Where Have All the Association Leaders Gone?

Leaders of the past almost always seem more effective than those of today. It's a perceptual bias: We long for what we don't have, and mythologize what we used to have.  But even taking this bias into consideration, many of today's condo/HOA leaders don't seem to measure up to the expectations of their members.  .

Our parents talk about former leaders of their day that not only inspired confidence, but respect and reverence as well. They talk about Roosevelt, Churchill, Eisenhower, Gandhi, and others of that generation as larger than life figures.  Our generation often includes the likes of John and Robert Kennedy, Martin Luther King, Margaret Thatcher, Ronald Reagan, Mikhail Gorbachev, and others. Sure they had their flaws, but they were courageous and decisive, and could communicate in ways that made it clear what they stood for.

So, where have all the good leaders gone?  "They're out pleading, trotting, temporizing, putting out fires, trying to avoid too much heat or legal problems, trying to please everyone, and trying to keep all of this in balance with their personal live that is impacted through this volunteer position.  They're peering out a landscape of bottom lines, multiple personal preferences and expected entitlements that often put them in the category of "hired help" or "landlords" by their constituents."  They resign.  They burn out.  They decide not to run or serve.

These leaders of today have to navigate a "very slippery slope" and operate in an environment that has changed significantly over the recent years, including:

• First, the velocity and volume of issues that Condo/HOA leaders are confronted with today has increased substantially. This doesn't mean that the previous generations of leaders had it easy; rather they had more time between decisions than leaders have today. Now, with the advent of instantaneous communication within and across the members, leaders have very little time to think.  Most of them are inundated with information and overwhelmed with meetings. They move from one issue to the next with frequent interruptions as new developments occur.  Relaxed time to think, reflect, and plan is limited and fragmented. But leaders who don't find ways to carve out that quality time reduce their effectiveness.
• A second reason for the diminished confidence might be that many of today's Condo/HOA leaders are overly concerned with the reactions of their stakeholders. This may sound odd, since a key function of leadership is to tune in to the needs of the people they are leading. Listening, however, only goes so far, particularly when the many voices do not agree. At some point leaders need to declare their intentions, even if not everyone will be happy. For this reason today's Condo/HOA leaders often hesitate to do what they think is right. Instead they seem to base their policies on polling trends, or about the reactions of influential members within the association. In contrast, respected leaders drive towards a longer-term vision and find ways to handle the speed bumps along the way.

Although there are theories that say leaders are born and not made, it is my belief that everyone has the leadership potential.  Leadership requires taking risks and initiative, which is discouraged by fear of failure, fear of repercussion (lawsuits, loss of job, criticism, damaged relationships, etc.).  Unfortunately, the operating environment will likely only get harder; therefore it is up to the men and women who serve as association volunteers to upgrade their leadership skills if they are to meet these increased member expectations. 

We can begin with accepting that fact that each of us can make a difference and begin by changing ourselves first.  We can become an effective leader by developing and enhancing our own leadership abilities.  We can begin by learning how to lead ourselves first, then by becoming an example to others.

One of the most important skills and a good first place to start is improving our decision making skills.  Association leaders are constantly required to evaluate alternatives and make choices regarding a wide range of issues that impact their association. Therefore, it goes without saying that successful leaders are good decision makers.  That doesn’t necessarily mean that they only make good decisions, but rather that they can make bold, timely decisions, and they are not afraid to make adjustments along the way, as needed.  They place a high priority on being fast and not necessarily always being 100% right.  Although you may think it is risky to make a quick, and possibly incorrect, decision, the reality is that timeliness is crucial in today’s ever changing and equally challenging environment for any business, including an association.

Waste Elinination In Condo or Homeowner Associations

The elimination of waste is the goal of any "Lean System", which has been popularized by the very successful Toyota Production System. It defines three broad types of waste; unreasonableness, inconsistencies, and activities that do not add any customer value. A condo or homeowner association is not exempt from these forms of waste and can also benefit from their elimination.

