Sep. 4, 2008 - The Story of a Non-Profit Organization
Well, THIS interesting story begins some 40 years ago, when a group of enthusiasts who played a certain musical instrument (let’s say the Musical Saw—a contradiction in terms, of course, but a popular instrument in many rural areas) got together and formed an organization to encourage and preserve the heritage of this instrument and its music in the state of Michigan. I think in the beginning these folks were a few mid-state farm families who really enjoyed the annual music reunion and campout which happened in July in a rural community smack-dab in the center of the state.
Our friends encouraged THEIR friends to come to this celebration and before long the festival got larger and larger, and a club was formed with the sole purpose of holding the festival and preserving the musical saw and its heritage. The festival continued to grow, and the overnight campout for 30 people eventually exploded into a 4-day festival with 200 workshops, 50 vendors, 750 camping units, back-to-back stage shows, and the mournful sound of several hundred musical saws wafting over Michigan.
The festival moved to a large fairground in the town of Smack-Dab, and workers were hired to clean the barns, mow the grass, plant porta-potties, and empty garbage. The festival grew still more, and embraced food vendors and kids’ activities as well—so, more garbage and porta-potties.
The Festival Committee worked hard to keep the fees low—all 4 days of the Saw And Bow Gathering cost only $3 per person, and little kids and real old folks usually got in free. Dues for the Club were $5 a year—that was it. Everything else was pretty much done by volunteers, who – among other things – sold the tickets to the 5 -7 thousand people who came through the gates each year.
Sounds like a success story—the little engine that could, or the shiny saw that sang, or something like that. Even broke a world record for the number of musical saws on the stage at one time playing the same tune.
But what of the organization—the “Saw and Bow Belles and Boys”? And of the Festival Business, which now had income, employees, insurance, and assets and liabilities? Well, remember that the members of the SBBB Club were volunteers, motivated by a deep love of their instrument, its music, and the history of their state. The very organization was built on tradition and the preservation of values, and the organizational structure of the organization reflected their desire.
In 2008, a couple of things happened:
1.A key organization leader resigned with a very public statement about how the ‘rules’ contained in the bylaws prevented her from effectively doing her job;
2.The vendors of musical saws and related products said the same thing—the rules were preventing them from doing business effectively in the trade show buildings; and
3.The performers on the stage shows (often also vendors of products) said that they weren’t satisfied with the stage shows (which drew several thousand people each night) and threatened to not return and perform or sell saws and bows and CDs.
Yikes!
Having acquired the dubious honor of being a member of the club (that makes me a ‘Saw Belle’?) AND a professional association manager, I was asked to visit the bylaws of the SBBB Club and see what was up.
The first thing I found that was troublesome was that there was just a lot of ‘stuff’ in the bylaws that shouldn’t be there—the number of teeth you had to have in your saw in order for it to be musical, the fact that the saw can only be made of metal, and not any of the new substitute compounds, the fact that no member could play a saw that had a plastic handle in a stage show. There were several pages of rules about the festival management itself—who could ride the golf carts, what committees and subcommittees the group should have, how long the festival should last and what days of the month and week it should be on.
SAW FESTIVAL BYLAWS RULE NUMBER ONE: Get the management stuff out of the bylaws. By definition, the bylaws are the formal rules for regulation of the entity's (ie corporation) actions, such as rights and duties of officers, directors, share holders, and members. Bylaws are adopted by an entity usually at the first shareholders' meeting. Day-to-day management decisions cannot wait for bylaws changes to be made, and in 2008, organizations running business operations (such as a music festival or an MLS) doesn’t have the luxury of a year, or even 90 days, to make necessary changes.
The second thing that was troubling about the bylaws as I saw (!) them was the decision-making structure. Any changes to the SBBB bylaws had to be made by personal vote at a meeting which was held only once a year, right there in the Smack-Dab Fairgrounds. As a Saw Belle for several years, I’d never been to the annual meeting and barbeque: 200 miles is a pretty long way to drive for a fight and a sandwich.
SAW FESTIVAL BYLAWS RULE NUMBER TWO: Allow for mail, electronic, or faxed ballots. It’s difficult enough to get members to care about things enough to take a couple of days’ time to go vote on whether kids under 18 can ride in a golf cart or carbon-fiber saw handles will be allowed in stage performances. This is the modern age, and electronic systems are secure and efficient. Some states, however, have suggested language to include in bylaws, so check with your state government about absentee voting and other legal requirements.
The next problem was how to answer the question of SBBB membership. First, the bylaws weren’t clear as to who was the member—the individual, or the family. And if the family group was a member, how many votes did the group get? Pretty much the same problem appeared in the description of the Board of Directors: in an effort to preserve tradition and honor the past, the SBBB bylaws made every past officer and past major committee chairman a lifetime member of the Board of Directors AND, by the way, their spouses were automatically voting Board members as well. A rule like that can result in a whole group of very old people on the Board, as you might imagine. And in the SBBB's case, there were more honorary and appointed members of the Board of Directors than there were elected ones.
SAW FESTIVAL BYLAWS RULE NUMBER THREE: Be clear on who your members are and what powers they have. Past presidents and organizational ‘heroes’ are always a problem—we want to recognize and thank them. But often, they begin their sentences with “When I was president, we used to…” Try to avoid putting together a strategic planning committee or a board of directors filled with the past. The goal is to make your Board of Directors truly representative of the membership, as well—the voice from every segment of stakeholders needs to be heard. Include affiliates, vendors, and various levels of membership and point their faces forward, not looking back over their collective shoulders.
So there you have it. Michigan musical saw players are sharpening their teeth and preparing for their annual meeting. I think I’ll go this time, even though I may get a little cut up, bringing whatever voice of reason and experience I’ve gained after 30 years as a Realtor association manager. But the truth of the matter is, no matter how well intentioned an organization is at its inception, the world and the members change, and no preservation effort will keep things the same.
It’s a part of the job of a Board of Directors and of the association staff to keep the organization legal and IRS-Compliant through annual operating document reviews and governance changes. That’s a part of what’s known as ‘due diligence’, and it’s our obligation in our roles as volunteer and staff leaders.
Aug. 23, 2008 - I'm from the IRS and I am here to help...
One of the consulting projects I've recently (almost) finished is the construction of a policy manual for a non-profit Realtor organization. It's a pretty good-sized manual (about 150 pages, all told), because the CEO of the association has spent a lot of years standardizing the practices in the association office, and even created some processes which are included in the policy manual as a way to add consistency to office functions.
In otherwords, my client really understands the value of not having to reinvent the wheel every time dues are collected, new member applications processed, or envelopes are opened and mail distributed.
That's a good thing.
The downside is, of course, that all of this material needs to be organized and presented in a way that is user friendly to a harried staff member who needs a quick answer to a problem. So I agreed to work on “The Big Ugly”, as we begun to call this document.
However, the real impetus behind the revision is the new IRS form 990, which tax-exempt organizations will now be filing with the IRS for tax years ending December 31, 2008 and thereafter.
If you are one of the lucky ones who encounters this form, you'll find yourself enmeshed in an 11 page core form and 16 tax schedules.
“Oh,” you say. “We hire a CPA to do that stuff. Not to worry.”
Well, the problem with that is, this new 990 is more than finance: the IRS is focusing on the management, governance, and various activities of exempt organizations in a new and much more thorough way. The IRS feels that good governance is the basis of good tax information (imagine that!) and that these new requirements will encourage a new level of transparency between the organization and the members and public. (Note: even if you're a 'for profit' organization, these are worthy goals, and you might consider incorporating some of the suggestions implied by the form.)
