Thursday, December 18, 2008

10 Habits of Highly Effective Associations

Taking a page out of Steven R. Covey’s bestseller book, “7 Habits of Highly Effective People”, a similar framework can be constructed for condo or homeowner associations. This is a collection of best practices that can play an important role in the effectiveness of an association. The implementation of these best practices involves knowledge, skill, and desire. Knowledge allows us to know what to do, skill gives the ability to know how to do it, and desire is the motivation to do it. These practices have a strong track record of success and will provide any BoD a high return on their investment.


Probably the most important element in the success of any condo association is effective communications
. A successful communications system can forestall the development of cliques and factions, enable the association to provide services that owners want, and can help owners develop a sense of trust with the BoD. You should carefully craft a staged communications plan that identifies what information will be communicated (new information, progress to date, anticipated problems, decisions made), how it will be communicated (personal contact, letter or email, group meeting), by whom will it be communicated (President, Secretary, all BoD), and when will it be communicated (date, frequency). You want to give the association members a steady flow of information that addresses the things on their mind along with the things that the BoD wants to communicate to them. Other communication options include:
  • Go electronic. It is time for associations to go electronic. If your governing documents do not allow it, change them. There are simply too many benefits to be gained. All the association’s records should be stored in electronic form to save space and money drain.
  • Use e-mail for correspondence and go paperless whenever it is beneficial. Depending on what your covenants/bylaws and state/local government rules state, you may also use e-mail to distribute the annual budget or notify owners of covenant violations and overdue assessments.
  • Websites can be developed and maintained at minimal cost to condo associations. An effective website can contain viewable and downloadable copies of all of the association’s material records, such as its governing documents, meeting minutes, financial statements, permits, insurance policy, committee structure, business processes, and annual budget. It can also contain forms, copies of the association’s newsletter, a homeowner directory, an event calendar, a community bulletin board. All of these features significantly reduce the need for paper, as well as increase an owner’s ability to become involved in the community. An association website is probably the best move your association can make to improve efficiency and reduce its administration costs.

Management infrastructure

The BoD must understand how decisions will be made, who is to lead and who is to follow, the procedures to be used, the authority levels of its members, the communication system, and a host of other things that should be considered in the performance of their work. If you do not use a management company, you will have to set up your own management control infrastructure. There are multitudes of opinions on the best way to manage a business and there is no loss for management consultants or books that have been written on this subject. At the risk of adding to the fray, it is recommended that a BoD focus its energy on the following elements of a management control system:

  • Setting up a committee structure. An effective committee structure helps make an association strong. Committees can lighten the load by focusing on specific tasks that are assigned by the Board. A charter should be developed for each, as well-formulated marching orders can greatly improve the effectiveness of new committees. A charter describes the purpose and authority of the committee, clarifies responsibilities, assures accountability, and creates and limits authority.
  • Establishment of several key business processes. Every organization, including associations, should have a set of key business processes in order for it to function in an effective and efficient manner. These processes help define the basic management system and should be well documented, communicated, and understood by all members for them to work properly. The following are recommended; Annual Budget Preparation , Architectural Variance Approval , Assessment and Fee Collection , BoD Request for Decision , Deed Restriction & By-Laws Enforcement , Emergency Contact , Maintenance and Repair Request . If a Management Company is used, they will typically have these in place.

Decision packages

A proven way to help a BoD make decisions is with the use of decision packages that describes everything one should know about an issue, along with a recommended course of action in a very condensed format. The advance work will help you to quickly come up to speed on pertinent information, alternatives that were considered, and an analysis of the preferred solution. It will help you make effective decisions in a timely fashion and save hours of wasted meeting time trying to get the decision makers to a common level of understanding.

