By Will Yakowicz

The styles, tools, and theories of management that CEOs and academics are espousing this year.

1. Unlocking hidden strengths

Chris White, managing director of the Center for Positive Organizations at The University of Michigan’s Ross School of Business, tells Inc. that today’s best leaders are engaging in “endogenous resourcing,” an academic term that refers to finding unique ways to unlock employees’ hidden strengths. White explains that by focusing on building relationships with your employees, you can discover their full capabilities while also providing them with a feeling of ownership over their work and a greater sense of well-being. “There are positive physiological outcomes from this type of leadership that can be scaled to whole companies,” he says.

A good example of endogenous resourcing can be found in the leadership style of Whole Foods co-CEO Walter Robb. “He draws on individuals’ strengths in a way that is firm yet deferential and open,” White says. “He’s able to be collaborative but is also clear in his directions.”

White says that when new employees begin working at a Whole Foods store, they undergo a three-month trial period. At the end of that time, their team votes on whether they will keep the job or be fired. “This practice helps to build ownership and collective responsibility, which are all resources from within,” White says. “You can’t buy that stuff–you have to lead it.”

2. Giving second chances

Fred Keller, founder and CEO of Grand Rapids, Michigan-based plastics manufacturing company Cascade Engineering, has led his multimillion-dollar business based on a quote from 18th-century theologian and social reformer John Wesley: “Do all the good you can.“

Cascade, which Keller started in 1973, now has 12 business units around the world, producing auto parts, furniture components, waste containers, and installing wind turbines, solar panels, and affordable water filters for the developing world. Cascade is the largest manufacturing business certified as a B Corporation, which means it has made a commitment to solving social and environmental problems and meets a lengthy set of performance, accountability, and transparency standards.

Keller, who also teaches sustainable business practices at Cornell University’s Samuel Curtis Johnson Graduate School of Management, says his leadership style is ruled by his heart first and his brain second. Cascade’s signature program is “Welfare to Career,” where the company brings aboard people who have been on government assistance for long periods. Keller says the program has saved the state of Michigan millions of dollars by getting people off the welfare rolls.

“It isn’t just about providing a job, it’s about providing a career,” Keller says. But it hasn’t been easy. “We had to learn how to change our culture to be more accepting and welcoming. Guess what? When we did this for people who have been on welfare it made our culture more positive throughout for everyone. And it turns out to be good for business.”

After the program took off and the culture changed, Cascade’s retention rates rose, as did employee satisfaction. About five years ago, Keller launched a new program to hire ex-felons.

Management policies like these are spreading, and taking on a greater importance all the time, Keller maintains. “There is an increasing sense that our politicians are not going to solve our problems. They have demonstrated that they can’t even keep the trains coming on time,” he says. “But then who is? It’s up to business leaders who align their businesses to solve some of the world’s problems.”

3. Implementing democracy

Avinoam Nowogrodski, CEO of project-management software company Clarizen, says the command-and-control style of leadership popular in decades past doesn’t work for today’s business environment. “People want a voice, people want to participate, and this requires democratic principles,” he says.

Nowogrodski attributes his company’s success to hiring the right people and leading democratically. He says he hires people who have three distinct characteristics–curiosity, modesty, and passion–or what he calls the “Clarizen DNA.”

Once you have people in place who exhibit those key traits, you can implement a democracy focused on individual participation and empowerment, he says.

“It requires all the principles of democracy: People can say whatever they want to say and you want to cultivate their voice and make sure they are outspoken. There needs to be a justice system where everyone is equal. This makes people feel as if they’re in a fair fight, things are possible instead of being dictated from above,” he says. “We make our employees feel like they contribute more than they ever did at other companies and are a part of a big story.”

WILL YAKOWICZ is a reporter at Inc. magazine. He has covered business, crime and politics at Patch.com, and his work has been published in Tablet Magazine and The Brooklyn Paper. He lives in Brooklyn, New York.
@WillYakowicz

By Kimberly Weisul

Accenture says these are the trends that will affect big companies in 2014. They’re going to influence you, too

File this under “Know Your Customer:” Accenture recently released its Technology Vision 2014 report, detailing the six big technology trends that the global consutling firm thinks will soon transform large companies.

