As a Board member, you must continuously engage in strategic planning - not just once a year. It must be the central focus of each Board meeting. It is really hard to create sustained, long-term value for your community when the Board (and homeowners) are blinded by short-term views.
Boards are most effective at developing strategies when partnered with a professional manager, working together based on mutual trust and respect. This means coming together throughout the year to identify important topics, consider strategic risks, and answer hard questions. Management by itself cannot conclusively cover everything in goal planning – but benefits from the collective wisdom of the Board.
It is critical that all Board members understand the Association’s strategy and can articulate it consistently when responding to homeowners’ pointed questions and pressures. There should be no surprises with a fully involved Board.
Placing education and discussion on strategy development into each agenda must be your priority. All too often, the Board allows itself to get bogged down on governance and compliance issues. Push as many of these items to your committees for processing. If you don’t have committees, establish resolutions that capture the bulk of the situations dealt with by the Board, so management can proceed on autopilot.
When it comes to the meetings, all Directors must arrive prepared, with all applicable materials reviewed in advance. Plan to regularly include third-party experts for additional perspectives at your meetings. A CPA, attorney, engineer or insurance broker provides an outside voice identifying potential disruptions to your goals.
You need to be talking about risks associated with your strategy and how these can be mitigated. Effectively managing risks more than just protects value: It actually helps create value by taking advantage of the unexpected. You want to maximize opportunities and improve your community’s position compared to competing neighborhoods.
Manage this strategic risk by answering, “What is the amount of risk we’re willing to accept in pursuit of value? What is the worst possible thing that can happen and still leave us standing? What milestones do we need to check along the way to our five year goal?” While some things should not be changed (ex: always deposit money with FDIC-insured institutions), decisions on expansions and upgrades to the amenities are valid considerations.
The Board and management should be prepared to regularly readjust key assumptions. Every goal has variables requiring mid-course changes. Are you willing to alter the way you evaluate performance whether your plans exceed or fail to meet your initial expectations?
Final thought: When bad decisions meet a good management team, the bad decisions win every time. Don’t be quick to pin blame. When things go wrong, take a deep breath and analyze the situation before making changes.