• Unreasonableness. This includes all the unreasonable work that a BoD imposes on its committees and members, such as forming a committee without a proper charter or description of the duties it is to perform, requiring a member to "jump through hoops" when satisfying a request for financial information, asking a member to investigate a project/idea, knowing that it will never be approved. Unreasonable work is almost always a cause of multiple variations.

• Inconsistencies. This is the variation and inconsistency that may exist within an association, such as; the enforcement of CCR's or the collection of delinquent maintenance fees, granting an architectural variance for one member, but not another. Lean focuses on how the work design is implemented and the elimination of fluctuation at the policy formulation level.

• Waste elimination. This specifies any human activity, which absorbs resources, but does not directly add value to association members such as; poorly run meetings, making a decision without sufficient factual information, continually revisiting a decision that has been made, calling a BoD member to find out the details of a past decision. These non-value-adding activities and results should be eliminated.

Lean is, in its most basic form, the systematic elimination of all forms of waste. Waste elimination is discovered after the process is in place and is dealt with reactively. It is seen through variation in output. It is the role of the BoD to examine the waste in the processes and eliminate the deeper causes by considering the connections to the unreasonableness and inconsistencies of the system.

Customer Relationship Management in an Association

In today's customer-driven economy, businesses and associations must move to a customer-focused personalized approach. The expectation of association members is that they are the customers of a BoD. Members want to feel important and they want to know that a BoD has the necessary expertise to manage their interests. The more you demonstrate your specific understanding of their problems, concerns and aspirations, the more quickly they'll support you, often without really understanding what you are promoting or deciding.

Therefore, the highest goal of customer relationship management for a BoD is making sure they are keeping customers (members) happy, discovering and solving problems. A problem is simply the difference between what you have and what you want. It may be a matter of getting something, of getting rid of something, of avoiding something, or of getting to know what you want. In order to do this, they must build and nurture relationships with the members.

As a business professional, you should ask yourself: "What business am I in?" The answer is quite simple: if your business has anything to do with people – and ALL associations do - you are in the business of building relationships. "Some BoD's think that if they manage an association, they are in the business of making business decisions. They aren't. They are in the business of building relationships – because that's how you make decisions that are compatible with the needs and interest of association members.

In every association and business activity, influential people succeed and non-influential people don't. You cannot influence someone unless he or she likes you in some way. People are motivated for their reasons, not yours. Rapport is the key to influence. Rapport and influence start with acceptance of the other person's point of view, their state and their style of communication. To influence you have to be able to appreciate and understand the other person's standpoint. And these work both ways: I cannot influence you without being open to influence myself.

Beyond making decisions as an individual, and as every BoD member knows, the landscape gets a little more complicated when you are a leader of an organization such as a homeowner or condo association. First, you have to make decisions in a group environment. This is very different than individual-based decision making and involves a whole different set of dynamics, considerations, challenges, and opportunities. Personality traits such as emotional maturity and the ability to get alone with others take on more importance in making these types of decisions and managing an association. Rather than focusing strictly on business acumen or technical skill, associations need BoD members who can persuade as well lead, and communicate as well as command. It is a different type of skill set than the traditional command-and-control personality. It is a more subtle, sophisticated type and requires someone who is an "influencer."

But, probably the most unique dynamic is that comes into play is that a BoD is made up from members of a community in which they live. The people who elect them and who they represent are friends and neighbors. Therefore, the health of the association is fundamentally determined by the relationship the neighbors have for each other and for the BoD. Make bad decisions or untimely decisions that do not adequately represent the views of the overwhelming majority of members and you will lose their critical support. Power freak BoD members, spurred on by expensive and egotistical attorneys, attacking neighbors with nasty letters including threats of fines is not how good neighbors treat each other.

