The last time we were together on The Property Management Show, you learned why having standardized systems and processes is so important to your property management company. This week, we’re digging a little deeper into that: we’re talking about how to implement standardized systems and what to do first.
This can really be transformative for your property management business, and we’re joined by Dave Gorham, who makes this a living and breathing part of the way he does business at Realty Solutions.
How to Implement Standardized Systems in Property Management:
Job Descriptions and Organizational Flow
In Part 1, we discussed the importance of standardizing your processes and what kind of obstacles and benefits you can expect when you use them in your property management company.
Now, let’s take a look at the process behind standardized processes: how do you implement standardized systems?
Realty Solutions is a New Jersey-based property management company that is successful now because they embraced a sense of organization. Dave was an early adopter of job descriptions and putting together an organizational flow.
You have your own assumption or expectation about what each person on your team does. It’s important that those team members have the same expectations and assumptions. Unless you have something written down, you cannot talk about why you may be out of sync.
Don’t keep your job description in your head. Write it down.
If you’re the president of the management company, you have some expectations about what your bookkeeper should do. But, your bookkeeper might have different ideas about what her job is and what your job is. That’s why you have to write down every job description. It allows everyone to know your true responsibilities and the responsibilities of others.
Titles and jobs have different meanings from industry to industry and even from company to company. At Fourandhalf, our job description for an account manager is very different from what an account manager does at a bank or a cable company.
Each business defines it for themselves.
If you don’t have each role defined, everyone will have different expectations. So your first step in getting an organizational flow in place and systems standardized is to define every role in your property management company.
Contracts and Agreements Lead to Accountability
If you don’t spell out what you’re doing, it’s easy to get out of scope.
Identify your roles and relationships. You can customize things as needed, but make sure it’s written down for everyone to see and understand. You wouldn’t take on a property management client without a contract. Make sure your employees have a job description – or a contract – as well. That’s a precursor to a compensation package, and from there you can move to KPIs and improvement plans.
Agreements need to be in place as well. They can be put into place by two people. Those agreements have to be described in writing. They also have to have consequences which are good or bad, and there has to be a way to clean up the agreement if it stops working.
Things do not happen magically. You need a collective mindset that agrees to this, and it has to come from a leader within the company who sets up guard rails or boundaries and then allows every employee to use their creative and critical thinking to follow the processes and commit to the agreements.
Developing an Organizational Flow (Chart)
How should you implement standardized systems like organizational charts or flows? At Realty Solutions, Dave developed an organizational chart for the company, but he doesn’t want you to embrace all the negative connotations that come with the term ‘organizational chart.’
Don’t see it as a superiority scale or a picture of who is most important in the organization. It’s better to make it an organizational flow rather than an organizational chart. This is important in getting rid of the idea that if someone’s name is above you, it’s in a superior or authoritative aspect.
What the organizational flow should show is where you go for support or questions. The person in the box above you knows what you do and how you function. You’re the one keeping yourself accountable – not the person in the next box up.
This turns into a decision-making and operating structure.
You may remember the Fourandhalf blogs Michael Lushington did a couple of months ago on work flow. This is similar. Before Michael came to Fourandhalf, everyone had an idea about who did what, and how they should respond if something went wrong. But, nothing had been written down. Nothing was on paper. There wasn’t any standardization. We were successful, but as we grew and added new people to the team, things were bound to break. Those ideas in our heads had to be put into a work flow.
Workflows Are Not One-Size Fits All
Dave is not a micro-manager at Realty Solutions. His job is to create policies and procedures based on what works well. That’s an ongoing conversation with everyone on the team. Each best practice is put into a policy, and that’s something every team member (they changed the language from employee to team member) has available to them. If a property manager is struggling with rent collection or a fair housing issue, there’s a policy in place that provides the guard rails or the boundaries of what should be done.
The goal is to have all this in place so your company can move on without you.
We want our companies to survive without us. It’s what Scott Fritz talked about last year at PM Grow, and it’s something every property management company owner should be prepared for.
Your organizational flow has to have meaning. If you’re a huge national company with a large organizational chart, it may feel too big and every team member feels like an ant in an overwhelming system. Organizational charts can be big – but, they have to mean something.
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Providing Support for Team Members
Whether the organizational chart is operational or hierarchal, it delivers creative license and support to your team members. You’re encouraging people to think critically and make their jobs their own.
This is a culture you need to create inside your property management company because it expands out to your owners and your residents and your vendors. It provides you with a natural litmus test when you’re screening or talking to a potential new owner. You’ll know right away if you’re talking with a bad resident or an owner who isn’t your target client or a vendor who might not be a great fit.
This is one of the ancillary benefits provided by solid organizational flow.
When you’re responsible for a team, you shouldn’t be telling them what to do. Instead, they should be telling you what they need to do their jobs. You need to support your team members, and that’s got to align with methodology. If you choose to micromanage, you’re taking away the creative license and critical thinking abilities of your team.
