Taking Lessons in Corporate Culture, Bank Regulatory Agencies Try to Anticipate Economic Climate through Strategic Planning

By Albert, Andrew | American Banker, October 21, 1984 | Go to article overview

Taking Lessons in Corporate Culture, Bank Regulatory Agencies Try to Anticipate Economic Climate through Strategic Planning


Albert, Andrew, American Banker


Like the human knee-jerk reflex, federal bank regulators have been charged with reacting spontaneously to sudden changes in their environments without planning in advance.

Congress still fires an occasional salvo at the agencies for failing to anticipate banking calamities.

Prompted by those attacks, U.S. financial authorities have tried desperately over the last three or four years to shed their reactionary image.

The Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and, to a lesser extent, the Federal Reserve Board have devised separate systems to help them keep pace with the quick-changing banking world.

Their ultimate hope is to avoid embarrassing surprises on the banking front. They want to brace themselves and the industry for future developments, such as the possible legalization of interstate banking, or perhaps, worsening economic conditions.

to prepare for tomorrow, the banking agencies are taking a lesson from corporate America and engaging in their own strategic planning programs.

Strategic planners began taking Big Business by storm in the mid-1970s -- offering the first systematic method for setting long-term corporate goals. The objectives are based on assumptions about upcoming economic, competitive, and legal developments. At many firms, goals are eventually translated into specific staff assignments, known as operating plans.

So, in a sense, strategic plans can make an organization tick. And that's precisely the kind of direction the federal regulatory agencies were seeking in the late 1970s and early '80s.

But because the programs are still so relatively new to the agencies, their usefulness remains questionable. And the emergence of strategic planning in government, as opposed to its more traditional private sector site, has produced some high-level skeptics. Some view planning as simply a waste of time.

What the agencies have produced over the last four years are three distinct kinds of strategic plans, using entirely different planning approaches. For instance:

* The Comptroller's office is the only one of the three banking agencies that releases its plans to the public. In 1981, the OCC became the first bank regulatory agency to produce a formal strategic plan. The latest update, released in January, 1984, comes packaged in a neat, three-page, color brochure.

comptroller C.T. Conover, a long-time advocate of planning, has elevated the status of his agency's planners -- giving them their own strategic planning division. The new division produced the latest plan, which is the result of months of internal discussions and working drafts. This summer, OCC's planning units used the blueprint as a basis for their operating plans.

* At the FDIC, where long-range planning is a top priority, the strategic and operating plans for each division are confidential documents. Bound in a looseleaf, the plans are updated every quarter. And by January 15, agency staffers expect to have completed their 1985 plan.

The planning process reaches the highest levels at the FDIC, including Chairman William M. Isaac, who is also described as a strong proponent of strategic planning.

* Last October, the top officers of the Federal Reserve Board's division of bank supervision and regulation secluded themselves at a West Virginia resort in order to avoid interruptiions. There they brainstormed about the agency's internal problems and the future of banking. The result was an internal working paper containing specific taks aimed at completing their agreed upon goals.

The process, which began within the last few years, produces no formal strategic plan. But, says John E. Ryan, the Fed's director of bank supervision and regulation, "It seems to suit our needs." No Crystal Ball, But...

Agency planners don't portend to possess a bona fide crystal ball in their strategic plans. …

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