It goes without saying, of course, that in filling out the form and responding to the questions, you always have the option of answering “No”, when asked if certain policies are not in place. There's even a place to indicate WHY the organization doesn't have these policies. The idea here is that the IRS is not mandating, only suggesting, that these are the components of good governance. You're allowed to disagree—if you wish.
However, these 'suggestions' from the IRS via the 990 might result in an organization's inclusion of the following components in its policy manual :
A written “Whistle Blower” policy in which the process of reporting suspected infractions is described and employees are given instructions regarding how to communicate with appropriate management. Of course there's also a guarantee that the organization will not retaliate against a good faith accusation by an employee.
A written “Conflict of Interest” Policy which should be renewed annually by leadership and staff. I developed a form in conjunction with “The Big Ugly” which should be signed annually by the appropriate people.
A written description of the process used to determine the compensation of the CEO and other key management employees of the organization.
A document retention policy, one which also forbids anyone from destroying documents which may become part of a legal proceding involving the organization.
A policy that all actions by the Board of Directors will be recorded in minutes and retained for records. Most Realtor organizations do this, but many don't make it a written policy. The IRS thinks they should!
Internal review of the 990. In completing the new 990, you'll find some questions about internal review of the form, particularly about whether or not the form has been reviewed by the governing body prior to filing. The point here is to encourage transparency, and while it's not a requirement that it be reviewed, you might wish to think about sharing it with the Board, or with the Executive Committee, if you have one.
Joint Venture activity. Examine 990 Part VI, line 16a. You'll be asked for a yes/no response about whether your organization has participated in a joint venture (taxable partnership or taxable association activity). If the answer is 'yes', you'll find that line 16b will ask if you have policies in place to govern that relationship, It's very likely that if you have an arrangement with an MLS that is a separate corporation apart from your organization, the Board attorney and/or CPA may want to draft a policy for your policy manual.
I hasten to add that I am neither an attorney nor a CPA, and my list of suggestions for a policy manual are only that: a list of suggestions. Any language you use in your manual should be reviewed by a qualified professional. However, I do think that the new 990 is a step toward identifying the components of a good governance structure for your association, regardless of your taxstatus.
Who can argue with consistency, transparency, and fairness as values which should be embraced by every association?
Not long ago, my good friend and Supreme Queen of Association Managers, Cindy Butts, blogged about a short training tape which she had watched called “The Abilene Paradox”. She mentioned a few interesting points which piqued my interest—namely, that often leaders of groups agree with a variety of off-the-wall propositions just because they don’t want to offend anyone by expressing opposition.
I can remember several such incidences in my previous position—one involved the husband of a member of the Board of Directors. To call this man incompetent and untruthful would, in fact, be very nice—complimentary, even. Of course the Director-wife in question loved him, so much so that when he said that for an outrageous fee he would be delighted to accept an offer from our association to solve all of our technology needs, the Board seriously considered his proposition, not out of ignorance but out of respect for the wife of the aforementioned con artist. Fortunately, his fee was so outrageous they finally made a decision not to spend the money at that time (not too long after which the tech turkey blew town leaving behind a lot of debts, unhappy customers with partially developed software, and a devastated former wife.)
The point of this is, of course, that yes, there was conflict of interest and yes, there was politics, but mostly there was a group of very nice people who didn’t want to make waves and instead floundered to the very edge of a steep drop-off, and a potential association disaster.
In “The Abilene Paradox” the situation is the same: the family, bored and hot on a summer Texas day, decides to go to Abilene for dinner. The drive is long, the car is hot, the dinner is mediocre, and nobody wanted to go in the first place. Why is it we do those things?
I’ve just ordered “The Abilene Paradox” video and the training materials, and I will be using these as the basis for some for the leadership training programs I’ll be doing this fall. I think being able to raise challenge points, to move decisions forward without becoming confrontational, and to constructively examine all sides of an issue are important skills to be learned in any leadership role, whether it’s in business or the organizational sector.
And whether or not I’m on your agenda for a training session, be alert! the Abilene Paradox is everywhere. Cindy describes a few situations:
“1. Committee afraid to hurt the feelings of the chairman who liked an idea so much, so they met for nearly two years to discuss the idea because they liked him (not the idea);
2. Group agreed with the loudest voice;
3. Immediately called staff "obstructionist" for suggesting negatives - so rallied around that;
4. One committee member talks incessantly so everyone voted yes so he'd stop talking and they could move on to something else;
5. The bigger the group the less likely people are to speak out;
6. Didn't want to make their friend mad, so complained about issue before and after the meeting/vote but said nothing during discussion part of vote;
7. Social events that no one enjoys or attends continue because "we can't be the ones who vote to kill it";
8. Want to be on a committee, but don't want to show up. Like having it for their resume or to get meeting materials - but not the actual participation part.”
Or, to quote Jerry Harvey in Organizational Dynamics, "organizations frequentlty take actions in contradiction of what they really want to do and therefore defeat the very purposes of what they are trying to achieve. A major corollary of the Abilene Paradox is, ' The inability to manage agreement is a major source of dysfunction in organizations'."
Dinner, anyone? I know a great truckstop on the outskirts of Abilene.
Whew! Today I just completed one of the most frustrating assignments of my consulting career: I was hired to be a meeting facilitator for a non-profit organization for one and one-half days at the group's annual retreat. And if I had to rate the performance of the facilitator (me), I would consider my performance a total washout.
Now I write this not to be critical of myself, or to be critical of the organization for which I was working, but to shed some light on what needs to happen in order for the consulting experience to be a successful one—in this case, 'success' means that the organizational expectations for the meeting were met, appropriate decisions were made, and the money the group paid for a consultant was well worth its investment.
Here are some ideas for making sure this happens....and, needless to say, much of it didn't happen in my case on this particular assignment.
The organization needs to do the meeting pre-work. Most frequently, this stage is staff responsibility. Consider this phase a rehearsal for the performance, if you will—but it means a little prep work for everyone concerned with the meeting. The first thing that any meeting needs is a clear statement of the expectations for results. For the meeting of the Fingerpainting Arts Professionals (FAP!) (I made that name up—could you tell?), I was told that this was the annual planning retreat. “Well,” I thought, “I've done those before—30 years of 'em, actually. Since the invitation to facilitate this meeting had come from a referral group, I immediately contacted the FAP CEO, confirming the location and time. I might add, the invitation came (verbally) two weeks before the meeting. Point Number One: Plan Ahead.The attendance was good, by the way, so the meeting date had been arranged well ahead of time, just not the details, apparently.
My initial conversation with the CEO was at best sketchy. I had to ask him about the group—what was it named, who were the members, who was on the retreat group, and so on. Though I have been connected to the arts, and have done some Fingerpainting in the past, the fact of the matter was I knew nothing about this particular organization. The CEO, Dusty Nails, seemed affronted that I didn't know this information. Finally, I asked for the FAP Strategic Plan, which Dusty emailed me. I asked what the expected results of the conference were, and Dusty said, “Oh, we just get together to brainstorm. No real motions or action plans come out of this meeting. Next week I will send you the agenda.”
A couple of suggestions for CEOs who are planning to hire a consultant, speaker, or meeting facilitator arise out of this scenario:
Point Number Two: Develop a background packet about your organizationand use it for any instances where people need to be informed. Include what your organization is, its membership and structure, key points a speaker should know, and any unique snippets of information (how many of us have had speakers who can't pronounce “REAL' tor? How many Association Exec presenters have we experienced at seminars who think our job is to sell real estate?).
Point Number Three: Develop a written statement of meeting expectations. For instance, if your planning retreat should produce a stronger leadership team, an informed background of industry trends, and a clear work plan for the coming year, say so. Tell everyone—meeting facilitator, attendees, staff. Let folks in on the secret!
