What is a "process" and why do we need it as a landlord or property management company? Webster’s defines process as a series of actions or steps taken in order to achieve a particular end. All you property managers out there, sound familiar? Our daily workflow in this business requires us to follow certain steps for several reasons: legal compliance, efficiency, profitability to name just a few. Think of the activities in our jobs which need to stay streamlined: business development, owner onboarding, move-ins/outs, rent collection, evictions, and more. On today's episode, Bob discusses the need for property management processes with Jordan Muela, CEO at Lead Simple.
A full transcript of this podcast episode is below.
[2:45] Jordan introduces himself, his various business ventures related to property management, and Lead Simple's new workflow solutions module to help bring process to the property management lifecycle.
[7:25] Is a process the same or different from a checklist, workflow, standard operating procedure, or system?
[9:20] Why are processes so critical in a property management company?
[12:50] A process can’t be “set it and forget it”.
[16:00] How having processes documented can help with risk management in a property management company.
[18:20] Where to property managers start in writing their processes?
[21:15] Jordan explains how the Lead Simple process solution fits in the market with its unique differentiation.
[25:35] Jordan tells the story of how he has learned to confront conflict openly and transparently in his organizations.
Connect with Jordan
Connect with Bob
North County Property Group
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Bob Preston: 01:10 Welcome brainstormers to the Property Management Brainstorm show. I'm Bob Preston, your host broadcasting from our studio at North County Property Group in Del Mar, California. If you're new here, please subscribe. So you have ongoing access to all of our great episodes. And if you like what you hear, please pay it forward with a positive review. Today's episode is all about one word, process. Webster defines it as a series of actions or steps taken in order to achieve a particular end. As landlords and property managers, our industry and business requires us to follow certain steps for several reasons, legal compliance within our respective state and local regulatory mandates, but also for standard operating procedures to keep things running consistently and efficiently. In property management, think of all the things we need to do on a daily basis to keep streamlined business development, owner onboarding, move ins, move outs, rent collection, evictions, and more. On the show today I have with me as a guest Jordan Muela CEO at Lead Simple, and he also has his own podcast, the Profitable Property Management Podcast. Jordan and I are going to talk process and this episode and why it's important for property management companies like yours and mine. Jordan, welcome to Property Management Brainstorm.
Jordan Muela: 02:23 Hey Bob, it's a pleasure, my man. Thanks for having me on.
Bob Preston: 02:26 Oh, you bet. I'm so glad you're here. I've been really excited for it. And Jordan, you're a well-known guy in this industry. You've got your hands in several companies and even an event focused on property management. And as I mentioned in our intro, you're on podcast too. So maybe a really good place to start is let us know about yourself, what you've been up to personally, and then specifically what's new at Lead Simple to help property managers with their processes.
Jordan Muela: 02:48 Yeah, well, Bob, I'm the CEO of Lead Simple as you were alluding to, I do have involvement in some other projects. I cofounded an event called PM Grow with a friend of mine and I have a company called Profit Code, which provides outsourced accounting and finance solutions for the property management industry and a company called the Rent Scale. It does sales consulting Lead Simple. The company that you referenced is the leading CRM in the property management industry. And we also provide workflow solutions, which we've pivoted into to really help people go from closing a new deal, to actually onboarding a property, onboarding a client, and really managing that entire life cycle of property management successfully.
Bob Preston: 03:30 It's a cool combo. I mean, maybe that's something where we could start as how, how are those two related, you know, you think of a CRM as your customer relationships and making sure you close deals, right? And then how does that flow over? You've described it briefly, but maybe you could share a little bit more about that. Why does it make sense for the CRM and the sort of business development process to be something that could open up to other workflows and processes?
