ABC Easy As 123

SETTING BOUNDARIES TO AVOID SCOPE CREEP.

By Dean Jackson, CCAM-HR

Have you ever had friends or family who really had trouble with boundaries? Maybe, dad read your diary. Maybe, your friend is a close talker and invades your personal space. Boundaries are important, and they sometimes need to be learned. When boundaries are not enforced they cease to be important, bad habits continue, and that close talker’s breath will continue to make you light headed.

Management companies have A, B, and C clients (you may define yours differently).

The A clients relax and trust their manager and management companies. There is an easy rapport and little drama. These clients allow the manager to keep the plates spinning, they take advice, and they are not afraid to raise assessments or spend money on necessary preventative maintenance. Approximately 20% of clients fall into this category, low maintenance, low volume of emails and phone calls, and coasting along the minimum of angst.

By far, the biggest percentage of clients fall into the B category. Approximately 70% of the associations and their boards of directors take effort to manage. These are the associations that may have to be convinced to pave the parking lot or replace the roofs, but once they have all of the pertinent information, they are all in.

They fall into the “trust but verify” category. It takes patience and a bit of work to keep things running smoothly. Emails or phone calls are common but not overwhelming, and the manager has to be on top of providing information, answering questions, and being organized.

B associations are the bread and butter. They make the management company earn their bread, but in the end, they know that the company is on their side and out for their success.

The C clients are usually the ones with boundary issues. While this group can be as little as 10% of the client load, if the manager isn’t careful and prepared, they can take up 80% or more of their time.

These boards of directors are mistrustful, micromanaging, and miserly. They monopolize a manager’s time with after-hour phone calls and emails. Their mistrust can lead to antagonism against the manager and vendors to the point where vendors refuse to work with them.

A C association can have the manager repeatedly looking up information, providing explanations that have been provided before, and to the detriment of their community, they often refuse to spend money, and when they do, the pennies they pinch look like they were flattened on a train track. The emails are frequent, the phone calls are long, and the responses are expected immediately regardless of the hour.

So, how does a manager and a management company rehabilitate a C association or set up a scenario in which a client learns to respect boundaries and remain in the A or B categories? Paul Collins, CAMEx, CCAM, CEO of Collins Management, offered a few suggestions.

START WITH EDUCATION

Providing advance education for a board of directors so they understand their role, the role of the management company, and the role of the manager is very important. To this end, board orientations are important. Here they learn about their fiduciary duties from their attorney, insurance broker, manager, and others.

Organizations such as ECHO provide training to boards on how to conduct meetings, how to read and understand financials, how to understand insurance coverage, and how to work with management.

With the proper education, the board of directors will be able to understand that their duties to the association are more than just saving money and that their relationship with management should be a partnership built on trust.

ENFORCEMENT

The manager needs to be disciplined. They need to learn how to set boundaries and help the board to understand why. When a board is bending or breaking boundaries, the manager should be able to guide the board to a more productive alternative.

CREDIBILITY

The manager should build credibility with the board of directors. When a task comes up at a meeting and the manager can accomplish it easily, they should offer to do it and follow through.

If the manager follows through on tasks they say that they will do, the board should learn that the manager will take care of business without micromanagement, that after-hour email or call, and the need to question every decision or action.

THE EXECUTIVE AGENDA

This is simply a meeting agenda with well-considered thoughts and recommendations to the board after each agenda item. This enables the board to know that the manager is thinking and planning things out ahead of time and not on the fly. The manager is being proactive, providing guidance, and actively moving things forward.

BOARD DISCIPLINE

If the manager can help a board to prioritize and choose one or two projects to focus on rather than the 10 that they may want to do, it will help them to focus and make decisions, avoid confusion, and yield demonstrable results.

The board should also be disciplined about excessive communication and having multiple directors give directions to the manager. This can cause the manager to be confused about their tasks, and the board to be confused about what directions has been given to the manager.

BILLING

Billing keeps a board honest. If the board wants the manager to do a lot of things that are outside of the scope of the contract, they should see the effect on their invoice as soon as possible. The boards should know that if they are making these requests, there is a cost. The board has skin in the game.

The manager shouldn’t establish a precedent of not billing. This does them and any successor managers no favors. The management contract is the manager’s friend. It sets out clearly the items that are included and excluded. This is not an all-you-can-eat buffet. A manager should be diligent about working to the parameters of the contract and not be shy about billing for the items outside of those parameters.

What happens when a C client can’t or won’t improve their grades?

An assessment of the expenses associated with the management versus the profitability of the account should be reviewed.

• How much management time is it taking?

• How many board meetings do they have?

• Are there a lot of violation letters or architectural applications requiring a lot of back office support?

• Is there a lot of extra billing?

• Should their management fees be raised, or should they be cut loose to make way for a bigger earner?

Ultimately, losing one C client that can’t be rehabilitated may free the manager and staff to manage several more A or B clients, improve morale, and improve the bottom line.

Thanks to Paul Collins, CAMEx, CCAM, CEO of Collins Management, and Melanie Malik, CCAM- PM, Director of Operations and Education at Collins Management for their contributions to this article.

Dean Jackson, CCAM-HR is the Director of Project Management at Collins Management, ACMC.