I thought I would throw the most contested topic in property management out there. For those that have read the Building Blocks book by Ben White he refers to a squad structure in property management that promotes a high-performance team culture. Each structure has its unique beneifts.
What type of property management structure do you have and why does it suit your business best?
Hi Adam,
As you know in my business we have had success with both. Personally, where we landed was to create a boutique offering running smaller number of properties with a higher level of care. For this reason, we landed on Portfolio, however we do have a Task based team of Admin Support, as well as a VA who assists in the functions. Our teams are divided into areas with a Squad leader or Team Leader who helps oversee their portfolio and covers all leave so there is a continuity of care.
I guess you could say we have tried to find a hybrid of all of the above. Personally, at Wendell Property here in Auckland we have found that this works best for our business and our clients.
Love the question though, always provokes interesting debate!
Cheers,
Ashley
Thats an interesting take Ashley. Since you are running multiple different structures internally, do you see your own pro’s and cons to each. Is there a structure that seems better at supporting some process and another that struggles with that same thing. Take staff leave for example.
Thanks Adam,
I feel like this is one of those topics which is like opening a can of worms, but here we go! Yes, I do feel like there are different Pro’s and Con’s.
Portfolio:
Pro’s: Lower level of risk. If a staff member leaves, the exposure to the business is lower, while not fully limited to that team members own portfolio it is somewhat “ring fenced” your then dealing with 120 clients in flux, as apposed to 250 - 350 if you were running “Pod” and your Senior PM left.
Con’s: the biggest one is lack of opportunity for growth and development. We try to overcome this by creating side tasks for PM’s (like training, or Blog Creation, Fleet Management etc) but ultimately they will not progress out of this role unless they move into New Business or Management.
Squad: (or in our case team leaders)
Pro’s. You have an added layer should that PM leave, so chance of loss due to staff turn over is reduced significantly. Also, when a team member goes on leave there is continuity of care and a chance for the Team Leader to “Audit” that Pm’s work and identify any areas of additional training needed.
Con’s. One really, this is expensive! You are essentially double paying at various points for this, and a Team Leader layer can really eat into your margins. In our business, we are happy if we are getting a 50% wage cost.
Department or Task:
Pro’s: In our model it allows for a high level of accuracy by the team members. Our accounts team have a 99.9% accuracy rate, (meaning there is a mistake in 1/1000 invoices or transactions) this also means that PM’s can confidently “outsource” to this department a lot of the admin which would take them away from their core role of Relationship Management.
Con’s: In our model, this is a cost issue also. Given our department is not VA’s, were paying top dollar for inner city realestate and high level admins to get the accuracy levels. The only other con here is that it can create a “Silo Effect” which not managed can bread a “Not my Department or Problem” attitude between the roles. This has been something we have had to watch for and manage carefully.
In my experence, business need to adapt and change from time to time as it will depend where they are in a growth or profit cycle. Personally, I dont mind jumping between strategies as long as we are clear as to why we are doing it, and keep our service levels high, and our end goal in mind.
Hope this helps someone out there, and thanks @adam for posing the topic.
Cheers,
Ashley
Interesting take on that. I see you have hedged your bets in portfolio around staff leaving by minimizing the impact on the business and isolating staff churn to a portfolio, yet in a squad if a PM leaves you can offer continuity of service by ensuring the rest of team can cover in this event.
@jodie.stainton you have a lot of experience in this area… What are your thoughts on this, how does your current team do things?
Ok, you’re about to get a rant! This is one of those things I’m a bit passionate about. Firstly, let’s take a look at Portfolio. Expecting a property manager to be able to do:
*Marketing & copy
*listing properties (sales)
*contracts
*accounting
*legals
*maintenance & building compliance
*insurance claims
*debt collection
*inspect properties
*represent at court
*increase return on investment and understand wealth creation through property
And do it all with a great customer satisfaction score, while out of the office at least 30% of their time - I just wonder where these unicorns exist?
We have a terrible customer satisfaction score across our industry at -6 for Aus and we wonder why? And usually these people are between 20 & 30 and have never been a landlord.
So if you haven’t guessed, not a fan.
The pros of portfolio is that the owner wants one person to contact, but the negative is that person is usually out of the office and can’t answer the phone when they call.
