TQM for Co-ops

Richard campbell would probably agree with the approach of deadpan detective Joe Friday on the old Dragnet TV series. Whenever a witness veered off on an emotional tangent, he steered her back to the subject at hand with a much-parodied catchphrase: “Just the facts, m’am. Just the facts.” Campbell, the board president of the 47-unit 129 Condominium at West 89th Street in Manhattan, is also after “the facts,” although, in this case, it’s not a crime he’s investigating but the operations of his building. And he, his board, and their manager are using a tool that is old news to big business but something fresh – and potentially transformative – for property management.

It’s called performance analytics, and its purpose is to measure objectively the workings of staff, management, and, potentially, boards. It was instituted by the condo’s managing agent, Georgia Lombardo-Barton, executive vice president at Morton Andrews, who took over management of the property about six months ago.

“There was an interest by the board to be more proactive in the management of the building,” observes Campbell, a financial services analyst. “Georgia explained this system to us and said that we could use it to measure performance in the building – scientifically, not anecdotally – as well as to identify weaknesses.”

A former board member herself, Lombardo-Barton had been frustrated by the information supplied to the board by her own building manager: vague assurances that everything was fine. When she moved to the management side of the table herself, she said, “There has to be a better way.” She found one.

Lombardo-Barton took a cue from the corporate world where she had previously worked. She was familiar with the system used by many corporations called Total Quality Management, a method developed by Japanese companies in the 1950s and 1960s to measure performance. “With performance analytics,” she notes, “you can actually see if you’re getting your money’s worth.”

The first step is to seek out the area you are going to rate, i.e., staff performance. You then break that down into tasks that can be rated, known as Key Performance Indicators (KPI). These KPIs are given a numerical standard. If the hallway is supposed to be vacuumed every Tuesday and Thursday eight times a month, for instance, then the standard is 8. The data from all tasks is assembled in a monthly “operational scorecard” – a report card – that uses a chart to compare the standard set with the actual performance (much as a monthly operating budget compares projected with actual financial figures).

This way, a board can keep track of areas where the staff is falling down or excelling and know where to turn its resources. If, for example, the data finds that their super, Nick Pepa, is spending much of his time cleaning and consequently neglecting other areas, Campbell, the board president, notes, “we may decide we want to add on another person to help him, or look and see if something else is causing a problem [in hallway cleanliness that is making them dirtier than usual] that we have to look at.”

While Lombardo-Barton currently uses performance analytics only to evaluate staff, she admits it could also be a good tool to evaluate the manager’s performance – and even that of the board itself.

Will the technique take off? Steve Greenbaum, director of management at Mark Greenberg Real Estate, notes that his company employs a process in which boards set goals or standards that they want the manager to help them achieve, but it is hardly as involved as Lombardo-Barton’s system. “Very few managing agents use performance analytics,” observes attorney David Berkey, a partner at Gallet Dreyer & Berkey who is familiar with the technique and assisted Lombardo-Barton in running a recent seminar on the subject. “In theory, the idea is very good. In practice, many management firms think they’re already doing it. But they are not. It requires more hands-on work than they usually do.”

Lombardo-Barton has only recently instituted performance analytics at three of her buildings, so she says it is too early to judge the results. But she and 129 Condominium’s Campbell are optimistic.

“It’s a great tool,” she notes. “It helps management stay on top of everything so that nothing falls through the cracks.”

Adds Campbell: “This is a way of saying, ‘Let’s review the same items the same way at every meeting in an easy-to-understand format. It’s a quantified picture that can, to some degree, be audited. At the end of the day, the ultimate use of this information is to be able to explain to all the owners how the building has been working. It’s a way to understand things.”