Dave says his company was in a position last year where the whole business felt dumbed down and team members were not thinking critically. They were pushing buttons and sending things out but not really investing themselves in anything.
He wants his team members to manage as if they owned the property themselves or as if they were the residents moving into the home. He wants them to consider whether they’d be happy with the decisions they are making for the client or the resident.
How did the company get to the point where people were not critically thinking?
Partly, it was due to what we always talk about. Property management companies want to grow, but they’re not always prepared for that growth. The way you work at 150 units is not going to be the same way you work at 1,000 units. It’s a different business. You have to recognize when the business changes.
Your team members need systems and structure, and they also need creative license within those systems so they’re not just pushing buttons and nothing more.
Responding to Questions: Noise vs. Solutions
Every management company has high maintenance clients and residents with constant issues and problems. This is frustrating for a property management question, and you have to make sure you’re responding to the question or the problem, and not the noise.
Figure out the real question. When a client or a tenant or even a team member brings you noise, simplify what’s being asked. The noise is at an emotional level. Logical solutions are at a higher level.
To solve a problem, you need the facts. If the facts aren’t clear, ask for clarification and keep going.
Think if it as a disease. The noise represents the symptoms of the illness. If you keep treating the symptoms, they’ll come back over and over. If you get to the actual cause of the illness, you can cure it completely.
Limit the noise so you can be more compassionate. Even if there’s a decision that one party will find to be negative or not what they wanted, your willingness to show compassion allows people to accept the negative decision.
Don’t be afraid to include that need for compassion in the job description. You might think of a job description as being a list of tasks a person has to manage. But, it could include how those tasks are managed. You have to tie the job back to the overall organization. They why is just as important as the what.
Empathy vs. Compassion in Property Management
The difference between empathy and compassion is huge. Dave held a class on it for his team members and he coaches people to realize that empathy has no business in property manager. Compassion does belong in the way you manage your business, but empathy is not the skill you want to bring to the office. When you have empathy for someone, you’re putting yourself in that person’s place. You’re getting noisy with them. That prevents you from seeing a path to solve their problem. When you’re compassionate, you’re outside of the noise and you can see a clear black and white answer.
Being compassionate is more beneficial to all parties when you’re a property manager or managing a property management business. You get through the noise and you move on.
With your systems standardized, all the answers are right there within your company’s structure. If you have a situation with a tenant or an owner, you’re going to be able to respond to it. There’s a lease and a contract and an agreement within your company that shows your team members what to do. No one should have any expectations that are out of alignment.
Ritz Carlton understands compassion. They use the terms “ladies” and “gentlemen” instead of employees or customers. They help people without hesitation and without asking why they should. Dave once needed a ride back to the hotel he was staying at in Orlando after having dinner at the Ritz Carlton. They had a car take him back without any questions asked. The hotel chain didn’t know who he was, and they didn’t ask if he was a hotel guest; they simply responded to the need. Everything is yes, whether they were hotel guests or not.
This is compassion, and Ritz Carlton trains their team members on compassion.
It’s not dissimilar to treating people like residents instead of tenants.
Mapping Out Your Operational Flows
How can you map out your operational flow?
Start with the organizational chart that reflects every role in the organization. Then, fit in the tone, the idea of the job, and a key question – are they compensated properly for the job? You need a separate compensation document.
You also need an agreement at each level. The property managers should have their agreements and bookkeeping has another and sales has their own agreements. You can keep diving in to decide how far you want to go.
Once your organizational chart and your job descriptions and compensation documents are in place, you can move on to performance improvement plans and key performance indicators.
Dave uses organizational flow to understand when something needs to change for his team members. He currently has a property manager who didn’t get the training she needed when she was first hired. She had to figure everything out on her own, and she pushed ahead without anyone supporting her. Now that Dave is looking at the work she does, he’s worried that it will be hard to scale with the way she is working. So, they’re working together to help her be better as her job changes.
What to Remember When You Implement Standardized Systems in Your Property Management Company
Policies. Procedures. Best practices. You can use those terms interchangeably. Make them public on your website, as PDFs, whatever you have to do to make them real and accessible.
You should have a process and a procedure for each thing, whether it’s eviction or move-in inspections or rent collection. That doesn’t mean the property manager doesn’t have to think. You’re still leaving room for creativity because you don’t want to get too standardized.
Four years ago, Buildium went into a partnership with Happy Inspector. It was supposed to be the perfect way to conduct inspections. Most people loved it, but it didn’t work for Realty Solutions. They felt it took away all the critical thinking and made the process too standardized. So, Dave and his team developed their own inspection process, but now the company is outgrowing that, so they’re giving the Happy Inspector platform another look.
Your biggest takeaway should be this:
Don’t have a process just to have a process. It has to have meaning. It has to live and breathe.
Thanks for joining us for both segments of this podcast with Dave. If you have any questions about how to implement standardized systems into your property management marketing, contact us at Fourandhalf. And, we hope to see you at PM Grow in Austin this May.
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