T he Bo ardRo o m m ag az ine
C E L E B R A T I N G 24 Y E A R S O F E D U C A T I N G T H E P R I V A T E C L U B I N D U S T R Y ISSUE 287
|
VOLUME XXIV JANUARY/FEBRUARY
Vo l um e X X IV, Jan uar y/ Febr uar y 2 0 2 0
Fritz Skeen
Sawgrass Country Club 10 | PUBLISHER’S PERSPECTIVE
46 | LAW & LEGISLATION
THE NEXT FIVE YEARS WHAT CLUB TRENDS SHOULD WE KNOW ABOUT?
DO YOU MAKE NEW YEAR’S RESOLUTIONS?
16 | BOARDROOM BASICS AND BEYOND
ARE YOU STRESSED OUT OR BURNED OUT?
THE PRESIDENT’S COUNCIL ON THE CLUB OF THE FUTURE
68 | ON THE FRONTLINES
110 - 113 | INNOVATIVE IDEAS
Preserve
HELPING CLUBS THRIVE
the places you love to play and support the team that makes it possible. Whether it’s a foursome in the pro shop or a four-top in the dining room, Jonas Club Software has an integrated solution to enhance the member experience from booking to final billing. Join us this year at the CMAA World Conference and Business Expo to learn about the newest ways we’re helping clubs thrive.
When you join Golf Course Superintendents Association of America, you’ll ensure superintendents have the resources they need to provide enjoyable playing conditions and a sustainable future.
Online Ordering MemberInsight
CRM MetricsFirst
Self Serve Kiosk SkyTab
BECOME A
Mobile Point of Sale Shift Manager
Club Management Software of the year Business Intelligence Software of the year CRM of the year
Visit Booth 1223 at the CMAA World Conference and Club Business Expo between February 10 - 11, 2020.
VISIT JONASCLUB.COM
Visit www.gcsaa.org/friend today to become a Friend.
FORT WORTH | PALM DESERT | SCOTTSDALE | BEVERLY HILLS CLUBDESIGNASSOCIATES . COM | 866-484-9853
Barton Creek Resort & Spa, Aus�n, Texas
Recently named “Clubhouse Design Firm of the Year 2018” by Boardroom Magazine.
T�� A���� -W� � � � � � F� � ��...O � � A �� �� � � T�� � . M����� P������� | A����������� | I������� D����� | C���������
The Country Club at DC Ranch, Sco�sdale, Arizona
SCOTTSDALE | BEVERLY HILLS | FORT WORTH | PALM DESERT | 888-217-1117
PHXARCH . COM
DAVE WHITE Dave White is the editor of BoardRoom magazine. If you have comments on this article or suggestions for other topics, please send Dave an email to: dave@boardroommag.com.
EDITOR’S NOTE
Congratulations to BoardRoom’s Top Presidents It’s recognition time again and a tip of the hat this year goes to Fritz Skeen, president of Sawgrass Country Club of Ponte Verde Beach, FL, a Boardroom Distinguished Club, upon his selection as BoardRoom magazine’s Distinguished Club President for 2019. BoardRoom magazine is honoring 24 Private Club Presidents and Board Chairs of the Year – 2019 for practicing what they preach – leadership for the betterment of their clubs – board presidents or chairs that have served as the volunteer leaders of their club. It’s the 12th year BoardRoom magazine has recognized the industry’s top private club presidents for their outstanding work. It’s been a year of achievement for President Skeen, who among other successes has increased the depth of the board orientation and educational process through the club’s Leadership Development Committee and implemented an ongoing members satisfaction survey through ClubIQ. Our congratulations go out to these outstanding presidents and the work they do with their volunteer boards for their private clubs. You can read more about them in our cover stories this issue. n n n
Of course, the Club Management Association of America annual World Conference at the Gaylord Texan Resort & Convention Center in Grapevine, TX remains the focus for many private club general managers and board members in early February. BoardRoom magazine will be well represented again so drop by our booth at the Club Business Expo for a chat. More than 250 exhibitors are expected at the Club Business Expo. n n n
One of our features in this BoardRoom focuses on The President’s Council on the Club of the Future. As explained by Dick Kopplin of Kopplin, Kuebler & Wallace, the concept of The President’s Council, initiated by KK&W, is the result of recurring comments from board members and specifically club presidents, seeking a club leaders’ forum to receive insights from the club industry’s premier consultants. 4