For that reason, when making decisions in an association, everything possible should be done to create and maintain open and amicable relationships. Members of the community should be encouraged to attend board meetings, to form and join committees, and to express their needs and opinions and solve mutual problems together. Although in some circumstances they do not have the right to vote on a particular topic, they certainly they have every right to be involved in the discussion pertaining to that topic. Limiting discussion to a few short minutes might be appropriate for large organizations and/or city council meetings, but they are over-control and over-kill for condo or homeowner associations. In spite of well intended advice from professional management company people to be formal, experience would suggest that informality and friendliness are far more effective. Demands are resented. Requests are honored.

What Does a Good Association Decision Look Like?

Clearly, the top function of a condo or homeowner BoD is to make good decisions that are best for the association and its members. When a BoD does not make good decisions, it can alienate its members, create distractions, and build mistrust towards the BoD. Decisions won’t stick - they will be revisited again, people will implement actions not chosen, or the results of the decision will be invisible in a matter of weeks. But, what does a good decision really look like?

There are two critical components; the quality of the decision and the timeliness of the decision.

• Quality of the decision. How would you recognize a high quality decision for your association if you saw one? Many would give answers like:

o All the right people have been involved
o We had all the best information available
o Risk was considered
o A decision was made—action occurred!
o Everybody bought in to the process
o The process did not drag on and on and loop around
o We did not get bogged down in the details
o There was a clear set of choices
o We knew about the difficult trade-offs to be made
o Implementation went smoothly
o Etc...

These are all important considerations among a long list of others. Generally, they can be summarized into six categories:
1. Is the right question being answered?
2. Have we generated a small set of creative yet feasible alternatives (or choices)?
3. Do we have meaningful and reliable information, particularly about risk?
4. Have we identified clear preferences and trade-offs?
5. Did we exercise sound reasoning, and clear communication about complex issues?
6. Do we have a commitment to action?

• Timeliness of the decision. The second component of good decision making is its timeliness. Nothing slows down an organization more than paralysis by analysis – the inability to make even smallest decisions quickly. Unnecessarily delaying a decision or making no decision is just the same as making a decision. You have simply chosen the option of taking no action. It means you are defaulting to the status quo.

When you don't make a timely decision, there are a lot of other bad things can happen, even though the decision itself may be a sound one. It can cause delays in decision implementation which in turn, can result in a missed opportunity or make a bad situation worse. It can put the association into a "downtime" condition that brings it to a temporary standstill on the issue being examined. It allows the grapevine and rumor mill to churn, which now brings further complications that have to be addressed. But, probably one of the biggest problems that it brings is a loss of confidence in the BoD leaders. Hesitation or a reluctance to make a decision is often the sign of ineffective leadership and is a surefire way for a BoD to lose support of its members and thus its ability to lead.

When it comes to decision making, successful BoD leaders have learned that action is vital. They live with the reality of consequences and know there will always be uncertainty in their decisions. No one can see all possible ramifications; no one can predict every contingency; no one can absolutely prevent failure. Strong leaders know that failure is not final, it is a learning opportunity. The real danger surrounding decision making is not "will I make the wrong decision" but "did I make the best decision possible given the facts and circumstances in a timely manner". Good leaders will always recover from poor decisions - they learn and become wiser. But weak leaders will mess around and miss opportunities. And once they finally make a decision, chances are their decision will have no momentum, no passion and no urgency and probably too late.

Tighten The Financial Belt Of Your Management Company

If and how you use a Management Company to help manage your association duties, will be an important area to examine for cost reduction opportunity. This category of expense can run upwards of 30% of an association’s annual budget -- money that you may be able to spend more wisely. Depending on the nature and severity of your financial situation, you may be forced to take on more of those duties even though it may not be your first choice. Elimination of some or all of the services, rebidding/renegotiation of the Management Company contract, innovative use of private contractors or specialty service providers, holding Management Companies more accountable for cost reduction, and/or “partnering” to jointly attack cost reduction, are all within the realm of possibilities.

The reasons for an association using a Management Company can range from “convenience” for some to a “necessity” for others. But, if an association’s BoD is facing a severe financial condition, it may have to take on more of these direct management duties than it would prefer. Since the use of a Management Company can represent a major expense to an association, it is an area of cost reduction opportunity that cannot be ignored.

