A strategic initiative is an endeavor intended to achieve three interrelated outcomes: a boundary-spanning vision or “strategic intent”, realization of important benefits to “strategic” stakeholders and transformation of the organization.
For George Ellis and Kathy Siminovich, owners of SFMC, Inc. in Virginia, personal service is a very important aspect of their business. That is why George and Kathy continue to actively manage properties in their company's portfolio. Their clients greatly benefit from the personal touch and individual service that they are able to provide, and that translates to a good reputation for the company.
Many management company entrepreneurs choose to manage properties themselves, following the mantra that if you want something done right, you have to do it yourself. Unfortunately, this can lead to a classic trap for any entrepreneur trying to grow their business. The more you focus on day to day minutiae, the harder it is to see the bigger picture.
When confronted with this problem, you have three choices. You can choose to keep doing it all yourself, keep going the way you are going and keep your business small and manageable. You can delegate the day to day tasks to your team, step back and focus on growing your business, or you can take the route that George and Kathy chose.
They promoted one of their long-time employees to a brand new position, a position designed specifically to keep an eye on the bigger picture of the business as a whole. This person would help to research and provide guidance for improving both new business acquisition and client retention.
Lulu Rodriguez-King is the first and only Director of Strategy & Operations that I have met in the community association management industry.
Since taking on the role in June of 2014, Lulu has focused on identifying the gap between where SFMC is and where they want to be, then working with George and Kathy to work out strategies to close that gap. We interviewed Lulu to learn more about what she does, and how it has contributed to SFMC's success.
First of all, tell us about SFMC
"SFMC is a mid-sized community association management firm in Manassas Virginia. We service the Northern Virginia, D.C., and southern Maryland areas. We’re an 18-year-old company. For me personally, I think the thing that makes our company great is our culture, the people that I work with every day. We have a really great team. I enjoy coming to work every day. We have a really great group of managers, our leadership is phenomenal, and they promote an open environment where communication is valued."
Tell us about your role at SFMC
"I am the Director of Strategy and Operations. Initially when I came in, and what I continue to do, is assess what we’re doing and how we do it, then figure out if there are ways we can improve how we operate. We are continually assessing our company’s operations in an effort to maximize efficiency, competitiveness, and profitability. This involves questioning and challenging our traditional methods of doing things.
Part of that is understanding every aspect of the organization. I need to know how the process works with managers, accounting and administration, from beginning to end, so I can see what is efficient, and what isn't - which is something that owners may not have the time for, given their commitment to on-going personal service to clients.
It can be extremely beneficial to have someone who knows what you do inside and out, and can provide recommendations on how you’re doing and work with the leadership to develop strategies. The owners tell me where they want to be and it’s my job to figure out how to get us there."
What skills should a management company look for in a person in this role?
"A management company looking for an individual in this type of role should seek out professionals with operational management experience with corresponding educational background or certifications. I have a degree in Management from George Mason and I am working toward my MBA in project management right now."
What prompted the creation of your position?
"We went through a period of growth, tremendous growth, we took on a lot of new properties, a lot of big clients and we recognized internally that in order for us to continue to grow in a profitable and effective manner, we need to take time to establish strategies and processes for our operations so that we can continue to grow in a way that not only benefits our company but benefits our clients as well. That was the intent.
Both of our owners are very involved in the day to day operations of the company. They’re very hands on: they’re out in the field, they go to board meetings, they manage clients. That doesn’t give them a lot of opportunity to sit back and look at how the company is doing overall, how we are operating and what we may need to do. This position gives them that view."
How has this role helped SFMC improve client relationships?
"On a basic level one of the first things I really thought of when I got here was, 'How are we providing customer service to our communities?' So things as simple as the way we answer the phone were adjusted. Instead of saying 'Thank you for calling SFMC how can I direct your call?' we now say 'Thank you for calling SFMC, how can I help?' The idea is really conveying our desire to serve them and meet their needs.
Working with an outside marketing/PR firm, we’ve committed to the use of social media to connect with existing clients and improve communication. One of the things we try to do is attend community events, and when we attend, we take pictures. Following the event, we’ll showcase the community event on our blog. What we’ve found is when we do those things we get really positive feedback from the community itself. They feel like we’re in touch with what they're doing. We’ve found communities to be really responsive when we do that type of thing."
When did you first feel that this position had a major impact on SFMC's success?
"I would have to say it was automating our payables process.
