Aug. 14, 2009 - The Board of Directors as Employer: Building a Better Board, Part 3

I am continuing my series on building the Strategic Board of Directors—what a strategic board is and how AEs can build one. The process clearly is ‘building’ one, a gradual process lasting over time. One leadership conference, one guest speaker, or a year on the board of directors won’t magically produce a strategic-thinking, productive leadership team.

In previous posts I’ve suggested how an executive director might create an atmosphere for more productive financial management, and how actual board meetings might be structured to become more strategic and policy-centered. Hopefully, you’ve already incorporated some new activities into the meeting agenda, like asking the board to approve a complete financial policy and introducing regular  progress reports on the process of the strategic and/or annual plans. You might have started a series of analyses on how much things REALLY cost, like the annual summer outing or administration of your lockbox program. Directors are, hopefully, getting used to the fact that opportunities to nitpick the color of the drapes in the conference room are becoming increasingly more limited as they are being asked to converse on a somewhat broader scale.

At this point, my blog is  going to get into a topic that NOBODY likes: the role of the directors as an employer. Members of boards don’t like this role because (a) they’ve never done it (they’re independent contractors or employers of one person, maybe) or (b) the whole idea of measurable evaluation and legal responsibility is not why they signed on as volunteer leaders (“YOU WANT WHAT? All I want to do is make sure we have a better Christmas party than last year’s”).

Joking aside, volunteers really want to do a good job for our associations, and they want to make meaningful contributions. But managing an employee?   Most directors simply don’t have the skills and knowledge base to do it well. And most executive directors feel uncomfortable training their bosses in how to be good bosses.

Here are some suggestions about  how you, the AE, might set the stage for good personnel management from your directors. First, answer the following questions:

1. Does our association have clearly stated goals for the coming year, and have we formulated measurable results for each? Often an association has definite goals (“We want more affiliate members”) but no measurable results (How MANY more members? How will you know when you’ve reached your goal, in other words?)

2. Has the role of the AE has been clearly stated in these goals? No strategy is complete without an assignment of responsibility. If the association wants twenty more affiliate members by the end of the fiscal year, who’s going to do this? If it’s a task force of members, what’s the AE’s job in the process? Once the Board has stated its goals and measurable expectations, you can come back to them with the statement of how you’re going to assist in the implementation (“I’ll work with the Task Force to set up a job description, make sure staff  supports their efforts, and I’ll make sure their progress is reported to you each quarter.”)

3.Does the board have a consistent, ongoing process to review the progress toward its goals and recognize  the AE’s responsibility in bringing those goals to fruition? As AE, the ‘you’ includes your staff: your job is to manage staff performance, and if the MLS director doesn’t complete her job, for instance, YOU are held responsible: this goes without saying. By the same token, you are the one to issue reports to the directors on the progress of the goals. I suggest you do this regularly, perhaps at every meeting. Give a report from the AE which in essence says, “this is how I am doing what you told me to do in the annual work plan”, and “this is how close we are getting to achieving the measurements you established at the beginning of the year. “

Are you getting the message? Once the board establishes clear and measurable outcomes, the process of evaluating the AE’s performance becomes straightforward. The board personnel committee can sit down with the AE, review the progress and discuss the results—or lack of them. By doing the initial work of clearly defining goals and outcomes in the beginning of the year, the process of evaluation becomes automatic.

That isn’t to say, however, that the board members are going to WANT to do the evaluation. If things are going well, they may go kicking and screaming into an evaluation session: “You’re doing fine,” they will say. “We don’t need a MEETING.”

“Well, yes”, you reply, “you do. You need to meet, fill out a written evaluation form, sign and date it, and put it in my personnel file.”

1. As directors, your job is to be responsible for carrying out the organization’s mission. It there are not good results happening, you’re responsible, and you are expected to intervene.

2. It’s not in the association’s best interest to delay coming to grips with a AE’s failure to produce expected results. Delay gets you nowhere, and hoping the issues of unsatisfactory performance on the part of the AE will just disappear—well, it’s not gonna happen. 

3. If in fact it is the responsibility of the board of directors to see that the organization’s mission is accomplished, then you need to find out what’s going well and what’s not. And if there are results that you have defined and are expecting, then you need to tell the AE about it. By the same token, the AE needs to know what IS going well. Only then is there a chance that the mission will be carried out.

I, for one, don’t believe that performance evaluation need be tied in to salary discussions, either. Sometimes an employee can be performing beautifully and meeting all expectations, and there just isn’t any bonus money. Insist on the evaluation and separate it from finances. Establish a pay increase discussion at another time, perhaps during the formulation of the annual budget.