Point Number Four: Groups need action steps. The FAPs got really frustrated by the end of the retreat because the rule (stated several times) was “no action motions are made here at the retreat.” But what the group knew was, it only meets three times a year, and all of these wonderful ideas they were having were apparently just discussion items. Where would they ever see them again? No matter how fertile the discussion, participants want to have some notion that attention will be paid to their ideas in the future...even if it's just the promise that some of the steps suggested will be assigned to work groups or considered as inclusions in future budgeting. Something. Anything!
About four days before the retreat, the agenda arrived. It had three items:
Review of the Past Year
Consideration of Future Projects
Organizational Restructuring
There was no schedule, no indication of time frames, no breaks indicated, no evening activities described, and no convening and adjourning times. Perhaps some of that is convention that the group understands, but what about the new members? And, I might add, the Facilitator?
I placed another call to Dusty. “I'm a little puzzled,” I said. “I am reviewing the agenda, and I am still not sure of my role in this meeting.”
“Oh,” he replied. “You're the facilitator.”
“What does that mean to you?” I asked. “Do I introduce people? Start with an icebreaker? What?”
“The president will make the introductions and call the meeting to order. You're the facilitator,” he reiterated.
Point Number Five: Develop a job description for the consultant you're hiring. Review it with him or her. And in this case, the FAP president needed a little direction as well, and perhaps a conversation between the president and the facilitator might help clear the air.
Many association exec I know develop a script for these kinds of meetings. What that does is put into action form (much like a play) the chronology of the events and the responsibility for each. It might look something like:
1 PM: President calls the meeting to order. Outline the following three objectives
for the conference. . . . Introduce the two new members on the Board (include
bios). Directions for restrooms, snacks, cell phones, etc. Introduce Facilitator.
1:15 PM: Facilitator begins warm up exercise designed to build teamwork and
incorporate new attendees into the group.
And so on. Will the group stick to the script? Probably not—scriptwriting is not meant to be an exercise in micromanagement. But will the leaders and staff have more confidence because they know the scope of the events and who is doing what? Certainly, they will.
Point Number Six: Spend a few face-to-face moments with the consultant prior to the meeting. Dusty said, “Oh by the way, some of the Board members are getting together for lunch, prior to convening the conference. Why not meet us at 11:30 at the Moosejaw Tavern?”
“Oh, good,” I thought. “Maybe I will get some clues then.”
But no, the Moosejaw doesn't open for lunch, and our group of weary travelers went searching for food and a discussion venue in Moosejaw Village, population 300. Not an auspicious beginning, and by the time we got situated and had sandwiches in front of us, it was almost time to leave for our meeting. I had fully intended to ask Dusty and the president of FAP if there were any dysfunctional situations or loaded topics I should know about in advance. Oh well, then, I can run through the land mines with the best of them...
The best part of this story is that FAP has a great board of directors! Every board member brought considerable knowledge and experience to the table, and most felt comfortable in speaking and asking questions. Many were administrators of schools and had some power to effect results, and were supportive of FAP and its programs. I found myself enjoying their conversations and modes of finding information and coming to consensus.
So the retreat was not, for them, a waste of time. Participants came away energized and recommitted, and Dusty came away with many new ideas (and some rejections of his favorites). And me? Well, this group didn't need me in the first place.
And my report card should read “C-. Did not fit in with group. Overdressed. Contributed little to discussion.” I'll let YOU grade Dusty.
Jul. 10, 2008 - Don't get too casual on Friday--or any day....
One of the tech guys that I've always thought was one of the smartest guys around is Matt Cohen,Chief Technologist at Clareity Consulting. Matt's always had wise, very practical advice for me and he's a pretty interesting thinker when it comes to new ideas. I remember one very provocative conversation we had in the back of the room right after a vendor's ill-conceived 'product release'...but that's another story for another time.
Matt has an interesting blog article on telecommuting and security which every AE, MLS Director, and probably most brokers should study. As I was reading it, I was totally amazed at how far-reaching this issue could be for anyone employing people who access work computers from a remote location.
Of course Realtors have been telecommuters for a long time, and more and more brokers are cutting back on the bricks and mortar overhead expenses and encouraging people to work outside the office. Over recent years, there have been lots of business models for this kind of brokerage structure, and some have been quite successful. Now, as Matt points out, with rising gas prices, work-at-home is even more desirable.
In CDW Corporation's 2008 Telework Security Report, the trends are clear: over 76% of private sector employers provide support for remote workers, up more than 25% over the previous year. And over 40% of workers said that the ability to telecommute would significantly impact their decisions about taking a new job or staying in their old one.
There are additional advantages—my daughter, who works for a non-profit organization in Washington, DC, is a case in point. Her employer encourages work-at-home days. Work interruptions in DC are frequent—a guy driving a tractor onto the White House lawn can shut down the total Metro system for hours. A good thunderstorm can close the Beltway for an entire afternoon. As a result, companies build telework into their employee schedules—they know that matter what the disaster, work can be maintained with continuity if telework is an option for employees. And for three-quarters of the private sector workforce in America, it is.
The problem with this is, of course, security—just ask any IT geek. And the first item of security is verifying a remote users identity regardless of what computer she is using to access the remote database. MLSs should be worrying about this, and some of them are and finding that there several emerging solutions to that problem.
However, as Matt Cohen points out, every AE and every broker should be asking themselves the question: "Does my organization have appropriate information security policies and practices to address the risks of telecommuting?"
Matt offers some specific questions, the answers to which should be in your organization's policy. And we as management need to go one step further: the CDW report indicates 21% of governmental employees and 31% of private sector employees don't know if their employer has a security policy, let alone what's in it.
Policies about which no one knows are useless, about as useless as no policy at all. Guess we could get started on this issue at all levels of organized real estate. Begin with Matt's blog.
I was talking to a local Realtor association President yesterday, discussing the economic impact on organized real estate—specifically, real estate boards in economically hard-hit communities. This President was running scared. “We've been spending reserves,” she said. “The cash flow statement looks ok, but our overall balance sheet shows we're really spending down our cash reserves.”
“Well, that's what cash reserves are for,” I said. “We used to call them 'rainy day funds', and we are currently in the middle of a thunderstorm. It's fine to spend some to be there when the members need you. That's why, when you had all that spare change in your treasury you decided not to offer a dues rebate.”
Sally hesitated a bit, and then said, “Well, that's not all of it. We're not spending money to keep afloat and continue providing services—we seem to be doing some therapeutic spending. You know, like when I get depressed I go out and buy a new pair of shoes? Well, we're talking about new landscaping and new signs for the association building. And we are spending a lot of money on public advertising and community service projects, something we've never done before.”
In and of itself, of course, these are not bad ideas—but Sally's association has just lost 25% of its full members, and quite a few affiliates. That means a significant loss of income and—equally as importantly—a significant loss of the target market for the products and services an association sells to members. So, not only has Sally's group lost 25% of its dues income, its non-dues income like forms sales and the association store are also significantly decreased. What to do?
In my discussion with Sally, I suggested that now is NOT the time to cut visible, tangible member services. Some services which a Realtor association offers will never pay for themselves—ethics enforcement is one. That's an expensive program, if you figure in training costs, staff time, and member contributions of time and expertise. And while it can be streamlined and made more efficient, members tell us it's important to them, and should never be cut back. The same is true for education programs—at a time when members need skills the most, associations have to offer them more value, not less. If anything, now's the time to beef up Realtor membership programs, and make sure our members know we are really there for them.
