As I near my one-year anniversary of launching Association Bridge as a full-time venture, I am realizing how much freedom I have to share information. For 30 years prior, I spoke in the voice of a community association manager. The last 20 of those years were as an executive in the field. During that time, whenever I commented on the management business, I am sure some people thought that I had an agenda. In a recent conversation with a client, I had an Aha! moment. I was able to explain the realities of the management business with absolutely no dog in the fight. I was able to help that client perceive their reality clearly in a way I couldn’t before, or at least couldn’t quite as effectively.
One of the many ideas that came out of this month’s CAI Annual Conference had to do with the board-management company relationship. Sy Syms, an iconic discount clothier came to mind. He had a great company motto: “An educated consumer is our best customer.” Well, Sy was right and it works in our space as well. The more a community association board understands about the business of management, the better their odds of securing the services they need. They stand a better chance of forging an effective partnership with a management company.
Education and Partnership
Yes, I said partnership. The most satisfying and sustainable relationships are mutually beneficial to both parties. A zero sum game is transactional, not relational. Elements of partnership are integral to any sustainable relationship. Trust and confidence are fundamental. Why would business relationships be any different?
I think that can be a challenge in the community association management marketplace for a few reasons. Hyper-competition and commoditization have resulted in artificially low fees. This is at the core of failure cycles that can inhibit the perception of value, respect, and ultimately, trust.
The Aha! Moment
The moment I mentioned in the introduction was an Aha! moment for my client, which was why it was an Aha! moment for me. This board had already recognized they needed on-site management to provide the level of service they expected. But it did not stop them from expressing dissatisfaction over the performance of their community manager. They noted he had nine clients and took too long to address concerns or give them adequate support. They already knew he was overworked, but they didn’t see the fuller picture until I asked to see their financial statements. The interchange that followed went like this:
Me: So your monthly management fee is $1,686. That’s about $400 per week. Let me tell you a little secret. How much of that do you think goes towards your manager’s salary?
Board: (collective shrug)
Me: Probably about $100, give or take. So… how much time do you think $100 gets you each week?
Board: Ohhhhhh
Suddenly, everything made sense.
Solutions
Boards are going to have to go a little deeper. Management companies are going to have to let their clients see what’s behind the curtain a little more. When that happens, partnerships can happen. Failure cycles can begin to transform into success cycles.
This is the first of a new series of blogs. My goal is to help community association volunteer leaders understand the management business. I hope the insights into the challenges companies face and the opportunities that are available will help Board members to ask the right questions and make the best decisions when selecting and working with their management company.
