Strategic Planning for Board Members

This piece is a short excerpt from the presentation material for "Strategic Planning for Board Members," a presentation that took place at the ECHO Annual Seminar on June 19th.

Most successful businesses have embraced the concept of strategic planning and the results attained drive the direction, resources, and decisions made in the daily course of doing business. It guides the leadership and unites the employees and partners through common goals and objectives. Since the benefits of developing a strategic plan are generally positive, why don't community associations enthusiastically proceed along the same path? There are several answers to this question. One answer is simply the perception that creating a plan is complicated and requires a lot of time and money. Another answer is that many community association volunteers believe that the 30-Year Reserve Study is their plan. While this financial tool is an important part of a comprehensive plan, it does not include many factors that contribute to the overall health of the community. Some of these factors are changing demographics, local economic conditions, and aging landscaping and design elements. A complete plan will also consider the needs and wants of the individual community members.

Let's first tackle the perception that creating a plan is complicated and requires a lot of time and money. If we look at some of the examples used in the business environment, SWOT, Team Alignment, or Scenario Planning, this might be a true statement. But we can take the essence of these models and apply three simple steps - preparation, development, and implementation - and we now have a process that can be used by any size community association.

Step 1 - Board Member Preparation

Before you can begin to initiate projects and programs it is necessary for you to have a general understanding of your association. This is true even if you don't have a strategic planning process. So to prepare for service on the Board, as well as for planning, ask your self these five questions.

Do you understand the legal structure?

The CC&R's, Articles of Incorporation and Bylaws provide you with information about the structure of your community. First the CC&R's define maintenance and financial responsibilities of the Association and the members. All of the funding for the association comes from the members, and the formulas and limitations on assessments are also found in the CC&R's. Next are the Articles and the Bylaws which set forth the rules for operating the Association as a corporation. These documents contain information about meetings, elections, and distributing information to the membership. You don't need to memorize any of this information, but understanding the legal structure will help you fulfill your obligations as a Board member.

Do you understand the financial condition of your association?

The objective of this second question is for you to look at the big picture, not at how much it costs to change a light bulb. You will need four documents to provide you with the necessary information. You will need the most current month's balance sheet and revenue and expense report along with this year's budget and the most recent reserve study.

This year's balance sheet will tell you how much cash you have, how much money is owed to the Association and how much the association owes to vendors and/or lenders. The current revenue and expense report will tell you if you are operating within budget for the current fiscal year. The current budget will provide information on all the services and projects funded for this year and the cash flow schedule in the reserve study will inform you of the funding required over the next 30 years to keep your association's common elements properly maintained.

Do you understand the human resources available to your association?

Allocating human resources, including the time of the volunteer Board of Directors, is equally as important as the financial resources. Therefore, it is important to be aware of the services outsourced to professionals versus the services that are absorbed by volunteers. Do you have a professional management firm? What projects does the board choose to manage by volunteers? Will you be delegating projects to volunteer committees? Every association is different so a quick assessment of human resources will be helpful to the planning process.

What is important to your members?

If improving the landscaping is important to you, it is likely that you will be most familiar with others in your community who share the same desire. As a decision maker for the entire community, it is necessary to have some form of outreach to clearly understand the priorities and needs of all the members in your community. Ask your committee representatives for their perspective on needs, conduct an annual survey, or develop a task force to ask members what is important to them.

What conditions are present in your general community?

Conduct some general research into your surrounding community to determine factors that will impact your association and its members. Gather information about the status of the employment and housing market in your community. Keep track of plans for new development or other changes to property use in your area. If there are other community associations in your neighborhood work to establish a process for sharing information.

By investing time in the process of learning about your community you will not only create a strong basis for service to the association, you will also establish a solid foundation to begin the process of developing an effective plan.

This is part one of a three part article. Parts two and three are called "Developing the Plan" and "Successful Implementation." To read the whole thing, join us at the Annual Seminar on Saturday, June 19. Follow the link below to see the Annual Seminar event page.

Debra A. Warren, PCAM, CCAM is the principal at Cinnabar Consulting, a firm that provides consulting services to board members and management companies. Debra is an experienced manager and a regular speaker at ECHO events.