Realtor associations have long depended on the MLS to attract and retain members. Oh, I know, there are really successful associations which do not have their own MLS, but most of us have never really developed the skills of membership development. One exercise every Board of Directors should engage in now is to ask themselves, “If I were a prospective member, would I become a Realtor? If there were no MLS, would that still be true?” And if the answer is 'no' from even one Board member, the leadership group needs to do a little self examination. Joining and maintaining membership in the local association is an economic investment for members. As one association exec said, “Anyone can join an association when the money's coming in, but the current environment is one in which we need to expand our membership programs and make the investment worthwhile."
(Of course, we should also debate the efficacy of the MLS in today's market and how long it will last—but that's the subject for another blog, and about 10 years of meetings.)
So, maintaining or enhancing member services is a necessity. By the same token, association managers should know every single nook and cranny of association finances. How much does each and every program cost? Include the overhead, staff time, member contributions, offsetting income—develop a complete picture for every function or service! In an association, some things are not going to pay for themselves, but are a part of the members expectations—ethics enforcement and lobbying are two important one, and should be funded by dues dollars. But many other programs are just there because they've always been there, not because they are valuable in and of themselves. Be prepared to make some hard decisions in those cases. And again,make sure you have a written business analysis for each product or service and some measurable results which you can analyze.
One association I know decided to have a First Time Homebuyer Expo this year. It was lots of work, renting a facility, writing press releases, placing advertising, securing speakers and exhibitors and so on. The association declared it a success based on the feedback from the exhibitors: “It was fun,” they said. “We loved the lunch afterwards, too.”
“Yes, I imagine it was,” I said. But ever the consultant, I asked: “Was it successful? Is that the same as 'fun'? How did you measure success?”
“Well,” a staff person said, “We had a lotta people come.”
“How many?” I asked. “And how many were members and their friends and relatives, as opposed to the buying public? What exactly did it cost in staff time, advertising, publications, and so on? Did anybody make any sales from this event?” Now is not the time to be casual about the answers to these questions: we are talking about return on investment here and as in any product release, success must be measurable and demonstrable.
To summarize, maintain service and products meaningful to members. Ruthlessly evaluate existing and proposed programs and services with a written business plan for each. And there's another caveat here: consider your service delivery.
In one Realtor association I'm familiar with, over half the members work over 30 minutes away from the association office. Now imagine this: how good is your association program—educational or otherwise—which entice members to take time and gas (at $5 a gallon, almost) to drive to an event? Better yet, how good is your convention, if you're a state association or a regional cooperative? How well have you marketed your product? Are there more effective ways to deliver services—online courses, YouTube media displays, staff and leadership visits, or web casting? If your association didn't invest in delivery technology when times were good, it will be more difficult to do so now—but there are an abundance of services from which you can subcontract these things. And most of all, don't go backwards! It's not the time to drag out (or continue) your 70's technology (like, say, printed MLS books or flossy magazines or conventions) when the world would rather read online and order using PayPal.
Instead of bemoaning the fact that this is a tough time for real estate associations, restructure your thinking to embrace this as the golden age of real estate associations.
Many brokers are cutting back on services like training and advertising, and physical overhead. For associations this means more opportunities to offer services to the collective member market which is no longer funding them. If your association brokers hated the idea of a fast-start sales training program, they may really like it now. Or perhaps it's 'Rent a Personal Assistant', community open houses, a call center, or a basic computer service department. But the secret is, find out what the members need—not what you think they need, or would like for them to need, or what NAR tells you they SHOULD need. And will they shell out a few dollars to subscribe to an online video magazine called “Toolbox”? If the content is really meaningful, of course they will.
This is a time when we all truly must think like the trade association that we are, a cooperative of professional people trying to benefit from shared products and services.
I wrote those two previous blog articles on the AE and the Board of Directors, thinking to stimulate a little discussion. Actually, I did stimulate some discussion, but it was off line, from one of my coaching clients. He asked, “So what's my role as an AE? I just came back from the NAR Washington meetings, and I had lots of great ideas—my head was just spinning! But my Directors who were there weren't really interested in what I was thinking. They had some nice dinners out, met with their elected officials, and did a little shopping. They're not really interested in what I learned, though—so what do I do now?”
Obviously, Mike is new at this AE-ing stuff. I remember my first NAR meeting (it was in New Orleans) at an annual convention. There were zillions of people, way too many things to see and do, my feet hurt, and the fire alarms kept going off in our hotel all night long. What information could I retain? What could I bring back to make the association better? All I remember is huddling in the lobby in my raincoat at 3 AM waiting for the firemen to finish their inspections and let me go back to my room.
But over the years I came to the understanding that traveling to state and national meetings is a wonderful way to gain new ideas and refresh your perspective on your employing association. It's just that the members who are there with you most likely will not share your outlook or your enthusiasm about association management topics. Elected leaders are more likely to get excited about some products they see at the trade show, or perhaps a controversial legislative initiative, or a new sales idea they heard about in the lounge—they don't care about the latest NRDS search parameters or how NAR is going to handle the issue of not enough rooms for the Leadership Conference, or whether AE's can sit with their association leadership at a NAR Directors' meeting.
“Yes,” you say on the plane ride home, “I found some great new ideas for our association website. You went to the Board Forum and heard the guy from Huston. What did you think?”
“Um,” says the President. What he really means is, “So? What will it do for me? For the membership? And how much will it cost? And does that mean we have to have yet another committee? And can we do it during my presidential watch or is this something we can do next year when Joann is President?”
Well, AE, what did you expect? Your President sells real estate. YOU run the association. He's good at what he does, and you were hired to be an expert at what you do. The President's priorities aren't yours.
So what happens when you get off the plane? My advice is to first of all, plant the seed. Put your new ideas in a report to the Directors as things which could possibly strengthen the association. But don't ask them for anything. Just mention that you are going to continue to research the idea of a revitalized association website, and that you'll construct a full-fledged proposal and business plan for their review and possible adoption.
Then do just that. Develop the parameters for the new website. Get quotes from programmers, website hosts, and overhead (your time and staff's). Forecast income—advertising sales, featured listings, links.
Project a time line. Check with the Huston folks and find out how successful their new site really is. Is volunteer help needed? If so, how--specifically.
Then, write it up. Get it to the Board in the form of a careful business plan, well in advance of the meeting where a decision is made. Show the Directors how this project fits in with their strategic plan and overall stated goals. Solicit buy-in from key leaders and staff, and go for it. In other words, take ownership of not only the idea, but the implementation plan, and make a responsible presentation to the decision makers.
The most your Directors can do is turn your plan down. And they'll be less likely to do that if they can see how it would work, and have confidence that you have done your homework and are prepared to be the plan manager. It is, after all, why they pay you.
And yes, coming back from a NAR meeting or an AE Institute or an ASAE symposium means you are usually raring to go with some ideas that will save your association world. But often you don't have the personal resources to do it all, or the association just may not be ready for the idea. I was always impressed by a good friend of mine, now the CEO of a large and active state association, who made a habit of coming to NAR meetings with a file folder of background information for the meeting and schedules for himself and the leadership from his association. I was impressed by the background work that he put into maximizing his attendance at the meeting, but even more I was impressed by the “to do” list he always maintained on the inside of that file folder. Each time he discovered a new idea, or heard about something he needed to follow through on when he got back to his office, he wrote it down. At the end of the event, John had a numbered list of steps in his action plan and a clear idea of what to do next.
The point of all of this is, understand as an AE that you are the expert at project management. That means defining, implementing, and funding. But does that mean that your association is (to use an often meaningless phrase) is “staff driven”??? Heaven forfend! If your leaders have done their jobs and constructed their association vision and values in the the strategic plan, then you are just the water boy (in this example, bearing a new website). It's the vision, direction, and funding of the leaders that make the project possible. And while they were out being good Realtors, you made it happen.