At first glance, you might not care too terribly much about what’s going on at big companies. But if you sell into a large company of any type, you know that whatever affects it sooner or later affects you. And since many of these trends have their roots in the consumer world (wearable technology, for instance), they’re likely to affect businesses of all sizes before long.

1. The digital-physical blur

What this really means is that we’ll increasingly get information exactly when we need it, rather than stopping mid-project to Google that missing fact or pausing mid-run to see how our vital signs are doing. We already see beginnings of this in products such as a Fitband or Google’s Glass. Smart businesses of all sizes that can take advantage of this same instant, integrated access to information will use it to empower their workforces and re-engineer their processes.

2. From workforce to crowdsource

When big companies talk about crowdsourcing, it often means they’re more open to ideas from their smaller suppliers and from entrepreneurs. Procter & Gamble had a stunning success in so-called outsourced innovation with the Swiffer. A small design company actually came up with the idea, and then P&G worked with them to license, develop and market it. A similar process led to the Olay Regenerist product. Expect to see more willingness to pursue deals like this from the big companies in your ecosystem.

3. Data supply chain

Big companies, like smaller ones, often have more data than they know what to do with, and certainly more than they can analyze in a timely, competent, and useful way. The key to getting the most from “Big Data,” says Accenture, is in treating it like a supply chain issue. Data is just one more input that has to be processed and delivered to the right people at the right time to enable them to do their jobs–whether they’re vendors, employees, or customers.

4. Harnessing hyperscale

In search of higher efficiency and lower costs, companies are looking to optimize their power consumption and get more out of their processors, solid state memory, and infrastructure architectures. Sounds like a great opportunity for entrepreneurs with expertise in these areas.

5. Business of applications

Accenture says 54 percent of the highest-performing IT teams already have in-house app stores. If you’re selling a tech-related product or service to a big customer, do you have an app to help them use and manage it? And would it make sense to make that app available to a wider range of people through the customer’s own app store?

6. Architecting resilience

Businesses of all size increasingly have to be prepared to run 24/7, but most operations aren’t designed to run non-stop. Accenture says that means systems must be ‘designed for failure,’ not designed to spec. In other words, the product or service you’re selling needs to be rock-steady. And then you need a plan B and C.

Have you signed up for Community Association Management SmartBrief yet? CAMICB provides a free, weekly e-mail newsbrief specifically designed for community association managers. Sign up here.

This complimentary resource is aimed at bringing you a quick, two-minute read that will help you keep up-to-date with the latest news and trends in our profession. SmartBrief will provide short summaries of the news articles that will be of interest to you as a community association manager. We know it will save you time, keep you informed and add to your success. I hope you will subscribe.

Here’s what you missed this week:

Can HOAs ban pot use in homes?
Homeowners associations in Colorado are contacting lawyers in an effort to ban the usage, growth and distribution of marijuana following the legalization of the drug in the state. Legally, HOAs can’t take action until owners become a nuisance to neighbors, said Jerry Orten, an HOA legal analyst. A two-thirds vote by homeowners within an HOA could ban the use and growth of marijuana in a community, but such actions may be difficult to enforce, Orten said. Jeff Gard, a marijuana-law expert, said he believes the larger issue of a widespread ban will be decided in court. The Denver Post/The Cannabist blog(1/14)

Boutique condo buildings attract wealthy buyers
U.S. cities including Miami and New York are experiencing a boom in small condo buildings with a handful of residences and high price tags. Wealthy residents and investors are willing to pay top dollar for privacy, including higher association fees that aren’t spread among many members, Candace Jackson writes. The Wall Street Journal (tiered subscription model)(1/16)

HOA wants neighboring gun range to pack its bags
A homeowners association in Wood County, W.Va., is battling a neighboring gun range in court after more than two years of residents filing complaints about errant bullets. The Wildwood Homeowners Association says the gun range is a safety hazard, with many spent bullets being found close to people and propane tanks. A cease-and-desist order against the gun range by the county expired last week, but the range owner said he has taken safety precautions to prevent bullets from going astray. The State Journal (Charleston, W.Va.)(1/18)

New mortgage lending rules are going into effect Friday that aim to put an end to the worst mortgage lending abuses of the past.