There are several things that should be highlighted regarding the use a Management Company.

• While management companies can simplify things for a condo or homeowner association BoD, they do not replace the BoD. A Management Company reports to and receives its direction from the BoD and not the other way around. The BoD has hiring/firing authority and can eliminate, replace, revise, or renegotiate a contract with a Management Company.
• Inexperienced BoD’s must guard against a Management Company “dependency” where the Management Company is calling all the shots and the BoD is merely a rubber stamp. A good Management Company can be a real benefit to your company. They do bring experience, an extra set of hands, and usually ideas tried and proven in a condo or homeowner association environment.
• A BoD has a fiduciary responsibility to the association for which it serves. This fiduciary relationship requires the members of the BoD to act in good faith and in the best interests of the members of the association and that they exercise due care and diligence. A fiduciary obligation represents the highest level of responsibility under the law. Unlike a Contractor, a Management Company acts as an agent of the association and is also held to the same fiduciary responsibility as the BoD. Likewise, it has a duty to manage association’s costs in the most effective way possible.
• A Management Company, like any company, is only as good as its people. They may not have the necessary skill sets to attack cost reductions and may have “blind spots” that prevent them from examining new ways to attack cost creep that will eventually come into play. Like the BoD, they too can also fall into the complacency trap of simply meeting cost increases by raising association fees. Today's Management Company must do more than review monthly budget reports, handle violation notices, or perform the daily maintenance activities. They must minimize costs at every opportunity and come up with creative ways for condo and homeowner associations to combat rising costs or economic downturns.
• 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, it also may be more difficult for an association BoD to change suppliers or to address a lackadaisical cost reduction performance. A responsible BoD must take any action that is necessary and to set the expectation with its Management Company that cost reduction is one of its primary responsibilities. It is also their job to replace them if they are unable to deliver.
• If an association BoD chooses to use a particular Management Company, it should expect a relentless effort to help them reduce their costs. This is a new concept for many, as they are much more comfortable with just delivering the services outlined in the contract. Take a look at your existing contract or a proposal from a potential Management Company. Do you see a statement that says they will deliver cost savings to the association? Or better yet, do you see a statement that says they will deliver (X) % of cost savings to the association? A Management Company like any other supplier does not like to be pinned down. It often easier to just deliver the service and pass alone any cost increases to association members in the form of increased fees or special assessments. Management Companies should be held accountable for cost performance and a provision should be incorporated into their contract to reinforce that responsibility.

Shown below are some ways to cut your Management Company cost:

• Determine the level of self-management that you will use and that you can afford (Take apart the Management Company contract line-item-by-line item and explore alternative ways to eliminate, revise it, or have the service performed by someone else at a lower cost. Separate the association “needs” from its “wants”. Have the Management Company provide quotes for each line item in the contract. This will allow for an apples-to-apples comparison with self management or other suppliers. Use this eliminated or reduced service level as a basis to renegotiate a lower priced contract.
• Use consultants, freelances or part-time employees, instead of full-time employees.
• Often, one of the largest expenses is bookkeeping. If you have an active volunteer group that is willing to take over some management tasks, you can realize significant savings by hiring an accountant to handle the books and to process payments/receipts.
• Competitively source your small service projects. For small service needs, it is not necessary to have a Management Company or professional contractor perform small maintenance tasks or to fix every little problem. (Handyman Services. For condo or homeowner associations that can't afford a full time maintenance person, contract with a licensed, bonded and insured handyman who can perform a monthly "laundry list" of small repairs. Combine tasks to provide a full day's work. Moonlighters. In most buildings, the building staff moonlights as painters and general repair persons. Talk to your staff and see if they would like to make extra money by doing some of the work that normally a professional would do. The best example of this approach is touch-up painting in halls and stairwells. Develop a closer alliance with subcontractors to perform work in the neighborhood to get small projects done quickly and cost effectively. Volunteers. You may have members who have special skills/hobbies (engineers, contractors, woodworkers, gardeners, skilled trades, etc.) who may be willing to perform small maintenance duties or projects. Do no be afraid to ask for their help. The use of volunteers is an excellent way to help keep your costs down.)
• Jointly explore with the Management Company any changes that the association cold make to reduce the Management Company cost that in turn could be passed along to the association. (Eliminate or reduce the amount of time that a Management Company is required at BoD meetings. Shorten the length of BoD meetings. Hold quarterly meetings versus monthly meetings. Hold daytime meetings during normal business hours to avoid overtime. Move the Board meeting to the management office to save manager time and avoid mileage charges. With an approved budget, proper policies in place and a management planning calendar, the Management Company should be able to handle most issues with only occasional input from the president.)
• Reconfigure how a Management Company handles administration of insurance claims and damage reconstruction. Insurance matters can take many hours of a Management Company’s time. If the contract agreement specifically states that insurance claim work is an extra cost to the association, the Management Company can bill the insurance claim for the time it takes to administrate a claim and renovation work. A similar principle involves time spent on collections or legal action against an owner. This management time should be billed to the delinquent owner.
• Rather than having the association bear the cost for preparing sale disclosure statements to owners who are selling their homes and buyers' lenders, have the Management Company bill owners and buyers separately for this service.
• Scale back on the frequency of services that are offered.
• Limited office hours or lengthened response time
• Offer part-time services for security, gate/door attendance
• Send out association dues on a quarterly basis versus a monthly basis. Allow members to pay dues on a semi-annual or annual basis, if desired.
• Hold minor repair items until enough are accumulated to allow for a more efficient utilization of maintenance contractor’s time
• Conduct less frequent inspections for CC&R violations and batch process related notices.
• Use electronic communications to members and record keeping to eliminate paper, filing, stamps, mail handling, etc. Allow for electronic payment of association fees.
• Eliminate all overtime and transportation expenses for Management Company employees
• Include in the Management Company contract a specific reference to the expected level of cost savings efforts required of the Management Company. This could be in the form of a specific amount or a percentage of operating costs. Then, conduct a performance review with the Management Company on the progress being/not being made. It is not uncommon for companies to demand a 10-15% annual cost savings from their internal departments or outside suppliers.
• Go out and get competitive bids and bring them back to your current Management Company so they have the opportunity to lower their price for you. Large service contracts like a Management Company should be competitively bid every year or two. Even if you are totally satisfied with the service received and have no intention of changing providers, it will demonstrate to the membership that the BoD is practicing due diligence and good stewardship. Also, if a particular Management Company is maneuvering for a contract increase, a competitive proposal will work to the association’s advantage in negotiating or verifying that the current Management Company is entirely justified in the increase. If it is to the advantage of the association, negotiate a long-term contract with the Management Company that states in exchange for a competitive price, the association will not seek competing competitive bids for a certain period of time.
• Confront your Management Company if it announces a price increase and re-bid the order where appropriate.
• Request that your Management Company prepare recommendations on ways for the association to reduce association waste, increase efficiency, or save money.
• Develop a scorecard for keeping track of Management Company service, quality, delivery and pricing. Implement a monitoring program (metrics, customer complaint system) to better understand the service / issues.

Condo or HOA Communication Skills #101

Effective communication skills form the foundation for successful management of a condo or homeowner association. They are so fundamental that we sometimes forget their significance or assume we are skillful. Communication skills enable you as a Board member to lead others. You cannot lead without being able to communicate your ideas well. People will not go with you unless you have established with them your ability to lead. That requires trust which is a by-product of effective two-way communication.

Show me an association that is rift with problems (including, member in-fighting and discontent, distrust and a very active rumor mill, etc.) and I will show you either incompetent Board members or ineffective communications, or both!

The intent of this article is twofold. The first describes how you can improve your personal communication skills and the second describes a high return communication technique that can be used with your association.