One of my current projects involves revising and re-writing some association policy manuals—and as a result I've been thinking a lot about manuals and the need for good ones in an association. This is especially true in Realtor organizations: because our governance usually involves an annual change of leaders (and, sadly, in some associations an annual change of AE's), it's imperative that there exists a good set of operating policies. These policies should be reaffirmed annually by the Board of Directors and both leadership and staff become familiar with the contents. It is within the policies that the association maintains its continuity and its history.
A big area of association misunderstanding is travel, and travel-related expenses. This is true in local and state associations: members often see themselves as travel 'have-nots', and imagine all kinds of excesses relating to volunteer and staff travel. When it's budget-crunch time, the jugular is the travel budget, even though it may be less than 5% of the total expenses—travel is where the majority of members envision the greatest misuse of “The Dues I Pay”.
AE's and past presidents can make great cases for the reason for making travel important. Particularly in the Realtor association, local boards are expected to fund participation in 3-5 state meetings, and equally as many NAR meetings (the Convention, Legislative Meetings, Leadership Conference, AE Seminar are a minimum number). And even though smaller associations have fewer resources, even one funded meeting is often subject to suspicion and scrutiny.
Can we avoid this? No, probably not. But as staff and leadership, we can treat the subject of travel with seriousness and accountability, and one of the first places to start is with a travel policy. Even if your association almost never subsidizes travel expenses, some day it will—and it's best to have your policies in place to avoid the misunderstandings which can arise after the fact (when you find the expensive bottle of wine on the president's expense request).
Here are some suggestions for what might be included in a comprehensive Realtor association travel policy:
Introduction: Travel policy purpose
Travel Arrangements and Reservation Procedures
Who Qualifies: what classes of members are reimbursed and for which specific events. Correspondingly, detail this in your annual association budget.
Air Travel: Reservations, reimbursement, class of travel, frequent flyer programs, cancellation or re-booking expenses
Rental Cars: Guidelines for rental types, preferred suppliers, insurance, car accidents and/damage
Personal Car Usage: Usage guidelines, reimbursement guidelines
Personal Travel and Vacation Expense: when connected with a business trip
Telephone and Computer Expense: Allowable calls, personal cell phone reimbursement, air phones, hotel room phones and computer access, rental cell phones and temporary Internet access.
Travel Insurance
Payment Methods for Travel Expense: Corporate card usage; termination of corporate cards; corporate card billing and payment responsibility; personal use of corporate cards; travel advance policy; use of personal credit cards; per diem limits if any
Expense Reporting: Timing for submission of reports, documentation requirements, narratives or reports to membership requirements; approval authorization process; appeals
Now your association may not need all of these subjects included in your policy manual, but again, it's always best to imagine the worst cases that could happen and try to anticipate the occurrence in a policy that can be referred to when a dispute arises. In addition, a good policy manual will answer questions like:
Doesn't the AE book all the plane and hotel reservations?
Doesn't staff arrange for our dinners reservations?
Can you come over to the hotel and leave the credit card number before I check out?
What's the matter with ordering a $300 bottle of wine? We can afford it!
Can I bring my wife? (husband, girlfriend, partner, best friend, mother?)
Do I have to share a room?
And so on. Remember, too, that travel is not something that everyone has experienced—or wants to experience. Nor is it particularly pleasant in these times of airline disruptions, crime, and terrorism precautions. Best to do your homework as an association and try to prevent as much confusion as possible with travel policies everyone understands in advance of the trip.
I suspect some of my peers were a little uncomfortable about those high expectations the Board of Directors might have of them, but let's get real. Members of the Board of Directors often don't have a clue about what's expected of THEM, either legally or by the CEO who is employed at the Board's discretion.
Here are my thoughts on the matter of what CEOs expect from their Board of Directors:
Legal Compliance – The CEO is, after all, hired by the Board of Directors, and evaluated by them, and compensated by them as well. This means that the Board is an EMPLOYER (a term not all of them may understand). Usually the CEO grasps these responsibilities more accurately: she,after all, knows employment law and employer responsibilities. She knows how to evaluate employees, pay them fairly, and dismiss them in compliance with the law. My personal recommendation is that your association should annually provide a review of Director obligations under the law: be specific about the requirements of financial oversight, employee management, and other legal requirements. This education process needs to be consistent and unrelenting!
Additionally, Board members must be well of their responsibilities in matters of anti-trust, equal opportunity, and other legal and legislative requirements. Again, consistent and unrelenting education should be mandated for all members of the Board.
Support – Often the CEO is in the position of enforcing a Board of Directors program, let's say a dues increase. Directors need to support the Board's decision, rather than blaming the CEO messenger. It's also bad business—and unethical—to snipe at the CEO rather than bring performance dissatisfaction to this discussion table.
Hands Off Management - Micromanagement is the bane of the CEO's existence, particularly when that level of detail is engaged in by people who are not fully educated in the topic at hand. The Board and the CEO need to reach an agreement in this area by signing off on clear job descriptions and responsibilities of each. Board members also need to realize that they do not assign jobs to staff: the CEO is responsible for the allocation of all association resources, including staff time. I remember an exceptionally enthusiastic elected association treasurer who could consume 10 hours a week of the staff business manager's time. As a result, staff work was not getting done in a timely manner, and overtime expense grew and grew. The CEO and the Treasurer had to work out a compromise plan which would satisfy the Treasurer's need to know and the existing association resources.
Financial Support – The CEO expects financial support for personnel programs. That means that she expects to be compensated in a manner equal to her peers in the management field. Health insurance, retirement, and other benefits must be included in this calculation: again, the Board must remember that the standard is not the independent contractor arrangements with which they may be familiar. Surveys are available which define these levels in actual situations: NAR's Toolkit for Recruiting AE's
And finally, the CEO expects the Board members to be the liaison with the community—both the membership community, the real estate community, and the public in general. It is Directors' familiarity of these areas which will govern the policies by which the Board operates and the direction it takes. An example of this is that of the CEO who, prior to beginning the budgeting process for the year, solicits information from the Directors about of the state of the real estate economy and its impact on business operations. Budgeting for dues income, for example, depends on knowing whether brokers will be hiring potential Board members, or cutting back; whether brokers are anticipating a good year of listings and sales, or a weak one. No budget can be realistic without this important information from the practitioners in the field.
In addition, it is the members of the Board of Directors who are elected to represent the membership community, and in order to do that they must be in contact with those members. Staff can do some of this work, but it is leadership which conveys information to and from the constituents. Each meeting of the Board might have time for this discussion on the agenda, or the association might set up an online discussion program for the Directors so that they can examine new information as the need arises.
As I mentioned in the previous post, people don't know things unless they are told. Directors run for the position for a variety of reasons—desire to serve, ego gratification, political agendas—but whatever the reason, they usually come into the Boardroom without a clear understanding of what's expected of them. Consider informing candidates for the Board of these expectations at the time a nominating petition is requested. Make sure that the Nominating Committee (if you have one) understands the requirements. And don't skip an orientation or a mentoring program for the new Directors as well as an annual review of expectations and requirements no later than the beginning of each new leadership year.
(writer's note: don't read anything into the fact that some of this text is underlined and blue. I just couldn't figure out how to turn it off.....j )
Jun. 15, 2008 - What the Directors Expect of the AE
In the introduction to this series, I talked about the need to establish regular, meaningful communication between the president-elect and the staff manager, or AE. I urged you do to this regularly—maybe a weekly coffee, or regular phone call. It's important to be there, to gain cultivate familiarity and confidence—not to mention trust.
One of the most significant interruptions in the circuitry between the leadership and the staff is the lack of understanding of the differing roles of the two. Perhaps the best way to mitigate this hazard is to approach it directly: develop a written list between the President and the AE about the expectations one has of the other.