The new rules are designed to take a “back to basics” approach to mortgage lending and lower the risk of defaults and foreclosures among borrowers, according to the Consumer Financial Protection Bureau, which issued the new rules.

“No debt traps. No surprises. No runarounds. These are bedrock concepts backed by our new common-sense rules, which take effect today,” said CFPB director Richard Cordray in remarks prepared for a hearing Friday.

Mortgage lenders are being asked to comply with two new requirements: The Ability to Repay rule and Qualified Mortgages. Here’s how they will impact borrowers:

 Ability to Repay

• Lenders must determine that a borrower has the income and assets to afford to make payments throughout the life of the loan. To do so, the lender may look at your debt-to-income ratio, which is how much you owe divided by how much you earn per month, including the highest mortgage payments you would be required to make under the terms of the loan. To calculate your debt-to-income ratio, add up all your monthly obligations — including student loan, credit card and car payments, housing costs, utilities and other recurring expenses — and divide it by your monthly gross income.
• In an effort to put an end to no- or low-doc loans, where lenders issue risky mortgages without the necessary financial information, lenders will be required to document and verify an applicant’s income, assets, credit history and debt. For borrowers, that means more paperwork and longer processing times.
• Underwriters must also approve mortgages based on the maximum monthly charges you face, not just low “teaser rates” that last only a matter of months, or a year or two, before resetting higher.

Qualified Mortgages

• To make sure you aren’t taking on more house than you can afford, your debt-to-income ratio generally must be below 43%. This rule is not absolute. Banks can still make loans to people with debt-to-income ratios that are greater than that if other factors, such as a high level of assets, justify the risk.
• Qualified mortgages cannot include risky features, such as terms longer than 30 years, interest-only payments or minimum payments that don’t keep up with interest so your mortgage balance grows.
• Upfront fees and charges cannot add up to more than 3% of the mortgage balance. That includes title insurance, origination fees and points paid to lower mortgage interest rates.

The rules also restrict “steering,” or practices that give financial incentives to loan officers or mortgage brokers for pushing people into higher-interest loans that they can’t afford — a practice that was all too common leading up to the housing bust, Cordray said.

“We think the new rules are balanced and well-drawn. They will offer consumers protection without limiting credit to qualified borrowers,” said Gary Kalman, the policy director for the Center for Responsible Lending.

Lenders don’t seem to be too worried about the new rules, according to Keith Gumbinger of HSH.com, a mortgage information provider. “It’s no surprise; everybody has been preparing for the change for months,” he said. “Because there will be additional underwriting scrutiny, it could gum up the works initially and slow loan processing, but it’s really just the codification of things that are already in place.”

A significant factor is what’s not in the rules. There’s no minimum down payment or credit score requirement.

“[The qualifed mortgage] is not taking a one-size-fits-all approach. It ensures that first time homebuyers can still come to the table,” said Kalman.

If the rules required a minimum down payment of, say 10% or 20%, it would eliminate many first time buyers who would have a difficult time raising that much cash.

The lack of a credit score requirement will enable lenders to loosen currently tight underwriting standards in the future should conditions warrant, according to Gumbinger. For the moment, most loans will still have to be backed by Fannie Mae and Freddie Mac, and, with a few exceptions, they won’t approve applicants with scores below 620.

Today, January 8, the U.S. Senate is voting to invoke cloture (a.k.a. bring the debate to an end) on S. 1846, the Homeowner Flood Insurance Affordability Act (HFIA). If cloture is invoked, the Senate will proceed to debate and a vote on passing HFIA.  Please contact your Senators today urging support of invoking cloture and supporting passage of HFIA.

In 2013 Congress adjourned without reversing flood insurance premium hikes set in motion by the Biggert Waters Flood Insurance Reform (Biggert-Waters) Act. The premium increases, which are being implemented in phases, are already impacting homeowners and community associations across the country.

