If you've spent some years in the property management industry, you have become aware of the value of operational systems. A well-run business must systematize. Webster defines systemization as "arranging according to a definite plan or scheme." Everything property managers must keep streamlined: business development, owner onboarding, move-ins/outs, rent collection, evictions, etc.
In this episode of Property Management Brainstorm, Bob's guest is Paul Kankowski, a systems expert and host of the Property Management Systems Conference, scheduled to be held in Las Vegas January 23 – 26, 2024. Bob and Paul discuss systems and why the concept is essential to every property management company.
[2:10] Paul Kankowski introduces himself and the PM Systems Conference.
[4:06] Do the terms Procedures, Policies, Methods, Systems, Workflow, and Process all mean the same thing?
[5:05] Why is it bad for the company staff to keep their systems and processes only in their heads?
[7:10] Paul explains why you can't just "set it and forget it" regarding property management systems.
[10:40] Can documented property management systems help with risk management?
[12:12] Is there an art to creating a system, and where do you start if you know your company is lacking?
[20:10] Which company aspects should be the top focus areas for creating systems?
[27:35] Should systems be automated or driven by Artificial Intelligence (AI)?
[29:45] Paul provides his parting words and thoughts on systemization.
Connect with Paul Kankowski
Connect with Bob Preston
This episode is always available for listening, sharing, or downloading at Property Management Brainstorm. Subscribe to Property Management Brainstorm on Apple, Google, Stitcher, Spotify, TuneIn, iHeart Radio, and YouTube.
Transcript of This Episode
Bob Preston 00:05
Paul, welcome to Property Management Brainstorm.
Paul Kankowski 02:12
Thank you. I'm glad to be here.
Bob Preston 02:14
I've been looking forward to this because we're good friends. I know you well, and as a property management consultant, I'm eager to hear what you say. Please introduce yourself, what you're up to now, and more about your upcoming conference in January and the coaching and mentoring that goes on there.
Paul Kankowski 02:25
Sure. Well, I had a property manager company in Temecula. And I sold it to Pure Property Management about two years ago. And then part of their acquisitions team. Now, I've just stepped back from working part-time with Pure. I'm the head of Nevada for Pure, primarily working with others on systems procedures. My conference is in January; we moved into January because of the great weather in Vegas. And it's not a conference; we call it a workshop because you get stuff done. Like you're there. And the goal is that when you leave your finished product, you can hear people speak and talk; we have some fantastic people coming that are speaking on it. But the same people, this is the eighth year it's going on, the same people come every single time because they're, you know, they're getting their systems done. And then we always have a good chunk of new people. But it's good at helping get you so that you can get farther in your process.
Bob Preston 03:26
I love that. So you can take your action plans, or whatever it is, whatever the format is the output, you can take it back and put it right to work. That's fantastic.
Paul Kankowski 03:34
Yeah, when I go to a conference, I get 25 ideas. And I always tell people to take two or three, don't go to another forum. Did you get at least one of them done? Because we get 25 ideas and only do some. So my conferences, hey, let's give you some ideas. But let's get two or three done while you're at the meeting. We actually can come back the next time because you go dumb.
Bob Preston 03:56
I call those nuggets, right? If I go to a conference and I can take away a couple of chunks and have all the ideas and those nuggets get implemented for the year for the quarter, whatever it is, then you've done a pretty good job. All right. Well, listen, in our property management industry, you hear a lot of different terms, okay? Procedures, policies, methods, systems, workflow processes, do all these things mean the same thing? Can you use them all interchangeably? What do you think about that?
Paul Kankowski 04:18
Well, I'm dyslexic. So that means that when lots of names are similar, it just gets all jumbled up that process procedure system, whatever you want to call it, I don't care what you call it, get yourself organized. So you know that when this happens, this is the outcome that is the result. Could we use these different words to help someone who's an English grammar person could be? They're all interchangeable, even though they probably mean very other things.
