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Friday, March 14, 2008

What I Learned from the Homeowners Associaition

Last night I chaired the annual meeting of the Merritt Downs Homeowners' Association. I am blown away by how well that meeting went, capping a year-long turnaround effort by the two of us who comprise the HOA Board of Directors. Now some of you who know me know that I'm a start-up and turnaround junkie; a fact that has a lot to do with my coming to Nelson seven years ago. Having done so many of these I thought I had a good handle on how its done. The feedback from the homeowners last night, however, gave me some new insight on what people look for in leadership. Here's where we've been and what I've learned.

Context
This week last year Dalton Masson and I came to the annual meeting to see what in the world was going on. We'd had two Boards in the three years that the community had existed (being a former cattle field in Old Hickory). One Board resigned amid scandal, the second resigned in disgust. There were only a hand full of people at the meeting, and the spirit was evil and accusatory, with only negative energy in the room.

Being new to these types of associations and meetings, before we knew it we had been nominated and elected as only two people on what is supposed to be a three-person Board. We couldn't get a third person to accept a position. For those of you unfamiliar with HOA boards, its a volunteer position and there's absolutely nothing in it for the members but grief. Still, the junkie in me smelled a mess and there's nothing more appealing than the opportunity to make right something that's in the ditch. Dalton survived a terrible stroke several years ago and then lost his beloved New Orleans home in Katrina. He sits at home all day on disability, having had to retire physically but still having his financial wizard mind in tact. We took the job.

Although we were charged by charter with finding a third member, Dalton and I established a great working relationship and decided early on that the two of us could agree on most anything, so we bucked the covenants and became a Board of two. Also, the covenants require that there be a President, Vice President, and Treasurer. We similarly ignored that requirement and both of us are Directors; no other title, no rank, no pecking order. We then made another critical decision to focus on the fundamentals; all the block parties in the world won't save us if the grass is high and the pool has a green wall. Finally, we set out to vet all the service providers to the community to find out why nobody liked the property management company and why simple maintenance couldn't get done. We ended up not renewing any contracts with any vendors and spent the year selecting a whole new team for this upcoming year.

Last night we reviewed the year, the finances, our priorities, and introduced the new team to a group about double in size to the previous year. It is terribly early in Year Two of our two-year term, so there really haven't been any significant results from the turnaround yet. Still, there was applause in the room at various times for the changes and the spirit was entirely different.

Lessons

1. Keep it simple, and harmonious - By flattening out the Board in terms of numbers we kept the number of opinions to a minimum, thus fostering agreement. I've seen so many managers in business who want to cover themselves by bringing everybody into the conversation. That's fine at some level, but at the top get a small group that can get along and get things done. Last night the harmony between the Board members and new vendors set the mood and the homeowners picked up on it instantly.

2. Focus on the basics - When your organization, or department or division or company, is dysfunctional your Step 1 is to stop doing anything that's sexy, fun, done just to please a strong-willed personality on your team, etc... These are distractions and the core cause of organizational dysfunction is almost always found in the core of your business. Get rid of the distractions and focus on getting your core business right. Last night we didn't get a single question on block parties or community cookouts; we fielded a dozen on the landscaping, the pool, and the balance sheet. People you lead know when you're full of fluff and when you know your business, and there's nothing sexier to your people than getting a bonus check.

3. Get over yourself (and get rid of people who can't get over themselves) - One of our themes in talking to homeowners in the community has been, "We have no agenda other than to get it right; we know there's no Ferrari at the end of our term". Last night one of the kindest comments we heard was, "I just want you to know how comforting it is for me to know that the organization is being run by people who really didn't want it". As an employee, isn't it a different experience when you work for a leader focused on their profession vs. being led by someone whose in it for the ego, or just the money? Some of the worst leaders I know are in it for the gated community, the trophy spouse, and building their empire within the company for all to see and worship. Their judgment is clouded by self-interest, and their people don't trust them.

4. Attitude is everything - We've never been on a Board or lived in a community with an HOA before. We're right up front that all suggestions are welcome and please call us on our mistakes so that eventually we'll get it right. Last night a small Indian man on the front row, in broken English, said to us, "I'll take the right attitude over the right answer".

People are feeling good about the overall direction; now if we can just get the pool opened by Memorial Day all is well. Which really is Point 5; it feels good to accomplish a turnaround, or any accomplishment. And we get to enjoy it for about five minutes before its time to go back to work...

Jim

1 comment:

Michael S. Hyatt said...

Jim,

This account is very inspiring. It's amazing how much of this applies to business—any business!

Thanks,

Mike