In thirty years of association management, I’ve seen a lot of very fine AEs come and go. What I’ve learned is, frequently the disappearance of an AE has little to do with competence. Some very fine AEs have returned from vacation to find a cardboard box on their front porch and the locks on the office door changed. You as an AE need to understand that if the Board wants to fire you, it will—fair or unfair, politically motivated or not. You can’t stop that. 

But what you can do is insist that the board be professional about it. Conduct regular written evaluations based on the agreed-upon tasks, inform you in a professional way when you are not meeting their expectations, and define a manner of termination which will work in the best interest of the association (one good reason for a contract for the AE, by the way). I have a dear friend, now retired, who always kept his signed letter of resignation in his top desk drawer. He told each new board that the letter  was there and that if he found it on his desk one day, signed by a majority of the board members, he would be quietly gone in a few hours. It never happened, but he had the process defined and in place, and it would be graceful and quick.

By the same token, you can provide your directors with some tools which will assist them in being professional and, at the same time, doing as little harm to you as possible in the process. Perhaps a termination checklist/succession plan might be a handy education for them should the need arise: it will certainly point out that there are legal issues and protocol involved in a drastic decision—and those considerations may allow clearer heads to prevail in times of real stress in the organization. And of course, should some other unplanned disaster befall the AE, an emergency succession plan (either temporary or permanent) should be easily accessible.

Hopefully, this discussion isn’t about termination or disaster, though. It’s about performance evaluation, and that is a stage that you as the AE can set. Insist on a clear and measurable work plan from the directors, report on your performance in effecting that plan, and insist the board of directors evaluate that performance in writing on a regular basis. Encourage the directors to have discussions about your performance which are centered on those tasks in your job description and that your evaluation be conducted in a transparent and professional manner, rather than in the parking lot after the meeting or at the Malcontent’s Bar on a Friday afternoon.

I have developed a template for succession planning. If you’re interested in a copy, don’t hesitate to email me directly.

Aug. 11, 2009 - Google versus the Property Portal

Aug. 10, 2009 - The Strategic Board, Part 2: Fiscal Oversight

There’s no more treacherous ground in association leadership and management than the fiscal oversight process: it’s the battlefield of last resort when it comes to staff-leadership relationships, and it’s a topic of ongoing complaints from the membership to the leaders and staff.

You’ve heard these comments I’m sure—probably many times over. Good management will, of course, stop and do a systems check to make sure that they aren’t a sign of a major organizational illness that needs first aid, but all too often these kinds of objections are brought into the board room and result in much time and resources being wasted on trying to satisfy the complaints of one squeaky wheel. In a board of directors which does not have a firm grasp on its priorities, such conversations often result in ill-conceived, hasty decisions which are not in the long–term best interests of carrying out the association’s mission.

The association’s travel budget is often the object of membership concern. In most associations the travel budget is a small percentage of the budget, often 7-10% of operations. Members often see association travel as a perk for leaders and staff rather than as an opportunity to learn from the best practices of other associations and to develop and groom new leadership, among other things. Armed with good intentions, the directors respond to membership complaints by hacking away at this expense item rather than seeing it as an investment in the future.

In reality, gnawing away at specific budget items is a very small part of the responsibility that a board of directors has to the membership. Much more important is the board’s oversight of the fiscal operations of the board, particularly in matters of financial operations, procedures and policy. Board members must not be allowed abdicate their responsibility for providing thoughtful fiscal oversight.

To be successful in carrying out this responsibility board members must:

1. Have a strong interest in the fiscal affairs of the association, including its overall, current financial position, the reliability of the reports it receives, and the effectiveness of the management of incoming and outgoing funds.
2. Require regular, timely and complete financial reports from internal finance staff or contract staff and expect the board to hold staff accountable for meeting the standards of timely reporting.
3. Ask critical questions about the financial reports the board receives, including budgets, periodic financial statements, the annual Form 990 and annual, sometimes audited, financial statements.

I know it seems impossible, but I received a call from a friend of mine, a Realtor in an association in another state, who was assuming the position of President-elect in her board. “Should we be getting regular financial reports?” she asked. “All we ever get is the year-end summaries from the bookkeeper.”

“Argh,” I growled. A board that fails on any of the above issues is incapable of meeting its legal duty of care, and any AE who does not enable the board to meet these expectations is not meeting her responsibilities as a staff manager.

As an AE, you can assist in positioning your board of directors to assume a role much larger than budget BB-stacking by asking them to               

A. Approve a comprehensive fiscal policy. You might do this little by little at each meeting, but every association, large or small, should have a cash reserve policy, an investment policy, policies on fiscal operations, employee bonding, and spending. These policies should be reviewed annually by leadership at staff and revised as needed through a consent process;               

B. Meet annually with the association financial professional to review the audit or review;               

C. Develop a financial crisis plan. What would happen if disaster occurred—the association lost another 50% of the members, or the MLS disappeared? What are the options for survival?              

