“Boards that are able to function effectively as a team have an 800% greater impact on firm profitability than any one well-qualified board director”(Charas 2019).
It’s time to take your HOA board out of the HOA.
The true secret to mastering your homeowners association (HOA) isn't about disregarding your community or getting lost in mundane meetings. The focus here is on a smart, business-oriented approach to your HOA board.
The surprising fact is, your board of directors shares much more in common with a top-notch professional organization than you might initially imagine. A deeper look into the successful boards from the corporate world can provide valuable lessons to bring into your association's boardroom.
Exploiting a professional mindset while interacting with your peers and making decisions could be the decisive factor between a flourishing board and one that is merely meeting baseline expectations. Such a mentality can also be instrumental in crafting effective HOA strategies.
This mindset will not only drive your association's success but will also have enormous impacts on your HOA's financial health, property values, and the overall resident experience.
Now, let's delve into the four common traits that successful organizations possess, which you can emulate in your HOA's planning and operations.
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Purpose, over personal agendas
The perfect formula for a thriving board lies in prioritizing the interests of the community or corporation. Whether you're a member of a high-powered corporate board of directors or part of a governance team for a large residential association, it all boils down to maintaining a purpose-driven board.
This principle fits flawlessly in the context of an HOA boardroom. We observed a case where an association successfully navigated a complex legal and mediation procedure, all thanks to their community-centered approach. The success of this board lies in their single-minded dedication to the essence of the community. They value their individual perspectives, but they understand that the community's welfare takes precedence over personal motivations. This community-centric philosophy has enabled them to drive various projects to completion and uphold property values in an intensely competitive market.
Efficient boards grasp that even amidst differing opinions and diverse personalities, a cohesive board centers its focus on the community's best interests.
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Participation, plus enthusiasm and education
What’s the one requirement for any board member (corporation, non-profit or homeowners association)? Participate. As a volunteer HOA board member, you don’t need to have a background in association management or HOA strategies to be an effective leader. You need to be dedicated, enthusiastic and equipped with the right tools to make an impact.
Believe it or not, most board members of professional organizations take the same approach. These board members may be professionals in the work that they do or the positions they hold, but they are not board members by default. “People do not join boards knowing how to be an effective director. It is important to learn how to become an effective director” (Griffin et al. 2017).
Active engagement and education go a long way in building a successful board. The best boards are proactive and apply themselves to learning and adopting new skills, like “asking the right questions, not being directive, leading conversations rather than acting as ‘the expert,’ staying engaged, and building on the points of view of others” (Griffin et al. 2017).
The same skills that it takes to be a great board member in the professional boardroom are identical to those in the HOA boardroom. The advice for both groups? Be engaged and committed to learning more. Work with your management company and industry professionals to strengthen your knowledge on HOA topics, including softer skills like leadership, board dynamics and conflict resolution.
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Prioritization, aligned with your vision and HOA strategies
No one agrees on priorities all the time – but a great board stays on target. A vision, mission statement and strategic plan can help you accomplish this. When the conversation drifts into less-impactful topics, having concrete HOA strategies in place helps you redirect the discussion.
While it may be tempting to focus on the immediate priorities of your association (e.g., violation enforcement, resident complaints, etc.), your time should primarily be spent shaping your future. The most effective board is a policy or “strategy” board. They work to shape the mission and vision of the company and make decisions with that in mind.
According to a McKinsey & Company report on successful boards, “Board members with very high impact invested eight extra workdays a year on strategy” ("The Board Perspective" 2020). This doesn’t mean you need to add an extra meeting to your calendar for the next eight months. Instead, it means shifting your priorities from day-to-day operations to the future. The same piece from McKinsey said, “Governance arguably suffers most, though, when boards spend too much time looking in the rearview mirror and not enough scanning the road ahead.”
How can you ensure that your board prioritizes HOA strategies over operations? First, confirm that you have a well-defined mission statement and vision. Then, make sure you are getting adequate support from your management company, so that you can spend your time developing and executing HOA strategies, not day-to-day tasks.
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Professionalism, when personality clashes occur
“They don’t see things the way I do.” “We are never going to get along.” “I don’t understand what they’re thinking!” If these thoughts have ever gone through your head (at a board meeting or elsewhere), you’re not alone. Don’t let that stop you from engaging with different personalities or use that as a reason to shut down others who disagree with you.
The risk of cutting off engagement with different personalities or opinions is that you create an environment where “it's not safe to share opinions, concerns, or come up with new ideas” (Gershfeld 2019). Ultimately, this will create conflict and stifle growth in your association.
Professionalism and empathy help drive a successful company (or association). We may not associate “emotional connection” with business success, but understanding, listening and responding to one another can make or break a board. Forbes Council Member Lola Gershfeld, Psy.D., says, “The success of a board relies on feelings of emotional connection.” Successful boards “help each other step out of these negative patterns and soothe one another” (Gershfeld 2019). On the flipside, a board that doesn’t value emotional health and connection among members will have a hard time accomplishing its HOA strategies.
To improve professionalism and communication on your board, you may want to attend a course or workshop together. Work with your management company to see what is available locally or online and sign up for a class or seminar.
Taking Your HOA Board Into the Business World
Just like any professional entity, your HOA board forms the backbone of your community. Implementing effective HOA strategies bridges the gap between administration and homeowners, boosting your efficacy and strengthening the association from within. Take a moment to evaluate your board, keeping the core principles of professionalism as your criteria. When these strategies are embraced, the impact on your board is profound - propelling your community's reputation, enhancing the experience of residents, and elevating property values.Bibliography
1. Charas, Solange. 2014. "The Key To A Better Board: Team Dynamics". Harvard Business Review. https://hbr.org/2014/01/the-key-to-a-better-board-team-dynamics.
2. Gershfeld, Lola. 2017. "Board And Team Dynamics Starts With Emotional Connection". Forbes.Com. https://www.forbes.com/sites/forbescoachescouncil/2017/11/16/board-and-team-dynamics-starts-with-emotional-connection/#75f0563f50f4.
3. Griffin, Taylor, David F. Larcker, Stephen A. Miles, and Brian Tayan. 2017. "Stanford Closer Look: Board Evaluations And Boardroom Dynamics". Gsb.Stanford.Edu. https://www.gsb.stanford.edu/sites/gsb/files/publication-pdf/cgri-closer-look-63-board-evaluations-boardroom-dynamics.pdf.
4. "The Board Perspective". 2020. Mckinsey.Com. https://www.mckinsey.com/~/media/mckinsey/featured%20insights/leadership/the%20board%20perspective/the-board-perspective.ashx.