Jordan Muela: 03:52 So if we go way back, Bob, I got my start in the industry, actually in the lead generation side of the industry, I had a company called Management Property way back in the day, I'm still around and we were sending people leads and, um, they paid money for leads and hopefully they would follow up and everything would work out. What we found is that property management is no different than any other small business. In between juggling a bunch of different functions, business development and sales tends to fall through the cracks. We built a CRM initially to help with the sales and marketing processes. As we did that with a workflow look like for most of, um, Lead Simples life was to close the deal and then to go enter it in Property Where, Appfolio, Rent Manager and kind of manage it from there. What we saw was a gap around that transition of first, just knowing that the salesperson for most property management companies is not completely siloed for most small businesses. It's not acceptable to have a paradigm where a sales person signs the contract, hands it over to ops and is like, call me later. They want to have some level of relational continuity to know that they care that it's a quality door that you're actually adding to the portfolio that the owner actually feels like they're being handed over into operations in a smooth way. What that means is that the sales person tends to have some level of involvement and the onboarding function right or wrong. And so we wanted to be able to support that continuity the notes, the context, all of that information. And as we weighted deeper into that, we saw a bunch of other processes wrapped around it from leasing process to renewals, to inspections and those basic building blocks of what we were building were able to support a number of processes. And so it just kind of evolved over time.
Bob Preston: 05:33 Wow. That's pretty cool. Yeah. I'm a full disclosure. I mean, I'm one of your customers for Lead Simple and there are different stages you take a lead through. So I imagine that can be applied to a lot of different processes within a business. I think all of us at a very young age are taught the value of a checklist, right. You know, like maybe your kid in school and your teacher gives you a checklist of all the things you've got to do to get your homework done and completed. And whether you're a student, you know, you're out grocery shopping, you might have a checklist, but in business it seems like the basic checklist just doesn't cut it. And why is that?
Jordan Muela: 06:04 No, the basic checklist is, is obviously incredibly useful. If you were to, I would wager to venture that if you would've walked into a hundred residential property managers office, that at least a quarter of them, maybe as high as 30 or 40% still have paper shops.
Bob Preston: 06:25 We have a whiteboard or the whiteboard. Not that we're here in the office together anymore to check to check things off the whiteboard. But yeah, that still works for some things. Yeah.
Jordan Muela: 06:31 Yeah. The medium that's right in front of you. It's going to be, there's always that attraction. That here's a great example. I email myself notes in 2020, when this is being recorded, you would think by now there would be an app or a program or a protocol, but the ease of me emailing myself a note is really attractive. So, so the proximity to the work and how the work gets done is really hard having to change. I think that the reason to answer your question, the reason that checklists aren't enough is that when people see the full context of combining a checklist with a database where there's history and a memory, and then connecting that through some triggers to actually have work done on the backup task completion, it's the totality of that offering that will pull somebody off of their really convenient paper checklists that they've been using for a decade plus.
Bob Preston: 07:23 There are a few terms that sometimes get grouped into this category together. And we've already mentioned checklists. There's probably heard of the standard operating procedures, right? Policies is another term, systems manuals, a workflow, right? These are some other terms. Do all these mean the same thing to you or is process stand out with its own definition?
Jordan Muela: 07:43 Yeah, that's a really great question. I kind of hear that, you know, your terms all mushed together as well. I think that distinction is that mattered to me first and foremost. Processes as a way of codifying a thought work philosophy of how the organization should, at least that's what it can be at its best, the actual implementation execution. And that's where we can get into something that looks more like a checklist or where I work. So I think there was going to kind of start at the top of what is the vision for how to run the company. How does that translate into culture? How does that translate into policy? And then when we're talking about workflow, we're talking about.
Bob Preston: 08:24 Does then process have more dynamic aspects to it than say a workflow or perhaps an operating procedure, which is more static?
Jordan Muela: 08:33 Yeah. I think that my experience Bob has been that it's really attractive to think that I'm going to come up with or somebody who's going to need the process. What I find is that the process, regardless of any of those things, SOP workflow or process, it's a moving target it's changed. And that often we are the ones that are breaking into my mission to grow streamline, become more profitable, etc. So all of these things are really a fluid moving target.
Bob Preston: 09:08 Yeah. I mean, there are these, if then decisions that need to be made along the way or what could be called conditional logic. If this happens, then logically you need to go in a different direction. You can't just follow that checklist. Let's talk about property management specifically, then why is process so critical in property management?