Clear roles and responsibilities

There are two important ingredients for a successful Board: One is getting the best people to serve as members and the other is making sure that they know what they are supposed to do. Too many Boards fall into the categories of; “rubber stamps" that dutifully follow the lead of the association’s president; micro managers" who get too caught up in the day-to-day operations of the organization and can't delegate to those responsible for making things happen; or “ineffective” who can’t make decisions, particularly tough decisions that may be unpopular with some members. One of the largest sources of conflict in a BoD occurs when the roles and responsibilities are not clear. Most by-law provisions describe officer’s duties in very broad terms, leaving lots of opportunity for role confusion, overlaps, and/or omissions. As with any effective team, BoD members can’t perform effectively if role questions or overlaps are present. Don’t leave people to figure out things on their own. Get rid of role ambiguity. Nail down every person’s responsibilities with clarity, precision, and attention to detail. There should be no question regarding where one job stops and the next one starts. A detailed BoD roles & responsibility document that supplements the governing documents should be developed and agreed upon by BoD members.

Financial health

Healthy finances are absolutely critical to the sound operation of an association. If you finances are good, it takes the pressure off and will tend to overshadow the minor issues. There are many factors that come into play, including; accounting controls to protect the association’s assets, well thought out and implemented budgets to ensure there is enough operating capital to over the ordinary expenses of the association, and detailed reserve studies to provide enough capital for future capital expenditures. One of the most important things a BoD can do is to create the right cost-conscious mindset with all association members and particularly with the BoD and the Management Company, if one is used. BoD members should continually look for ways to reduce costs and to challenge every budget line item. Any cost increases should receive the highest level of scrutiny. Ask others to justify expenditures. Always, be on the lookout for ways to cut costs, even if they are small amounts.

Rapid decision making

Making timely decisions is a major responsibility of an association BoD. If decisions are not made in a timely manner, it can lead to owner frustration, additional costs, rework, increased wait time, and a host of other undesirable things. Effective BoD’s place particular emphasis on making rapid decisions. They institute processes to facilitate quick decision making, provide pertinent and factual information regarding the issue, provide for the exploration of appropriate decision alternatives, and finally to document all of this information for future reference.

Ethical behavior

Board members are elected to make decisions in the best interest of the association they serve. They are charged with a duty of loyalty and fiduciary responsibility to use good business judgment in conducting the governance of the association. Directors must make sure that their decisions work to the benefit and protection of property values in general and without consideration of personal interest or gain. Members of the Board are protected by the business judgment rule, so long as the Board acts for the purposes of the association, within the scope of its authority and in good faith. It is not illegal to err or even cause financial loss or other harm provided that the Board can demonstrate reasonable investigation, consideration, thoroughness, and good business judgment in reaching its decisions. But, truly ethical practices require more than a fear of legal consequences or a desire for a good reputation. They require a clear understanding of right and wrong, and a motivation on the part of directors, members and contractors to act in the proper manner at all times. This means adhering to not only the letter but also the spirit of all applicable laws and regulations. A written code of ethics policy helps to maintain a culture of honesty and accountability.

Effective Meetings

Efficient and effective meetings are a hallmark of a well run association BoD. A poorly run meeting is expensive and can burn up an inordinate amount of time. Effective BoD’s first know when and when not to hold a meeting. They avoid a meeting if the same information could be covered in a memo, e-mail or brief report. They set meeting objectives before planning the agenda for the meeting. They provide all participants with an agenda before the meeting starts. They give all participants something to prepare for the meeting to assure that meeting has significance to each group member. They practice good meeting mechanics like; sticking to the agenda, starting and ending on time, making assignments for items requiring action, and taking minutes. Also, savvy Board members NEVER have the board meeting "at" the board meeting. They ALWAYS contact other BoD members in advance of the meeting to get their input and reactions to important issues that will be discussed. This can be a time to build support for a particular course of action, to identify any “blind spots” or holes that you may have missed, and to gather information that may be critical for a successful implementation.

