Interview with Karen Conlon, President and CEO of Sequoia Grove Consulting, Inc.
Karen Conlon is widely recognized as one of the key leaders that transformed California’s community management industry from an unfamiliar occupation into a professional “credentialed” career. Karen, along with a group of HOA management company owners, formed CACM in 1991 to create a “professional organization dedicated to ensuring the quality and standards of practice in the California community association industry.” As CACM’s founding Executive Director, Karen directed the development of its Statewide Expo & Conference, established a Professional Standards Committee to oversee the development and enforcement of the Code of Ethics, and spearheaded its first Law Seminar and educational programs to include more than 100 offerings. In 2002, the Certified Community Association Manager (CCAM) designation was recognized by California with the passage of AB 555. Since 1991, CACM has grown to over 3,000 members and continues to be California’s premier resource for the improvement of community managers and their affiliated vendors.
Please tell us how life is treating you outside of CACM. How is your new job? What new perspectives do you now have about the HOA industry – if any?
I retired from my position as President & CEO of CACM at year-end 2014. Since then I have been working full time with my own consulting firm, Sequoia Grove. We provide a variety of services, including governance training, strategic planning with HOA’s and other professional and non-profit associations. I also serve as an expert witness for the community management industry and love the special projects I’ve been hired to perform for management firms, service providers and affiliate partners. Although I hadn’t initially considered it as part my firm’s services, earlier this year I was retained by two HOA boards to perform an executive search for their general manager positions. Both had very successful outcomes, they had managers placed and the associations are extremely happy. It was very satisfying getting personally reacquainted with many community management professionals who are looking for those opportunities to advance their careers – they are amazing! And yes, I have also been traveling. All-in-all, I am very blessed.
What is the most important thing that Community Managers should know about advancing their careers and making a difference in the HOA industry?
There are many factors that community managers should take into consideration, but the biggest hurdle is making a professional commitment to the industry as a career. Here’s why! While at the helm of CACM for 23 years, I recognized how the organization needed to design and develop education for those evolved areas of specialized management. Now, a manager can achieve their state-specific certification, AND advance to specialized credentials for high rise, portfolio, new development, large scale, and other avenues of community management. The opportunities for advancement and a six-figure salary are attainable. Getting there takes courage, hard work and gumption! I love seeing individuals enter and excel in their career path.
What are the most common mistakes that Community Managers make and how can they be avoided?
It’s easy to spot those individuals who are not interested in this industry as a career. Those managers who go to their board meetings and sit at the table only to take minutes – will not last. However, those who are committed, are willing to gain the skills, do the work, and are not afraid to take on the tough assignments will thrive. Boards are hungry to work with professionals who guide them through the tough business decisions; while also being candid with a board if the board members aren’t following the Business Judgment Rule. Boards must also realize that hiring a CCAM, a MCAM or a CCAM with a specialty certificate warrants higher compensation levels. I applaud those management firms who support their managers in obtaining state-specific training and credentials. There are none better in the nation than California certified managers and the ACBM management firm.
What do you see as the biggest issue(s) facing the HOA industry? What can be done about it?
Honestly, I don’t think this has changed in the 37 years I’ve been in the industry – it’s how management firms price their fees. Relinquishing margins, undercutting competitors by a ridiculous amount, and diluting indemnification provisions in the management contract, all contribute to commoditized pricing. Some say it’s all about the numbers – “managing more units we can afford to lower our management fees.” Simply not true, is the response many management firms have told me. Are there factors that have led to these behaviors? Yes and no. There are no easy answers. Be willing to stand your ground on your management fee, provide the level of service the HOA is willing to pay for, and most important – management firms MUST provide great customer service.
What is the most important “best practice” that builders should always implement at their new communities?
Builders still need to keep open and transparent lines of communication with their new communities and listen to the hired management professionals. They also need to train (hey I’m available!) the reps who sit on the boards of new communities for the developer. By training, I mean providing the tools necessary to be good board members. This can include a working knowledge of the governing documents, what fiduciary duty means, their roles and responsibilities as directors and officers, and what lines in the sand not to cross, while simultaneously wearing the developer and board member hats. Having worked for Shapell Homes (now Toll Brothers) for 7 years, creating all of their HOAs from new subdivisions, I was able to develop the tools necessary to train the volunteer directors and owners. They too, have defined roles to fulfill.
The recent consolidation of HOA Management firms, the wrap-up by Associa from Texas and FirstService from Canada happened quickly. Do you think this consolidation is good for the HOA industry? What dangers do you see and what opportunities do you foresee with this wrap-up?
Consolidation of our industry was and continues to be inevitable. Although, I am now also seeing quite a few new start-up management firms, because the economy is improving and new HOA communities are coming into the market. There is room in California for management firms of all sizes. However the differentiation gap that I see growing is that those firms who provide excellent customer service are faring better in terms of pricing, margins, and retention, than those that do not.
Tell us something that no one knows about you.
I am very adventurous and have a lot of gypsy blood – that means I love to travel and undertake new adventures! I have crewed as a cook on a 40 ft. sailboat in Central and South America, going through the Panama Canal, San Blas Islands and Cartagena, Columbia. I love zip lining all over the world. One of my more memorable and physically difficult adventures was driving a herd of horses over 60 miles from snow elevations to the lower pasture areas in Arizona and New Mexico. Along the journey, the trail boss captured a wild stallion, his mare, and their colt. It was an amazing thing to see. My African safari adventure changed my life; the trip to China was unique. Climbing to the top of the Sydney Bridge in Australia challenged my fear of heights and the vacation in Tasmania yielded an encounter with a few Tasmanian Devils (yes they exist). I just recently completed a driving trip through Ireland, Wales and England. Yes I am blessed.