There’s three other main issues with portfolio:
So then Task.
Katie Knight from Remax Toowoomba runs the best task system I’ve seen - managing around 2200 properties really well. I don’t mind task, but I do wonder who is responsible for the wealth creation for the owner (Katie does have this working but I haven’t seen it often and she’s pretty exceptional!). I feel like the tasks are done well across a property, but no-one’s really thinking about the client and how to increase their return. If task has a dedicated relationship manager (making it more like squad) then I think it can work well. The other issue is property managers tend to get pigeon holed, doing the same thing over and over and don’t really understand the full service offering and why they do what they do. So there needs to be great cross over training and time for people to learn different parts and understand the full client journey.
I’m a big fan of squad/pod running it myself way back when. This is where there is a relationship manager for the client (senior property manager) who also looks after their own team. This person is usually more in the office than out and can therefore service the client. It allows juniors to progress through their careers and allows good pms to step into leadership roles. It means when you’re hiring, you can usually hire at the bottom and have that person supported by a leader. LPMA talks about PMEs (Property Management Executives), PMs and PMAs (Property Management Assistants). At Coronis we have PMEs with either a PM or PMA as much of our admin work is automated through our system, so the two can manage well, 300 properties. (NPS +26 across tenants and owners)
The con is that you must have strong leadership training in place or you’ll find the senior goes through assistants and then the system falls down.
The pros are that if the senior leaves, you have a PM and or a PMA that knows the property still in the office. Also, when a team member has a planned or unplanned absence, the team can usually deal with it. Also, there’s less direct reports and more buy-in to roll things out due to less chiefs, yet leaders who want to represent the company well. BIG fan! When selling squad to a new client, I say we take a multi disciplinary approach to your property as there’s many skills required to manage a property (and list them out)and I don’t think one person can do all that well, but our team is structured to ensure we have strength across those areas and our senior leader with 5+ years experience is your point of contact. Seems to work.
LPMA have published Building Blocks which talks a lot about all of this and more in detail for anyone interested.
Okay, to be fair I asked for it! But that is fantastic advice… I totally agree, training on everything required is so hard, and almost impossible to recruit for, certainly to scale.
Haha can of worms opened. I see your points though too and think they’re relevant. Think it’s just personal views and the fact is, all of the systems can work and all of the systems can fail.
Matrix management - I think adding the term Matrix Management would be good for the discussion.
My general picture is this:
Start a PM as a Portfolio Manager as the Portfolio grows the manager becomes more of a squad as you build into the team. I believe within the squad you will see people starting to natural split roles. When you get your second PM growing into a Squad start looking for common administrative tasks.
These task can then be pulled into a centralized Department that performs a specific task: the easy one are accounting, reception and maintenance coordination. the harder items to get added are leasing, marketing and business development. As these departments are clarified you can then outsource various sections, to control cost.
Pros: Unlimited growth potential based on this shape, mentoring capabilities, ability to provide machine type results.
Cons: Chain of command looks like spaghetti, new PM tend to be forced into the model rather then help develop it, harder to establish KPI for systems, delays for hand offs.
I have actually consider writing (if I could spell) a book on a virtual business shape that would work more like an water and each part would fill in around the opening in the other parts naturally.
@glenn I think you’ve aligned to the way we think about building the squad structure. I have attached an implementation diagram that shows; Start with a PM, introduce a junior or support member then promote as the team grows and recruit from the bottom. I like that you have thought about which parts you would outsource as this is becoming a hot topic at the moment.
@adam (I apologize for the poor graphic here)
I would start with that as squids. I extend into the following:
This throws in the executive level that runs the support departments (centralized services) for the Various Pm squads. The customers for these support department is actually the PM teams. The departments would also be each others customers. In my opinion these departments are best if they have no external customers.
Just a thought on how my brain wires things. (Yes my thought processes tend to be wiggly, incomplete and slightly out of focus).
I like your plan @glenn it’s feels ok. So are the accounts, maintenance and marketing roles the ones you would consider outsourcing in the future?
Yes - with a model of a control point in the company to monitor the outsource. Also, you can split and outsource some, most people do not do their own website. So you could outsource to web development, social media management and a leasing call center. While keeping you BDM and marketing director in house.
I call it matrix because there are lines directly from some PM squads to people inside marketing.
