What makes a good strata manager? How to differentiate between someone you want to engage with and someone to avoid?
Employers: don’t employ the total empath but must have compassion – a hard mix to find
Owners: key question to ask the business; what percentage of your business has been through acquisition and what percentage organically won? There’s the key issue.
For those companies that have grown predominantly via the organic method, you are more likely to find –
- Good management structure
- Compassionate managers
- Processes that foster support within the business that will equate to appropriate support for their clients
For those companies that have grown predominantly via acquisition, you are more likely to find –
- Slick marketing obscuring a track record of poor management outcomes
- Managers who are overworked and overwhelmed
- Processes that foster appearance over substantive management outcomes
Having worked in the industry for 22 years, I have observed all kinds of managers and all manner of businesses that offer strata management services. I know which I would like to engage with.
Whilst reducing the sector to the dichotomy of good versus bad is highly simplistic, providing an overview in a brief setting requires this.
Unfortunately, most property owners aren’t aware of the differing models on offer. Typically, all managers are grouped together due to lack of diversity of experience of the end user. Changing managers is not an easy thing to accomplish which means lot owners typically end up jaded, believing that all managers are the same and the devil you know is better than trying someone new.
I’ve witnessed many strata managers entering the profession with good intentions only to find their upper managers don’t support them or uplift them. These managers ultimately see the business owners as seeking only profit rather than provision of great service. Sometimes this is true but not always. How much responsibility does the market bear in the problems?
It’s not hard to see why profit is such an important factor. No one takes on the risk of operating a business for purely altruistic reasons. There is nothing wrong with making a profit; it’s driven innovation and lifted so many out of poverty that the ‘evils’ of profit have been ameliorated but when profit becomes the only driving factor, service outcomes will inevitably fall.
The profit priority method:
- Acquire business via purchase.
- Tax deduction on the purchase
- Tax write off on losses
- Over-scale the size of the portfolio to staff ratio
- Engage off-shore personnel to fill ancillary roles
- Maximise the use of software to reduce staff touch points
The service outcome method:
- Acquire new business only via organic methods
- Focus on being an employer of choice
- Engage software to augment work practices
- Ensure full suite of resources to support staff
- Ensure adequate training for staff
- Have clear service standards that are adhered to
How does the consumer differentiate between the two types of management?
Whilst there are fundamental differences between the two types of management, from an external perspective, it is almost impossible to discern. Each should have a good website and a suite of marketing materials to spruik their services, each will have a business development manager who will tell you how good their business is and how easy they will make the process of changing management be. They will each be able to provide testimonials and references as to their great service leaving the consumer still unsure which is genuine and which has only profit as their goal.
Some different ways to measure performance that I have found work:
- Look for staff longevity
- Speak to other managers that you are not engaging in the process for industry insights into the business you are considering
- Speak to your friends who are also in strata properties for recommendations
- Ask to attend an AGM to see how the manager operates before you commit but ask that you choose which AGM to attend
Some properties use Brokers to find their next manager. If you are paying the Broker, that’s probably a good method but if not, I can guarantee you that the Broker is being paid by the manager you choose. Typically that will be three times the annual management fee meaning that manager will not be earning much (if anything) for the first three years they are managing your property. If they have to pay to gain new managements, they are not at the top of their game and you would do better looking elsewhere.