Begin first with the larger statements. Those are really the most difficult to talk about, but once you have an agreement, then the smaller duties ascribed to each party will become more clear and any disjunct will be apparent. As an example, I have a friend who is the CEO of a mid-sized Michigan association. Her Board of Directors went to a leadership conference and decided that she needed a new title: “Board Executive Officer” just wasn't enough: it was much more prestigious to be called “CEO”. And so they bestowed the title (needless to say, with no new job description or salary increase). I was talking to her the other day, and she told me the phone lines into the association office were clogged with calls from morning to night—not unusual when an association has grown 40% in three years. “Get another line,” I counseled.
“Well”, she said, “I could take that the the Board for their approval....”
Egad! A CEO who can't order in a telephone line?
Let's begin by looking at what a Board of Directors might expect from a CEO. What specific attributes can be defined by the Board? Of course many of these characteristics will be defined by the inner workings of the Board itself, but certainly there are some 'best practices' that can be articulated.
Leadership! This is not the familiar (and often meaningless) question of whether or not an association is 'staff driven' or 'leadership driven'. A well-run Board of Directors has specific goals (can you say “strategic plan?”) and the CEO (or AE, or EO) should have the ability, influence with members and community, and charisma to guide the organization on its stated path.
Team Player. It's not enough for the CEO to be a member of the staff. She is, in fact, THE member of the staff—she's in attendance at the pig roast and the bowling tourney, she's the cheerleader for Realtors, she's a performer. Staff members are often, by definition, followers. The Board expects a well-run, supportive team, and that will only come from a participating, interactive CEO.
Staff Manager: In addition to wielding the broom on association office clean-up day, the Board expects the CEO to manage the staff. The Board of Directors does not want to handle personnel problems, staff development issues, or retention problems. The Board members want a well-running and competent staff team, and they expect the CEO to bring this about.
Business Manager: In addition to being a staff manager, the CEO should be competent in the day-to-day management responsibilities of the organizational operations. In a Realtor association, this means knowing about issues and trends, volunteer management, program management, membership records and financial direction. It means that the Board expects the CEO to solve the problems that arise as they do in ant business, and to find help from delegation of responsibility and available resources.
Communication skills are also a key expectation for the CEO. The CEO must be able to convey the goals and programs of the association, and keep key players informed—be those players leadership, members, or staff. The Board of Directors does not want to be caught by ignorance, and the CEO must assume the responsibility of informing them IN ADVANCE of their need to know.
Picture this scenario: a Realtor comes into the Board president's real estate office and says, “Hey, Jack! I was just over at the Board office in this rainstorm and guess what! There's buckets and garbage cans all over the place collecting water. There's buckets of it! Everywhere! I betcha you're gonna have to raise dues for a new roof, eh? Probably you should think about cutting out those expensive trips you guys take to places like Las Vegas first. And staff salaries, don'tchaknow?”
The impending disastrous dialog would never take place if the President could have replied, “Yeah, I know. The AE has called the roofer, and we're still under warranty. Not to worry.”
Community involvement. Most Realtor associations are concerned with their community image—that's no surprise. And so it is that the CEO represents the community just as much as the association headquarters building or the media ads in which many associations invest. The CEO must be visible and active in the community, holding leadership positions in visible community groups and being an industry spokesperson in appropriate discussions.
Personal Ethics. The Board expects the CEO to behave in a manner consistent with the highest propriety. Without this reputation, the association cannot gain strength in the community.
Impeccable Financial Management and Control. Probably this requirement should be at the top of the list! By law, the members of the Board of Directors are the stewards of the organization's assets,and it is through the CEO that these responsibilities are implemented. If you as CEO or elected leader have any questions in this area, I invite you to refer to my Financial Operations Checklist ( http://www.judithlindenau.com/financial_checklist.pdf) which is available for your use on my website.
Business Development: Certainly over the last ten years the watchwords of “non-dues income” and “run like a business” have been increasingly more frequent in Realtor hallway discussions. Some of that is due, of course, to the failing economy in some areas, and the loss of association income due to declining membership. Expense cutbacks are the word of the day for many Realtor associations, and accompanying that is the need for CEOs to look for new income sources. When I was the manager of a small association, I used to call us the “Bake Sale Board of Realtors”, because it seemed that ever project needed to develop a funding source. But above and beyond that, CEOs need to be alert to the income potential available to them, and take the initiative in bringing to the Directors some new income—perhaps a new membership category, an income producing website, or an online class. Directors (and members) are busy with their own business development, and they expect the CEO to produce results in this area.
The buck stops here. Well, that's the bottom line, isn't it? Board of Directors don't want excuses as to why something didn't happen, or was unsuccessful. They want to have it HAPPEN, no matter how difficult. In that respect, Realtor association Directors are no different than Directors of large corporations and cause-driven non-profits.
Once again, the important lesson here is to talk about these expectations in a no-holds-barred conversation between leadership and CEO. Often, Directors have not allocated resources (either staff or financial) to meet their needs. In that case the Board must evaluate the compromises necessary to meet their goals. In other instances, the association staff person has been hired without any expressed expectations and have no idea that her former experience as a secretary or librarian (or even real estate salesperson) does not provide adequate knowledge and experience to move the organization on the right path.
Next: What the CEO (and staff) expects of the Board of Directors.
Recently, the National Association of Realtors announced that its annual Leadership Conference was 'sold out' in a matter of hours after reservations opened. Long waiting lists were created, and grumblings and mutterings were heard among the ranks of Presidents and association staff.
It was a first—a national leadership conference that popular and so much in demand. Perhaps the reason lies in the poor economy throughout much of the US, and the need for elected leaders and AE's to gather together for support, reassurance, and new tools for association productivity in these difficult times.
An AE voiced another type of concern on a professional email list: “I've got to find a way to spend some quality time with the incoming president and figure out how we can work best together in the coming year. “
And yes, the NAR Conference was in fact more than a 'meet the bigwigs' opportunity: it was a time to share knowledge with peers and NAR staff, and a time to create valuable bonds between elected leaders and staff—a need which needs to be addressed no matter what the size of the association or the resources available to it.
Well, you don't have the NAR Leadership Conference to do this for you—so how do you as a local association staff member recreate the opportunity for yourself and your president? Here are a few ideas.
Does your state association have a leadership conference? Many do, and they are usually pretty good at building the awareness of the elected leaders of the great big world outside local association boundaries. But in addition, remember that getting away is one of the building blocks—it's a chance to have meaningful conversations on the trip to the meeting site, and a chance for you as the AE to find out more about your President. I once had a checklist of items that another AE provided me—personal questions like 'what does your President like to drink with meals?', And 'Does he/she expect to go to church while at a meeting or convention?' Make a list of all the questions you have which will make your time together easier because you've answered a lot of the logistical questions before you get started.
Use other available resources. The American Society of Association Executives sponsors a series of workshops for Elected Leaders and CEOs—and those opportunities are really worthwhile. The ones I've attended have been filled with interactive exercises designed to develop communication skills and partnerships between elected leaders and staff. It's also an eye opening experience to realize that the Cattlemen's Association, Leaf Peepers International, and Realtor leaders have many of the same issues .
The same can be said for other groups in your area: see what resources are available. Your local Chamber of Commerce might co-sponsor a leadership training event with you, or there may be a resource in your local college or high school who can provide mentoring or training for several of your leaders. Even hiring a personal coach to work with the two of you would be a real step in building a good, productive, smooth running team.