Bob Preston 04:53
I like that because then you can focus, hey, look, we're talking about systems here. You can call it what you want. We're talking about plans. Get this stuff done, and The left, let's put it into your business. Okay, cool. When I started my business back in the day, I researched how to do things and came up with my ways all in my head, right, not the right way to run. As the company grew, I started adding other people, which was different from the right way to do it in my head. And then worse, as they entered the company, they began having things in their head. And I spoke recently with a consulting client. And she told me a similar story. And she said, you know, the staff tries to rule the roost here. And it's like the tail wagging the dog because they consider themselves irreplaceable. After all, these things aren't captured. It's all in the heads of the staff. So they know how to do everything; it's all in their heads. And if we were to leave, this kind of their position would start from scratch. So, do you hear stories like that from people who come to your conference in some of your clients every day, every day,
Paul Kankowski 05:51
Bob, I hate to break it to you, but you had a job, you didn't own a company, you had a job because if you went away, your company had issues. And so if your staff has all the systems and procedures in their head, they could leave start that company somewhere else in their head, and you would flounder. And you probably would lose many clients; you have to think of it that way: you're protecting your asset.
Paul Kankowski 06:16
If McDonald's allowed their workers to put in their heads, what kind of burgers would we get at McDonald's? We do. McDonald's has people on minimum wage minimum skill level, and you get the same product every time; it might be a better product, but it's the same product; it is a McDonald's product. And that is how we have to look; that's why I always tell people we need to look at our business. Do you want every owner to get a different outcome, every owner to get another product? And, you know, you know that because you've been seeing it when, you know, with pure and everything when we go to other companies that like the whole point is you want to be able to get like when an application process goes forward, that the application process is the same for every single person who applies.
Bob Preston 06:59
Absolutely. And you might have different property managers; they're all doing their own thing, doing it differently, that could even be worse. Yeah, I've always described growing a property management business. And I've either done my own or consulted with other companies, too, climbing a set of stairs. You run with how things are going until you hit a wall. It's inevitable, you know, things are going to break, you're going to hit a wall, and then you sort of jump in, and you're forced to change, maybe, then go for a while longer, and then they fail or break again, make another job continue throughout the growth. How does that sound to you? Do you hear that from clients? I'll go with a process or system, and then it breaks because the approach may be more straightforward in the beginning than when you're 1000 doors.
Paul Kankowski 07:39
One of my favorite things, and I've had a couple of companies I've helped implement this, was that every January, I would go down to Guadalajara and get my entire staff in Guadalajara. Besides my US debt, my US staff would stay at home. But they would be video conference so that all of a sudden my US staff was on the other end, they were video conferencing and for my Mexico staff, and we would I would put $100 on the whiteboard, we got this little room and stuff, I put $100. And the best idea to change the systems receives the $100. Well, you know, in a Mexican in Mexico staff, that's seven $8 an hour, that's good, that's much money. So then we would go and break down every process. And their job was to break my cycles, break my systems, make it so they found out why they sucked. And then we would get that. And then when we when they got done doing all that because they're the ones who did all the processes. They're the ones who were all the back end, my staff in the US, they were the ones who went out to the field, they were on the field. So then once we got to the IDEA Part, they would come in on video conference with my staff and us when it was their process when something that they were in, and they would hear, and they were the ones who didn't know who made the idea what they would vote on what they thought was going to make their job better. And then we would look at it, and we would change the process right then.
Paul Kankowski 08:59
So you can wait for a process to break. But if you could change a process that might save you $10 An application or take you $5 per CD, something like that, that $100 gets so quickly like that. It's nothing. And then yeah, I had to spend for my staff to get together. But it was great because now my Mexico staff felt like, oh my gosh, we're part of the team, or my whole thing is when they break if you're the owner. You're the only one that comes up with the idea. My idea is that your company will fail if you get the people who have been doing the process all year. Because you've been out on a mountain bike, whatever you're doing as owner, like you're working, but also not doing the day-to-day process. Could you get the people doing the day-to-day to find out why it's breaking and help them fix it?
Bob Preston 09:45
Well, if you wait till it's broken, then it's broken, and you're losing valuable time. It's costing you more money to your point, you know, yeah, if you invest $100 or the time to get your team together and fix it in real time, you're much more efficiently working on your processes and systems. The point is, it can't be set it and forget it. There need to be ongoing review adjustment improvements. And you agree with that.
