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c. myers live – 2024 Key Strategic Planning Themes

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With the busy season of Strategic Planning upon us, common themes are emerging from our client sessions. In this episode of c. myers live, we discuss some of the critical conversations institutions are having across the industry.  From growth strategies and financial performance, to the ever important focus on cultivating talent, we dive into themes that should be part of every strategic conversation this year.

About the Hosts:

Adam Johnson

Adam, CEO and one of c. myers’ owners, leads a client-focused team of 50+ professionals who are passionate about helping our clients position themselves to remain relevant, sustainable, and differentiated.  In his long tenure at c. myers, Adam has been a key contributor to the philosophy and design of c. myers’ proprietary financial models and ALM processes.  He helped design c. myers’ approach to assessing business models and strategic planning processes, and serves as the strategic guide for the Process Improvement and Strategic Implementation business lines.

Learn more about Adam

Brian McHenry

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As one of c. myers’ owners, Brian works daily with CEOs and C-Suite teams to help them identify and prioritize necessary changes to continuously adjust their business models and remain highly competitive.  When working through the strategic process, CEOs regularly praise Brian’s calm communication style and ability to authentically engage anyone he interacts with.  Brian’s expansive knowledge of the financial services industry, combined with his dedication to being on the leading edge of emerging consumer behavior trends, enables him to help decision-makers address tough business issues and explore creative solutions as they link their vision, strategy, and desired financial performance. 

Learn more about Brian

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Real-Time Financial Forecasting: The Fed Is on the Move

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Q:  When the Fed has significantly cut rates, how many times has the yield curve shifted in parallel?

A:  ZERO!

What does this mean for you?

In a world filled with uncertainty, this is one thing you can count on. So, don’t rely solely on parallel shifts in the yield curve when modeling.  Expand your analysis to capture more realistic scenarios.

It is important to show other decision-makers the financial outcomes depending on the shifts in the yield curve.  Technology has advanced so that this dynamic is easy and fast to model.

In days gone by, this would have taken hours of hard labor to show the potential financial outcomes of yield curve shifts, especially over a time horizon of more than 1 year – hence the simplifying assumption of parallel shifts.  See the graphs below as a reminder.  They show the change in the yield curves since January 2020.

Here are just a few scenarios being requested by decision-makers to understand the range of possible outcomes:

1. What if as rates come down, we experience FOMO on CDs, (like we have when mortgage rates ticked up) and our CD demand increases, putting more pressure on COF, before it declines?  Learn from history, many financial institutions experienced this the last time rates were around 5% (2006-2007).

2. What if the yield curve continues to flatten?  Long-term rates come down, refinancing kicks in significantly, and our COF does not decline the way we anticipated?

3. Same situation in number 2, but people don’t refi with us, and we have to invest?

4. What if our business lending hits a rough patch with respect to credit risk?  As a result, do we respond by tightening our standards and volumes decline?

5. What if number 3 and 4 happen simultaneously?

6. What if our organization experiences a big mortgage refi boom – what portion should we hold or sell?

7. How do we hold up in the Fed stress tests?

8. What if the Fed cuts rates much faster than we anticipated and our prepayments on loans accelerate significantly beyond expectations?  How might we need to adjust our KPIs to accommodate?

9. What if we need to achieve our KPIs by materially lowering our expected yields?  Is the trade-off of volume vs rate worth it?

10. What if the situation in the Middle East causes inflation to ramp back up?

These scenarios can be run in front of the entire C-Suite team in a matter of 1-4 minutes.  This can result in the decision-information being shared with the Board so everyone could be on the same page with respect to a range of potential scenarios and financial outcomes.  This helps the organization be much more agile in optimizing their financial structures for many reasons.  One key reason is a significant increase in appreciation for all the moving pieces.

Each quarter, take your current financial structure and run these scenarios to see how the outcomes can change.  As appropriate, also add any significant emerging trends.

Leadership and Boards value what they refer to as real-time financial information.  Some of them equate it to the push notifications they receive from their financial institutions and wealth-management advisors.  It keeps them forward-looking.

