Thursday, March 19, 2009

Pay Attention to Your Management Company Transition

The relationship between an association BoD and its Management Company is usually a deep one, and one that can last for a long time. The longer a working relationship lasts, the better the two parties understand one another and work together. But, when a condo or homeowner association Board of Directors (BoD) decides that its Management Company is not doing the job to its satisfaction and that it should be replaced, it instills a range of uncertainties, hopes, and fears. Even managers who have previously been superior managers may not be the right manager for that association today. Lots of things can contribute to this situation: Board personalities change, the needs of the community change, expectations change, skill requirements change, ---- and for whatever reason and nobody's fault, the manager may simply not be a good "fit". The decision to change is sometimes initiated by the Management Company itself due to internal staffing issues such as; resignation or reassignment of the manager, inability of the Management Company to make a profit, disputes with the Board or association members, etc.

Once the decision has been finalized on who to hire as the new Management Company and the contract has been signed, you enter a very important transition period. Most condo or homeowner association BoD’s woefully underestimated the importance of the transition period, or may not have given it any thought at all. The same is true for Management Companies. Even if either party does pay attention to this transition, it almost always focuses on the technical side of the business (by-laws, past BoD meeting minutes, financial information, delinquency and violation logs, business processes, etc.). It seldom focuses on the people side of the equation (the culture, unwritten rules, key membership influencers, informal communication channels, things to avoid, etc.). Any successful transition is maximized by jointly addressing both areas, simultaneously.

No matter how skilled or competent the new Management Company manager may be, s/he will go through a normal transition period to learn the organization and to get up to speed. These first months on the job are critical to building the foundation for delivery on promises and many believe that a new manager’s success or failure is determined within 90 days on the job.

Although everyone is counting on the new manager to be successful, it won’t just automatically happen. Ensuring a successful transition not only lies with the new Management Company, but also with the association BoD. If the association BoD expects to receive a return on its investment of time, energy, and money in selecting a new Management Company, then it should be actively involved in transition the new manager and invest the necessary time. This is not the time to be supportive from a distance.

Everyone loses when a new Management Company manager fails. Goals aren't met. Members are disenfranchised. Opportunities are missed, and often lost forever. How much does it really cost? The "soft" costs of derailment can be incalculable. The "hard" costs aren't. With so much at stake, you should do whatever you can you do to get the highest possible rate of return on your new Management Company investment? More importantly, why would you leave it to chance?
An important first step is for the BoD to understand how they want to use a Management Company. Then, here are some important steps for the new Management Company manager.

  • Prepare for the job – before you start the job
  • Learn as much as you can about the association
  • Hold a “supervisor” orientation meeting
  • Conduct an “administrative” orientation
  • Hold preliminary (one-om-one) discussions with each BoD member
  • Be visible and talk to association members
  • Make contact with professional service providers
  • Conduct a Leadership Transition Meeting with key association members
  • Finalize your plans with your supervisor and/or BoD
  • Secure some early wins

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