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REALTOR® ASSOCIATION EXECUTIVE
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| Business or Strategic, What's the Plan? Jeremy Conaway President Integrated Plan Services Corporation Phoenix A competent planning process is neither automatic nor comfortable. The process starts with a decision that there's a destination to reach and growth that needs to occur. The planning process recognizes that some measure of change is required and goes on to establish a pathway by which that change will be managed. We'll discuss two forms of planning in this article: business and strategic planning. Contrary to some people's beliefs, the two terms aren't interchangeable, and the differences between the two are substantial. You'll learn how the two processes differ and how they can work together to effectively take your association into the future. But first let's take a quick look at some basic planning assumptions. The basis of all planning is information. REALTOR® association planning must take into consideration the full range of external trends and circumstances currently creating turmoil within the real estate industry. Those involved in the planning process need to understand the global consequences of such mega-trends as affinity marketing, emerging professional roles, transaction information provision, and broadcast technology. They also need to be able to reach intelligent conclusions about how those trends will impact the real estate marketplace at the local level. The discussion and consideration of trending information should take up one-third of the planning process. A Strategic Approach Strategic planning first identifies critical factors in an organization's internal and external environment, classifies them as strengths, weaknesses, threats, or opportunities, and then proceeds to create a commonly shared vision of the future of the industry. The process next creates a series of goals and objectives that address such classification. The traditional strategic plan attempts to provide an organization with an operational focus for 24 to 36 months and is generally developed and adapted by leadership and the governing board with administrative assistance from association staff. Strategic planning assumes the existence of certain competencies, assets, and resources relative to the planning organization. It doesn't undertake to consider or measure those basics but rather provides a focus for the near-term use of overall association resources, assets, and competencies. Let's Get Down to Business Historically, because the audience of an organization's business plan consists of individuals unfamiliar with the organization, the plan makes no assumptions and must examine and discuss each and every component of an organization's operations. The traditional business plan includes sections on such subjects as facilities, equipment, staff, financial resources, and anticipated revenues and expenses. It also explores the anticipated opportunities or threats created by external forces, with emphasis on their impact on immediate-term financial stability. A business plan reflects, with some specificity, the organizational performance anticipated and projected by those in control of its operations. Most important, business plans set forth how the financial resources will be invested and how they will improve the performance of the organization. A competent association business plan examines every aspect of the association's current status, compares it with future needs, and sets forth a detailed plan regarding how the current status will evolve to meet the future need. It should include in-depth discussions and analysis in such areas as current market conditions, membership profiles, programs, products and services, marketing strategies, staffing plans, management plans, governance, MLS operations, broker liaisons programs, strategic relationships, finance, incentive compensation, research and de-velopment, and quality assurance programs. A business plan is very specific and detailed and creates identifiable responsibilities and performance benchmarks. It becomes the blueprint for the association's future. Association business plans are developed and prepared by the association executive and adapted by the governing board. The performance targets of a strategic plan are reflected in its objectives and goals, whereas the performance targets of an association business plan are presented as action plans at the conclusion of each element. This format creates a useful executive summary and a performance checklist. Today you can't assume that practitioners will join the association and purchase its programs, products, and services. In particular, the current low level of profits for brokers places their participation in the association in question on an annual basis. Therefore, a primary function of an association's business plan is to convince members, especially brokers, to continue their investment in the association through their dues and purchases. Put the Plans to Work Once a REALTOR® association's leaders have elected to enter into a valid planning process, they must determine what process to use and what type of plan product would be most appropriate to the association's needs. A business plan is essential for every association. If such a plan is in place and its action plans have been either executed or are nearing execution, the association should consider a strategic plan. Associations that already have a strategic plan should undertake a business plan to identify the competencies and com-ponents necessary to effect the strategic plan. The traditional association strategic plan might list as an objective the provision of additional educational services to its members. Such an objective assumes, perhaps without justification, that there is sufficient staff and financial resources to develop, market, and execute the objective. Strategic plans don't address such details. In an association business plan, each aspect of the association operation is carefully examined and identified. For example, an analysis of the real estate education marketplace might find that competitors outside your association are offering new education products, thus requiring the association to develop new education products and the appropriate marketing programs. The strategic relationships element of the business plan may have determined the feasibility of joint venturing the new education program with an area university or college. Further, the level of financial investment will have been determined and identified in the current budget. (For more examples of corresponding components found in business and strategic plans, see "A Quick Comparison," at the end of this article.) Association business planning ensures that the association and its human, equipment, facilities, financial, leadership, and volunteer resources are appropriately organized and invested, especially in light of today's changing real estate industry. The first phase of the business plan is essentially an operational audit. The association business plan provides a blueprint from which all future investment and planning can be made. Today's real estate industry is demanding a more market-centered approach that uses human resources, technologies, and marketing programs not found in the traditional association. Often the first step in any renovation is the creation of a blueprint of the existing structure. An association leader who undertakes a strategic planning process without the foundation benefits of a business plan is like a general who orders the movement of troops without ensuring adequate transportation. The troops will move, but it will be a long and painful journey whose objective won't be reached within the time frame set forth in the strategic analysis. Strategic planning without in-depth knowledge of the association's tactical capabilities is a meaningless exercise. However, a strategic planning process undertaken with the benefit of an underlying association business plan can be a very exciting, dynamic process. Leaders proceeding in this direction will have the confidence of knowing that the goals and objectives reached in the planning process will function as natural extensions of the association's business plan and that there is an excellent possibility that the plan's goals and objectives will be met. Leadership Is Planning Today's real estate association, like today's REALTOR®, is facing unparalleled challenges at all levels and in all endeavors. Whether the issue is governance effectiveness, resource allocation, volunteer usage, or staff incentives, the need for an effective planning process has never been stronger. Often a planning process is made effective as much by the communication it activates as by the document it creates. Planning empowers all participants to look at themselves and their organization in a different light. Planning is about that most exciting of all characteristics--our potential. Jeremy Conaway lives in Traverse City (MI) and is president of Integrated Plan Services Corporation in Phoenix. He provides association consulting services in the areas of business planning, marketing, association reorganization, leadership, MLS operations, and quality assurance programming. For more information, call him at 602/949-4350 or fax him at 602/371-0307. For Additional Information Benjamin, Maynard H. Business planning at your fingertips: automation can help you plan your association's future. Association Management. Aug. 93:40, 44. Ernstthal, Henry. Strategic planning addresses issues core to an association's nature. Association Trends. March 26, 93:5. Jackson, Jerry. Which do you need: a business plan or a strategic plan? Skylines. April 96:61-62. Nye, Richard C. Develop a plan through strategic leadership. The Executive Officer. June/July 93:12-13. Does Your Association Need Excess Insurance? The NATIONAL ASSOCIATION OF REALTORS® provides professional liability insurance coverage to local and state associations in compliance with NAR policy. The policy period is effective January 1 through December 31 of each year. Upon renewal of the policy, associations have the option to purchase excess insurance under insuring Clause 1B. This excess coverage applies only to claims relating to antitrust, lockboxes, discrimination, sexual harassment, employment practices, MLS copyright infringement and dispute resolution system. The application for excess coverage will be included with the insurance mailing in December. Premium discounts against the excess premium are available by purchasing NAR's Antitrust and Real Estate; Fair Housing: Opening Doors to Equal Opportunity; and Sexual Harassment: Awareness and Prevention training kits. To order these products, call NAR's Customer Service, 800/874-6500. For additional information on insurance coverage, call Angela Blanton, NAR's Legal Affairs, 312/329-8381. |
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