BOARDROOM | JANUARY/FEBRUARY 2020
Of course, a conference such as this provides club general managers and board presidents insight into what’s happening in the industry around the country and as one general manager, Mike Fleig of Greeley Country Club, Greeley, CO, explains, it also “provides a common language that will allow our board president and me to communicate effectively.” Yep, tools in the club’s toolbox. n n n
In a special dispatch to BoardRoom, we’re also featuring a case study on the Milwaukee Athletic Club and its revival, sparked by president David Kriete, a third-generation MAC member. MAC, a few years ago, faced an uncertain future, and as the story suggests, the club likely wouldn’t have made it past 2018 without Kriete pushing an aggressive plan. “I chose to run for the board out of love and passion for the club. I grew up here and have so many memories of me and my parents participating in club activities. I wanted to be part of ensuring the club not only survived, but thrived once we figured out a game plan,” said Kriete. By looking at options the club has been able to initiate a comeback, supported by MAC’S members, along with an aggressive Legacy Membership campaign that has paid dividends. “The club is refocusing its brand and purpose to be the heart of Milwaukee business, athletics and wellness. I have no doubt this will be something extraordinary and worth every minute of the past years’ efforts,” expressed Kriete. The reimagined MAC expects to be back in full operation by later this year, to the benefit of almost 800 members. n n n
And it’s time for just a little bit of celebration as BoardRoom magazine enters its 24 year as the premier magazine of the private club industry. Thanks to all our supporters – readers, contributors and advertisers. And here’s to the future! B R
Publisher/CEO
Co-Founder/CEO
John G. Fornaro
John G. Fornaro
Editor/Co-Publisher
President
Dave White
Keith Jarrett
Assoc. Editor/VP Creative/Co-Publisher Heather Arias de Cordoba
Chief Analyst Frank Gore
Innovative Ideas Editor
Chief Information Officer
Meghan Thibault
Jeff Briggs
APCD Executive Director
Quality isn’t Expensive It’s Priceless!
Executive Director
Bill Thomas
Editorial & Marketing Director Dee Kaplan
Business Development
Bill Thomas
Executive Assistant/ Director of Support Joshua Nuzzi
Joshua Nuzzi
Accounting/Subscriptions Susan Giem
Contact Information
www.DistinguishedClubs.com (949) 376-8889
Contact Information
www.BoardRoomMagazine.com www.apcd.com (949) 376-8889
Featured Columnists Henry Delozier John G. Fornaro Bonnie J. Knutson Dick Kopplin
Nancy M. Levenburg Jerry McCoy Gregg Patterson Kevin F. Reilly
Bill Schwartz Dave White Edward T. Yoder
Contributing Writers Bruce Barilla Nancy Berkley Chris Boettcher Bill Boothe Lisa Carroll Jarrett Chirico Ron Cichy Bennett Delozier Dave Doherty
Philip J. Harvey Larry Hirsh Lynne LaFond DeLuca Michael Lee Marian McGill Richard McPhail Steve Mona Dave Moyer Peter Nanula
Philip G. Newman AJ Redetzke Whitney Reid Pennell Robert Sereci Rosie Slocum Robyn Stowell Frank Vain Gordon Welch Nicholas Wilhelm
The
most trusted name in executive search and consulting for over 24 years !
Strategic Partners and Allied Associations
EXECUTIVE SEARCH FIRM OF THE YEAR 13TH YEAR IN A ROW
BoardRoom magazine is published by APCD Inc. 1100 S. Coast Hwy. #309 Laguna Beach, California 92691 The BoardRoom magazine (USPS 022516, ISSN 15537684) is a bi-monthly trade publication. Issue 287 Periodical postage paid at Laguna Beach, Calif. and additional mailing offices. POSTMASTER: Send address changes to THE BOARDROOM magazine, P.O. Box 9455, Laguna Beach, Calif. 92652. Reach The BoardRoom magazine at (949) 376-8889 ext. 1 or email sue@boardroommag.com or johnf@apcd.com or visit the website at www.BoardRoomMagazine.com.
CLEVELAND / DENVER / JUPITER / NAPLES NEW YORK / SCOTTSDALE / WASHINGTON D.C.