Paul Kankowski 10:06
I know people who say, Oh, I made this process. And you know, think about it, chat. GPT is out there. Now, if your process doesn't involve when you're doing leasing, have chat GPT write up the descriptions of the properties, but would that be part of the process two years ago? No, it didn't exist. Yeah. But right now, my process for leasing would be chassis, PT, we put in three bedrooms, and we put in our crappy description until Chapter GP makes it look nice. And boom, it looks nice. And these are the types of things that technology will make you want to change the process to make it better?
Bob Preston 10:39
What about risk management? Can documenting processes and systems help protect us as property managers against litigation?
Paul Kankowski 10:46
Yes, but you, your California; we have no risk, Bob. There's no litigation, and we have no law lieutenants out whenever we want. Yes, of course, it does. If I look at it this way, the application process is the clear one, you know, I don't deny people the process denies them. If I get audited by Fair Housing, I can show that we treated everyone equally through our process because it's a document. I used to hear people say, Why look at their car? Their car is messy, and I'm not running to them. And I'm like, my car's sloppy half the time. This is the stupidest process I've ever heard of—so discriminatory, oh, your car's dirty. So we're not going to, you know, rent to you. But if this and this happens, we're not going to rent to you. It has nothing to do with, you know, what they're what they have; it has to do with physical data. I mean, I love the fact that my staff doesn't even see applicants anymore because I don't want them to be like, you know, that was self-showing and all that they don't even notice that like, you know, fair housing comes to us and be like, here's the process, here's what we follow.
Bob Preston 11:59
True, right? Because if you can document fair housing, or whatever the particular ordinance might be, or regulation, that you're doing the same for everyone, that it does reduce your risk and the potential for violating, okay, is there an art to creating a system? Do you cover this kind of stuff in your conference? And if not, could you help us understand, like, where do you start? If I know I need more systems, what do I do? Where do I start? And how do I identify those areas,
Paul Kankowski 12:24
My conference has two starts and advanced on the first day; we break people into advanced and beginner systems. So it's like, you're a beginner system, you don't have a plan, you do have a plan, you have something, you start by just getting out what you're doing on paper. People need help saying I don't have a system for it. Could you figure it out? Let's start looking at it. The whole reason why the conference started eight times ago was because I'm cheap. And Arrow Allen was like three or $4,000 of debt. And so I said, Hey, on faith, it was on, it might have been all the way when we had listserv back in the days. But anyway, is there anyone else who wants to help reduce the cost and help me pay for this guy? And so we had 14 of us come together, and then suddenly, I'd have to pay that much. Because we rented a room and, you know, had that. Almost all of us had our move-in, move-out, or leasing system; it was just one long process.
Paul Kankowski 13:31
Like we just had, we wrote on paper we all did. And we're like; we felt so good about these, like write your process up, we all wrote everything down. And he's like, and then he broke it down from there and looked at it. So the thing is, get it on paper because you have to be able to get what you're doing. And then you know, at that point, you start analyzing it. And some people say, You know what, I'm brand new. I will automate all my processes on day one; you will not. Automation is the worst thing ever for you. If you're brand new, get it out of the process, know how it works, understand what's going on, get it so that you learn from step one to step Z how it works, and then start solving it. When people make a process. I always tell them a process takes less than one day to complete. It takes three to four months. So you start by writing the process out, then make it so you can make a process in one day. Now, you implement that process. And then a couple of weeks later, you go through what's wrong with it, where are we hitting walls and speed bumps and what's happening, then you revise it, then you go another month, and then you keep doing that. And then, like, four months, you got a perfect high-speed system because you sat there and concentrated on it for that period.
Bob Preston 14:45
So if you're talking about, okay, write it down, get it captured, then review it. What are the best platforms for that? Right, I mean writing it down. Sure. And there's a, you know, maybe it's even a checklist or in a Word document or something like But are there apps or their software? Where are you? What are you seeing out there? Which platforms do you recommend for recording these systems?
Paul Kankowski 15:07
So, could you get a platform? But when I started, I thought I was as essential as possible. So when I started, I began to sign up very basic, you know, it was a checklist thing, then I went to process Street was much better and did much stuff because then I ended up with lead simple, I love lead simple. There's Monday; lots of other software's out there, there is like, Run DMC process software, it knows what the things I don't know, run PMC or something like that. What you want to do is you want to, if you're starting fresh, and you're like, Oh, I have to find the perfect software. No, you won't go to see the software; the software is Microsoft Word; it can't ever get it on paper, contact, like what you're doing, and then interview the software companies and find what will be good for you. So, someone might start with a solid; you might start with something straightforward. And that costs you $5 a month; you should start with something that's $100 per month.