D. Operate using professional reports. The board meeting is the AE's time to inform the board in a professional setting using written reports, business plans, and impact analyses. In an earlier post I mentioned business plans for new projects or services, and summaries for events or programs the association has held. Use operating ratios, too—the travel budget is what % of total operations? Personnel costs are what %? Compare these ratios with other organizations like yours, and make sure your directors think this way, rather than in nickels and dimes.               

E. Complete a self-audit on a regular basis, preferably annually. This is a good exercise for the  directors and the finance committee. I’ve posted a financial operations checklist on my website—feel free to use it or adopt it to meet your needs. Also visit Realtor.org for additional resources and examples of  financial policies.These techniques aren’t limited to large organizations.

 Even if yours is an association of just a few hundred members,  it should have a clear and current set of financial policies, good reports, and a well-educated and responsible board which sees its job of financial oversight as one of conservation and protection of resources, a role that goes far beyond line-item scrutiny.

Aug. 9, 2009 - View from the Top of the Molehill: Building a Better Board of Directors, Part 1

I had a call from an AE the other day who described an all-to-familiar scenario. “I don’t know what to do about my association Board of Directors,” she said. “They spend all their time nit-picking the budget, arguing over expense cuts that might save us $250 a year, and pointing fingers at me and the staff because we are not in great financial shape right now. they make mountains out of molehills. What can I do to get them back on track?”

Many of you may be muttering, “That’s MY board of directors!  I know these people!”

The pure fact of the matter is that these directors are everywhere right now.    They are volunteers who are doing their best, trying to understand what’s going on in the industry, and hoping to save their professional associations in the only way they know how, the same methods they are using with their own personal checkbooks and their business management—they are dealing with the small issues, hoping that by chopping away at them one by one the cumulative effective of their actions will magically solve the problems.

Of course it ain’t gonna happen that way. A decision to move from 4-ply to 2-ply toilet paper in the association bathroom is not going to solve the massive problems of the real estate industry and the resulting effects those problems have on the association. The question then remains, how does the association leadership move from reactive micromanagement to proactive strategic decision-making?

The answer, I think, lies with the association executive. Too often I hear AEs say “My board would never let me….”, as if they are thus absolved of responsibility for and creative thinking or effective problem-solving. The reality is that over time, the association manager is in large part responsible for creating an atmosphere of exploration and strategy on the part of the leadership, for encouraging an environment of prioritizing and exploration and service to needs of the membership.

It’s not an easy job, building this environment, and it can’t be done all at once. You can’t just give a new format to the meeting agenda and change old patterns of prolonged discussions over un-productive issues.    But there are some things association managers can do—changing the directors’ meeting agenda is one of them.

The Board of Directors will never start thinking strategically unless strategic thinking is a part of their meeting menu. That’s a fairly easy change to implement, and even if it doesn’t produce great results at first, a strategic agenda plants the seed: policy and strategy are the board’s job description.

1. Shorten the meetings. Our younger members have it right—any meeting over an hour in length becomes counter-productive. Use a consent agenda to minimize minutes, committee reports and routine business (you can get rid of it all in the first five minutes of the meeting). And use a timed-agenda—that says to everyone that some items are more important than others: there’s a priority suggested between a three-minute item and a ten-minute discussion.

2. Add some education to your meetings. Perhaps a telephone conference update from the state association on legislative issues or an important legal case, or your regional vice president on a new national association policy—the regular inclusion of these phone calls creates a sense of belonging to a world outside the drapes in the meeting room.

3. Have a regular agenda item for understanding membership concerns. It’s interesting how often when leadership shuts itself in the meeting room that it forgets that the primary responsibility is to the membership welfare. Consider setting aside a few minutes of every meeting agenda to concentrate on the members, either by letting them address the group in person, or presenting an email/Twitter compilation of member concerns, or by asking the directors to take responsibility for contacting one or two members between each meeting and reporting back to the group on member concerns. Again, the goal here is to create an ongoing awareness of responsibility to the members’ welfare.

4. Make an executive director’s report in each meeting, or distribute it in advance and just review the highlights. Keep the report short, but position yourself and your staff as the implementers of policy and programs, responding to the directors as the policy makers and strategists.

5. Always put your association’s mission statement at the top of every agenda. If one could get away with it, a group reading of the mission statement should start every meeting—at least keep it at the top of the agenda, in plain view of everybody.

I am planning on a series of blogs on developing a strategic-thinking board. I will cover other leadership issues—the board’s role in personnel issues, understanding the industry, and protecting the association’s resources. I’d be most interested in your ideas and solutions to building association leadership—please email me or call!

And I have more information about building agendas and planning effective meetings on my website.

Aug. 5, 2009 - US-French Real Estate Information Exchange: a New Model for property data exchange?