CAI supports a financially stable National Flood Insurance Program (NFIP) that more accurately reflects the real risk of flooding. However, under the current law, the sale of a property removes the 5-year transition to actuarially sound premiums and instead requires the new owner to immediately pay full risk rates. This can be a significant financial hit on the current or new owner that may stop the sale of the home. As the housing market is improving, this creates yet another hurdle for sales in communities across the country.

Other unintended consequences of Biggert-Waters include premium increases on homes built to code but that new flood maps now designate as higher risk. Many times the new federal flood risk maps ignore state and local flood control systems that protect these homes and businesses, a flaw that FEMA concedes. These owners should not be required to pay insurance premiums on risks that do not actually exist.

For a cloture motion to be successful at least 60 Senators must vote in the affirmative. Once cloture has been invoked, the Senate may proceed to a final vote on the legislation without concern for a filibuster. Given HFIA’s broad support among both Democratic and Republican Senators, there is a clear path to securing the 60 votes required for the Senate to take up and pass the legislation.

The vote for cloture on HFIA will take place today, January 8, 2014. Please click here to contact your senators and urge them to vote to invoke cloture on HFIA and support final passage of this critical legislation.

CAI will continue to monitor the debate on flood insurance rate relief and advise members of key votes on HFIA in 2014. If you have any questions or comments on flood insurance or other governmental issues affecting community associations, please send an email to government@caionline.org or call (888) 224-4321.

The Foundation for Community Association Research recently published the 2013 Community Manager Compensation
and Salary Survey.  The survey provides practical, data-based information to managers and the management companies and associations that hire and compensate them.

Based on almost 1,000 responses, the statistics in the report eliminate a lot of guesswork when decisions need to be made about compensation and salaries for association management professionals.

The 62-page report provides data on salary, employee benefits, health coverage and retirement plans for: 

• Portfolio, on-site, high-rise and large-scale managers
• Assistant community managers
• Management company chief executive officers

Readers will also find detailed results delineated by annual community association budgets and the following professional credentials: 

• Certified Manager of Community Associations (CMCA)
• Association Management Specialist (AMS)
• Professional Community Association Manager (PCAM)
• Large-Scale Manager (LSM)  

The survey was conducted for the Foundation by Industry Insights Inc., an independent professional research and consulting firm specializing in conducting industry operating surveys, compensation and benefits studies, and member attitude surveys for trade and professional associations.

 The full report is available to CAI members for just $59. The nonmember price is $99.

CAMICB office are closed due to inclement weather.  We will reopen on Wednesday, December 11, 2013.  Please email info@camicb.org with any questions.  Thank you and we apologize for any inconvenience.

CAMICB Board and Staff

New-home sales are surging, according to a report from the U.S. government on Wednesday.

Sales of new single family homes jumped to a seasonally adjusted annual rate of 444,000 in October, up 25.4% from the previous month’s revised rate, according to a report issued by the Commerce Department. The rate was the highest level in six months.

On a year-over-year basis, sales rose nearly 22%.

Keith Gumbinger, vice president of mortgage information site HSH Associates, said that this year’s stock market gains could be the prime factor in driving the housing market.

“It may very well be that a lot of folks are feeling better about their prospects and buying a new home,” he said.

Another key reason could be easier financing for buyers, as “builders are motivated to get folks into homes,” Gumbinger said.

While 30-year fixed mortgage rates are about a percentage point higher than they were in the spring, they are off the recent high of 4.58% set in August, according to Freddie Mac. In the week ended Nov. 27, the rate was 4.29%.

Gumbinger also said that inventories of existing homes are thin in several markets, prompting people to build new homes rather than buy old ones.

Related: New mortgage rules mean less choice

Nationwide, the government said there is enough new home inventory to last for 4.9 months, if the market manages to maintain its October rate of sales for that time.

While the sales jump is impressive, the rate remains less than half that of the peak of the housing bubble; in 2006, the annual sales rate topped 1 million.

The median sales price of a new home was $245,800 in October and the average sales price was $321,700.

The report said the South is the hottest market for new-home sales, while the Northeast is the slowest.