I just got back from a great trip visiting some wonderful HOA management companies in the southeast US. These companies have experienced explosive growth and have smart people running their companies.
Unfortunately, all of the growth and constant focus on superior customer service has left executives at these companies exhausted as they continue to try to juggle the demands of running a ‘successful’ company.
The sad news is that I hear this story repeated time and time again when I talk to management companies throughout our industry. You’ll find that 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 all Fortune 500 companies.
These large and successful Fortune 500 companies outsource things like human resources (eg Hewitt & Associates), payroll processing (eg ADP), entire IT operations (eg Accenture), even manufacturing. Not surprisingly, these companies look at what they do that is truly valuable and difficult for competitors to replicate, and then start outsourcing the rest!
Take Nike, a global brand with incredible brand recognition. Did you know they don’t make ANY of their shoes! How about American Express? They discovered having an IT department over a decade ago!
You see, when you’re great at winning HOA management contracts and providing superior customer service, you need to get rid of the other work you do that doesn’t help you set yourself apart.
Take the HOA accounting. I have yet to see an HOA management company that is great because they have superior HOA accounting. In truth, it’s just accounting. Either you do it right or you don’t. No one can differentiate themselves in this part of the business.
If you can’t differentiate yourself from your competitors with accounting, you need to make sure you 1) do it right and 2) do it at the lowest possible cost. You can cut costs by outsourcing.
If you’re successful at managing HOAs but haven’t started to look at what really makes you great, I suggest you start now (tip: ask your clients why they 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!