Paul Kankowski 16:07
I was talking to Jordan Muela, the CEO of Lead Simple. And I said I loved their product. One of the biggest problems people have is buying this expensive software, but they must invest more time. They think I will spend $4,000 on software and my systems will work. Well, your systems are going only to work if you spend money. Unless someone else you have to invest time into making it. So your systems work. And then I always have people say, Hey, can I buy your system? I'm like; You're not. Your company runs differently. And you could buy mine, look at it, and change it up. But how many times in the past ten years? Did you buy all these things that come out, go to an art conference, and believe like, you know, I bought? It was good. It was hoped to help me, but the guy from Colorado purchased some of his pamphlets. And I bought some stuff from the company a long time ago; I bought all that stuff. But then, I didn't invest the time to make it mine. So it just sat on my shelf as $1,000.
Bob Preston 17:17
Good advice and excellent input. I also sold my business to Pure, so we're cousins, right? We're both part of that big family. But when I still had the North County property group, we started by putting it into Word documents and PDF files. But the problem was that we had excellent systems captured for all positions in the company; there was a systems manual suitable for every single place within the company and every single process procedure, whatever, for that particular job. The problem was that they were PDFs on a file server, right? It is almost impossible to utilize if somebody is actually in the middle of doing work. Because you're not going to stop when you're talking to someone and then jump, oh, let me I have to check that in my systems manual, right? But it was an excellent place to start because we had it captured. I think that's your point. And then take the next step. Perhaps it's Asana; maybe it's processed read; we also went to lead simple; it's perfect. But the fact that we had already had it captured made putting it into lead simple that much easier.
Paul Kankowski 18:11
Can I add one more? I want to add one more thing. This is something that I find fantastic. So when you eventually get a, let's say, it's the move-up process, and you're outstanding process elites, and then it's dialed down, and you've worked on it, and someone needs to follow the process. So, Bob, you're doing you're working for me, you don't mind it. When the crap hit the fan, I would go to the employee, saying, Hey, we probably messed up on the process. I'm not blaming the employee. Now. Let's look at the process and find out why this mistake that cost the company $3,000 occurred when, hopefully, it's in the process; we should go through the process. If it's missing, why did the mistake happen? We add it to the process precisely in real-time. If it's in the process, we show the employee goes, Yeah, I follow it. And then you say, follow in the future, you're pretty annoyed because it cost you $3,000. But they were good employees. I think you might need to find a new employee. It was cool if they did it again because it wasn't like, hey, this was my head employee. Why did you think of it? This is written down; you didn't fall. It may cost the company money, or this happens every time anything terrible happens every time something hits the fan, then we would go back to the process. And many times, it wasn't that the employee was involved. It was that we should have put it as part of the process. We should have thought about the contingency of this happening. So, of course, it gets added.
Bob Preston 19:39
The beauty of using a tool or platform, whether a processed read or a lead, is simple: whatever it is, you can fix it in real time. And you can do it as a team with it up on the screen in your conference room versus a system manual, which is a PDF; you have to rewrite the whole thing and then publish a new version, right? So, it's not necessarily the most efficient.
Paul Kankowski 19:59
Yes, it could be better for the environment to keep printing new copies because you change one sentence.
Bob Preston 20:06
Okay, so where do you draw the line? How deep do you go on processes? Right? There's a short list of property management processes you should have. You know, I had somebody joke once, like, well, you're going to write a process for the coffee we choose for the Keurig machine, you know, well, no, you know, we're not going to do that. Where do you draw the line? What's the low-growing fruit for processes and systems and property management?
