REALTOR® ASSOCIATION EXECUTIVE
By Paul Beakley
Plan for the Worst, Hope for the Best
It may be that they’re the victims of an ancient Egyptian curse. Or, perhaps their office needs a feng shui consultant. Whatever the case may be, few associations have had worse luck as of late than the San Diego Association of Realtors®. Starting in 1997, SDAR found itself in the middle of one of the most acrimonious antitrust lawsuits in real estate when two brokers filed suits having to do with SDAR’s MLS. In October 2003, when a quarter of San Diego County found itself ablaze, the association’s offices smoldered at the epicenter of the fires. In February 2004, the association’s immediate past president died. Then, after repeatedly beating back antitrust allegations the association was found guilty of a minor price-fixing charge by the Federal Ninth Circuit Court of Appeals.
While most associations won’t have to deal with more than one crisis at a time, a smart disaster plan that addresses the most likely scenarios can help keep your business in business.
According to the American Red Cross, 40 percent of businesses that suffer a major physical disaster--such as a hurricane, fire, or terrorist attack--are no longer operating two years after the event. Natural disasters will disrupt any business, and unfortunately, business insurance won’t always ensure a return to normal operations.
Rob Authier, EVP of the Virginia Association of Realtors®, started putting together a disaster plan shortly after the 9/11 terrorist attacks. Although his association isn’t worried so much about terrorism, it is concerned about the catastrophic effects a hurricane can have. Rains flooded several neighborhoods in Richmond, Va., during the summer of 2004; for many businesses, it was a wake-up call.
"Several years ago, we had a convention canceled because of a hurricane," Authier explains. His best advice? Always purchase cancellation insurance. He also recommends finding a way to contact the entire association’s membership quickly. "We found a broadcast phone service where we recorded a message and broadcast it to everyone on our list [who was] heading toward our convention," he explains.
The Alabama Association of Realtors® incurred the same situation when Hurricane Ivan forced the cancellation of their annual convention in September. Association staff canceled all hotel reservations for attendees staying in event room blocks so members didn’t have to worry about getting their money back. The association’s answering message and Web site also went into detail about the cancellation, assuring all attendees they would be refunded their payments.
Where there are natural disasters, there will also be loss of personal property. Establish a disaster relief fund even before a disaster takes place, advises Authier, so you are able to assist Realtor® members and local association staff in their time of need.
Surviving a Personal Loss
While the death of any team member is very difficult, the death of a vital officer can be extremely disruptive. In SDAR’s case, immediate past presidents serve in a variety of capacities: as the state’s regional association president, as part of the board of directors, as chair to the nominating committee, and as a member of the performance review committee.
The death of an association executive can be even more disruptive. Jerry Panz, AE for the Wilmington Regional Association of Realtors®, in South Carolina, has taken a light, but practical, approach to the subject. He maintains a file on his computer called, "When Jerry Goes to Meet Jesus." This file contains some advice and some important resources: 1) Be happy, 2) Don’t panic, 3) A list of immediate actions and phone numbers related to daily association operations, 4) How to run the association’s payroll, 5) Where to find keys for filing cabinets and safes, 6) How to do end-of-month accounting, 7) How to change the Rappatoni database to reflect the interim leadership, and 8) Where to find various insurance policies for his family.
"I was prompted to create this file when a friend of mine died," Panz explains. "It was a disaster. The family didn’t know where to find things, who to contact, how to access password-encrypted files, all those kinds of things that happen when you don’t have a good plan in place."
In the past several years, most associations have come to rely heavily on computer systems, files, and networks to run their businesses. In addition to the potential for natural disasters to wipe out records and systems, technology sometimes melts down on its own.
"If anything happens to our data, I want to make sure we all still have jobs," says Matt Bruer, network administrator for the Illinois Association of Realtors®. Bruer’s association recently completed a comprehensive disaster recovery plan for its computer systems. Five association staffers brainstormed likely disaster scenarios, with the assistance of an outside consultant, so that they could develop their plan.
To ensure IAR can maintain operations with minimal downtime, Bruer came up with two policies. First, he backs up the association’s data every day and stores a copy off-site once a week. Second, he purchased additional servers that are configured and ready to be turned on at a moment’s notice. To speed up operations, he’s negotiated with several nearby Realtor® associations to share space so he can set up the new systems.