Effective personal communication includes; speaking and listening, informing others, and fostering open communication. When you master these skills, you harness a great deal of power – the power to get things done through others.

Effective personal communication involves:

• Knowing who needs what information and communicating that information in a concise and timely way
• Choosing and effectively using the most appropriate communication medium – oral or written – for those who will receive the information and how it will be used
• Knowing how to listen effectively

Shown below are some important personal communication skills to master.

• Speak effectively. You should make an effort to get your point across when talking and avoid rambling. Outline in your mind what you are trying to say and then stick to it. Try to eliminate speech habits that may annoy others, such as talking too slowly, too rapidly, or too hesitatingly. Become more animated in your style by using appropriate gestures and body language to “punctuate” you discussion. Also, work at varying your volume, pitch, and pace to emphasize your major points in discussions.

• Foster open communication. To build trust and solid working relationships with association members, it’s important to be seen as someone who is committed to sharing information with others and who goes beyond communicating only what is necessary. Developing a climate in which you and your members are open with information is critical in order to function effectively. You should find out what members want to know. Most are interested in things that impact them personally. Use the informal grapevine communication network as a way of keeping others informed. Wander around, have coffee with people, ask them questions, and so on. A proven communication strategy is to “over-communicate” rather than “under-communicate”, even if it means that you may have to retract something in the future. Just preface those types of communications with the statement, “this is what we know at this time, but it could change in the future -- so don’t hold me to it.” In other words, don’t wait to communicate something important until everything is finalized. Provide on-going updates as they occur and if you don’t want to communicate something at a point in time, let everyone know when they can expect to hear something.

• Listen to others. Listening involves hearing the speaker’s words, understanding the message and its importance to the speaker, and communicating that understanding to the speaker. It is key to developing and maintaining relationships, making decisions, and solving problems. When listening always follow this order: 1) hear, 2) understand, 3) interpret, and 4) respond; don’t jump from “hear” to “respond” without making sure you understand.

Communications with association members should not be left to chance – it should be carefully planned and managed. A useful technique for a Board to consider is the development a “staged communication plan” that provides a regular flow of information that addresses the things on their member’s minds along with the things that the BoD wants to communicate to them. This plan 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). Below is a sample plan.

As required or immediate

BoD decisions, meeting minutes, CC&R reminders, rumor control, emergency situations, breaking news, status report on key issues, notice of special assessments (anticipated or assessed), volunteer recognition, informational items (impending legislation, changes in the property tax assessment, sightings of unique wildlife, special events, new bike riding trails, fall color tours in the area, increases in water/sewer/trash collection, etc), highlight real people enjoying the facilities (special gatherings, normal day-to-day use, etc), feature articles of members, their families, hobbies, special achievements etc., changes in operations, such as major repair work on the pool, etc.

Monthly

Financial performance (budget vs. actuals), President letter (status report on key issues, breaking news, informational items)

Quarterly

Encourage & recognize volunteers (look for examples and reasons to thank someone), feature article on a committee activity or a particular aspect of condo or homeowner association life, any special accomplishments,

Annual

Year end letter (accomplishments, future outlook, holiday wishes), annual budget and maintenance fees, annual meeting notice and minutes, event calendar, contacts and procedures for requesting vendor services

The Dynamics of an Association Board Leadership-Team Behavior

How Board of Director (BoD) members interact says a lot about the state of a condo or homeowner’s association

Leadership is the ability to make things happen by encouraging and channeling the contributions of others, taking a stand on and addressing important issues, and acting as a catalyst for change and continuous improvement.

Yesterday’s leaders in for-profit businesses could demand performance. Today they are faced with a more educated and democratically oriented workforce. In a volunteer organization such as a condo or homeowner’s association BoD, the problems and opportunities can even more complex and challenging. As a result, today’s BoD must encourage and apply the contributions of all of its members, both individually and as a group.

Shown below are some ways that effective and ineffective BoD teams act.