Paul Kankowski 20:29
Things that happen once in a blue moon; we don't have a process for Yep. So, you know, we had in the history of our company, it was about ten years, we had four evictions, we never, we never got to writing a process for removals, we should have, we should have a strategy for evictions, but by the time it would happen, it would just be like, I would handle it, and it would just get done. And every time, it would be done a little differently. But that would have been probably something. But every once every two years, it wasn't happening. But for most companies, you'd have an eviction process because I know my friend in Indiana, you know, they have evictions monthly. So you would have to have an eviction process because of the clientele in the area that we're in—so changing the coffee filter? Well, I don't give a Yeah, we don't give a crap about that. But anything that's going to be something. So you start your primary process, create, let's work on the stuff we do daily, work on applications, and move in and out. Let's go ahead and do all that might be processed. I liked that I added a monthly checklist process for all those little things like how we buy coffee on the process and check to see if we need to order from Amazon at the end of the month. I mean, you know because we might forget and then God's provision of coffee, I don't drink coffee, but government, you know, coffee in the office, you might have an appraisal. So that can be added to the monthly thing of things that we did. Now, we still need to say how to buy it. No, we wouldn't know how to purchase anything. We had to consider. I like to put it out there. So I can start thinking about the company.
Bob Preston 22:03
And they're things under regulation and legal requirements where the process or the system becomes all that more important. I was joking about the toilet paper and the coffee thing. That's more of an office management internal, right? You don't need processes for that thing. What we're primarily talking about are things where you're interfacing with a client or a tenant, or maybe even a vendor, you know, you're trying to protect yourself, and reduce your risk and make it consistent every time,
Paul Kankowski 22:33
Yeah, the way you know what's happening with, you know, finding vendors, onboarding vendors, there should be a process for onboarding vendors. Those are things that you don't start with; you don't start with an onboarding vendor process. But when you get to the point where everything else is going to, that's important, because then you know, they have insurance, you know, that they're, you know, that you're checking them yearly for insurance. And so that process could have a thing where it comes up on your item, hey, you still need to check, so and so penny and a year make sure that their insurance is up to date. If you have a process for that or some way of importing it, you'll remember that five years might go by, and they might be four years without insurance. And that could cause you a big problem if liability happens then.
Bob Preston 23:14
So, do you help your attendees prioritize at your conference, like coming up with the list? And I know it depends upon the stage of their development as a business because a newbie is going to have a long list, and somebody who's been in it, or maybe coming back to your conference for the second, third, fourth time, would have their processes pretty well developed.
Paul Kankowski 23:33
It's very different; like your first day, you're getting very advanced or beginner systems. And that's where we will go through the first day. So, on the first day, you're not creating processes; you're hearing people teach. Then, on the second day, in the morning, you have classes you can choose from from different people. And then at noon, it starts. And then what we have is we have, we have three different types of rooms, we have teaching rooms, teaching room as you go to a room and someone's going to teach you so I always say you go to teaching rooms, you're not going to get much done, but someone's like, I'll have a teaching room on how to create a tenant university because I had attended university where tenants would go through a university, they get a diploma before they moved in, and they had to get that diploma before they could move in. So it told you the processes. It's very similar to the co; it's a teaching room. Then we have class; we have guided practice rooms. We have a person from technology; they're usually if someone from lead simple, we have, we have one, they want eight people. And so we have one of them walking around, and they will help you with any technology you need. If you are working on Process Street, they will help you. They'll help you with anything because they've done it all. They've seen it all. And we have another property manager walking around. And so there might be a focus on the move-in process. We have another room that'll be move-out. We have another space that will be leased. So you go to the room you're focused on, there'll be about 15 to 20 people in there, and you're working on it. You're talking to people, And that is guided practice. And then we have vendor rooms where vendors are, you know, where vendors will be like, Hey, you should buy this because it will help you. So, we have three types of rooms. And the conference starts on Tuesday and ends on a Friday. So it's a long conference. And so you get time to get that done. So we switched it. So, one of my biggest complaints with people is that you need more content for me to go to it. And I've done it because I was too busy in the teaching rooms; I'm like, I don't believe it's my fault. You have a choice we give you, like a Choose Your Adventure book; you read it, Choose Your Adventure book, and you choose which way you want to go. That's the conference you have because we need to have conference rooms. This is a huge suite, like 3000 square foot suites. So we have you working in suites. And different than anything you've ever been to. And then every night we have fun. But that's how you know, so yes, if you are a newbie, many people are there to say, Hey, this is what you need to do. We'll help you with this; this will help you get started.