Perhaps one of the most difficult disasters an association can face is a lawsuit. Depending on the suit, it can last for months or years, cost a lot of time and money, drive up insurance premiums, and demoralize both the staff and the membership. In the case of SDAR’s antitrust litigation, AE John Lomac estimates it has cost about $5 million over the past seven years. Luckily for the association, which no longer has insurance coverage protecting it from the lawsuit, much of this expense has been picked up by the state association as well as by NAR.
"While the litigation continues, we can’t be emotionally reactive," Lomac explains. "We have to be responsible and communicate with our members that, despite the court’s decision, we never believed there was any injury. We put the best face on it we possibly can. I’m satisfied we’ve done a good job at damage control.
Otherwise, how’s it possible we grew our membership so much?" Lomac notes that despite the lawsuit, SDAR grew from 3,500 members in the mid 90s (when the suit began) to more than 8,000 today.
In almost every case of a lawsuit, an association will have to deal not only with the crisis at hand but but also with the inevitable public relations backlash.
Surviving a Blow to the Reputation
In the eyes of the public, lawsuits and technology failures can make an association look bad; deaths and natural disasters can create unease.
"A public relations disaster can be as bad for an association as a tornado," says Edward Segal, executive vice president and communications director for the Marin Association of Realtors®.
"Public education is absolutely essential in dealing with PR disasters," Segal explains. He offers four steps any association should take in the event of a disaster with a negative publicity component.
First, assess the situation. Do not jump to conclusions about what happened or why. Second, assure the public and members that the association is taking immediate steps not only to fix the problem but also to ensure that it doesn’t happen again. Third, assign experts or outside counsel to investigate what happened. Finally, keep the public and members informed every step of the way about what the association is doing; only announce legitimate news. "The worst thing "an association can do is take steps but not tell the public," Segal says. "The public will assume you’re doing nothing."
The Albuquerque Board of Realtors® recently went through this process when one of its members was murdered while showing a property. Shortly after the murder, the association held two press conferences. At the first conference, association president Joe Gilmore conveyed to consumers that there would be Realtors® in the community who may change their standards of practice and how they show property, particularly to unknown persons. At the second, Gilmore told the public about a series of quarterly safety seminars his board would be offering to Realtors®.
"A lot of the membership realized this can be a dangerous profession," Gilmore says. Although his association didn’t have a specific PR plan in place, he did all the right things in calming down both the public and the membership and keeping them apprised of changes to help ensure it wouldn’t happen again.
In the end, despite nature, crime, death, and the public eye, everything eventually passes, says SDAR’s Lomac. "All the crises can be debilitating, but somehow we continued providing services and letting our association members get on with their business. A disaster can’t get us down, because we know there’s so much valuable service we need to provide."
It’s a rare association that somehow escapes crisis in any of its many forms. So, how will your association react when, not if, disaster comes calling?
Leave Your Association with a Plan
Jerry Panz, AE for the Wilmington Regional Association of Realtors® in South Carolina, maintains a file on his computer called, "When Jerry Goes to Meet Jesus." This file contains some advice and some important resources:
1. A list of immediate actions and phone numbers related to daily association operations
2. How to run the association’s payroll
3. Where to find keys for filing cabinets and safes
4. How to do end-of-month accounting
5. How to change the Rappatoni database to reflect the interim leadership
6. Where to find various insurance policies for his family
Hurricane Survival Tips
Now that the staff at the Pinellas Suncoast Association of Realtors® in St. Petersburg, Fla., has lived through Hurricanes Charley and Frances, they’ve gathered some new insights from the experiences. Protecting your business and your employees could become your number one priority at any time, says CEO Ann Guiberson, who offers 15 tips for hurricane preparedness online at http://www.realtor.org/eomag.nsf/pages/hurricane.
Create a Disaster Plan
Associations, Realtors®, and MLSs looking to create a disaster plan should first check out NAR’s Realtor® Secure program. This is an excellent technology-oriented certification program that covers the industry’s best practices for disaster recovery. Even if you don’t want to go through certification, the information available will give your association a good starting point for disaster planning. Learn more at www.realtors.org/secure.
Another excellent resource is available from the American Red Cross, which offers the Personal Workplace Disaster Supplies Kit. Visit www.redcross.org and select disaster services for more information.
Finally, the Virginia Association of Realtors® has made its crisis plan, developed in 2002, available to all associations, free of charge. Contact Lisa Noon at 804/264-5033 for more information or click here to access.