Jordan Muela: 09:24 That's a great question. You know, being in it, yours kind of wonder, well, what is unique or special about this industry? Obviously we all know that there's it's complex and there's a lot of challenges. Is it any more or less complex than other industries is that thought about it over time? I've come to the conclusion that there are fundamentally more moving parts here than in other industries, the constituencies, the frequency of events taking place, the flow of communication from multiple parties. There really is a lot of dynamics going on here. And furthermore, I think where the real nuance is understanding what can be systematized in a process that is let's call it rigid, rigid to the point of saying, you must do it this way. This is what we all want and what aspects of it are fundamentally dynamic. They need things that will always be a matter of if you hire a monkey that does not have the ability to implement judgment, cannot job properly. I think teasing out the nuance of those things is really the difference between being able to effectively implement systems versus being totally winning versus believing that everything has to be decided on a one off basis and no standardizations.
Bob Preston: 10:40 Well, that's really interesting because we have system manuals in place currently, and we've been looking at your solution, which is easy to modify. You can view it on your screen. You can apply it to a specific person, a property. And it takes an individual on our staff through that process, almost like a guided tour, right? The system manuals are great, but they're a PDF on our file server. So realistically, when a person's in the middle of a job, are they really going to be flipping through those pages and referring to this PDF, the static document. And that's where I've sort of had issue in the way we have implemented it so far, which it brings me to why we're so interested in your solution. It's also a matter of scale, right? How, how fast your business is growing. When I started North County Property Group, I can tell you, you know, I was in my spare bedroom. I had processes for everything, but they were all in my head and I didn't have some sort of a capture process in place. So there's this tribal knowledge or I call it Bob legacy stuff that gets passed along. And that is pretty ineffective at times. Do you hear that a lot from some of your clients?
Jordan Muela: 11:40 Experience it in my own company. And so I can think of a call. I had just the other week where I'm talking to and we're growing and the conversation is like, Hey, this thing, your fingers have been pried off, quite a few things. Last finger on this last issue has got to be pulled off and you don't want to delegate it because if you get it wrong, something really blows up. It's really significant. Um, but that kind of work needs to go through the normal channel and people protocols. So I think it's, it's natural for that shift to happen because as the business owner, your gut is right, you are having to slow down to speed up and that's no fun. But the question is always six months from now, 12 months from now, what is the leverage look like then? And as we know, it's, it's worth it. It's worth the investment.
Bob Preston: 12:32 I can still walk around the office today. And there aren't as many people in our office now we're pretty much working remote here during the middle of the COVID pandemic, but just kind of eavesdrop on someone may be doing something or speaking to someone and I'd stop. And when they were finished and say, why aren't you doing it that way? The response was sometimes, well, that's the way you taught me five years ago. Right? I guess the point is process is never static, right? It's not a set it and forget a thing always has to be changing because as companies grow things break. Right?
Jordan Muela: 12:57 Yeah, absolutely. I mean, I think the thing I think about is the visibility of the work, the position that I want to move away from and all of my companies as they grow is when I want to know if something got done, do I need to ask somebody and hope I'm getting an accurate answer or can I see it with my own eyes? I would always rather show than tell. It's a part of what we're getting at is process technology is auditability. It's there. Whether or not it didn't get done, how it got done communication associated with it is actually documented. What I find is that people want to move straight to augmentation change improvement. But the step before that is just documentation, seeing what has actually happened. And that for its own sake is incredibly valuable. And on the back of that, we often improve. But if we have no baseline visibility into how work flows through the organization, it's really challenging to change.
Bob Preston: 13:53 And so I suppose it's upon us as leaders and business owners to make those fine tunes. As we see things in the organization, or maybe have audit meetings, you have clients who do that to sit down periodically and audit their processes to make sure they're still valid?
Jordan Muela: 14:05 Yeah, absolutely spot tracking people, inspect. I heard a business owner refer to themselves as the kind of beef they'll come in several miles up, drop some bombs by the time the bombs actually hit they're miles away. Yeah. You obviously don't want to, I don't want it to be like that. Buy in change in management is huge. And I think that's really an extension of how much trust when you come with the big idea. Did you sell it or did you just tell people this is the way it is with what we're doing? It's complex enough that we, as people that are helping our clients implement this technology, we feel the need to, to make sure it's clear to everyone on staff, what the benefit to them at the organization, to the owner, but what is the benefit to them individually? And that's understood that's when people open up.
Bob Preston: 14:54 Yeah. I think it's this notion of helping people on the team streamline. How does the word streamline, I guess, fit into this conversation?
