How banks can design a dynamic quarterly planning rhythm to drive strategic alignment

In our Vision for banking report, our research of 600 technology and banking leaders revealed that 67 percent believed traditional banks risk losing market share if they fail to keep up with fintech innovations.

To meet or exceed customer expectations and remain competitive, traditional large banks must become more adaptable, focused, and efficient, whilst ensuring alignment to customer outcomes. However, this can be especially challenging for banks who struggle due to size and legacy planning processes.

Quarterly planning rhythms have been introduced across the industry in recent years to meet this need. However, many of these processes continue to fall short due to scale, poor design, and the perceived extent of change required, leaving traditional banks vulnerable. So how can banking leaders sharpen their quarterly planning rhythms to maximise their impact?

Through our work across the industry, we have demonstrated that critical to the success of a quarterly planning rhythm are several key elements:

Engage executives to review strategic intent and enable true adaptability

Executives must be involved in the quarterly planning rhythm and visibly portray real commitment throughout the process. Strategic direction setting, via quarterly executive direction setting events, must come from the very top to provide clarity on priorities for the quarter ahead.

By assessing live performance data and the environmental context during these events, leaders can adapt the bank’s strategic intent as needed and provide a clear mandate to be disseminated through the layers to teams, empowering them to effectively plan.

Whilst this event may seem somewhat obvious, it is often overlooked. Its role in fostering the conditions for success and organisation-wide buy-in are undeniable as it:

• Provides clear strategic direction – establishing a compelling message that aligns to the bank’s overall strategy and communicating this to all colleagues across the bank is critical.

• Fosters strong leadership and support – driving transparent communication from the top cultivates an environment of empowerment where colleagues can act upon the clarity provided.

• Enables adaptation and flexibility – monitoring external trends and conditions allows proactive responses and promotes continuous learning.

Banks who do not actively involve executives in the quarterly planning rhythm often fall short of achieving organisational agility due to the rigidity of top-level strategy, which limits adaptability within business units.

Include a dependency marketplace event to improve dependency management across different businesses

Improving collaboration between business units is difficult due to cultural, process, and structural factors, especially for large banks that are traditionally siloed. Often large, cross-business unit dependencies are poorly handled and can result in falling short of targets. Incorporating a dependency marketplace event within a quarterly planning rhythm can help overcome this by helping to build a muscle that should ultimately be a business-as-usual process.

This event is attended by all business area leaders. All unresolved cross-business unit dependencies, alongside the potential implications on strategic targets, are captured beforehand. These are visually referenced on a large Kanban board and are moved from the 'backlog' to a resolved state. The event is, by design, very fluid. All leaders attend understanding their outbound dependencies and discuss these during the event, which is staged in a marketplace fashion with rotation around the business unit stalls.

An impactful dependency marketplace event should promote:

• Clarity - resolving complex dependencies is difficult as they require agreement between senior leaders who are often too focussed on targets to understand the implications. Dependencies raised at the event must be well thought out with key fields captured consistently across all teams.

• Transparency - visually displaying all unresolved dependencies creates comprehensive insight helping to identify synergies and new opportunities. These can be initiated immediately as all leaders are present.

• Gamification - no one likes being last, especially senior leaders. Visually displaying unresolved dependencies for all to see creates an energy to resolve these the fastest and encourages having fewer unresolved dependencies in future iterations. This fosters a strengthened culture of proactively discussing and resolving dependencies, rather than waiting to be told to.

• Holistic viewpoint - bringing leaders together enables the complexity of certain decisions to be understood. They have a greater appreciation of the implications on other business units, thereby putting the overall bank first.

Dependency marketplaces are usually self-retiring. They evolve from a day-long event with leaders that rarely interact otherwise, to increasingly shorter sessions with less dependencies as leaders proactively manage these during the quarter through collaboration. Hence, a dependency marketplace ensures dependencies are effectively managed and play a key role in improving the culture across the bank’s leadership.

Align objectives and key results across the layers of the organisation to improve customer outcomes

Any bank can fall victim to wasted effort and not seeing the desired results from significant expenditure. A common reason for this is focusing on outputs rather than outcomes.

Objectives and key results (OKRs) are a goal setting framework, which should be incorporated within a quarterly planning rhythm, that defines a medium-term strategic ambition - the ‘objective’ and measures incremental progress against it - the ‘key results’. OKRs can be set from small business lines up to organisation-wide, and the magic begins through alignment across the different levels. This provides a golden thread of strategy from the top of an organisation through to its teams. The value is further strengthened by linking all work items at each level directly to OKRs.

The benefits unlocked by using OKRs in a quarterly planning rhythm should not be underestimated:

• Customer focused prioritisation – OKRs enable prioritisation decisions to have the relevant customer outcomes at the heart of the discussion. As key results provide short-term targets, these outcomes are very tangible in nature. The benefits also extend to cross-organisational dependency management where greater commonality can be found through discussing the target outcomes rather than the work itself.

• Adaptability – through consistent tracking of incremental key result progress, plans can be adjusted and capacity managed.

• Strengthen employee engagement - connecting all work items to strategic outcomes has cultural impacts. Employees can clearly see how their work contributes to the organisation’s overall ambitions, improving motivation and loyalty.

• Focus – senior leaders can focus on OKRs, rather than a laundry list of deliverables to see what benefit the organisation is delivering, and pivot based on these. Furthermore, the use of OKRs builds confidence in the implementation of strategy, through demonstrating incremental progress.

An impactful quarterly planning rhythm is key to achieving a more dynamic, adaptable, efficient, and focused organisation tightly aligned around customer outcomes. Its success is determined by its core design and how it enables the connection of strategy to the work throughout the business.