Building an Enterprise Planning and Strategic Initiatives Group (EPSI): A Strategic Imperative for a Fast-Growing Bank

As leaders at a rapidly expanding bank, we recognized a growing challenge: the absence of a structured process to evaluate and prioritize the increasing number of initiatives being proposed by various departments. Without a clear framework, these initiatives were often approved in isolation, with little consideration for their broader impact on the bank’s project portfolio, revenue growth, or risk profile. To address this challenge, we created the Enterprise Planning and Strategic Initiatives (EPSI) group—a cross-functional team dedicated to ensuring that our resources were allocated to the highest-priority initiatives aligned with our strategic goals.

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Why the EPSI Group Was Necessary

The need for the EPSI group arose from a lack of consistency in how initiatives were managed and approved across the bank. Sponsors would frequently pitch their projects directly to individual executive team members, who were then forced to make approval decisions without sufficient information. This fragmented process often resulted in a misallocation of resources, duplication of efforts, and initiatives that did not align with the bank's strategic objectives or deliver a sufficient return on investment (ROI).

The EPSI group provided a centralized mechanism to facilitate the evaluation, prioritization, and management of all strategic initiatives by the Executive Team, ensuring a cohesive strategy that balanced growth with risk management. This group was tasked with creating a five-year strategic roadmap, updated quarterly, that would guide decision-making and align resources with the bank’s broader goals.

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Forming the EPSI Group: A Cross-Departmental Collaboration

To establish the EPSI group, we formed a small, focused group of leaders with banking expertise, consulting experience and facilitation skills. They engaged with leaders from key departments including Business/Frontline, Treasury Management, Lending, Deposits, IT, Finance, Risk, and others. The group began by developing a comprehensive five-year roadmap that included all major departmental initiatives.

We kicked off the process with a series of facilitated working sessions, engaging department leaders in open discussions about their strategic goals, current initiatives, and resource requirements. This collaborative approach allowed us to identify overlapping initiatives, consolidate efforts, and prioritize projects based on strategic importance, potential revenue impact, and risk.

Each quarter, we repeated this process in an abbreviated format, using the updated insights to refine our roadmap and ensure it remained relevant to our evolving goals and market conditions. This continuous feedback loop helped maintain alignment across departments and kept the bank on track to meet its strategic objectives.

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The Role of the Executive Team: Active Engagement and Strategic Discipline

The success of this EPSI process depended heavily on the active participation and commitment of the executive team. Their involvement was crucial in several ways:

• Understanding Costs, Benefits, and Resource Implications: The executive team needed to fully engage in the EPSI process to gain a comprehensive understanding of each initiative's costs, benefits, resource requirements, and potential impacts on other projects. This understanding enabled them to make informed decisions and prioritize initiatives that aligned with the bank's strategic objectives.
• Saying "No" When Necessary: One of the most critical roles of the executive team was to be willing to say "no" to initiatives that did not meet the required ROI or strategic alignment. This discipline was essential to maintain focus on high-impact projects and avoid the dilution of resources.
• Enforcing the Process and Curbing Lobbying: To ensure fairness and consistency, the executive team had to insist that all initiative sponsors adhere strictly to the established process. This meant putting an end to the practice of individual lobbying by department heads or initiative sponsors directly to executive members, which could undermine the group's strategic focus.
• Engaging in Transparent, Candid Discussions: The executive team had to be prepared to engage in frank, open, and sometimes difficult discussions about the merits and drawbacks of each proposed initiative. This candid dialogue was necessary to challenge assumptions, uncover hidden risks, and ensure that every decision was made in the bank's best interests.
• Alignment and Support of Decisions: Once an initiative had gone through the EPSI process and a decision was made, it was crucial that all executive team members were aligned and fully supportive of the group's decision. This unified front helped to maintain strategic clarity and prevented any confusion or conflict within the organization.

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Governance Process: A Structured Approach to Decision-Making

The EPSI group’s governance model was built around a structured process consisting of three key stages: Gate 1, Analysis, and Gate 2. Each stage played a critical role in the careful evaluation and prioritization of initiatives.

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Gate 1: Presenting the High-Level Business Concept

In Gate 1, the initiative sponsor, with the help of the EPSI team, presented a high-level business concept to the Executive Team, which included:

• Overview: A summary of the initiative's purpose and scope.
• Goals/Objectives: The specific outcomes the initiative aimed to achieve.
• Recommendation: An initial recommendation on whether to proceed.
• Assign Executive Rep: Designation of an executive representative to provide oversight.
• Approve Expenditure for Analysis: Authorization of initial funding to conduct a detailed analysis of the initiative.

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Analysis: Conducting a Comprehensive Evaluation

After passing Gate 1, the initiative entered the Analysis phase, where a thorough evaluation was conducted with the help of the EPSI team and other department leaders, including:

• Coordination with SMEs: Engaging subject matter experts to provide detailed insights and assessments.
• Risks/Rewards: Evaluating potential risks and expected rewards.
• Costs/Benefits: Conducting a detailed cost-benefit analysis.
• Level of Effort (LOE): Estimating the resources and time required.
• Competitive/Market Analysis: Understanding the competitive landscape and market implications.
• Financials: Preparing a detailed financial forecast and ROI projection.

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Gate 2: Presenting the Detailed Proposal

In Gate 2, the sponsor presented a detailed proposal based on the analysis, which included:

• ROI/Proforma: Projected return on investment and financial statements.
• Risk Identification: Detailed risk analysis and mitigation strategies.
• Vendor Requirements: Any third-party vendor needs or dependencies.
• LOE (Level of Effort): Finalized estimation of required resources.
• Assign Priority (Approvals): Final prioritization and executive approvals.

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Benefits of the EPSI Approach

Implementing the EPSI group and its structured governance process brought several significant benefits to our bank:

• Focused Resource Allocation: Ensured that limited resources were deployed on initiatives that offered the best ROI and strategic value.
• Enhanced Strategic Alignment: Provided a clear framework to ensure all initiatives aligned with the bank’s overall strategy.
• Improved Risk Management: Enabled proactive identification and mitigation of risks associated with each initiative.
• Greater Accountability and Transparency: Created a more transparent decision-making process, with clear roles, responsibilities, and criteria for approval.

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Best Practices for Establishing an EPSI in Community or Regional Banks

To establish an EPSI group in a community or regional bank, consider the following best practices:

• Secure Executive Buy-In: Ensure that the executive team is fully committed to the EPSI process and willing to enforce its governance rigorously.
• Engage Stakeholders Early: Involve representatives from all key departments to foster collaboration and buy-in from the start.
• Define Clear Governance Steps: Implement a structured governance process with clearly defined steps, such as Gate 1, Analysis, and Gate 2.
• Promote Open Communication: Encourage transparent discussions and regular updates to maintain alignment across departments.
• Regularly Update the Roadmap: Keep the strategic roadmap dynamic by regularly reviewing and updating it based on new data and changing conditions.

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By following these best practices, banks can create a robust framework for managing strategic initiatives, driving growth, and focusing on projects that deliver the greatest impact.