When managers are mistaken for leaders

It's no secret that the Blog has been highly critical of the Sutherland's managerial performance of our Association - and for good reason.  Despite their near decade-long reign in dictating just about every facet of life here at Glen Iris Lofts, finding examples where traditional business management principles have even been discussed - much less implemented - is next to impossible.  The reason for this is pretty simple.  Despite the fact that they manage an annual budget that is now nearly a half a million dollars and that by the end of this year, will have enjoyed the unfettered ability to determine how and where almost $4 million dollars of Association funds will have been spent, the Sutherlands don't run our Association like a business.



Rather, the administration of the financial affairs of our Association more closely resemble that of someones personal household budget, where personal preferences and desires trump financial cost/benefit analyses, benchmarking and return on investment.  In fact, the Blog would go as far out on a limb - and it's a very sturdy limb - to assert that Kit Sutherland couldn't put together a formal report based on any of those three metrics for any given Association project or spend.  Likewise, one would be hard pressed to find any evidence that they are even aware of - much less understand the value of - any of the normative management approaches to leadership that would cultivate and maintain a membership that understands shared objectives, is passionate about reaching them and that can reliably draw sufficient strength from their faith in those that lead them, that they are willing to follow - even when the way forward is less clear and each of the possible paths from which we can collectively chose has its own substantial risks.

What the Sutherlands have to offer is management by fiat, not leadership.  They lack completely the ability to forge organizational goals and objectives whose legitimacy lies in a skillfully formed foundation of consensus and the even more exceptional ability to translate them into a plan of action that sustains that consensus.  Evidence of this is ubiquitous and is most powerfully illustrated by the fact that each consecutive year with them at the helm of our Association, correlates so closely with a steadily rising tide of member discontent, disaffection and stridency of discourse.

None of this is to say that the Sutherlands don't have skills that would be very valuable in the right situation or circumstance.  Companies in need of mid-level managers to fill positions that require an unwavering ability to stick to a prescribed set of of objectives - even unpopular ones, no matter what - could probably find no better candidate than Kit Sutherland.  One needn't even close their eyes to envision her all but certain success as a foreclosure manager for a large bank or an insurance company claims investigator.  Whatever the position, the degree to which one could reliably predict her success would principally be determined by the degree to which the position did not require the facility to establish objectives or involve highly refined interpersonal skills.

Witness what homeowners didn't receive at their most recent Annual Meeting.  Completely missing was any semblance of an effort to sell a decided-upon course of action for the coming year to those in attendance.  Instead of an effective campaign that enrolled the membership around a set of objectives forged by consensus in an environment of transparency and earnestness of intent, what was proffered was an impenetrable wall of what will be done, behind which its corresponding rationale and motivation were safely hidden from view.  A wall both constructed of, and defended by, bricks made from the very lack of knowledge on the part of the membership the Sutherlands themselves work so tirelessly to perpetuate; alternatively laid end-to-end to buttress the wall from behind and hurled from atop onto those below.

Not withstanding the Sutherlands' deficient leadership skills plainly evidenced by the current - and ever-present - lack of membership unity and cohesion, they are unwittingly doing our Association an immeasurable disservice by failing to draw on or make use of even the most rudimentary of analytical tools used by any successful business.  Take for example the considerable expense that comes with our decision to employ the services of a professional property management company.  Although this seems like a relatively straightforward matter - and no doubt is treated as such by the Sutherlands - it actually presents an extremely complex managerial problem for our Association. On the one hand, we need their skills to take care of the day-to-day tasks that keep the lights on and the gate operational - and we want them to do so for a cost that is as low as possible while still meeting homeowners' expectations of quality and value.  But on the other hand, the management company is itself a business - one that has its own perfectly legitimate objective to minimize costs and maximize profits.

And there's more to understanding these opposing objectives than can be had by merely evaluating the set monthly fee paid for their service.  Because they are a business that is always looking for ways to maximize revenue, it is a widely understood reality that property management companies make money beyond the monthly management fees through their provision of services and service providers to homeowner associations.  There are many examples of this right here at Glen Iris Lofts - like the fees totaling at least $10,500 that CMA collected for arranging our last loan.  Recognizing the totality of ways by which they could extract the most revenue from our Association, would, necessarily require that any competent first step on the part of our leadership to endeavor to control those costs for homeowners, begin with some sort of analysis to better understand the financial drivers of CMA as a vendor.

