Condo/HOA Professional Forum

Three Key Issues

9/17/2014

The ongoing evolution of
community association management

The publisher recalls the Year 2001 with
Property managers and professionals respond from across the country to provide a 2014 Update and a projection for the future
· What role will technology actually play in the homeowner association world?
· How has CAI’s position changed over the past twenty years?
· Is there room for a candid communication platform between board members and their professional property manager?

These are three of the questions being asked around the country and discussed in management offices and at board meetings.

Hi-Tech vs. Reality (2001)
The proliferation of hi-tech and .com companies hit the community association field just as it did so many others. It was pretty much a big noisy wind in 1999-00 followed by a breath of reality in 2001 as many of the newcomers faded away while the survivors reevaluated exactly what business was to be reasonably expected.

Many companies were offering to build individual community web sites for thousands of dollars, and some for no money at all with an expectation that banner ads would pay the bills. The underlying presumption was that the individual homeowners would flock to their own community’s web site. That’s not really happening. Sure plenty of individuals are now more web-savvy than five years ago. Thousands, even tens of thousands are now ready to jump on the Net as soon as they get home from work, but they are really no more interested in condo activities and concerns than they were before hi-tech made access so easy.

The managers and boards are proud to present their meeting minutes and agendas on-line for all to see. Financials are available. Even elections are possible. The communication pathway is clear, but apathy is still the main challenge. By the way, banner ads don’t work so well as people first thought. Statistics are proving them to be about the least effective of the measurable advertising media. The surviving players in the web site business are looking elsewhere for revenue. They are developing and providing value-added tools for the community associations to run their business. The expectation was that the internet would finally provide the ideal communication medium for condos and HOAs. The reality is that nobody has much more to say now than they did ten years ago. The only time homeowners are interested in condo business is when there’s a problem. Once the problem is solved, they go back to their own life struggles.

2014…JOE WEST RESPONDS:

Community associations have always been a microcosm of society. Since the rise of the two-income, overworked family, people have continually altered the way they send and receive information. Add to that the extraordinary amount of data now available through so many formats, people have to be very selective when it comes to what they spend their time actually reading, watching and listening to.

Sorry, your association’s web site still isn’t anywhere near the top of that list, no matter how much effort you’ve put into it to keep it interesting and informative. People will only visit that site for a specific reason – to find an answer to a question, or to find out where to complain.

But that shouldn’t matter….the association should still maintain a web site that provides as much information and association transparency as they can post. People want to be able to find information when they want to find it, so put everything you can think of on the association’s web site.

I built and manage one condo association web site. It’s huge. It has every document, policy, resolution, newsletter, budget, reserve study, board and committee member, work request form, project schedule, photos’ of social events and 20 other pages of information. For a 350 unit condominium it gets about 120 hits a month – peanuts by internet standards. At the annual meeting, the board asked if they should take it down or shrink it ---- the unanimous response was “NO” ---- they like the fact that it is there when they need it, and that’s the point. You want to be there for both the people who actually read the stuff you put out, and for those who only want to look it up when they need it.

The fact that one form of communications is dying or dead doesn’t mean you stop trying to communicate. Regularly poll the residents about how they would prefer to receive information …..emergency, important, FYI….. and file it away. Then match the responses with the technology that services it. One association liked Twitter - “ ……the Board committee and management sent our short tweets of Meeting dates, reminders, community interest activities, Board meeting summaries, etc.. It was also used as a director to the community’s website for more in-depth information. “ (http://www.examiner.com/article/for-an-hoa-board-communication-is-the-key)

Community association management has always been late to the technology ball. Up until recently, management companies did not have the resources to invest in software development and continual hardware upgrades. Some companies were able to, and they, along with third –party companies, began to develop software for most of the management services. Now, most digitalize documents for storage, and transmission, as well as providing access to needed information for boards and owners, as well as employees. In recent years, technology has moved from desktop to mobile devices and management makes good use of that. Not surprisingly, few make good use of technology to track their own costs, especially personnel costs on a per client basis. Management has never been comfortable with time reporting so many still don’t really know the profitability of specific accounts.

--Joe West, 39 year veteran of the condo/HOA industry President Community Associations Network

How has technology influenced our business?

2014 Linc Cummings Responds
Technology has transformed our industry. We started in the 1960s with builder/developer assistants becoming managers using telephones, typewriters, calculators, and the USPS. Now all it is all gravitating to the “cloud”. Many in our business are still of the “old school” mentality and are slowly dropping out and being replaced by tech-savvy folks.

Technology has greatly increased productivity and efficiency, but has in many cases taken us further away from the people we serve. We are in a customer service arena where personal contact is vital to maintaining cooperation and satisfaction. While we can communicate quickly and efficiently today with our thumbs on an iPhone, it does not offer the immediate human feedback so important to achieving understanding, cooperation, and agreement. It is easy to text nasty messages today without regard to how it will be received. Face-to-face contact is still very important. New technology efficiency needs to be balanced with human reception and reaction.