Bob Preston 26:05
It depends on the pain points of the individuals there. They know their company best, where they need the most help, and what's most urgent. And so they may come in with a shortlist, if I could leave here with these five or these ten processes written, it would be a significant improvement in my business.
Paul Kankowski 26:22
One or two. If I were to do ten processes and three months, that wouldn't be that great. To a newbie, you want to complete two processes in the first three months that you work on processes. You can get those done right, then work on another chip, then work on another two; processes are something where you write only some of your processes. Because first up, your staff will have a tough time when you come back, and you're like, hey, we out. I have the Bible, I wrote the Bible, and we're going to go on. No, do a couple, a couple of chapters at the beginning. And then also, let's say you would move in and out across this; I would tell everyone, hey, why choose my event? Bring the people who do that to the events that help you write it because you want your staff involved. Because if you come down with a directive that this is what the process will be, you will get resistance if they help you write it. And there are times when my staff is like, Hey, we're going to do this. And I'm like, No, I feel strongly that this is how it will be. I give guides where I feel strongly, but they still have input and are willing to be.
Bob Preston 27:29
I want to avoid going down a rabbit hole and going too deep into this. There is a role for artificial intelligence in automation when it comes to systems. What are you seeing? How far should companies take that? Even Lead Simple provides basic automation in their platform, right? And so to some of these other things like Process Street?
Paul Kankowski 27:52
So my take is that Jordan and I have had this conversation many times, and he agrees that if you automate crap, you'll get crap. So automation, if you are a newbie to my conference, you only think about automation once you return next year. For the next year, you could do catch-up TV, like, write the things and put it in there but don't have it. So that chat GPT writes your stuff without a human being looking at it because you might mess up. But get the process. Get it going well, and start thinking about automating a year after the procedure is done well. When I began my process, the meetup was a thing where you could send emails you can put send them directly without ever touching a button. It sends it out and says All through; we let six months go by with someone in Mexico pushing a button and checking it to make sure it didn't say dear owner, it's a Dear Sam or Dear whatever their name was, yeah, to make sure that that's all correct. After six months of it being right, we're like, Okay, we're going to automate it now. We believe it's good.
Bob Preston 29:16
And it allows you to get feedback and correct all your errors. The other thing that cracks me up is when that variable field, dear owner, and the property address are in a different font. Something like that. That is a form letter.
Paul Kankowski 29:29
Yeah. You know, so. So automation is good, but it's getting on the road.
Bob Preston 29:36
I like that. That's an excellent input. Hey, listen, you and I could be talking about this all day. We're friends. It's great to see you. Thanks so much for coming to the show today. But we got to wrap up in the interest of time. I keep these to about 30 minutes. Do you have any last words or thoughts for our listeners today?
Paul Kankowski 29:52
Stay calm by utilizing systems, processes, and procedures. If you've never taken a day off, and you're like, well, I can't go to a conference because I don't take a day off, you're the person who needs to go; you need to start thinking about hiring people, you have a job right now, get a company, own a company, own a business, and systems process procedure, whatever you want to call them. They're the path of freedom; they're the path to being able to ski more. For me, that would be my thing. I know that would be your thing. If I can ski more, I'm a happy camper. So just you know, don't be afraid, get help. That's a great thing about our community, as we're a big community that will help you out.
Bob Preston 30:42
Well, it's the adage that, as the business owner, you should be working on your business, not in your business, right? So this is the ticket to working on your business so you don't have to be involved daily. That is excellent input and advice. If someone wants to learn more about your systems conference, can you tell us about that and the best way to connect?
Paul Kankowski 31:03
The best way to connect is through pmsystemsconference.com. We have a registration up there. We are limited to 150 people; we're about 70-something people signed up right now. And it's, it's in January. So we will set up a pm systems conference.com, And I know until the end of August. It will be for the next ten days, or we'll have a little discount whenever we go. If not, please get in touch with me at my cell phone number. You know, Bob, to put in the thing, you can call me, you can contact me through Facebook, and I'll give you my cell phone number. Please don't hesitate to contact me through Facebook. I'm happy to talk to people. Paul at solutions pro.com was my email. But you know, if you want to talk about systems. I'll talk to anyone for 20 minutes about plans and see if it's right for you.
Bob Preston 31:54
Paul, thanks so much! Great to see you. Great episode. And thanks so much again for coming to the show today.