Performance Analytics to Quell Performance Anxiety

It's called performance analytics, and its purpose is to measure objectively the workings of staff, management and even boards. It was instituted at Campbell's condo, the 47-unit 129 West 89th Street in Manhattan, by Georgia Lombardo-Barton, executive vice president at Morton Andrews, who took over management of the property around fall 2007.

Campbell, a financial-services analyst, says, "There was an interest by the board to be more proactive in the management of the building. 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 her own building's manager would supply to the board – mostly, vague assurances that everything was fine. When she moved to the management side of the table, she vowed to find a better way.

TQM with TLC

Lombardo-Barton took her cue from the corporate world where she had previously worked. She was familiar with a system used by many corporations, Total Quality Management, that was developed by Japanese companies in the 1950s and 1960s. "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, such as staff performance. You break that down into tasks that can be rated, known as Key Performance Indicators (KPI). These KPIs are given a numerical standard. For example, if the hallway is supposed to be vacuumed every Tuesday and Thursday, eight times a month, then the standard is 8. The data from all tasks is assembled in a monthly "operational scorecard" — a report card, basically — that uses a chart to compare the standard set with the actual performance.

This way, a board can keep track of areas where the staff is falling down or excelling, and how best to allocate resources. If, for example, the data finds that the condo's super, Nick Pepa (at right, in dark shirt), is spending much of his time cleaning, and consequently neglecting other areas, "we may decide we want to add on another person to help him," Campbell notes, "or look and see if something else is causing a problem" in hallway cleanliness that is making them dirtier than usual.

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.

Steve Greenbaum, director of management at Mark Greenberg Real Estate, says his company employs a process in which boards set goals or standards that they want the manager to help them achieve, but that it's not 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 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 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."

Image: Building super Nick Pepa, managing agent Georgia Lombardo-Barton and condo-association president Richard Campbell inspect the boiler during a performance-analytics tour.

Adapted from Habitat March 2008. For the complete article and more, join our Archive >>