WWW.KKANDW.COM
480-443-9102
THE MOST AWARDED
F&B MANAGEMENT SYSTEM IN THE CLUB INDUSTRY
USED BY THE INDUSTRY’S MOST PRESTIGIOUS CLUBS
OCEAN REEF CLUB
BOCA WEST COUNTRY CLUB
CHEROKEE TOWN & COUNTRY CLUB
JOHN’S ISLAND CLUB
THE POLO CLUB OF BOCA RATON
CAPITAL CITY CLUB
COLONIAL COUNTRY CLUB
WAIALAE COUNTRY CLUB
OLYMPIA FIELDS COUNTRY CLUB
SOUTHERN HILLS COUNTRY CLUB
COUNTRY CLUB OF VIRGINIA
RIVER OAKS COUNTRY CLUB
FOOD-TRAK F&B management software, and the SCI teams that implement and support it, have been recognized year after year for excellence. Larger clubs need an enterprise-level F&B system for inventory, procurement and culinary control that is capable of integrating their accounting, POS, catering and distribution ordering systems. Expanded, fine-tuned and perfected over 40 years, the FOOD-TRAK system is capable of handling the most complex environments in food service. The intelligent use of scanners and mobile devices make data collection fast, accurate and even fun. And our team of highly trained, club-experienced professionals not only implement the system, but orchestrate a smooth stress-free transition for your staff. If your club is a Platinum or Distinguished Club, then perhaps it’s time to consider partnering with SCI’s award-winning team to take your F&B management and control capability to the next level.
Contact our club account managers at 800.553.2438 or visit our web site at www.foodtrak.com to learn more.
®
DEVELOPERS OF DEVELOPERS OF FOOD & BEVERAGE MANAGEMENT SYSTEM
FOOD & BEVERAGE MANAGEMENT SYSTEM
See you in Dallas at the CMAA World Conference & Expo! Booth #1317 Call 800.553.2438 for special one-on-one VIP appointments
CONTENTS | JANUARY/FEBRUARY 2020 PUBLISHER’S PERSPECTIVE | 10
GLOBAL PERSPECTIVES | 12
PLIGHTS AND INSIGHTS | 14
THE NEXT FIVE YEARS
KEYS TO CREATING A CLUB LEGACY
MEASURING POST-EVENT PERFORMANCE
BY HENRY DELOZIER
BY NANCY M. LEVENBURG
Change is constant … and the private club industry offers an excellent example of that. But what of the future? What are some of the trends members of private clubs can expect over the next five years …what do boards and management need to know about what’s coming down the pipe and what changes are private club boards and management initiating?
Legacy is a concept dear to many private club board members. They love their club and want to leave a marker of their contribution to its success and longevity as testimony to their service. But sometimes the most valuable forms of legacy are those that are less visible, a lesson we can learn from the much-admired champion rugby squad of New Zealand, the All Blacks.
Your private club just finished hosting a big special event for someone – maybe a member of your club, or maybe it was an event hosted by someone from the general public. Perhaps the event was a bridal shower, or a wedding reception, or a Chamber of Commerce dinner. The big question now is, do you know how well your club performed?
BOARDROOM BASICS & BEYOND | 16
WINNING STRATEGIES | 18
CLUB FACTS & FIGURES | 62
THE PRESIDENT’S COUNCIL ON THE CLUB OF THE FUTURE
CAPITAL INVESTMENT PROJECTS
NON-MEMBER REVENUE REPORTING REQUIREMENTS
BY DICK KOPPLIN
BY KEVIN F. REILLY AND EDWARD T. YODER
“Driving sustainable success by embracing strategic governance over operational governance.” That was the theme for the first President’s Council held recently at Medinah Country Club and hosted by the club’s president Joe Gattone and general manager/ COO Robert Sereci.
The club industry is booming with capital investment. All over the country, clubs are renovating and innovating. Some areas it’s just a contest to see who can build it bigger and better. However, over the years we have run into so many circumstances that either have stalled club projects, wasted club money or built something less efficient than it should be, causing long term operational issues.
MEMBERSHIP MUS INGS | 84
FOOD FOR THOUGHT | 92
TRIBAL MAGIC | 114
ALEXA, MAKE ME A TEE TIME
WHAT SHOULD MY FOOD COST BE?
BY BONNIE J. KNUTS ON
BY BILL SCHWARTZ
THE FIVE-MINUTE “ONCE-A-DAY-EVERYDAY” TRAINING WORKSHOP
Meet Siri, Echo and Cortana. Like its cousins, Siri and Cortana, Alexa is one of a new generation of voice-activated virtual assistants (VAVA) that are changing how we switch what we see on our flat screens, how we remember to lock our cars, adjust the thermostat, turn off the lights, or ask a question. It is also on the cusp of transforming how we can operate our clubs – for both members and for employees.