Whatever tactic you choose—a list of your President's personal preferences, an ASAE Leadership Training Opportunity or – if you are one of the lucky ones—the NAR Annual Leadership Conference, remember that leadership and teamwork don't just appear like magic. These are learned skills which come not as a divine gift, but as a result of hard work, training, and good communication.
I will continue this series with additional resources and suggestions—but don't wait for me. Start meeting with your incoming president on a regular basis and start this important process now.
I've spent the better part of an hour staring at this blank page, wondering how to coalesce my
thoughts on paper after the last few months of major change in my personal and professional life.
Perhaps the best way to do this is to start with my personal change. I've been the manager of a
real estate association for the past 29.5 years, and at the end of September, I retired from that position. It wasn't easy-I love my job and the people I work for, but it was time to move on. I'd planned this, researched
it, and was looking into every option available to me. I'd also completed a year of personal
coaching and I'd finished some coaching training programs as well. And
finally, I'd managed to complete some major home maintenance programs-painting, new windows, repairs. I'd given the
Directors plenty of notice and they had begun the process of hiring for the AE position. I'd even scheduled in a hip
replacement surgery so the physical part of me would be up and running in good order.
I was well positioned to begin thinking about "new"-new life, new body parts, new job. And as I
geared up my consulting and training presentations, I was thinking about the tremendous reinvention that is going on in
the real estate industry-new business models, new economic conditions, new membership profile. I
dedicated a part of my consultant slide presentation to the dichotomy in the Realtor membership, The Geezers and the
Geeks. And just last month I did a presentation for an AE seminar on the skills the AE needs to
build association community within the emerging demographic of younger members.
As I thought about those trends, and began talking about them to my peers and to Realtor association leadership, I could
see the clear distinctions between the generations of member needs and leadership styles, and I began to identify tools
and techniques which successful association managers might need to have. And while I was thinking
about these things, along came Realtor AEs Ryan and Stephanie and a letter which said, they were
"working to compile a list of the
Generation X & Y (21-35-something) Realtor Association Executives for a new group called "Generation AE." This group
will not only be an opportunity for young Association Executives to network, but also to share experiences and ideas and
learn together how the future of the Realtor Association is changing with generational influences in leadership,
membership, and programs."
The letter further
explained, "Generation
X&Y Association Executives may find themselves in a maze of confusion in relating to their membership and leadership
in subjects such as Technology, Community Outreach, and giving Realtor Associations a new perspective the future of Real
Estate, MLS and the Realtor Association structure. "
Wow! I fired off a letter to them, volunteering my support. Not in my wildest dreams would I
qualify as a member (see "joint replacement" and "retirement" as mentioned above), but I sure want to know more about
what's happening. The group itself ("Generation AE") is a good example of how the younger Realtor
members tend to behave in a group setting. First, they clearly identify an issue. Secondly, they
ask the question, "How can we fix the problem?" And third, they take the initiative to begin the
solution process.
What they have no
patience with is 'paying their dues' for the sake tradition, sacrificing personal values for that tradition, and spending
time in activities which do not contribute to their personal 'quality of life'. This means is that
the Ryans and Stephanies of the world are not going to wait until they 'grow into a leadership position' to try and fix a
problem. They are not going to spend a lot of time and energy waiting for the established
decision-makers to catch up. And they are going to seek solutions through action initiatives which
include anyone who can assist them in their goal.
"What do these people
(the Generation AE group) want?" groused an AE friend of mine. "I have wisdom and experience to
offer. Are they just throwing that overboard?"
"No," I answer. "I
think what they want is application. They want to better accomplish the goals we
all have, but in a new setting with new techniques."
Let's take
'participation' as an example. The very first Realtor meeting I attended almost 30 years ago had as
its underlying theme "Our members won't participate. Only 20% come to our General Membership
Meetings." Today I talked to an AE on the phone, and she said "Our members won't participate. We
need to have 50 people at the annual meeting and only 25 are registered."
The issue seems the
same: members don't participate. How do I know? Because they don't come to
meetings.
But I maintain that
the issue isn't the same-it's vastly different. Why? Because thirty years ago, 'showing up' was
how everyone judged participation. As Realtors we formed local associations to be 30 miles apart so
people could get to local meetings. We formed state associations with intricate geographical
representation so that everyone was heard from. And we held three national association meetings a
year in fun places with lots of adjunct social activities so that we could entice member s to show
up for mini-vacations. We based the success of the meeting not on what was accomplished, but on how
many people were there to be counted.
In today's world,
people don't 'show up.' They don't show up to shop, attend meetings, go on
home tours, or vote. However, in the world of the Internet, participation is not dead. On-line retail operations know that
purchasing a product is more than buying the thing-it's a social network experience as well.
You go to the online store and the fun begins: you can look at the options, know if they are in
stock, read what others have said about the product you're considering, even read about the options people selected if
they didn't buy the exact product you are looking at. And once you own the product, you have a social responsibility to
rate it, explain your satisfaction level, and even post additional photos if you wish.
In addition, you as a
consumer become known to the retailer. You will someday get a message like "Didn't your
prescription just run out?", or "Isn't it time to change the oil in your auto? " If you are Ryan or
Stephanie, you rely on these commercial networks to support you, and you consider it your
obligation to do your share-to warn others about chintzy products or dirty hotel rooms or high-priced gas. In other words, as a Generation person your sense of social responsibility hasn't changed or, if it has changed,
it's deepened.
Ryan and Stephanie
understand these concepts, and they want to learn how to apply them to the world of association management. They want to challenge the idea that participation is judged by the number of faces in the room or that the
exclusive use of an MLS is to buy and sell property. They want to build association community in
new ways, using new technologies to deliver products and services. They want to learn marketing
lessons from e-Bay and Amazon and L.L. Bean, customer service from Disney, and product innovation from Google.
I remember serving on
the NAR Strategic Planning Committee when Richard Mendenhall suggested we needed to learn to "Think Outside the Box" (a
new phrase back then), and he took us to see Cirque du Soleil the evening before we began our committee work. We saw "O"
and I learned that sometimes things are not black and white, that you can't always tell water from air, and that 'eau' is
indeed the essence of life. I also learned that the splendor of the performance is only a small
part of its magic-there are 70 suited divers under the water helping performers appear and disappear at exactly the right
second, and that there is vast and intricate technology involved in creating such a stunning show.
And I say to Ryan and
Stephanie, "Go for it!" The Generation AE can bring us the richness, vision and energy our Realtor association needs at a
time when we very badly need it.
Bosnia is a complicated country: three religions,
three nations and those "others". Nationalism is strong in all
three nations; in two of them there are a lot of racism,
chauvinism, separatism; and now we are supposed to make a state out
of that.
Alija Izetbegovic
It's time for another story of success-- this time in Sarajevo,
Bosnia.
Another vacation destination, I grumbled, when the Norm Flynn,
CEO of the International Real Property Foundation, suggested that
it was time to repeat our Georgian adventures in Bosnia. Bosnia
was, to my mind, at the heart of violence and terror.
A quick and necessary trip to Google informed me that Bosnia is
located on the Balkan Peninsula, and has about 4 million residents
in a territory of approximately 20,000 square miles. What I
remembered most (though somewhat dimly, I must admit) was the
bloody Three Year War of the early 1990's, during which Bosnia and
Herzegovina gained independence from the
Socialist Federal Republic of Yugoslavia.
Currently, Bosnia and Herzegovina united under a common
governmental structure, and are candidates for the EU and for
NATO. The government was formed under the Dayton Accord of
1995, and represents a complex and tangled compromise government
which brought peace to the region but which is often unwieldy and
complicated during this period of stability and growth.