Ineffective teams: People shield those in power from unpleasant facts, fearful of penalties and criticism for shining light on the rough realities

Effective teams: People bring forth grim facts—"Come here and look -- this is ugly"—to be discussed; leaders never criticize those who bring forth harsh realities

Ineffective teams: People assert strong opinions without providing data, evidence, or a solid argument

Effective teams: People bring data, evidence, logic, and solid arguments to the discussion

Ineffective teams: The BoD president has a very low questions-to-statements ratio, avoiding critical input and/or allowing sloppy reasoning and unsupported opinions

Effective teams: The BoD president employs a Socratic style, using a high questions-to-statements ratio, challenging people, and pushing for penetrating insights

Ineffective teams: Team members acquiesce to a decision but don't unify to make the decision successful—or worse, undermine it after the fact

Effective teams: Team members unify behind a decision once made, and then work to make the decision succeed, even if they vigorously disagreed with it

Ineffective teams: Team members seek as much credit as possible for themselves, yet do not enjoy the confidence and admiration of their peers

Effective teams: Each team member credits other people for success, yet enjoys the confidence and admiration of his or her peers

Ineffective teams: Team members argue to look smart or to further their own interests rather than argue to find the best answers to support the overall cause

Effective teams: Team members argue and debate, not to improve their personal position but to find the best answers to support the overall cause

Ineffective teams: The team conducts "autopsies with blame," seeking culprits rather than wisdom

Effective teams: The team conducts "autopsies without blame," mining wisdom from painful experiences

Ineffective teams: Team members often fail to deliver exceptional results and blame other people or outside factors for setbacks, mistakes, and failures

Effective teams: Each team member delivers exceptional results, yet in the event of a setback each accepts full responsibility and learns from mistakes

Lead Courageously

Leading courageously is a very important trait of any successful association BoD. Today’s environment demands that BoD members make decisions that involve risk, and take their stand in the face of ambiguity or adversity. BoD members who lead courageously confront problems directly and take action based on what they believe is right. They win the respect and commitment of others by standing up for what they believe; making tough decisions despite ambiguity; by supporting others who make difficult decisions; and by following issues through to completion in spite of adversity. The following are valuable tips to help you lead courageously:

Clarify what is important to you. Identify your most, deeply held convictions. What is most important to me? What do I value the most? What is worth “fighting” or standing up for? On which of my values will I never compromise? Then use those convictions to guide your leadership.

Take a stand to resolve important issues. Pushing to resolve important issues requires clear communication, a strong emphasis on paying attention to and working with others, persistence, and the courage of your convictions. When asserting your position, be wary of using tentative language like, “I might be persuaded to …”, or “I’m not sure that it’s the best way …”. Instead, use firm, assertive language to state your position.

Demonstrate leadership courage. BoD leaders are often faced with situations in which taking the most appropriate course of action carries with it a backlash of complaints, problems, and negative reactions. It requires courage to take action in these situations. If others perceive you as lacking courage, try the following; Support others when they make tough choices; confront tough issues head on; Say “no” when necessary; When you are reluctant to make a change, ask yourself what is behind your resistance?

Drive hard on the right issues. Remember the old adage “choose your battles carefully” when you are deciding how best to spend your energies. You can’t possibly do everything, but it is especially critical for you to address the issues that get in the way of, or further the development of, your mission.

Confront problems promptly. When important individual or team issues come to your attention, it is critical to respond quickly. Addressing problems keeps them from growing and conveys the message to your team that you are willing to tackle tough issues.

Be decisive. Indecisiveness may result in the perception that you cannot make tough choices or take a stand on issues. Consider indecisive behaviors that apply to you and then try to remedy them on such things as; difficulty in determining which of several alternatives is best, immediately turning to others before you formulated your own options, procrastinating on deadlines, second-guessing yourself, using tentative language when describing your ideas, loosing touch with what is important to you, concern for taking a stand that will cause others to dislike you.

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
  

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.

Communication

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.

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.