Every foodservice operator knows what their food cost was for any given month, but the question they ask themselves is: What should it have been? Often the reported food cost is compared to the budgeted food cost to determine this. While that comparison is valid for business reasons, it’s not valid for operational reasons.
WHAT CLUB TRENDS SHOULD WE KNOW ABOUT? BY JOHN G . FOR NAR O
B Y J ER R Y M C C O Y
At the end of last year, many clubs received the same form letter from the IRS, Letter 6176 (4-2019) Catalog Number 72211B. It appears to have been generated by the IRS and sent to many 501(c)(7) exempt organization reporting non-member income, regardless of the non-member percentage of gross receipts.
BY GREGG PATTERSON
I spent all this money for a Known By Everyone Who Matters Top Dog Hospitality Consultant to deliver his guaranteed to turn ‘em around in an eight hours all day, all staff service workshop. The team cheered then promptly forgot what the top dog taught! And when all this expensive workshopping got done, The Wanna Be Country Club ended up with ZILCH within 24 hours of the top dog’s exit. The board’s bummed! I’m bummed.
SECTIONS LAW & LEGISLATION . . . . . . . . . . . . . . . 46
DEPARTMENTS
Do You Make New Year’s Resolutions? By Robyn Stowell
A SSOCI A TI ON OF P RI V A TE CL UB D I RE CTORS . . . . . . . . . . . . . . . . . . . . . 38
A Private Club Board Member - It’s A Job Like None Other!
PERSONAL DEVELOPMENT . . . . . . . . . . 58
By Gordon Welch
Got Grit? Got Grit!!! By Lisa Carroll
TE NNI S COMMI TTE E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Exciting News to Share
CASE STUDY . . . . . . . . . . . . . . . . . . . . . . 60
Creative Solution Saves Milwaukee Athletic Club
By John R. Embree
Special to BoardRoom
E XE CUTI V E COMMI TTE E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Focusing On the CMAA 2020 World Conference and Club Business Expo
ON THE FRONTLINES . . . . . . . . . . . . . . . 68
By Michael C. Davis and Randy Ruder
Are You Stressed Out or Burned Out? By Robert Sereci
CUL I NA RY & CA TE RI NG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
TECHNOLOGY PERSPECTIVE . . . . . . . . . 70
F&B and Event Trends that Adapt Well for Clubs
Tips on Negotiating Software Contracts
By Lynne LaFond DeLuca
By Bill Boothe
E XE CUTI V E COMMI TTE E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
NANCY’S CORNER . . . . . . . . . . . . . . . . . 80
Do You Offer Golf Hospitality?
Developing the Career Planning Roadmap
INNOVATIVE IDEAS . . . . . . . . . . . . 110-113
G RE E N COMMI TTE E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
By Mike Mueller
By Nancy Berkley
Champions Run Ledgerrock Golf Club Philadelphia Country Club
GCSAA Abassadors Take Golf’s Message to Capitol Hill By Michael Lee
CLUB SERVICE . . . . . . . . . . . . . . . . . . . . 118
G OL F D I SP UTE RE SOL UTI ON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
By Chris Boettcher
By Rob Harris
Truck Driver Hit by Errant Golf Shot Loses Lawsuit
Who let the DOGS in?
COMMITTEES EXECUTIVE COMMITTEE . . . . . . . . . . . . 28
HOUSE COMMITTEE . . . . . . . . . . . . . . . . 42
By Ron Cichy
By Bruce Barilla
Your Values and Beliefs
EXECUTIVE COMMITTEE . . . . . . . . . . . . 30
Where’s the Goal Line? By Larry Hirsh
EXECUTIVE COMMITTEE . . . . . . . . . . . . 32
Locker Suite - Beyond The Next Level! INSURANCE COMMITTEE . . . . . . . . . . . . 44
Protecting Your Club from Price Increases By Philip J. Harvey
New Year Reflections
RACQUET COMMITTEE . . . . . . . . . . . . . 48
EXECUTIVE COMMITTEE . . . . . . . . . . . . 34
By Jarrett Chirico
By Steve Mona
Women in Leadership Is It Supply or Demand?