Jordan Muela: 15:01 Yeah. People definitely bring that up. I think that people are to some degree talking about conformity, common experience when same task is getting done for a customer experience perspective, that's really important, making sure that things are being done in the most efficient way. As a business owner, I think, but rolling up into a labor efficiency or just, this is the labor is the number one driver profits. So if we can improve labor efficiency, we can hopefully pull more profit out of the organization. I think about error rate, you know, most companies have an oops. Somebody screwed something up, you got to run a check. So reducing that. I also think about just peace of mind. Can I go on vacation? This is always a great experience. What would happen to you if you go on vacation and how much anxiety would you feel about doing that? That's, that's an intangible, but I think it's pretty big part of the mix.
Bob Preston: 15:53 There are some real practical reasons as a business owner to not just for efficiency and getting the most out of your labor and the most profitability, but reducing your risk. Perhaps maybe risk management, like training new employees. I'm very active in CALNARPM and I was talking to one of the property managers I know through that organization. And she was telling me that there's this group of her employees who sort of hold it over her head, that they know so much that she could never do without them. And come review time, she hates being in that position and hence, you know, she's putting in place processes, right? Yeah. Right. I mean, and so I think there's some real practical reasons for all of us to adopt this as well.
Jordan Muela: 16:28 Bob, I'll never forget talking to a property manager and having them explain to me that somebody had stolen from them. And I don't know if that's happened to you or not. It doesn't really matter. The point is that's a really heartbreaking situation, the violation of trust. And so I want to be empathetic and, and you know, I'm listening with sympathy, but they're kind of going on. And at some point I realized that the reason they're still talking about this is that the person that stole from them is still working for them still and they’re employed. And this had happened months and months and months and months ago, why didn't they let them go? Because they didn't understand the work. They were so uncomfortable with how to actually do the function of what this team member was doing. That there were still there. And I think that's kind of the version of the story that you just told, but that's crazy. You got to fix that. You got to make sure that everybody is replaceable, including the owner.
Bob Preston: 17:20 What about other types of risk management like litigation? There's this specific sort of process that could really help come litigation time if you ever found yourself in that situation?
Jordan Muela: 17:28 Yeah, absolutely documenting communication is a really big deal so that you can defend yourself, but also just communicating as work is happening so that everybody in the organization is informed and the right hand knows what the left hand is doing. That's the worst, right? Is unforced errors. This is not a direct parallel of what you just highlighted, but it's kind of an adjacency. One of the interesting aspects of talking about fee maximization, right? If you go to you go to a conference here at 10 different ideas with these one thing that nobody mentioned is that certain fees come, would they a significant amount of admin overhead just to actually collect the money. And if you're not collecting the money, what was the point in, in emailing your owner to let them know that there's a new fee? So, it's the same thing here, this technology. So we built a fee. We actually get paid for it. That sort of thing.
Bob Preston: 18:17 Where do you start? I mean, is there an art to writing a process? Is there a process to writing a process?
Jordan Muela: 18:22 That's a good question. Um, my thought is that there are kind of two major cycles in property management. You have the initial cycle, which is kind of new client onboarding property, onboarding owner, onboarding the leasing process and getting everything up into that first check being distributed to the owner. And then the second major per cycle of processes being when you have a turn, right? So needing to do the renewal and the inspections and maintenance and things related to that. So I think these two major functions are where to where to start. And that is to say, focusing on a cluster of processes that are interconnected so that you're able to see the full kind of leverage. That's typically what we advise.
Bob Preston: 19:09 Okay. So in that top priority, you throw it out owner onboarding, right? That's kind of the fundamental let's go, right? What's the process to capturing that process? Is it doing a brain dump, getting together as a group, writing all those stages down? Is there a template that can be followed?
Jordan Muela: 19:22 Yeah. So the first thing that we always recommend is that you just document what you are doing today. So if you're doing that by yourself, that's you getting on a whiteboard and saying, what am I doing today? Not trying to improve, not trying to make it better, no aspiration, just raw documentation. That's a, if that's what you with a team member, it's the same thing, a whiteboard it out, build the basic flow chart, basic list of what are the specific tasks, what's the conditionality, etc. From there, there's the opportunity to ask, well, how could we make it that the more information, whereas there less information, we can be collecting, etc. But that, that's kind of the two ways that we like to break it off is first. What is second? What could be, cause when you mix them together, it just, it gets very big, very quickly.
