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 undergoes the painstaking process of recruiting and hiring a new one. Many think that their job is completed once the contract has been signed. But, in reality, it is just starting a very important phase that should not be ignored or underestimated – the transition of the new Management Company into its association. The transition can be lengthy and complex in the best of circumstances, while worst case scenarios can involve lost documents, unpaid bills and even the disappearance of funds. Done properly, it can result in significant personal and organizational efficiencies. Done improperly, it can also result in stress and turmoil for everyone involved and a period of downtime for the association.
Too many associations leave their new Management Company in a "sink or swim" situation, once they are hired. After all, they are getting paid all that money to know what they are doing, right? By the same token, too many newly hired Management Companies allow an association to do that to them. After all, they are the customer and they know what they are doing, right? There are several consequences that can be expected with this approach for both the Management Company and the association including:
- The Management Company may not thoroughly understand which customer(s) they are trying to serve – the person who hired them, the BoD, or association members. They in turn, may direct their efforts in the wrong direction or may be unduly influenced by the wrong people who have limited or skewed perceptions, or their own agendas to advance.
- The Management Company may not know about the nature of the association, its culture, its people, its issues and its opportunities. Although this knowledge is often gained over long periods of time, it is usually through a trial-and-error process with a high cost in terms of money and people’s time.
- The Management Company may become isolated. By not getting out and connecting to the people who really know what's going on and not building critical relationships with BoD members, they can be left stranded.
- The Management Company may come in with "the answer" but it may be the wrong one. The Management Company may come in with decisive actions and a directive tone to "fix" the association problems, often following their company standard policies and practices. But, “the answer” may not fix the right problems.
- The Management Company can move too quick or too slow. Attempting to do too many things at once may confuse and overwhelming people. Not making enough meaningful progress early on may breed dissension and discontent and plant seeds of doubt in their capability.
- The Management Company may not manage unrealistic expectations. Not understanding the nature of key stakeholders' expectations and carefully deflating those that are too high, while taking advantage of those that can be useful, will undoubtedly lead to performance disappointment in the eyes of the customer(s).
The cost of an improper transition of a new Management Company into a condo or homeowner association — in terms of failure rates and lost opportunities — is very high. Whenever there is a change in a Management Company, one can expect a productivity decline in the association -- a sort of organizational "downtime" that occurs due to this transition. It can be the result of the old Management Company leaving with its focus on wrap-up activities, the association BoD reacting with reduced involvement due to the uncertainty of the situation, or the new Management Company arriving on the scene with a lack of accurate information or important relationships with key decision-makers and leaders. This can cause the association to temporally shut down many of its normal activities until the new Management Company gets on board and up to proper speed.
According to a survey of 200+ company CEO’s; it takes an average of 6.2 months for a typical new midlevel manager to reach their optimal level of effectiveness. In the US Navy, this period has been estimated to be up to 6 months for a new incoming officer. Therefore, it is not unreasonable to expect that these numbers would be similar for a new Management Company manager joining any condo or homeowner association. Intelligently managing the transition process can significantly reduce the amount and length of this downtime to an association. An orderly and planned transition process can cut this “downtime” to 1 to 2 months.
Transitions are pivotal times and also periods of great vulnerability. New Management Company managers who fail to build momentum during their transitions face uphill battles from that point forward. The actions taken during the first few months have a major impact on the overall success or failure of the new Management Company that is hired. This book provides a proven method of transitioning new leaders to organizations. It has been used by the author for over 25 years in the for-profit business environment with an excellent track record of results. Simply put, IT WORKS!
Although many people can gain valuable insights from this book, it is specifically targeted towards a new Management Company manager and/or the BoD of any sized condo or homeowner association. Since the transition is vital to the success of both, either party can take the lead in implementing the principles and recommended actions. The objectives are to minimize organizational and individual stress and to reduce organizational "downtime" (less than optimal productivity). This is accomplished through a series of planned activities that assess and react to the needs, demands, issues, and concerns which much be addressed during this critical first 90-day period.