BoD leadership, management, and involvement

The Board's main focus must be to ensure the organization is aimed at providing the very most benefit possible for the association members that it serves. It must focus on the on-going capacity to provide that benefit and to assure that the proper management and control system is in place and that it is functioning correctly. For a Board to succeed, the number one key ingredient is: Involvement. Boards fail (and, in turn, associations fail) when board members become disengaged from either the mission of the association or their role in the governance of the organization. An engaged Board does more than simply show up for scheduled meetings and vote to approve minutes and budgets. Engaged boards partake in vigorous discussions that help shape the vision and future direction of their association. Engaged Boards ask questions of their Management Company and becomes educated on the issues their association is involved in. Engaged Boards read and understand monthly financial statements and accept their responsibility for ensuring the association’s short-term stability and long-term sustainability. Engaged boards define expectations for their Management Company and confront any poor performance. And, finally, engaged Boards must learn when it is appropriate to micromanage and when it is not.

Monday, December 8, 2008

10 Best Dressed Board Member List

Non-profit condo and homeowner associations face tough challenges to stay relevant, effective and viable. Given the voluntary nature of their BoD, they can have a particularly difficult problem of getting the best people to run their business. But, what skills, traits, and characteristics do the “best” Board members have? Shown below are the “How-To Guru’s” top 10 best dressed Board members characteristics or skills that should be nurtured and grown at every opportunity.

Leadership. They help create a common vision for the association, provide clear direction and priorities, and clarify roles and responsibilities. They step forward to address difficult issues and stand firm when necessary. They can assert their own ideas and can gain commitment and support from others. They build effective teams and can motivate others. Finally, they can champion change by challenging the status quo, acting as a catalyst for change, and paving the way for effective implementation.

Motivation. They drive for results and success and convey a sense of urgency. They drive issues to closure and persist despite obstacles and opposition. They demonstrate high standards of performance, sets aggressive goals, and works hard to achieve them.

Association Knowledge. They understand governing documents backwards and frontwards and know their responsibilities and limitations. They know and adhere to state law and administrative rules. They are able to use financial and quantitative date to establish realistic budgets and manage the business of the association. They possess up-to-date knowledge of condo or homeowner association issues and rely upon expert resources when appropriate. They have an understanding of relevant issues to the association and keeps that knowledge base up-to-date.

Organizational Strategy. They emphasize the need to deliver quality products and services at the least amount of cost to the members of the association. They anticipate association needs, take action to meet those needs, and continually search for ways to increase the satisfaction level of its members. They foster the wise use of scarce resources and look for ways to do more with less. They identify critical, high pay-off strategies and prioritize team efforts accordingly.
Self-Management. They demonstrate principled leadership and sound business ethics. They show consistency among principles, values, and behavior. They build trust with others and follow through on their commitments. They handle day-to-day work challenges and are willing to adjust to multiple demands, shifting priorities, ambiguity, and rapid change. They show resilience in the face of constraints, frustrations, or adversity and demonstrate flexibility. They spend the necessary time to prepare for and attend meetings, participate in discussions, review material, and ask questions.

Thinking. They consider a broad range of internal and external factors when solving problems and making decisions. They gather relevant information, consider a broad range of factors, grasps complexities and perceives relationships among problems/issues, seeks input from others, and uses accurate logic in analysis. They make timely and sound decisions, even under conditions of uncertainty.

Administrative. They develop short and long-range plans that are comprehensive, realistic, and effective in meeting association goals. They identify and implement effective business process and procedures for accomplishing work. They assign responsibilities, delegates and empower others, remove obstacles, and coordinates work efforts when necessary. They can allocate their own time efficiently, handle multiple demands and competing priorities, efficiently processes paperwork, and manages meetings effectively.

Communication. They speak clearly and express themselves well in groups and in one-to-one conversations. They crate an atmosphere in which timely and high-quality information flows smoothly between themselves and others and encourage the open expression of ideas and opinions. They actively listen to others. They prepare and deliver clear, smooth presentations and carry themselves well in front of a group. They convey information clearly and effectively through both formal and informal documents.