By Whitney Reid Pennell EXECUTIVE COMMITTEE . . . . . . . . . . . . 36
It’s the Member Experience That Counts
By Nicholas Wilhelm
MEMBERSHIP COMMITTEE . . . . . . . . . . 86
Changing Tide In Membership Demographics
RACQUET COMMITTEE . . . . . . . . . . . . . 50
MEMBERSHIP COMMITTEE . . . . . . . . . . 90
By Dave Moyer
By AJ Redetzke
Creating A Vision For Your Racquets Program
FOOD & BEVERAGE COMMITTEE . . . . . 40
By Dave Doherty
Communication: It Works!
FINANCE COMMITTEE . . . . . . . . . . . . . . 98
The Difficulty of Breakeven Budgeting By Peter Nanula
EXECUTIVE COMMITTEE . . . . . . . . . . . 102
Lifestyles, Values, and Experiences By Bennett Delozier
By Marian McGill
MEMBERSHIP COMMITTEE . . . . . . . . . . 88
GREEN COMMITTEE . . . . . . . . . . . . . . . . 54
By Richard McPhail
The Value of Inventory Automation For Private Club Operations
Creating a Successful Pickleball Program
By Frank Vain
The Elephant in the Club - Part VI The Club Restaurant
FOOD & BEVERAGE COMMITTEE . . . . . 76
Budget Building Blocks By Rosie Slocum
Calendars Are Not Just for Holidays and Birthdays
FINANCE COMMITTEE . . . . . . . . . . . . . . 96
Business Decisions in Turbulent Economic Times By Philip G. Newman
COVER STORY - PAGE 20
Sawgrass Country Club’s Fritz Skeen Selected as Distinguished Club President By Dave White 2019 TOP PRESIDENTS . . . . . . . . PAGE 26
JOHN G. FORNARO
PUBLISHER’S PERSPECTIVE
John G. Fornaro is the publisher/CEO of BoardRoom magazine, co-founder/CEO of Distinguished Clubs and the CEO of the Association of Private Club Directors (APCD). If you have comments on this article or suggestions for other topics, please contact John Fornaro at (949) 376-8889 or via email: johnf@apcd.com
The Next Five Years What Club Trends Should We Know About? Change is constant … and the private club industry these days offers an excellent example of that. There has been significant change in the industry especially with the recovery from the major recession this country experienced in 2008. But what of the future? What are some of the trends members of private clubs can expect over the next five years …what do boards and management need to know about what’s coming down the pipe and what changes are private club boards and management initiating? In this Publisher’s Perspective, the first in 2020, we’ve asked prominent people in the private club industry to give us their perspective about the future: Here are the thoughts and opinions of the industry experts, presented in alphabetical order.
members who frequent the fitness center or spa, members who spend a lot in F&B). However, future club technology will be person specific. The focus will be on using technology to enhance the individual member’s club experience. A number of technologies will be deployed to accomplish that task, including member name recognition, recognizing individual family member preferences, club-to-member communications focused on the individual, and mining social media postings to better understand what their members are really thinking. 2) What’s driving these new trends? Is it in response to members’ demands or are new trends driving the change that demands a response from private club boards and management? The GenX generation will be replacing Baby Boomers as the predominant source for new club members. Gen X’ers conduct most of their business and social interaction on their mobile de-
The Benjamin Franklin quote: “If you fail to plan, you are planning to fail,” remains true today, especially for private clubs that fail to plan. Successful clubs create a strategic plan, a five to 10-year strategic plan, that yes, allows for review, but which doesn’t bow to board members’ personal agendas. Failing clubs have no plans. They suffer from micromanaging and unproductive boards that focus on emotional or self-interests and not strategic issues. Bill Boothe, president, The Boothe Group, independent technology consulting firm. Question 1) What do you see as future trends in the private club industry that we should know about? Currently the primary focus of club technology is on “operations” such as accounting and billing, POS and inventory, sales and activity reporting, payroll and timekeeping. And that technology focuses on either the membership as a whole, or on subgroups of members (golfers, tennis players, 10
BOARDROOM | JANUARY/FEBRUARY 2020
vices. In club governance they will expect technology to be used throughout the club’s operations. And they will expect to have access to robust business intelligence and data mining. This Gen X tech-savvy orientation is a sharp departure from the current ruling class – the Boomers. While Boomers are embracing technology and are receptive to new advances, they are not completely comfortable in a tech environment. Gen X’ers are not only comfortable with technology, they are comfortable with new and cutting-edge technology – and they are constantly seeking ways to use technology in every facet of their lives. SEE PUBLISHER’S PERSPECTIVE | 120
HENRY DELOZIER Henry DeLozier is a principal of Global Golf Advisors. You can contact him at: hdelozier@globalgolfadvisors.com.
