Unlocking the Rule Book: Mastering the Game of Property Management
Introduction
In our series titled “The Winning Formula of a Championship Team” in property management, we continue to focus on Part 1: The Seven Critical Components.
As a brief reminder, Critical Component #1 is the Game Plan. The game plan is the foundation of the team and encapsulates the strategic vision and leadership direction that guides the team’s efforts and decisions. It clarifies what the team’s mission, approach to playing the game, and what winning the game looks like.
Now that we have created the Game Plan we will use it to base all future decisions on, let’s dive into Critical Component #2: The Rule Book.
Critical Component #2: The Rule Book
When I am first approached by a company to coach or consult with them we discuss the resources that the team has to do their jobs. When I ask about company policies they almost always tell me about their company processes. There has been a big push to “automate your processes” by several software vendors and other consultants in the industry so it’s understandable if that is where their mind goes.
They would prefer to talk about automating and streamlining operational efficiency because that’s the marketing message they have been exposed to for the last few years. But, before we can automate our processes we need to know the policies that those processes are built to uphold or adhere to.
We call our Policy Manual “the Rule Book”. The Rule Book contains our policies that we operate by in order to win the game.
Getting the policies out of your head
Many property management business owners state that they have policies in place and yet they continue to be pulled back into the day to day operations of the company and it’s typically one of two reasons:
- They have not hired someone to replace them in the day to day work
- They have not properly equipped their team to take action without first running the decision by the business owner.
Both of these reasons are impacted by the lack of a set of clearly written policies that can be shared with the team in order for them to make decisions in alignment with what the business owner would expect, and to operate autonomously and authoritatively.
In item #1 They have not hired someone because they don’t think they have the time to train anyone to help them, and in item #2 They are pulled back into the day to day because the team doesn’t know what they are supposed to do because the information that they need to make decisions is all in the business owner’s brain and it appears that it changes from time to time.
The good news is that you already have many of the policies that you need and we just need to get them out of your brain and into some system that is easily accessible by the team.
For the most part, we are not creating new policies but rather documenting existing policies to be able to share with the team so that we are all operating under the same set of rules or company policies.
Documenting our Policies.
It can be tempting to start looking into fancy software systems as you begin to document our policies. There are a lot of great platforms out there that have a ton of good features. The truth is, they are all overkill at this point in the journey. You don’t need the best of the best that you will need to hire someone who has a specific software skill just to be able to use it, you need to use something simple that makes doing a brain dump as easy as possible.
That’s why I recommend using a Google doc or a Microsoft Word document.
You already know how to use one of these programs. Use what is easy and familiar for this step. Once your team is performing at a high level you can always introduce more tools to increase your performance but to start with just use what you already have. Keep it simple. Every time you introduce a new login to your team you are automatically making their job more difficult. There may be benefits that overcome complications of introducing a new system but the benefits have to first overcome the additional challenges of an additional system before any of the benefits can be realized.
Structuring our Policy Manual.
We want to structure our policy manual so that it is easy to document the information and even more important, we want to make sure it is easy to find the information.
For further clarity, you can watch this presentation I did on the subject at a recent property management industry conference.
In our documentation process we will need to create some segmentation so that it is easy to find the appropriate policies for any given situation.
Over years of documentation, I have developed and refined the system I call “the Lifecycle of Property Management” where we segment our documentation into the following four categories:
- Landlords and Properties
We store all policies that relate to landlords and properties in this category. This is where we go to reference policies that affect or impact either a landlord or a property.
- Tenants and Leases
We store all policies that relate to tenants and leases in this category. This is where we go to reference policies that affect or impact either a tenant or a lease.
- Vendors and Maintenance
We store all policies that relate to vendors and maintenance in this category. This is where we go to reference policies that affect or impact either a vendor or maintenance.
- Team and Company
We store all policies that relate to our team and the company in this category. This is where we go to reference policies that affect or impact either our team or the company.
In each category everything flows through the five stages of the lifecycle:
- Prospect
Everything in the lifecycle starts as a prospect and it either moves through the lifecycle or moves directly to the closed phase.
- Onboarding
In the event that something is going to be active with us (active client, active tenant, etc) it must first move from being a prospect to becoming an active participant in our system. This transition from one stage to another is done in the onboarding phase.
- Active
Once something is completely onboarded then it becomes active. It can stay in the active phase for months or years. For example, we could manage a property for years or a tenant can reside in a property we manage for years. They will stay in the active phase until there is some trigger that moves them into the termination phase.
- Termination
As a participant or object moves from being active in our system to leaving and being closed or archived they go through our termination process. Once fully terminated they move to the closed phase.
- Closed
There typically is not much that happens in the closed phase of the lifecycle, however it is a needed phase as it is the last step where something exists. For example, the closed phase is where we would establish the policy for document retention for either a tenant or a landlord.
If you would like to download a Property Management Policy Cheat Sheet to get you started with this framework you can download it here.
Building for eighty percent.
As we continue to document our policies it will be tempting to try to consider every possible outcome in every situation. While we can always add policies as markets shift or new legislation is introduced, we want to be careful not to over engineer every last policy before rolling out the policy manual.
The reason we started with the “Game Plan” was so that when our team comes across a situation that there is not yet an established policy they can filter the decision through the lens of the company core values, mission and vision.
Occasionally, The team will come up against a situation where a policy doesn’t yet exist and we want them to have the authority and autonomy to make the right decision based on the Game Plan.
Our policy manual will never be 100% complete, and that’s ok, we are not seeking perfection, we are seeking incremental improvement over time.
Utilizing the Rule Book
At some point you will feel confident that you have documented enough of your company policies to roll it out to the company as a reference. To ensure success we need to make sure that people become used to referring to it and not simply continuing on in the old ways of the company.
The number one way to get your team to utilize the policy manual is to STOP ANSWERING QUESTIONS!
When a team member comes to you with a situation that they don’t know how to handle, instead of solving the issue for them simply ask them “What does our policy manual say?” If they answer that they don’t know, refer them back to the policy manual. If they say they checked the manual and the company doesn’t have a policy, resist the urge to tell them what to do. Ask them a follow-up question instead: “What do you think we should do?”
If their answer is close to what you think the policy should be then agree with them and tell them that before they do anything else, to go back to their desk and send you an email (or provide the information in accordance with your official policy manual feedback loop) with the new policy so that you can add it to the manual and share it in the company’s weekly update.
Training on the company Rule Book
Once the policy manual is complete enough to roll out to your team it is important to establish a training program for the entire team to be familiar with the policies of the company, not just their role but of the company in general. We need an educated team that understands why the company exists and how they contribute to its success. This comes from continuous reinforcement of the rules of how we win the game.
Next week:
Next week we will discuss the Company Play Book (Processes).
The Play Book is the list of processes that outline how tasks are executed, strategies implemented, and objectives achieved. This Play Book ensures that the team operates cohesively and efficiently, with clear steps to follow for success.