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Project Management – Avoid These 2 Common Misconceptions

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Becoming an organization that is good at project management is not simple.  While the basic concepts of project management are easily understood, there are a myriad of reasons why those concepts are not consistently and effectively put into action.  Here are 2 of the most common misconceptions that get in the way:

Components of project management diagram1) A good project management tool will keep our projects on track.  There is no question that a good project management tool can help with effective project management.  Depending on the size and complexity of the organization, it might be an absolute necessity.  But unfortunately, it won’t – on its own – make the organization good at project management.

A project management tool is invaluable for tracking tasks and clearly showing when projects are in trouble, but it can only do that when task statuses are reported realistically, and without undue optimism.

2) A good project manager will make us good at project management.  Good project managers can be an important key to effective project management, but don’t expect automatic success.  The greatest project manager won’t be able to shift the organization’s practices without the support and active involvement of senior leadership.

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Investing in the Next Generation of Financial Leaders

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3 minute read – With all the change in technology and evolving customer needs, one thing remains constant:  the need for effective leadership.  As financial institutions navigate through complex markets and unpredictable economic landscapes, the role of leaders becomes increasingly crucial.  However, ensuring the sustainability and success of these institutions requires more than just identifying talent — it necessitates a deliberate investment in cultivating the next generation of leaders. 

At the heart of this investment lies the development of three key attributes:  financial acumen, leadership presence, and critical thinking ability. 

With financial in the name, it is crucial leaders develop their financial acumen in order to understand how the business model and financial structure works.  Understanding concepts such as the 5 strategy levers of ROA as well as the relationship between asset growth, capital, and ROA are foundational and will help leaders be more successful in their current roles.  Increased financial acumen will help them connect the dots of their decisions and actions with the financial and risk impacts to the organization.  By providing aspiring leaders with comprehensive training and exposure to real-world financial scenarios, institutions can nurture their financial acumen from an early stage.  This can include structured education programs, mentorship opportunities, and hands-on experience in various financial functions. 

As important as the numbers are, leaders need to possess more than just technical skill and expertise.  In fact, leaders that are highly technically competent yet struggle with communication and presence often face more challenges in successfully sharing their ideas and leading others.  Effective leaders often possess strong communication skills, emotional intelligence, and the ability to influence and motivate others.  Helping to enhance these skills can empower future leaders to navigate through challenges with grace and authority, fostering a culture of collaboration and innovation within the organization. 

Critical thinking is critical – to play on words.  Leaders make numerous decisions day in and day out that determine the strategic progress of their organization. Elevating the ability to think critically helps leaders better connect dots, strategically and organizationally.  Critical thinkers are able to keep the strategic objective of their work and projects front and center even as they are in the details of implementation.  They also know that almost nothing they do exists in a vacuum.   

Investing in the next generation of leaders for financial institutions is not just a matter of talent acquisition — it is an investment in the future sustainability and success of the organization.  By focusing on cultivating financial acumen, leadership presence, and critical thinking ability,  institutions can nurture a pipeline of competent and visionary leaders who are equipped to navigate through the complexities of the financial landscape with confidence and resilience.

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c. myers live – The Evolving Role of Liquidity in Financial Institutions

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Liquidity management is more crucial than ever for financial institutions navigating today’s complex environment. In this episode of c. myers live, we explore key strategies for understanding your liquidity position, stress testing assumptions, and pivoting when things don’t go as planned. Additionally, we emphasize prioritizing your available levers and ensuring alternative liquidity sources are in place.

About the Hosts:

Sean Zimmermann

Sean, Senior Vice President and one of c. myers’ owners, has worked in the financial industry for over 25 years in various roles, from Chief Financial and Strategic Officer to President and CEO, at financial institutions with over a billion dollars in assets.  Sean uses his many years of experience to provide intriguing insights and different perspectives on complicated issues that impact the financial industry. His outgoing personality and passion for helping institutions remain sustainable and relevant allows him to play a key role in helping organizations optimize their business. 

Learn more about Sean

Charlene Leland

Charlene LelandSince joining c. myers in 2004, Charlene has become one of the most diverse facilitators within the industry, especially with regard to helping financial institutions of all sizes address three necessary business objectives: relevancy, differentiation, and sustainability. Over the years, she has honed her skills for facilitating various types of sessions, including Strategic Planning, Strategic Implementation, Member Journey and Experience Improvement, and Strategic Financial Planning.

Learn more about Charlene

Other ways to listen to c. myers live:

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