A number of the great management companies with the best mainframe computers are being left behind by smaller, more agile companies with laptops, iPhones, and IPads with all their computing being done in the cloud. Consolidation of management companies offers standardization and economies, but moves the manager further from the client. Board members are showing up today with their handhelds with all the same information available to them real time. Managers are no longer the sole conveyer of association information.

Those management companies and managers who seem to be thriving today are those who focus first on their clients, maintain human contact, and use technology wherever they are to support them.

Linc Cummings Principal, Cummings & Leeds LLC
CAI Founder and former President   www.CummingsLeeds.com

The Evolving Role of CAI (2001)
The Community Associations Institute has long been the major trade association connecting all segments of the industry. When it was founded, the guiding wisdom was based on representation of the homeowner, the property manager, the public official, the professional vendor (lawyer, banker, CPA, etc.) and the blue collar vendors (roofers, painters, landscapers, etc.) The institute was to provide an educationally oriented environment where all could share their opinions and concerns for the general good of the industry. There was a gentleman named ‘Linc Cummings’ who was a driving force. He was likable and provided a cohesive personality and drive. The homeowner was acknowledged as the central membership unit with all of the others there to enhance the industry and hence the homeowner’s situation. Education and communication were central to the mission.

After 25 years and nearly six separate reevaluations, self-examinations, retreats, consultants and introspective studies, the organization made a major shift in what it once was. The national organization, once financially challenged and of minor importance to the actual mission of the institute became flush with cash and a strong revenue stream, taking 75% of all membership dues plus fees upon fees. Most of the additional income came from managers paying for accreditation designations. Reserve study professionals paid for their own RS designation, and the attorneys were encouraged to join their own college of community association lawyers with additional fees and publication costs. The national organization found the Midas Touch. The local chapters, where 99% of the real activity of the organization takes place, found themselves strapped for cash and resources to deliver the prime product of the organization. Local CAI chapters once put on from six to a dozen different educational seminars a year. They once published newsletters with educational information and industry news. In 2001 the major activities of the chapters focused around the commerce generated between vendors, managers and their community association clients. It became more a trade association than an educational type of organization. Many chapters still held monthly luncheons with featured speakers. The attendees being the managers and vendors in a networking business environment.

CAI once had a course of study called the Leadership Training Program (LTP) that evolved into the ABCs of Condo Management. It was designed to give new board members an overall orientation to their new responsibilities. Producing that seminar at least annually is a requirement for each of the local chapters. While the content of that program, designed for new board members, is supposed to be controlled, it was really not. I sat through several sessions around the country that were supposed to be instructive and educational. However, the instructor decided to let each attendee have 5-6 minutes to tell stories of their condo experiences. Other segments turned into panel discussions that often ran far afield of the stated title of the session. That’s what poorly run panel discussions can do. The better management companies developed their own orientation programs for new board members and provided them in an ever-increasing frequency with good results.

CAI is still highly visible, just less faithful to the original mission of education. They still have the greatest archive of printed information addressing problems endemic to running community associations. They try to be a national voice of the industry in the legislative arena and in formalizing national property management credentials. What they really achieved in 2001 was an extraordinarily healthy bottom line for a national office with an annual payroll of over $1million. There were sporadic movements by old guard members to revamp the national staff, but they came up short. CAI is a strong national organization that dulled the point of its local chapter representation. The professionals involved see it as a business networking opportunity, not so much an educational force for board members or a common ground for problem solving. Business comes first.

2014…JOE WEST RESPONDS:
CAI has completed the transition from educational non-profit association to trade association. Today, management certification and education, as well as vendor membership fees, exhibit fees and advertising, provides the revenue that keeps CAI solvent. And, as the saying goes-----follow the money. To be fair, CAI was, and is, caught in an almost impossible situation. During my time with the organization, it tried very hard to be all things to all people, but that almost bankrupted it. In the process of trying to save it, hard choices had to be made and they were. You can argue or crab about it, but if you had been in charge, you would have been hard-put to find a workable alternative.

But hard choices included those made by members. After being a member for 30 years, having worked as a national staff member, and having been president of the local chapter, I took a hard look at my membership. I was classified as a vendor and my membership dues were set at $525 annually for essentially 6 issues of Common Ground - $87.50 per issue - (at the time my chapter had somehow screwed up its mailing list and I wasn’t getting any local newsletters). Great magazine, but not that great. I made a decision not to renew my membership. I still attend the trade show for the local chapter, and I’ve even had an article published in Common Ground. But with no certification to maintain, I have no driving need to “belong”.

CAI members still put out some of the best educational and informational material you can find, but you can find a lot of it on the internet. You can purchase most, if not all, of their publications on Amazon – overpriced – but available to anyone.

