The Development of Constructive Board Stewardship
and Executive Awareness and Intervention

By Julie Adamen

Click here for the PDF version of this article in the HOA Manager NewsLine

Micromanagement: To direct or control in a detailed, often meddlesome manner.”(1)

My working definition is: The over involvement of a Board or Board members in the day-to-day business of running a community association.

Last month, in Part I of this article (May 2007), we discussed in detail how micromanagement is time-consuming, energy draining, ever maddening, and demoralizing busy-work that accomplishes little. In that article, I listed some reasons I have observed on why Boards or Board members feel the need to micromanage, but I believe the underlying reason is that they truly have no idea what their role is in relationship to each other nor the community as a whole. I believe it is up to us as management professionals to guide Board members to a path of constructive stewardship. Constructive stewardship leads Boards away from destructive micromanagement. This serves not only the Boards and their communities it serves management. To that end there are two courses of action, which should be implemented concurrently involving long term and short term solutions. Like the name implies, long term solutions take a long time to develop and bear fruit, so we have to know how to deal – congruently – with the day to day stuff until the long term “root of the problem” solutions take effect.  How to deal with day-to-day micromanagement is an article unto itself and will be discussed next month. This month, we’ll discuss the following:

• The Long Term Solution: Leadership development within Boards
• Executive Awareness and Intervention
• The Cost of Micromanagement for Management Firms and Associations

Section 1

Long Term Solutions to Micromanagement: Leadership Development

Board Orientation: For new Boards and after every annual meeting because development of constructive stewardship starts here. I know of several (but no where near a majority) management firms that provide regular Board orientation – either right after the annual meeting (facilitated by an executive or senior, supervising manager; i.e. someone in some position of authority within the management firm) or annually for all their Boards at one large Community Leadership Forum – or both. And this isn’t only on the shoulders of the managing agent: all Boards should require their management firm (or on site manager) to provide orientation information, or access to Board Orientation through an independent facilitator. Boards seldom see their own development as an asset to the community and we need to change that view. No, Boards, this service will not be free; however, this may be the most effective use of association funds every year. The more Boards understand their roles and responsibilities, the better stewards and trustees they become.

While providing orientation, the managing firm or facilitator should review the following:

• Outline to the Board their duties as fiduciaries;
• Discuss how their varying offices within the Board work;
• Discuss that the primary responsibility of the Board is to set policy and to ensure that policy is carried out by staff to their satisfaction,  as opposed to undertaking staff duties themselves;
• When and how to hold meetings;
• Adoption of  parliamentary procedures;
• How to generally operate in a business-like fashion;
• Staying detached from the emotional reactions of owners  to various crises, which  they will undoubtedly encounter in their journey on the Board;
• And, encourage the Boards to look beyond their current term, and  set a Vision for the community in to the future by adopting Vision and Mission Statements.

The main reasons for adopting Vision and Mission Statements.

These statements give the Board and the community a solid platform for policy and decision making and give the Board focus – and that focus is on the larger issues of a good community, and how to get there.  A Vision Statement should be a simple statement of what the Board wants for the community; i.e. “To be the best place for families to live.” The Mission Statement outlines how they will get to the Vision; i.e., “Our Mission is to provide our owners with and outstanding quality of life, promoting community and providing the most prudent, ethical, financially sound, team-oriented, creative, and state of the art management within our capabilities.”  From these solid statements the next natural step is policy making for overall administration of the community,  not the micromanagement of the day-to-day activities of the community.

When developing, or reviewing and updating, these statements, the Board builds internal cohesion. When a Board goes through the process of adopting these purposeful statements for themselves and their community, they do so through either a formal Strategic Planning session or during an elongated Board meeting. Having facilitated a few of these, it is my observation that during this birthing process, the Board(s) puts a lot of thought in to what they want to say to each other as well as the community through these Statements. Some very revealing discussion comes out among them. After a few hours, they know each other better than they did before, and move forward with their adopted statements at least all sitting in the same pew, with the same view, if not singing from the same hymnal.

