I just returned from a great trip visiting some wonderful HOA management companies in the South Eastern US. These companies have experienced explosive growth and have smart people leading their firms.
Unfortunately, all the growth and constant focus on superior customer service has left the executives of these firms exhausted as they continue to try and keep juggling the demands of running a ‘successful’ company.
The sad news is that I hear this story repeated again and again as I talk with management companies throughout our industry. You see in other industries a concept of specialization is the norm and companies quickly determine their ‘core competency’ and outsource the rest. This model is now a tried and true approach to efficient operations in nearly every Fortune 500 company.
These big successful Fortune 500 firms outsource things like human resources (e.g., Hewitt & Associates), payroll processing (e.g., ADP), entire IT operations (e.g., Accenture), even manufacturing. Not surprisingly, these firms analyze what they do that is really valuable and difficult for competitors to replicate, then they start outsourcing the rest!
Take Nike, a global brand with amazing brand awareness. Did you know that they don’t manufacture ANY of their shoes! How about American Express, they spotted having an IT department over a decade ago!
You see, when you are great at winning HOA management contracts and providing superior customer service, you need to dump the other work you do that isn’t helping you differentiate yourself.
Take HOA accounting. I have yet to see an HOA management firm that is great because of it has superior HOA accounting. In truth, it’s just accounting. Either you do it right or you don’t. No one can differentiate on this piece of the business.
If you can’t differentiate yourself from your competitors with accounting, then you need to ensure you 1) do it correctly and 2) do it at the lowest possible cost. You can trim costs by outsourcing.
If you’re successful in HOA management but haven’t started analyzing what really makes you great, I suggest you start doing so now (tip: ask your clients why the do business with you to get the answer!). Then, start outsourcing the rest.
The lower cost and less work will make you more profitable and give you more time to enjoy all your well deserved success!