The second biggest change in CAI was the removal on the prohibition regarding lobbying. CAI PAC’s have been active in many states and relatively effective in both creating and blocking legislation. In the process they’ve garnered the reputation of being anti-homeowner by numerous local groups. The battles are increasing and will probably go on for a long time to come.

Joe West, 39 year veteran of the condo/HOA industry
President Community Associations Network

A few numbers to put this all into perspective:
In 1975 there were slightly over 2,500 community associations in the U.S. Today there are nearly 350,000 associations and CAI has 66 chapters and 35,000 members worldwide!

Our vision for CAI was a non-partisan, non-profit, research and education institute to address the successful creation and operation of community associations and become the preeminent source of information for the industry. We set out to educate all involved with common interest communities on: structure, governance, operation, management, communication, maintenance, financial, risk management, et al.

In March of 2014 there were:
13,716 people who had qualified for CMCA (6,853 of whom are currently active)
6,794 AMS (3,865 currently active)
2,447 PCAM (1,637 currently active)
274 RSS Reserve Specialists
153 CCAL Community Association Lawyer
107 CIRMS Insurance and Risk Management
74 LSM Large Scale Manager

CAI provides the standards, guidance, training, credentialing for common interest communities worldwide.
Linc Cummings   Principal, Cummings & Leeds LLC
CAI Founder and former President

Report Card for property managers (2001)

Most property management companies have a feedback mechanism for their boards to voice their concerns about the manager’s performance and the overall company performance. Most of these take the form of a discreet anonymous report card mailed to each board member and expected to be mailed back to the president of the management company for evaluation and action. Response is measured at 65-85%. Most people respond when there’s something wrong. If things are running smoothly, it’s just one more form to fill out that slips between the cracks. Maybe that’s as it should be. As long as the management companies listen to their clients, and most do, the purpose is accomplished.

But what about reversing the procedure? How about having the managers evaluate the board’s performance and point out areas where a board can help themselves by doing things a bit differently?

When presented with this thought, most management company presidents grinned and shook their heads. It would be a great idea, but our clients really aren’t interested in hearing any criticism of how they act. They are the customer.

Is that really healthy? A board of amateur volunteers ought to be very receptive to opportunities to improve their performance in order to improve their results. The managers are just not about to try and offer constructive criticism. They’re too afraid that an emotional reaction will result in the loss of the account.

It all boils down to the “R” word. “Respect”-mutual respect is the key to good community association management. Board members are volunteering their own personal time for the good of their communities. If their efforts can be more rewarding, then they deserve to know how. Managers ought to have a bit more confidence in their positions and generate more respect by being able to offer constructive criticism. Even if it’s to tell the loud mouth at the end of the table to give some of the other board members a chance to voice their opinions and allow the facts to be presented and considered.

2014…JOE WEST RESPONDS:

Sorry, this isn’t going to change. It’s the nature of the beast. Cabinet members don’t tell committee chairman that they’re bullies; CEO’s CFO’s, COO’s don’t tell board members they are “out of order”. They manipulate, maneuver and convince them of what they need to do to manage the entity they are administering. If you’re lucky, the association you’re managing elects reasonably sane people and you can work with them, providing “guidance” when needed. But that’s likely to change from time to time, given the electoral process, and the reluctance of large numbers of people to donate their time and talents to their association.

Management’s job is to manage, not just the physical plant or financials, but the people. This has been one of the weaknesses in management education – education of managers in the art and science of managing people.

Forbes had an excellent and concise article regarding the skills a “manager” needed to be successful – it really doesn’t matter as to business.

“People skills are, in short, the various attributes and competencies that allow one to play well with others,” explains David Parnell, a legal consultant, communication coach and author. “While on the surface these may be summed up by notions such as ‘likeability,’ or having a ‘good personality,’ when you start to look at what makes one ‘likable,’ for instance, you’ve opened Pandora ‘s Box.” But more often than not, these attributes come in the form of effective, accurate and persuasive communication, he says. (http://www.forbes.com/sites/jacquelynsmith/2013/11/15/the-20-people-skills-you-need-to-succeed-at-work/)

A few years ago I posited to a group of management CEO’s that with modern technology, a manager didn’t need any great level of expertise in maintenance or finance……most of that could be quickly referenced via the company’s web site. What was needed was the ability to create a working relationship with various groups of individuals, helping them to form a functioning unit, guiding them through the various mazes that association decision-making faces, and communicating effectively with all parties. Not an easy task, and one of the reasons managers tend to burn out all too quickly.

Joe West, 39 year veteran of the condo/HOA industry
President Community Associations Network

0 Comments

Evolution of the Community Association Manager

Evaluating the quality of a Community Association:
Questions worth asking

Three Key Issues

Archives

Categories

Evolution of the Community Association Manager

Evaluating the quality of a Community Association:Questions worth asking

Three Key Issues

Archives

Categories

Evaluating the quality of a Community Association:
Questions worth asking