Parting Ways With Your Partners

Dear Mary:

Every year our board has to deal with more and more partners/vendors to keep the building going. In addition to our resident manager, staff and managing agent, we have attorneys, insurance brokers, various engineers and consultants, an elevator expert, an HVAC company, a landscaping firm, and a health-club company. The list is endless. It’s no surprise that we’re not 100% satisfied with 100% of these relationships 100% of the time. But we have a dilemma. Given how much of our time and attention it takes to maintain the status quo, when does it make sense to look for new partners when a current relationship isn’t working? When should we hold, and when should we fold?

—Hesitant in Hudson Square

Dear Hesitant:

You’re being realistic, which is good. There’s no way to make every partner relationship perfect; you have to pick and choose what to work on. If you’re worried about safety or legality, you should probably take action right away. Other than that, there’s no blanket answer for when you should fold. But there are some steps you can take to help guide your decisions.

Clarify expectations. You have to know what your expectations are before you can conclude that a partner isn’t meeting them. Your contracts should include performance goals. But you might have existing arrangements that aren’t specific enough. And some things that may be important to you aren’t necessarily quantifiable. Have a discussion with your directors about your expectations — for example, “We need our energy consultants to give us more proactive advice instead of waiting for us to ask.”

Define the gap. How big a gap is there between what you’re getting from your partner and what you expect? Is that gap growing, staying the same or shrinking? A small or shrinking gap might not be worth working on. But if the gap is big and especially if it’s growing — let’s say you used to get early advice on new local laws but are increasingly behind the information curve — you may want to consider taking action.  

Assess impact. Even if you agree that there’s a growing performance gap, you still need to determine whether it’s worth working on. Again, you should not wait to act if there’s a risk to safety or legal compliance. Otherwise, consider the time and effort it’s taking the board to deal with ongoing issues versus what it would take to make a switch. And of course you should quantify the financial impact — including serious fines for noncompliance — and the effect on residents. 

Revisit improvement tactics. Before you decide to fold on a partner relationship, be sure you’ve made a good effort to improve it. Your partner can’t read your mind. Have you been explicit about your expectations and how you’ll determine whether there’s been a positive change? Give partners a fair chance to meet your needs.

Specify ‘triggers.’ Maybe you can now see which way you need to go — either keep the relationship or find a new one. Still not clear? In that case, it might help to specify your “triggers.” These are future events that, if they happen, will lead you to take a particular action. If, for example, you start getting proactive advice from consultants over the next three months, you’ll renew their contract. But if you learn about another regulation from a different source, that’s it: You’re changing consultants.

While there’s no simple checklist for making these complex decisions, the above ideas can help you add some rigor to your approach. Good luck!

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Mary Federico serves on the board of her 240-unit Upper West Side condominium. Through her consultancy, Organizational Behavior Strategies, she helps leaders use behavioral science to improve their organizations.