Bob Preston: 20:08 Sure. I, I get that. And so where do you draw the line? Like you don't need a process for which K-cups to get for your and coffee maker, right? Somebody can make that executive decision and make it happen without going through a process. So as a company, where do you draw the line? And I guess a follow-on question to that would be, you know, what, what types of processes does Lead Simple?
Jordan Muela: 20:27 That's a great question. I think philosophically I'd buy into the idea of the barbell and stretch. And that is to say on the one hand, don't die, don't do anything fatal. So if there are aspects of your business where there's a process, that if you screw it up, something catastrophic is going to happen. That's great. That's a great place to add. The other side is, is upside, highly aspirational, moonshots. So is there another aspect of your process where, you know, if you nail it, there's going to be a significant, an order of magnitude, more leverage in it. That's where I tend to look at maximum downside, maximum upside, lot of stuff in the middle. Nice to have, wouldn't it be great, you know, get to it when you can.
Bob Preston: 21:14 Okay. So there are some other solutions out there. Process street. I think my team uses Process Street for, for a couple aspects. There's one called I think Suite Process that I've heard of people using theirs. Exactly Rent Bridge is making a big push in property management. How does Lead Simple stack up? How do you compare yourselves and how do you differentiate what you guys have going?
Jordan Muela: 21:33 Yeah. So I think that the basic hierarchy here. You're going to have some point solutions that are really explicitly a checklist process. It is not looking to have a memory, is not looking to have context on this where it's at what's happened, client interactions, but as a visual checklist, great, it works barely people are, are using. So to differentiate against these simple checklists, what we're looking for is a totality of communication. It's really context. It's the execution of the work in the context of what has been done before. And that's the differentiator for other suites like HubSpot, which you mentioned or Podio. Um, the really difference there. You got to ask yourself, what is the scale of your ambition? You're looking for a full blown ERP. I heard it said early in my career that when a company grows large enough. Thousand, 10,000 employees all apps to, to Salesforce. And I think that it's really interesting because there is, there is truth in that. And at a certain scale, you know, the company is doing 20, 30, 40, $50 million in revenue. You do have to embrace some, some hairy, expensive legacy solution. But if you do that prematurely, it can crush the organization. Cause it's absolutely absolute overkill. So where we positioned against those, we are a dramatically lighter solution. Something like outside, you know, I read somebody, uh, I read it a reference customer the other day. They, the comparison name that they make. Cause there were at least some customers while was Camry versus Maserati. And I don't know that I would really argue with that. There is an industry and there is demand for Lamborghini's and Maserati's and I think that's great. I don't, I'm not really the guy here to say, I have nothing negative to say about a Maserati or a Lamborghini. If that's, if that's your, if that's your budget, God bless. But we are definitely a servicing folks that are looking for something that is much easier, much less expensive to implement and is going to solve for say 90% of what a Lamborghini can get you.
Bob Preston: 23:48 Attracted to it. And we're in the process of evaluating. And right now in testing, Zach's been great by the way, is that it's on a platform we already know, you know, for those people who are already Lead Simple customers, it's a very familiar way of setting it up and uh, the different stages and the like. The way I'm looking at this right now is I've got Q4. I want to hit the ground running in January because I really believe that as we come out of this pandemic, there's going to be this paradigm shift in our business. And I want to be out in front of that. Right. So are you hearing much from Lead Simple customers about, wow, I got to get on this? So I'm hitting the ground running, you know, in Q1 of 2021.
Jordan Muela: 24:23 We went live with this, you know, when I say March of this year and for about six months, good, decent uptake. But in those summer months, let's be honest. People are, people are busy. There's some lack leasing at leasing season independent.
Bob Preston: 24:43 I said in March and April, no changes. Right. And so I remember it was Zach called me and said, Hey, what are you guys going to do? I go, Hey man, your timing is great. We had sort of put a moratorium on bringing anything new in, let's give it a roll. Right. So that's kind of what we're in the process of doing.