Interpersonal. They relate to people in an open, friendly, accepting manner, show sincere interest in others and their concerns initiates and develops relationships with others as a key priority. They develop effective give-and-take relationships with others and balance those needs with those of the association. They identify and cultivate relationships with key stakeholders representing a broad range of opinions and interests. They use informal networks to get things done and build strong external networks with people in the industry or profession. They show and foster respect and appreciation for each person whatever that person’s background, race, age, gender, disability, values, lifestyle, perspectives, or interests.
Manage Disagreements. Conflict is part of any dynamic condo or homeowner association. It arises because people care and want to do their jobs well. Conflict is beneficial when the focus is on finding the best solution. It becomes destructive when the focus is on people and “winning.” The goal should be to avoid “win/lose” situations and to ensure there is a productive resolution of conflict. The effective BoD members bring substantive conflicts and disagreements into the open and attempts to resolve them collaboratively and build consensus.

Wednesday, December 3, 2008

10 Worst Dressed Board Member List

Many Board members are under qualified, under experienced or on the BoD for the wrong reasons. It is alarming how many condo or homeowner association’s Board of Directors (BoD) are populated by individuals who provide little or nothing of real value, or, worse, actually work against the interests of the association. Some of these members are born with these characteristics and some of them are home grown, after many years of practice. They frequently have little skill in group dynamics and the art of working in teams. The result is that individual Board members default to what they do best in order to control the situation. In other words, some directors revert to behaviors that manipulate others or the environment so they can get what they want. How can you spot these manipulative behaviors and how can you neutralize them. Identifying them is the easy part. What to do about is much harder. These are the “How-To Guru’s” 10 Worst Dressed Board members, in no particular order of disruptive behaviors.

Worry Monger. One of the primary responsibilities of a BoD is to make timely decisions. This ultimately requires that members take a position by stating their personal opinion or voting on a matter. This can be excruciating pain for the Worry Monger. They prefer to be non-committal, ride the fence to see what way the wind is blowing or worse yet, make no decision at all. What if I am wrong? What will other people say? How can I be 100% sure this is the correct decision? In their minds, no decision or a delayed decision can be a wise decision. They are experts at delay tactics and say things like; We need more information or data. Let’s form a study group or committee. That will never work. Let’s discuss it at another time. Sounds good, but I don’t think we can sell it. We have never done it that way before. You can easily spot them because they tend hide behind questions and rarely state what they really think. The Worry Monger can be one of the most destructive types of Board members, because they shut down effective and timely decision making.
Solution: These folks are slippery and hard to pin down. They usually have a lot of practice at shifting responsibility and in the art of delay. If they are couching their opinion by asking a question, then call them out by asking them, “What is your opinion on that matter? or “What do you think we should do?” If they are inappropriately pressing for more data, ask them, “Why would that additional information make a difference?” or “Can we make a reasonable decision now, rather than waiting for this additional information?” Many times, these people need lots of facts and information. Another technique is to document all of the relevant information on decision being requested of the BoD in the form of a “decision package”.

Dominator. This type of BoD member is in constant reactive mode and is a poor listener. S/he is often viewed as controlling, opinionated, egotistical, and uses more than her/his unfair share of air time. They can be overpowering, overcontrolling, and bossy to others. Their motto is “it’s my way or the highway!”, as they have already figured out the ideal solution or action that should be taken. They are aggressive, refuse to share responsibilities, and can be unappreciative of other’s contributions.
Solution: A BoD member or chair should speak privately to the Dominator in a “heart-to-heart” conversation that is direct, clear, specific, and to the point. S/he should be reminded that this style of managing can be very damaging to the team and the repercussions that can occur. If the dominating behavior persists, a public response is necessary. During the Board meeting, when the Dominator presents an idea, the first question the chair should ask is, “What does everyone else think about that idea?” The chair also might ask, “We have heard what (Dominator’s name) thinks, does anyone have an alternative position?” If the Dominator happens to sit in the chair position, the chair-elect — with support from other officers — may need to be the person who steps in to privately offer support to this individual by working through agendas together or serving as a mentor. S/he should be reminded as a member of the BoD group; they do not have a special privilege to pursue personal agendas or ideas not commonly shared as priorities of the whole.

