4 business strategies for HOA boards
“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.
We’re not talking about ignoring your association or going on a field trip.
Instead, we mean taking a professional approach to your HOA board. The truth is, your board of directors has more in common with a professional organization than you might think. By looking at successful boards in the business world, you can gather some great insights to take back to your association boardroom.
Having a professional mindset when you communicate with fellow members and make decisions can be the difference between a thriving board and one that is simply meeting standards. This mindset can have a tremendous impact on your association’s success, including financials, property values and the overall resident experience.
What 4 characteristics do successful organizations have in common?
1. Purpose, Over Personal Agendas
Choosing the community’s (or corporation’s) best interest over your personal agenda is the #1 tip for a more successful board. Whether you’re on the board of directors for a multimillion dollar corporation or a 500-unit single-family home association, keeping the board purposeful is critical.
This concept translates seamlessly to the HOA boardroom. One association was able to work through a difficult legal and mediation process because of their mindset. “The board has been incredibly successful because they are laser-focused on the community,” said Pamela Dobson, general manager of The Mark high-rise association. “Of course, they have their own opinions and input, but they know that the community’s best interest trumps personal agendas. Because of this mindset, they’ve been able to accomplish many projects and sustain property values in a very competitive market.”
Effective boards understand that even with personal opinions and different personalities, a unified board is focused on what’s best for the community.
2. 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 strategy 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.
3. Prioritization, Aligned With Your Vision and Strategy
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 a concrete strategy 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 strategy 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 a strategy, not day-to-day tasks.
4. 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 strategy.
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
At its core, your HOA board is no different than a professional organization. To increase your effectiveness and strengthen your association as a whole, assess your board with the above principles in mind. By taking a professional approach and embracing these principles, your board can be significantly more impactful, boosting your reputation, resident experience and property values.
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.