Jordan Muela: 24:55 Yeah. So we're getting some good, strong uptake and people are really going all in. I mean, it's fun to me to see the nuance of its, uh, it's just leasing, right? I mean, isn't it, it's pretty straight forward, you know, 10 different companies, 10 slightly different ways of nuance here and there. So there really is a lot of depth of richness and really loving seeing creativity that people are coming up with.
Bob Preston: 25:16 Is leasing or just onboarding, but there's a Baton pass that occurs in all those processes that is, you know, the human factor and the more that you can make that understood and documented and a process that can be followed every single day, then the fewer problems you're going to have in your organization, in your business. Hey Jordan, I like to ask my guests, if they have a story that helps define themselves. I like to tell stories when I'm meeting somebody for the first time, maybe something that's shaped your life, either personal or professional life. Is there a brief story you'd be willing to share with our listeners today?
Jordan Muela: 25:48 Yes, that's great. Bob, you know, I think the first thing that comes to mind for me professionally is simply having more courage in conversation and being willing to have hard conversations. That's been a huge growth part of my career is to be able to sit and to not conflate interpersonal conflict and making it about a disagreement on how to run the business or, um, you know, I just don't see, I can't work with this person into instead to take more accountability for the degree to which I can do that. How I am feeling, particularly my partners, multiple businesses, they're all partnerships, partners, partner relationships are a big deal for me. So I think the biggest shift for me in my professional career was when I sat down with one of my cofounders and just had a really candid conversation with the long list of complaints that I have, right. I mean, at the end of the day, it could have been handled a lot more tactful, but getting to the point more candid, we're transparent and to hear what the other person was thinking. And then to trust that out of that transparency, something good is going to happen rather than trying to quarterback it, engineer the outcome, to just be candid and vulnerable and to trust that that's the best thing for everybody involved in a business context, that means probably the most and impactful.
Bob Preston: 27:19 And has your ability to do that improved as you've seen yourself grow as an entrepreneur and a business?
Jordan Muela: 27:26 It has, you know, I would say over time I realized it was never, it's like you could say getting better. I think about the timeline of it upon which the outcome's going to happen. With my disposition personality, it's going to come out of it. It's just how pretty, you know, how, how is it going to come out? It's got to come out in anger, there's going to come out in candor. Is it going to come out now or it's going to come out a couple of years from now after a bunch of after it's way more complicated to unwind.
Bob Preston: 27:56 There's a little bit of that in all of us. Uh, you sometimes have to take some risks, fail sometimes, maybe not get a ride, maybe not choose the right partner or the right employee, you know, choose the right process. Maybe you have to change it. And I think those are really good lessons to learn from. Hey Jordan, I can't thank you enough for coming on the episode today. I think this is going to turn out to be a great episode. I'd love to continue cause I could geek out on process with you all day, but any last words you might have for our audience, by the way, what are you calling the new product?
Jordan Muela: 28:24 It is the operations module of Lead Simple. So that's, you know, might change over time, but that's what it is today. Um, and if I have any parting advice, I would just say that we're talking about processes and tends to have kind of an efficiency focus. But if I really step back, what we are trying to facilitate is customer success. I care dramatically more about enabling my customer's customer to be successful than I do about allowing my customer to cut 10% in labor. I'm excited about those efficiency gains, but I'm way more accepted about helping my customer's customers be successful and helping my customer fulfill and deliver upon the promise that was made. So if you're listening to this at home, my parting advice to you is to just sit down and get really clear on what are the key promises that you make to your customers and how is your organization doing on fulfilling on those promises? I really believe that that's a huge point of leverage for every business owner.
Bob Preston: 29:29 And if someone wanted to get in touch with Lead Simple, to learn more, see a demo? How would they go about that?
Jordan Muela: 29:34 Email firstname.lastname@example.org. We're going to lead simple.com navigate towards the demo page. Schedule a chat. Contact me directly at email@example.com.
Bob Preston: 29:47 Hey Jordan, thanks again for joining today. Great episode. As we wrap up today, I'd like to make another quick plug to our listeners to click on subscribe you to Jordan. I subscribe to your podcast. I want you to subscribe to mine. All right, give us a like pay it forward with a positive review to encourage more great guests like Jordan to come on the show. And that concludes today's episode. Thank you for joining the Property Management Brainstorm show. Until next time we will be in the field, working hard for our clients to maximize our rental income and maintain top tenant relations and walls.