You can control your Co-op or Condo’s destiny (whether you are an Owner, Board Member or Management) by getting ahead of various situations. Unlike a reactive board, who are often waiting for things to happen, proactive boards anticipate, think ahead and make things happen.
We often see boards comprised of too many “financial advisors” (who often are really sales people) and attorneys. Too many attorneys often lead to paralysis - no decisions made without costly outside legal advice, and a lack of change(s), no matter how well-needed. Conversely, business owners and C-level executives are used to making decisions and their time is very valuable. Therefore, they can often make effective decisions without wasting anyone’s time.
Similar to businesses, proactive boards are usually more successful than those who only react to Emergencies. According to The Hay Group, people who are actively engaged in any organization are 43% more productive than those who are not.
Here are some steps to help become a proactive board:
- Educate yourself: Learn about your current systems as well as potential upgrade alternatives
- Develop a plan and take ownership: This can be as simple as creating a spreadsheet list of all systems with installation and expiration dates
- Be solution focused, focus on small things that are controllable: Work on small upgrades that have an immediate or significant result so that you can cross that off and go on to the next upgrade
- Be accountable, get things done: Don’t “table” agenda items. This is a bad habit and should be avoided at all costs. Make sure to progress with the plan.
- Use “SMART” goals (Specific, Measurable, Achievable, Results-focused, and Time-bound)
Most old buildings have old building systems, which have been neglected for years and are in dire need of being replaced. The problem facing boards is that there are not enough reserve funds to cover the costs for the upgrades. In addition, the board often doesn’t have the time, will or commitment to do anything that is not absolutely necessary or required by law.
Stick to these basics. If the roof has a 25-year life, plan to repair or replace it in 25 years. Don’t coast through year 26 and just wait for leaks. You may not need to replace it in 25 years, but having the ability to do so if needed constitutes good planning.
SMART Goal Example
Here is a real-life example of how we are using SMART goals for one of our clients. This Brooklyn-based condo was using an exorbitant amount of electricity. One specific, controllable upgrade was to replace all light bulbs with LED. Although this only accounted for 20% of the total electricity usage, it was specific, measurable, achievable, results-focused, and time-bound. Now we are at a point where that 20% runs efficient, providing immediate cost savings. Those savings can be used to invest in upgrading the other 80% of the electric use. We are now in the process of narrowing down how to reduce the remaining electric usage.
Be aware of the complaints and/or maintenance requests in the building so that you can proactively take care of issues before they arise or escalate. We typically set up one board member to be copied on all maintenance requests that were directed to the resident manager and managing agent. This allows for better transparency and smooth follow-through.
When the resident manager informs the board that he thinks they need to make major plumbing upgrades, the board might not be as inclined to listen as much. If they “see” how many leaks resident report on a regular basis, they will understand. This is human nature; it also helps to paint a picture, which makes it easier for the board to understand and act upon.
One of our building’s previous superintendents had patched up all the leaky pipes with duct tape. Quick fixes are never the answer. They ultimately take more time to undo and become costlier in the long-run. Once the new management team realized the history, they started on a program to replace all pipes as leaks are reported.