Seat Warmer. These “do-nothings” rarely challenge/probe or come out from their hiding. They avoid work like the plague and can sit through an entire meeting without saying a word, causing the rest of the BoD to wonder why even bothered running for the Board. This individual may not pay attention during meetings, typically does not follow through on assignments, and exhibits great amounts of apathy. They may be in over their head or totally out of their league of capability. Overwhelmed, s/he shuts down, withdrawing from participation.
Solution: Although this type of member is not usually destructive to the Board, they are also not a contributor, leaving the bulk of work to others. If they are out of their league, they might benefit from educational and training materials. A fellow Board member might serve as a mentor to them for a period of time by walking through the agenda, sharing methods for reviewing Board materials, and debriefing after each meeting. The chair could draw the person out by asking them for their opinions during a meeting or praising them when they offer one that is unsolicited. If they refuse to do any work, ask them why and reinforce that everyone has to carry the load. Continue to ask them to perform duties that are within their capability and thank them when they agree and particularly if they complete an assignment.

Weak-Kneed. These individuals live in fear of being person­ally tainted by any kind of controversy. They lack a key characteristic of any good BoD member— courage. With every challenge they begin hyperventilating for a settle­ment, even if it means selling out on principle or against the prevailing better judgment. They avoid risk and never take a stand in the face of ambiguity or adversity. They do not confront problems directly and rarely take action based on what they believe is right.
Solution: These people need lots of reassurance and reinforcement. Encourage them to take calculated risks and ask themselves, “What is the worst thing that could happen?” Then, help them decide if proceeding is worth the risk. Championing something that one believes is right or important requires conviction. It is not always easy to go against the mainstream or choose the more disruptive course of action. Therefore, helping the person to know what is most important to them will strengthen their convictions and values. Ask them questions like; What is most important to you? What do you value the most? What is worth “fighting” or standing up for? On which of you values will you never compromise?

One-Trick Pony. The One-Trick Pony Board member is truly excited about being on the BoD because s/he can help "get the right things done," but he has no idea how to go about governing an association or running a business. S/he comes to the Board one or two issues, which suck up endless discussion time meeting after meeting. The person's narrow focus is an obsession in his/her life, and s/he draws it into every conversation. S/he also misinterprets Board materials related to his/her pet issues and fails to read unrelated Board materials prior to the meeting, which results in unpreparedness.
Solution: The short-term solution with this type of Board member is, first, a private conversation acknowledging the problematic individual's concern, defining the inappropriateness of the behavior, and emphasizing the need to read materials and address issues that cover the entire range of the association’s business. Second, if One-Trick Pony remains so, then during the meeting the chair can appropriately and tactfully restate the opinion expressed by the individual and directly ask the relevance of the statement to the current debate. Long-term, the options are few. If a BoD decision has already been made on the person’s pet issue, then reinforce that the decision has already been made and that it will not be revisited at this time. Try to convince them to recognize that the association has competing priorities and that the Board's job is to focus on the big picture. Such understanding comes with persistent, consistent Board training.

Nay-Sayer. This type of Board member is critical of almost any idea or solution offered, turning complaining and whining into new art forms. A Nay-Sayer often rolls his/her eyes, shakes his/her head, or inhales loudly with dramatic flair but offers little to advance the conversation. They discredit ideas before they’ve been fully explained and have a complete fear of the unknown. Their favorite phrase is: "That’ll never work."
Solution: The chair should provide a safe, open forum to air each BoD member’s comments and encourage the Board to actively listen with an open mind and suspend personal judgment until all ideas have been fully explored. The chair also should employ the Board's rules of engagement to ensure that diverse opinions are shared. When the Nay-Sayer finishes nixing, the chair should ask if anyone perceives positive aspects in the concept presented.

