Strategic Planning for HOA Board Members

Most successful businesses embrace the concept of strategic planning to drive the direction, resources, and decisions made in the daily course of doing business. A strategy establishes common goals and objectives that guide leadership and unite employees and partners. By guiding your HOA with a strategic plan, you can: make the board’s actions more consistent, schedule projects in a proactive manner to take advantage of pricing opportunities and timing, place decisions required for implementation on an Annual Calendar to have adequate time to prepare, and allocate resources strategically to meet member needs.

Strategic Planning for HOA Boards

HOA board members should embrace strategic plans to drive the direction of their resources.

Most successful businesses embrace the concept of strategic planning to drive the direction, resources, and decisions made in the daily course of doing business. A strategic plan establishes common goals and objectives that guide leadership and unite employees and partners.

By guiding your HOA with a strategic plan, you can:

  • Make the board’s actions more consistent
  • Schedule projects in a proactive manner to take advantage of pricing opportunities and timing
  • Place decisions required for implementation on an Annual Calendar to have adequate time to prepare
  • Allocate resources strategically to meet member needs

Despite the benefits of strategic planning, many homeowner associations don’t enthusiastically implement a plan within their associations. Some HOAs think that creating a plan is complicated and requires a lot of time and money while others incorrectly believe the 30-Year Reserve Study is their plan (Find out how to read your reserve study).

According to Forbes, “A strategic plan helps business leaders determine where to spend time, human capital, and money.” When determining where to spend time and money, a homeowners association should consider these factors:

  • Changing demographics
  • Local economic conditions
  • Aging landscaping and design elements

A complete plan will also consider the needs and wants of the individual community members.

We can take the essence of the models used in the business environment to make a simple, three step process of strategic planning for HOAs: preparation, development, and implementation. 

Board Member Preparation

Before you can begin to initiate projects and programs, it is necessary that you have a general understanding of your homeowners association. To be completely prepared, you should have the answers to these five questions:

What are your HOA’s governing documents?

CC&Rs, Articles of Incorporation and Bylaws provide you with information about the structure of your community. 

CC&Rs define maintenance and financial responsibilities of the HOA and its members. All of the funding for the HOA comes from the members, and the CC&Rs hold the formulas and limitations on assessments.

Articles and Bylaws 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 HOA board member.

What is the financial condition of your HOA?

There are four documents you need in order to see your HOA’s financial big picture:

  1. Most current month’s balance sheet – Tells how much cash your HOA has, how much money is owed to your association, and how much your association owes to vendors and/or lenders.
  2. Revenue and expense report – Tells if you are operating within budget for the current fiscal year.
  3. Current year’s budget – Provides information on all the services and projects funded for this year.
  4. Most recent reserve study – Has a cash flow schedule that will inform you of the funding required over the next 30 years to keep your association’s common elements properly maintained.

What human resources are available to your HOA?

In order to effectively allocate human resources, you must be aware of the services outsourced to professionals versus the services absorbed by volunteers. If you aren’t sure, do research on your homeowners association’s:

  • Management company
  • Projects managed by volunteers
  • Projects managed by professionals

What is important to your members?

As a decision maker for the entire community, it is necessary to have some form of outreach to understand clearly 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. For example, 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.

What conditions are present in your general community?

Conduct general research into your surrounding community to determine factors that will impact your HOA 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.

Your board members should work to establish a process for sharing information with other community associations in your neighborhood. By investing time in the process of learning about your community, you will create a strong basis for service to the association and establish a solid foundation for the development of an effective strategic plan.

Developing the Plan

Developing a strategic plan for your HOA will require a commitment of about 10 – 15 hours by the association’s board and each of its members. The time commitment is divided into four specific tasks to help your HOA move through the process as steadily as possible.

Purpose and Values

Set aside 1 to 2 hours to discuss the purpose of your HOA and its core values, which vary based on region, demographics, and size. There are many books and tools that can help with this processDuring this phase, your HOA needs to decide what factors make it unique. 

Develop the Agenda for the Planning Session

Select a time period when all board members can attend and a location that will minimize disruptions. The goal is to create 4 to 6 hours of uninterrupted time. Best practice is to try not to conduct this session in conjunction with a board meeting at the end of a long day. Instead, set aside time on a Saturday morning or on a weekday when you can begin by 1:00 in the afternoon.

Your HOA will also need to decide if a facilitator will be used to help with the discussion. A facilitator is a neutral party responsible for keeping the discussions on point with an equal opportunity for each member to share their ideas and opinions. Your goal is to have a strategic plan that was developed by all board members, not just the strongest voice in the room. The most sustainable plans are developed by all members sharing ideas and opinions.

Brainstorming – The Master List

The first part of the planning session involves all participants sharing ideas, priorities, and projects. You will want to make sure you have a current, mid-term and long-term perspective. What do you want to complete in the next year? Three years? Five years?

Your HOA should have a master list that can be used for a detailed discussion. This portion of the planning session benefits the most from the services of a facilitator. By using a variety of tools, the facilitator can create a list that is manageable as the group moves into the next phase of the planning day.

Allocating Resources and Prioritization

In this final step of the planning session, the group talks about each item on the list, estimates the financial and human resources required, and assigns a priority to each item. Often times, some items will gather support during the discussion and others will be eliminated as more pressing matters are identified. The plan will be based on the final list of priorities and should be drafted after the session is completed. Don’t get too attached to creating a perfect document to post in the Club House or on the community website. As author Patrick Lencioni, says “Don’t let the perfect be the enemy of the good.” First you have to finish the plan before you can experience the benefits.

Once your HOA has established its strategic plan, you can move into the implementation phase where constant review, analysis, and modifications will take place as circumstances change.

Successful Implementation

Implementing your HOA’s strategic plan occurs over a fairly long period of time. You will need to incorporate the results of your plan into your reserve study and operating budgets for future years. Your HOA should begin to reevaluate its plan roughly 6 months before the beginning of your fiscal year in order to include the planning results into your next budget. If your association has funds available for the current year, consider it a bonus!

Successful implementation requires regular review. Schedule a portion of every board meeting for reviewing progress, monitoring outcomes, and reallocating resources or deadlines. Complete the review by communicating the results to all stakeholders.

By following this simplified process and adding your own sense of commitment and discipline, your community will have a guide for current and future leaders, members and partners.

Adapted from information provided by Debra Warren. Debra is the Vice President of Development at Associa where she focuses on client education. She is a contributor to the ECHO Journal, a former management company owner and consultant, and she writes about current issues facing HOAs at Associa’s Living Better Blog. 

Image cropped from Chess King by George Hodan.