We pay about $28,000 a year to CMA in the form of monthly fees and miscellaneous reimbursed office expenses and we know that they make some indeterminate amount of money beyond that by way of 'surcharges' - for lack of a better word - through their provision of other service and service providers that perform repair, maintenance and other tasks for us.  Before one can evaluate if this is a 'good deal' for our membership or it isn't, a closer look at the numbers from the perspective of the vendor is required.   At its most basic level, our property manager is a revenue source for her employer, CMA.  Nothing wrong with that.  Most of us are a revenue source for our employers.  At the rate they propose to charge us by way of monthly fees, is it representative of a sustainable business model for CMA?  Is the fee that they are proposing commensurate with the percentage of time that we expect them to allocate to our property given the costs of the management resource, specifically, that of Maggie Jewell?  We strongly suspect that the Sutherlands do not know the answer to either of these very basic questions - and these are but two pieces of evidence of the essential business management skills that they are not bringing to our Association.  And that means higher costs for homeowners.

The Blog would like to thank homeowner Chris Gordon (Ph. II, Unit 611) for submitting what could be considered a very good starting point for gathering the type of information that is critically necessary for any effort to effectively negotiate an arrangement that has any hope of limiting the costs to our membership that CMA, justifiably, is always seeking to maximize.  A cursory review of this information, coupled with the fact that a simple Google search uncovered an actual management contract for an HOA right here in Atlanta that was signed for less than one quarter of the monthly per-door management fee contained in our contract with them, would indicate that, at minimum, further investigation is warranted to determine if a better deal for GIL homeowners could be negotiated.

Click the spreadsheet image below to enlarge.

Our Association is a business.  And just like any business, its success is dependent on the leadership skills and business acumen of those at the top.  When we put people in those critical positions with skill sets that may be valuable for any number of other purposes, but are nonetheless substantially divergent from those required, we all but guarantee a result that falls far short of what homeowners deserve and expect.  What inevitably results looks a lot like our community today: monthly assessments that are higher than what they would otherwise be; lack of unity and commitment to confront problems collectively and with determination; a fractured sense of community and rampant homeowner discontent; ever-growing mistrust in those that are supposed to be leading us; a marked and steady erosion of respect for the legitimacy and authority of our Board of Directors; lower home values partially resultant of our own self-inflicted wound of eliminating 40% of all potential home buyers by failing to manage our Association in a manner that meets minimum FHA standards.

Glen Iris Lofts is at a critical juncture.  At precisely the time when we are confronted with challenges that require the involvement and commitment of all its members, we have a Board that's more concerned with protecting egos, petty politics, staking out territory and maintaining control for control's sake, than with what they should be concerned with - the important and pressing needs of homeowners.   The fact that the Sutherlands prioritize their time to first accommodate the drafting of memos to the community about rogue utility carts, striking up discussions with police officers and attorneys about same, carving valuable time out of Board Meetings to engage in witch hunts for bloggers that wastes their own time and the time of all in attendance and otherwise preoccupying themselves with the mundane or ignoble, instead of resolving our FHA disqualification and getting a handle on runaway budget increases that are increasingly straining the ability for many of our neighbors to remain in their homes, speaks for itself.

It's time for every single member of our community to hold those at the top to a higher standard.  We need a Board with fewer personal agendas and without the over-arching and persistent interest in the counterproductive and trivial.  We need a Board with genuine leadership qualities that strives to build a consensus - not one that is forever working out of view to create the next explosive distraction mcgyvered out of obfuscation and division to serve as cover for a drive-by implementation of decisions that serve their preferences and desires only.  We need a Board that understands the fundamentals of our Association as a business enterprise, can bring relevant skills to bear for the betterment of everyone's share in it and is committed to giving homeowners straight answers - not one that treats the disclosure of financial details of our Association to its members as a privilege seldom granted and is forever trying to serve homeowners the same tired fare of financial double-speak and the empty calories of vague answers.  What our Association needs more than anything at this critical time, is a post-Sutherland Board. 

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