Today, modern Bosnia faces the dual problem of
rebuilding a war-torn country and introducing market reforms to its
formerly centrally-planned economy. One legacy of the previous era
is a greatly overstaffed military industry; under former leader
Tito, military industries were promoted in the republic, resulting
in the development of a large share of Yugoslavia's defense plants
but fewer commercially viable firms. Agriculture has never been a
mainstay of Bosnia, either; food has always been a net import, due
to the small and inefficient farming operations in the country.
After the war, economic devastation was the norm. However,
there are signs everywhere of rebirth-new construction, investment
by foreign developers, and a tourist economy which is growing at a
rate of about 24% a year. In Sarajevo, commerce appeared healthy:
there were street vendors, open air markets, stores and restaurants
everywhere, and many people moving about the downtown area despite
the 115 Degree heat we were experiencing. And, of course, we were
never very far from a bullet hole waiting to be repaired , a
burned-out building, or a Bosnian who still mourns the loss of
loved ones just a few years ago.
I traveled there with past NAR President Norm Flynn and his wife
Susan, who accompanies him on many of his trips for the
International Real Property Foundation. She is, I discovered, a
wonderful trip companion: she knows history, remembers names,
enjoys solitary walking explorations, and gracefully accepts the
limitations of air travel in the modern world.
And it must be said that getting to Sarajevo is NOT half the
fun. I was particularly plagued by a bum right hip (soon to
be replaced) and found myself in the land of no elevators, and
plenty of steps and curbs. The trip is long, and was made
longer by weather delays, mechanical problems, and missing
luggage--but the city we found, and its friendly and welcoming
people, made it all worthwhile.
Figure Sarajevo, city nestled in the mountains.
Our contacts were four Bosnian real estate
broker/developersyoung men committed to forming an association of
real estate professionals in their country. They had already
made progress: they had registered an association, adopted a
business plan, and elected officers. Now they were in the
first stages of planning for services for the soon-to-be members of
the Bosnia Real Estate Association.
We explained to them that what we wanted to do was to form a
management company which would offer staffing support to BREA and
to other real estate business associations, allowing everyone
efficiencies of scale in obtaining staff support. Since BREA
was projecting the possibility of only 30 brokers during the first
year of membership recruitment, acquiring a staff person and
funding an office seemed an unlikely goal for them. However,
during our time in Sarajevo we were able to interest the Property
Managers Association and possibly the bankers group in
participating in the management company we were forming.
And so, with only four and a half working days before us, Norm
and I began a series of meetings, aided exceptionally well by our
translator Melita, and our broker contact, Mirza Muhasilovic.
We were able to present a code of ethics to the BREA which the
board adopted; we hired a skilled and competent executive director
for our new company (The Professional Association Management Group
of Bosnia); I completed the first round of training with our new
director (Nina); and we began the lengthy process of incorporating
our management company (PAMG-Bosnia) in the country with the idea
that after two years PAMG will become self-sustaining and
ownership will revert to the client groups of the management
company.
Our stay was highlighted by a very successful media
event, a protocol signing agreement between BREA and the
International Real Property Foundation, an action which was
thoroughly reported in the media on the following day, and was
attended by over 40 people (again, despite the heat and the
warnings for Bosnians--and visiting US Citizens--to stay
inside!)
Figure 2 Mirza Muhasilovic (second from left), Norm Flynn,
and Judith Lindenau sign protocol agreement.
What lies next for the real estate community in Bosnia?
Norm and I are most optimistic. At the center of it all are
the young Bosnian businessmen who are so anxious to move ahead, and
bring their country greater stability, peace, and prosperity.
"Never", Norm explains to me, "have I encountered such a spirit of
cooperation among competitors." I think he's absolutely right, and
in addition, we are fortunate to have a USAID contingent who
supported our press conference and offered their resources.
And I have to admire the elegance of Norm's idea to form this
management compan, an idea which we knew and often embrace in the
US but which is totally new in this part of the world.
And I look forward to returning to Bosnia, and to Georgia.
There are courageous and friendly people here, perched on the edge
of an economic future which we Americans take all too much for
granted. Seeing the emerging world through their fresh eyes
is a personal reward for me, one that I truly cherish.
And, by the way, if you'd like to help us as we bring the real
estate business to these emerging economies in Eastern Europe,
Asia, and South America, your donation will be gratefully accepted:
just go to the IRPF website-- http://www.irpf.org.
Figure Norm and Susan Flynn and Judith Lindenau, strolling in a
Sarajevo park.
Well, that’s the wrong Georgia, actually.The Georgia that’s on my mind these days is the Republic of Georgia, a Eurasian country in the Caucasus at the east coast of the Black Sea. It is bordered on the north by Russia, on the south by Turkey and Armenia, and on the east by Azerbaijan.
Figure 1 Map of Georgia (Lonely Planet Map)
The territory of modern-day Georgia has been continuously inhabited since the early Stone Age. Georgia was Christianized in the early 3rd century and unified into a single monarchy in 1008 and then experienced periods of revival and decline until being fragmentized into several smaller political entities in the 16th century. Imperial Russia acquired Georgian lands in a piecemeal fashion from 1801 to 1866.. Independent again in 1991, after a period of chaos ofcivil warand severe economic crisis, Georgia stabilized by the late 1990s. The bloodless Rose Revolution of 2003 installed a new, pro-Western reformist government, whose aspirations to join NATO and attempts at bringing the secessionist territories back under Georgia's control has resulted in a deterioration of the relations with Russia. Currently, the government is also working toward joining the European Union.
There’s the background.I recently returned from a ten-day trip to Tbilisi, the Georgian capital—my second visit in two years.My reason for going is my work with a non-profit organization, the International Real Property Foundation, which has as its mission to help emerging economies build their real estate infrastructure through formation of professional organizations (real estate sales companies, surveyors, and appraisers) which can lobby for reform and educate the practitioner members.
As in most of the Eastern European nations, the Georgian people had no idea how to manage their real estate economy.When property became privatized, there were no mechanisms to assess value, hold title, transfer title, or borrow money for purchases. The entire system had to be built from ‘scratch’, and it is still a work in progress.One of my most interesting real estate moments in Tbilisi was visiting the open air market and park: on certain days, properties which are for sale are posted on the trees in the park.Purchasers wander through the forest, looking at descriptions and photos, and make arrangements to view the dwelling.I might add that not all properties are actively for sale: the person standing by the tree may have heard a cousin or other relative observe that MAYBE they’d like a larger place, and so the enterprising salesman simply posted the property description and figured negotiations could take place whenever an interested buyer surfaced.
Of course, there’s no licensing or competency requirements to sell property, or to appraise it.The government in Georgia (and most of the other countries I’ve mentioned) does not see itself in the licensing business for occupations—that’s not a ‘democratic’ function in their view.
All the more reason to form a professional association, of course.Educational and practical requirements can be enforced, and the public will have some tool for evaluating the competence of the practitioners, be they appraisers or brokers and salespeople.But forming organizations is not a skill that comes easily to people who remember life under Socialism.Americans belong to clubs as a way of life, but Georgians don’t understand concepts like bylaws and elections and dues.That’s where my experience as an association manager comes into play, and is a large part of what my activities in Tbilisi this May.
Figure 2 Tbilisi
This second visit was limited to working within the city limits of the capital of the country, an urban setting of close to two million people.Snow capped mountains border the city, yet the weather along the river plain that is the city center is almost subtropical.The population is quite diverse: Russians, Armenians, Turks, Jews, Germans all live together in relative harmony, it seems—according to the newspapers I read, living harmoniously with diversity is a very strong imperative.Education and the arts are also a very real part of every Georgian’s life, and the literacy rate in the country is an enviable 100%.
Figure 3“All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood. (Article 1 of the Universal Declaration of Human Rights)”
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