Vision and Mission statement help fight corporate memory loss: A major cause of micromanagement. Many is the time entire Boards turn over in one or two years – or less – much to the detriment of the community, the staff and themselves. Existing Mission and Vision Statements give new Boards an existing platform on which to build their own policies.    Even if the Board intends to change existing Vision and Mission statements and move the community in a new direction, those existing statements are a baseline for this process of change. The existing statements are the place from which the new Board will develop their own cohesion and move forward with purpose.

A last thought on Vision and Mission statements: Board members rotate in and out regularly, people move from community to community and only about 20% are interested at any one time to materials or issues. Therefore, Board continuity and corporate memory are the exception rather than the rule. Loss of corporate memory sows the seeds for micromanagement and the dreaded reinvention of the wheel.  However, management is not helpless in the face of these truths and there is something we can do: Encourage the adoption of Vision and Mission Statements in strategic planning sessions and provide valuable information and guidance, early, often and regularly to Boards on their true roles as policymakers, not functionaries. Policymakers seldom micromanage.

Board Policy and Procedures Manuals.  All associations should adopt – and managers and management companies should encourage the adoption of - Board Policy and Procedures Manual. Why? It can alleviate micromanagement. With this document, when a Board member doesn’t know what to do about a specific issue, s/he refers to the adopted manual and reviews the Board policy on that issue, or the larger issue at hand. Bingo! The member now sees that he doesn’t need to launch an exhaustive investigation on how many landscapers have been on the property each day for the past two years, he simply needs to advise the appropriate committee chair of his question in writing, and that person will take the matter in hand. Micromanagement thwarted in its tracks!

To be honest, I know of only a few communities that actually have Board Policies and Procedures manuals and they are large-scale communities. But there is no reason why all communities cannot or should not have these valuable gems. Management companies should provide a boiler plate model that could be modified and adapted by each community for any specific community’s special needs. Not only will these manuals save management hours in not being micromanaged and save Boards hours reinventing the wheel, it is another tool that helps the association save corporate memory.

Board development is a marketing tool for management firms. Have no doubt the process of regular communication between management firms – not just the manager assigned the account - and Boards works as a terrific marketing tool as well: Providing to our communities company-sponsored education and orientation for all new Boards after their Annual Meetings as well as continuing education for our existing Boards shows us in our best light as true professionals. Remember the basics in marketing: Contact develops relationship, relationship develops business, good relationships develop good (and more) business.   

Industry programs and information for Board development

Despite what we know is a vast amount of educational resources for Boards about Leadership Development, this is not the case in the minds of the Boards themselves. We as industry professionals need to bring the new and existing Board members into our professional organizations. Attending industry functions not only gives Boards great information, it provides them the opportunity to network with other Board members (a terrific thing).  Currently there are classes for Boards offered by CAI in addition to a pile of books and publications directed on Board development (www.caionline.org/education). From this site you can even download a free copy of Introduction to Community Association Living, a nifty publication that should be in all welcome packages as well as given to all Board members upon the beginning of their terms.  

Managers and executives, the point is that Boards can’t attend classes or read materials they don’t know exist. Likewise, they won’t know the full extent of their roles unless we continually provide Boards access to information and guidance for Board development.   It’s our job to lead the horses to water, even if we can’t make them all drink. If one or two Boards participate, you may save your management staff hours of maddening time spent being micromanaged, not to mention helping those Boards that can be helped on to a more productive and satisfying volunteer experience.

Section  2

Executive awareness and intervention regarding micromanagement.

For the average portfolio manager, micromanagement can mean the difference between a 60 hour work week and a 45 hour work week.  These 60 our work weeks often go unnoticed by senior staff and many managers suffer in silence figuring excessive work is just  part of the job. This is where executives must have awareness of each account and how much time is being spent on it and why. Any account that continually micromanages its manager is likely losing the company money by sucking out resources for which the account is not paying in terms of actual work hours. The micromanaging account is also sucking the life out of staff, a root cause of manager turnover. Executives should set policy and make appropriate changes to contracts so it is possible to bill for excess hours.  If the association is willing to pay for the extra time, fine. If not, by all means they should take their micromanaging ways elsewhere.

The costs of micromanagement to associations, management companies and managers.

From last month’s article: “Micromanagement is the number one reason all managers find their job frustrating. It’s the number one reason cited by on site managers when they want to leave their current position.  Micromanagement may very well be one of our industry’s largest challenges.”   Yes, indeed. But how do we quantify the effects of micromanagement? Easily.