Flame Thrower. The Flame Thrower is volatile. They appear to have no impulse control or self-discipline and are intent at tearing things down. They often make outrageous statements, feed the rumor mill, and are driven to comment on anything and everything. They are often characterized as "troublesome” or “loose cannons,” since they exhibit unfocused, unpredictable, temperamental, and egotistic behaviors. They are aggressive and believe that a strong offense is a good defense.
Solution: The worst thing you can do is ignore the situation; it will only burn further out of control. The first step is a private conversation focused on the how this behavior is disrespectful to other BoD members. The chair should address the concerns of inappropriateness and review the rules of engagement for the Board. Publicly, the chair must not react to the inappropriate remarks or escalate the situation. Instead they should douse the situation by trying to stay focused on the big picture or the particular agenda item being discussed. They should enforce the rules of engagement (i.e. Robert's Rules of Order) so the BoD may have an orderly, balanced debate. If the situation becomes out of hand and all means of control have been exhausted, then it is perfectly acceptable for the chair to threaten to end or actually end the meeting right then and there.

Pontificator. This type of BoD member is an expert at distracting a Board and taking them off into the weeds of Never Land. They do not follow an established agenda because they are too busy promoting their own interests or issues that are important to them at the time. They will often give their opinion on such things as “matters of state,” world events, social trends, the association’s history, or his/her own area of expertise. They like to hear themselves talk and burn up the valuable time of the BoD on unrelated topics.
Solution: The best way to assure that no one derails a BoD meeting is to first have an established agenda of topics and expected durations. You now have a basis for keeping the meeting on track. When the Pontificator starts to take the meeting in a different and unrelated direction, the chair should ask him/her, “How is that related to the agenda item that we are now discussing? If it is not, then let’s get back on track.” or something like, “That is very useful information, but let’s get back to our agenda item.”

Secret Service. Closely related to the Worry Monger, this type of BoD member is always looking over his/her shoulder and is shrouded in secrecy. Knowledge is power to them. They hold things very close to the vest and only give limited amounts of information to association members. Their motto might be, “What they don’t know won’t hurt them.” or “That information is on a need to know basis, and they do not need to know.” Another factor might be that since they do not want to look like they don’t know what they are doing or open themselves up to criticism, they should wait until everything is thoroughly checked, verified, and finalized.
Solution: Progressive BoD’s must realize that timely communications to their association members is not only a responsibility, but also a duty and requirement for running an effective association. The Secret Service members should be reassured that it is in their best interest to help alleviate the fears and concerns of association members. They should be encouraged at every opportunity to communicate early and often. They must be helped to realize that it is OK to sometimes to put out “half-baked” information as long as they tell association members that everything has not yet been finalized and things could change.

Sensitive Tooth. Any strength can also be a weakness and this type of BoD member can be overly sensitive to the needs and concerns of others. They become “shrinking violets” whenever a tough decision has to be made, particularly if it involves people. Their judgment becomes clouded because someone could be hurt, even though it may be in the best interest of the association. They can be at a loss when confronted with situations that require basic technical expertise or clear thinking. They may sweep problems under the rug when in conflict, may ignore the task in favor of relationship issues, and may take criticism personally. Unfortunately, this approach to problems won’t get them resolved, they’ll only grow.
Solution: These BoD members may need encouragement to recognize and pay as much attention to the details of the task as to the people. Help them understand that criticism or rejection is often objective and should not be taken personally. If they are uncomfortable making unpopular decisions, then don’t put them in the lead position for making them, if at all possible. If this is not possible, come to their rescue and don’t leave them hanging on a limb when confronted by angry association members.

Even though this is 10 item list, I will add an 11th.
Incompetence. There is no way to “sugar coat” this type of BoD member. They are in way over their head, which may be the result of no one else volunteering for the position or a miscalculation on their part of their own capability to perform the job. These are not necessarily bad people and their hearts are very likely in the right place. But the fact is that they may not have the necessary skills, experiences, or temperament to be an effective Board member.
Solution: Try to use these people for non-critical activities and minimize the damage that they could do. There is usually enough work to go around for everyone and you certainly do not want to discourage a “willing worker.” If this is not possible, then you may have to spend time and effort in mentoring and educating this Board member. If that does not work, you may have to employ “work around” strategies and hope for a quick replacement.