I met Strongroom at the CAMfire Conference and worked with them to integrate with our TOPS software. Before, we had carts of invoices that would be shuffled around to the managers and they were physically pulling out the bills and putting them back in and then pushing the cart to the AP/AR rep. Now all of our invoices are electronic, and we literally saved our staff countless hours.
On average our AP/AR staff were spending 65% of their day processing invoices; with the transition to automation we were able to cut that down to just 17% of their day. That's a 50% reduction, which is huge! So that frees them up to take phone calls from residents.
As a management company the primary calls we receive daily are residents calling about a violation, residents with questions about their account, or other industry professionals like real estate agents or mortgage companies looking for accounting or property data. In the past, because the accounting staff were so bogged down with invoices, telephone calls would frequently go to voicemail. By cutting down the time processing invoices they are more readily available to answer calls.
When homeowners call with questions about their account balance, they prefer to speak with someone as opposed to leaving a message and waiting for a return call. In many cases when a call is transferred to an AP/AR rep and it goes to voicemail, the homeowners call back immediately because they want to talk to somebody. We feel that by freeing up the staff’s time, they’ll be able to help assist homeowners on the first call. So making a change to how we process payables contributed to the overall strategy of improving service to our clients."
What is the biggest obstacle you face in this position?
"At first it was a learning period. Initially everyone probably thought, 'What is she doing? And is she going to be changing what I’m doing now?'
I believe the biggest obstacle in my position is change management. People can be adverse to change, even if it’s a small change. When people are accustomed to doing something one way for a long time and you introduce change, they can be resistant because the idea of changing is intimidating.
Change can be an obstacle only if it gets in the way of our ultimate goal. It’s a part of the overall process. So far, I have found of the things we implemented and plan to implement, almost everyone is on board, it’s generally just hesitation about something new.
I haven’t come across a situation where a majority of the team is opposed, and if that were to happen, I don’t think we’d do it. The opinion of our staff is very important to us."
How do you get people on board with change?
"Communicate! You’ll never get people on board with change unless you communicate openly, completely and fully, in a way they can understand. Communicate so it translates into their everyday job.
For a community manager, if I’m talking about transitioning to an automated payment management system, they may be apprehensive about going paperless. They're used to the paper, they like the paper. It's not the idea of the change, it's the implementation.
I believe strongly in communicating completely and fully in advance, giving clear training and allowing time for a transition. When things are sprung on people with little to no communication there will be pushback.
If you’re communicating in advance, 'This is the plan, this is the direction we’re going to go in.' there may still be some apprehension, but it will be better received.
With the automated payments, we went through a trial period, making sure everybody on the accounting side and executive side knew exactly how it functions before introducing the system to everyone else so that there would be less confusion, and if questions came up, we’d have people in house who know how to resolve them quickly."
Are the owners receptive to your feedback?
"Absolutely. They are really great people. They really care about employees and respect and value the opinions of everyone here.
If I observe something, I have no reservations about telling them 'We need to change something and let me explain why.' Sometimes we agree, sometimes we disagree, but the climate of openness exists so that we can freely exchange ideas and opinions.
They’re extremely receptive to any recommendations and suggestions I have, and obviously if you’re going to place someone in this type of role, you have to be willing to work with them and have open conversations."
Is this a role that other management companies should consider?
"I think no matter what company, what industry, every company should continually looking at how they operate, how they can improve where they want to be, and how they can develop strategies to get them there. Every company should be doing that, at least any company that is interested in growth and profitability. If you’re not taking a look at what you’re doing and what you can potentially improve on and how you can grow the company, then you'll decline."
Isn't that something the owner should be doing?
"Every owner is concerned with growing their business. Sometimes it’s beneficial to have an impartial eye. Part of my job is figuring out how to make us a better company. In a situation where the ownership is intimately involved in providing core services, it can be difficult to do overall assessments at that level of closeness. That’s where it makes sense to bring someone in that can provide an overall assessment and view of company operations.
I work closely with all of the departments: accounting, administration, and managers, to supplement our owners’ efforts and to provide an additional layer of assessment and potential resolution. I can convey that to the owners in a way that is beneficial for everyone. They may not see the same issues themselves because, as an owner, you have so many things on your plate."
Thanks to Lulu for giving a glimpse into strategic operations and how that position can help to improve a management company. Also, thanks to George and Kathy and all the fine folks at SFMC for letting us get a peek behind the curtain at how their management company works!
If you would like to learn more about how Lulu leveraged her position to improve processes at SFMC, leading to more than $100k in savings, continued growth, and impressive efficiency gains in less than one year, see the case study.