Responsibility + no authority = staff demoralization.  When a micromanaging Board member gets in where they don’t belong and gunks up the works, seldom is s/he held accountable for the results of his/her actions by the Board. This is because a) They are all micromanagers and don’t get the problem, or b) They don’t wish to see the problem, c) They see the problem but can’t control the micromanager, either, and expect the manager to simply suck it up while they look the other way.  The end result is that the staff member is held responsible for the actions of someone else. The buck stops with the manager when it comes to the final work-product.

No one can, or should, continually be held responsible for actions and decisions over which they have no control. This is what happens when community managers are micromanaged: Ultimately, the manager, by default of his/her hired position, has to answer to the Board and owners collectively about issues the micromanager either mismanaged or failed to complete. This insidious mode of operation results in staff demoralization. Demoralization results in turnover.   

Micromanagement limits staff development. All Boards and management executives should want their staff to grow and expand their abilities and knowledge because it benefits the Board, the management company, the manager and the community. Unfortunately, staff that is continually micromanaged seldom finds that spot for growth as the duties they are allowed to perform are limited.  Micromanagers keep their staff from developing and growing their managerial acumen by withholding skill-developing tasks that in addition to promoting knowledge and growth, allow the reasonable freedom to fail on occasion. [2]

What does it all mean? Micromanagement promotes turnover, costing time and money. Ironically, micromanagers often believe are “saving money” for the community by their continual involvement. On the surface, that may appear to be the case; however, nothing be further from reality: Micromanagement is a major reason for the turnover of community managers. A demoralized staff that is unable to grow or learn  in their position, or feel trusted, is a staff that eventually departs for greener pastures where their passion for the job is nurtured, not stunted. Micromanagers don’t recognize the financially debilitating aspect of their ways, because they think they are helping, their ego is overly-involved or they are oblivious.  According to the US Department of Labor:

“…turnover is an indication that something is wrong. At a minimum, the organization and the employee have been mismatched and often the only thing the organization has to show for it is another costly statistic.

“In this era of continuing — and increasing — labor shortages, organizations cannot afford the tedious and expensive process of recruiting applicants, only to have them leave in discontent.”

So, what does turnover really cost the organization? You can go to the Department of Labor website, http://www.dol.gov/cfbci/turnover.htm which has a worksheet from which you can calculate the cost of turnover. Caution: It’ll make your hair curl. From my own experience in the employment end of our business each manager turnover costs the employer between 6-12 months salary if you calculate the real costs of time spent by the executive, staff or Board in the search process, lost corporate memory, lost or damaged goodwill among the clients and homeowners, lack of productivity on the part of the departing employee and increased workload on other employees and executives (to name a few). Believe me, if turnover were a line item on an association’s or company’s financial statement more would be done to curb the causes of turnover, including micromanagement. Micromanagement costs money.

Section 3

The bottom line for management firms and associations

The suffering Board and the bleak future of volunteerism. Micromanagement is a debilitating behavior that is not only exhausting for the staff; it’s exhausting for the Board. And it impedes present and future volunteerism in the community: Micromanagers, overly involved in the day-to-day  affairs of the community give potential volunteers the absolute wrong impression about what the job of Board member actually is, unintentionally killing volunteerism.  Who wants to volunteer for an unnecessary full-time job? 

What we know. Micromanagement costs everyone money. It stunts employee development and takes the passion out of the job. It’s a major cause of manager loss, and that loss means thousands of dollars to associations and to management firms for each manager that leaves.  If the not-so-hidden cost of turnover were a line item on a community’s or management firm’s financial statement, micromanagement would be something which both entities would better address.

I have provided some tools for the Board and executives to tackle micromanagement. I said this at the beginning of this article and I say it again: I believe it is up to us, as management professionals, for the good of managed communities as a whole, to guide Board members to a path of constructive stewardship and away from micromanagement as best we can.  We need to be proactive in combating micromanagement because micromanagement can not only destroy the passion for the job, it costs money.  Remember:

“If you keep on doing what you've always done, you'll keep on getting what you've always got." - WL Bateman

Next month: The professional manager’s day-to-day guide in dealing with micromanagement: Act, don’t react