(Note: this blog entry is cross-posted to another of my blogs: http://judithlindenau.posterous.com/new-deal-allows-us-realtors-to-help-sell-fren)
 

Forbes Magazine reports that Immobel Global Listing Exchange (Camden, SC) and the FNAIM (French association of real estate professionals) have signed an agreement to translate all French real estate listings into English and make them available for US Realtors to market on their own websites.

Wow!( or "Woot!" , depending on your age group). We're talking 500,000 French listings here. We're talking country estates, Paris apartments, and a lot of real estate in between.....

And that's all very cool. But what's even more cool is a solution to what is bothering a lot of Realtors as MLS organizations regionalize, or form data exchanges in an attempt to provide their members with a way to move beyond the often-archaic boundary system of the traditional MLS.

Realtors often don't like extending a blanket commission offer to Realtors who are far away, or who may not be able to do their fair share of the cooperative work load. That's particularly true in large residential projects with complicated restrictions, or with recreational areas of the country where many property owners come from other locations. And who can blame them?

But here's how that issue seems to be resolved with the FNAIM-Immobel deal: participants in the data exchange get widgets which can be embedded onto US Realtor websites, for instance. When a sale results from a someone who has utilized the widget, that Realtor earns a referral fee from the sale of the French property.

And of course, the process works the other way as well: beginning September15, FNAIM members participating in this property data exchange will be able to display their choice of over 300,000 US listings from participating MLSs,  and earn referral fees.

Sure, the agreement between the two countries is a wonderful thing. But the mechanism by which it is carried out is so elegantly simple, it could well be a model for many of our US multiple listing systems.

And, by the way, kudos to the associations who participated, according to Forbes, they are located in

Florida (Greater Miami and Sarasota), California, Las Vegas and Washington D.C.  Good work!

Aug. 4, 2009 - Three (Count 'em, only THREE) Committees

One of my favorite governance writers is David La Piana, President of La Piana Consulting and the author of “The Non-Profit Strategy Solution”, an excellent resource on strategic planning.  In a recent blog, La Piana discusses something we association managers have all talked about—getting rid of committees.  I want to bring some of La Piana’s points home to my own sphere of reference, the membership organization. 

One management strategy that seems to me to be necessary in this day of diminishing resources for associations is that the good manager knows how much things cost.  Go beyond the electric bill: how much does a committee meeting cost?  Factor in the overhead; support staff salaries for preparation, travel; and time spent in meetings, minutes and follow-up.  Some associations even factor in the dollar value of the meeting participants’ time—this is, after all a contribution to the organization and for the participant (particularly independent contractors) this translates into dollars and cents.

Once you’ve done that analysis for each committee, let your Directors know.  Directors are, after all, the keepers of the association resources.  They should know what programs are costing them, and how much each meeting relies on member and staff support! 

After a period of practicing this reporting technique, you may find that meetings get shorter and  more productive—and some may disappear altogether.  And let’s face it, if you’re a small association with few resources to spend on extraneous activities, you’ll be richer by far if these committees go away.

La Piana suggests that a non-profit Board needs only three committees: Internal Affairs, External Affairs, and Governance.  The Internal Affairs Committee has a job description that embraces finance, personnel, and facilities and capital acquisitions.  The External Affairs Committee might have a job description which includes public relations, programs including social and educational events, fundraising, and legislative and advocacy issues. 

And finally, the Governance Committee—important in recruiting members, orienting them, over-seeing elections, evaluating the effectiveness of the Board, and training new leadership.  Perhaps you’ll find this the most important committee of all, and this discovery may be an “aha” moment if your organization has been program-oriented and has neglected to develop a program of infrastructure capacity-building.

As a side note, La Piana eliminates the Executive Committee.  His reasons are that in an environment where the Board of Directors is properly constituted and meets frequently (like monthly), and if policy manuals and plans are up-to-date (big if’s, I know), the Exec Committee isn’t needed, and often overshadows the work of the Board of Directors as a whole.

Within the Realtor organization, there may be a need for a couple of specialized function committees, like MLS Policy and Professional Standards.  But think of an organization where most member functions can be relegated to three basic committees. Not only would the support resources to sustain a large number of committees be diminished, but the resulting coordination of activities into three major activity groups would greatly enhance the efficiency of association operations.

Your association has to decide on these organizational issues—but consider this: an association has many other ways of getting work done and carrying out its mission than depending on traditional committees.  As association managers, we know about task forces and work groups and PAGs. We also have the technology—often free--for many other forms of collaboration and communication.  And we are faced with a diminishing resource of member time and patience for old governance structures, particularly with our younger leaders. 

Once a Board of Directors finds out exactly how much time and money is dedicated to each and every committee meeting and it begins to evaluate the return on the investment in each of its committees, Mr. La Piana’s governance ideas may be just the solution for an association.