Incompetence
“Luck is
always the last refuge of laziness and incompetence.”
—James Cash Penney
“Man cannot live by incompetence
alone.”
—Charlotte Whitton
Owners should not accuse their board of directors of dishonesty
until
incompetence and sloth has been completely ruled out. Take a look at
these examples:
One Etobicoke condo board hired the low-cost bidder to replace worn-out
hallway carpets. After handing the man a $25,000 cheque, the
down payment, he disappeared—never to be seen again.
Another board, out in Scarborough, hired a low-cost contractor to work
on the building’s HVAC system. The guy, who was found on Craigslist,
was incompetent so qualified tradesmen had to be hired to fix the first
contractor’s work.
A condo board in the west end hired an owner to paint a party room and
a hallway. He does a sloppy job so they hire a different owner to
repair the earlier work and complete the job. After starting the job
and receiving his cheque, this owner becomes ill so the job languishes.
The job needed to get finished so one board member asks a third owner
to take a stab at it while the property manager goes about hiring a
professional contractor.
Were these boards crooked? Of course not; they were incompetent.
Questionable
choices
A condo that received a city work order to fix a leaking parking garage
that needed $9,000,000 to repair, diverted $400,000 out of their deeply
underfunded reserve fund to buy new hallway carpeting.
That just didn’t
make much sense. (Unless the owners who were selling their units wanted
their corridors to look better.)
Dumb? But too
dumb to
know it
A sign at a Toronto grocery store
For more than a decade, David Dunning, a psychologist at Cornell
University, has found in his research that it’s “intrinsically
difficult to get a sense of what we don’t know.” It turns out that
incompetent people are too incompetent to recognize their own
incompetence.
For instance, many people don’t have training in science, and so they
may very well misunderstand science. But because they don’t have the
knowledge to evaluate it, they don’t realize how off their evaluations
might be. This is why many people doubt the existence of global warming.
Most directors make decisions based on very limited
knowledge. How many of the estimated 50,000 plus directors in Ontario
understand accounting, the building trades, HVAC and plumbing systems,
building envelopes, elevators, deteriorating concrete, labour
relations, how to negotiate
contracts and the many other duties that the board of directors needs
to make
decisions on?
So a board needs individuals who can hire management, contractors and
professionals that will give them good advice and must catch on when
they are being poorly advised.
Denial
“It's not denial. I'm just selective
about the reality I accept.”
—Bill Watterson
Denial in its broadest sense means refusing to acknowledge painful or
overwhelming external circumstances, avoiding the facts or minimizing
the consequences. Denial is a common response to a stressful situation
and it can be an
important coping and defense mechanism.
Denial—or even healthy skepticism—can help people withhold judgment
until all the facts are in. Gradually adjusting to major changes can
lead to better decisions in the long run. This gradual adjustment is
referred to as an adaptive response.
But denial can delay appropriate responses to circumstances that
require timely action and change. It is important that the boards face
reality so they can make the tough decisions that need to be made.
When one west-end condo had a leaky roof, the manager said that they
needed $600,000 to replace the roof. The directors freaked out as they
didn't want to raise the fees. Instead, they went with a discount
contractor who said that he could patch it, and it would be as good as
new, for a quarter of the price. A year later, after the repairs were
done and paid for, the roof still leaked.
Once again, the board is not corrupt; they are just trying to find a
bargain.
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