks from capitalizing on emerging trends or responding swiftly to market shifts.

“Strategic planning should be a living, breathing document,” said Hetherington. “You should always be assessing what’s changing in your market, in the economy, in your staff, and with your competition.”

To avoid this pitfall, community banks should embrace a more flexible and adaptive approach to strategic planning. This involves regularly reassessing market conditions, monitoring competitor actions, and seizing opportunities as they arise. By fostering a culture of agility and innovation, banks can position themselves as proactive drivers of change rather than passive bystanders in a rapidly evolving landscape.


Strategic planning is a cornerstone of success for community banks, but it’s essential to avoid common pitfalls that can impede progress. By thinking long-term, collecting sufficient data, involving stakeholders, planning for succession, and remaining responsive to opportunity, community banks can navigate the complexities of today’s banking industry with confidence and resilience. As we embark on a new year, let’s leave these strategic planning mistakes behind and chart a course toward a brighter future for our institutions and the communities we serve.


For more on strategic planning, check out season two episode one of The Correspondent podcast, “Strategic Planning: A Proactive Approach,” with Derek Hetherington and Eli Barber.

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