GLOBAL PERSPECTIVES
Keys to Creating a Club Legacy Legacy is a concept dear to many private club board members. They love their club and want to leave a marker of their contribution to its success and longevity as testimony to their service. Legacy is bestowed in many forms. Visible signs might include upgraded locker rooms, new sand bunkers on the golf course or a whizbang golf simulator. But sometimes the most valuable forms of legacy are those that are less visible, a lesson we can learn from the much-admired champion rugby squad of New Zealand, the All Blacks. The All Blacks won the inaugural Rugby World Cup tournament in 1987 and have won two since, in 2011 and 2015. The legacy of the All Blacks is consistent excellence and it can serve as a guide for club boards wishing to create a legacy of excellent governance. For the All Blacks, legacy-building revolves around three cultural keys: • Leave the jersey in a better place (than you found it). Make the club better through your efforts. • Be humble. No one player is of greater importance than the team. This essential value from New Zealand’s Maori tradition promotes the power of teamwork. • Sweep the shed. For the All Blacks the “shed” is the locker room. No one is needed to clean up the blood, mud and debris after an All Blacks match. Their team culture is enacted through the humble act of requiring little of others. That is legacy at work. Private clubs can achieve similarly enviable results if they choose to do so. Five keys for boards dedicated to creating a legacy of trustworthy governance for their clubs are: 1. Dedicate the board to excellence. The cornerstones of excellent club leadership are strategy, leadership, finance and governance. Each board member should understand the role they play in one or more of those functions. Excellence in each of the four segments is a formula for a successful legacy. This means that members arrive at board meetings prepared, having read the committee reports and fully understand the club’s strategy. What’s more, they should be current on the club’s financial position and condition and focused on board responsibilities. 2. Deliberate as many; govern as one. Capable and productive boards are composed of members who bring a range of needed skills and perspectives to the job. This mixture ensures conflicting viewpoints and, in some cases, differences of opinion. That’s healthy and should be welcomed. 12
BOARDROOM | JANUARY/FEBRUARY 2020
But those differences should be fully addressed and resolved internally, so outside the confines of the boardroom, the board speaks as one. Great boards are discreet and honor the shared commitment of confidentiality. Members trust such boards and with good reason. The legacy they leave is one of professionalism and respectful leadership. 3. Create a board policies manual (BPM) and use it. The concept of a BPM originates with John Carver, the creator of the policy governance model. Fred Laughlin at Global Golf Advisors, a career expert in non-profit governance and co-author of the Club Governance Model, adapted the teachings of Carver to provide club boards with a five-part guide to effective governance. “Good governance is one of the most controllable of all matters at private clubs.” Laughlin says. The keystone for a useful BPM, according to Laughlin, is for the board to establish its core principles or values, which describe how the board will govern. These governing principles point the board and the club toward a North Star of trustworthy leadership. 4. Distinguish between governance and management. The board and club management have clearly defined roles. Excellent boards understand that the board governs and management operates. Along this division of duties, the board’s focus should be on the club’s balance sheet, monitoring cashflow and ensuring adequate funding for capital improvements and programs. The financial condition of the club is a primary responsibility of every club board; leaving the club on sound financial footing is a worthy legacy. 5. The board speaks with one voice – in writing. Boards are deliberate in their actions and clear in their intent. That’s why they leave little to interpretation and prefer to communicate their decisions in writing. Individual board members do not single themselves out from the board. A highly respected board preserves the confidentiality of the boardroom. Indiscreet conduct is not appreciated nor tolerated. The All Blacks have a 77 percent winning record in test match rugby and are the only international men’s side with a winning record against every opponent. That’s a legacy of consistent excellence that is passed from generation to generation. Great boards can do the same when their leaders follow the club’s guiding principles, know their roles and speak and act transparently. That’s a legacy to be proud of. BR
Executive Search and Consulting
The value of peripheral vision. Full-service firm serving the private club and boutique resort industries.
denehyctp.com FAIRFIELD, CT 203 319 8228 JACKSON HOLE, WY 307 690 7931 LOS ANGELES, CA 310 409 8957
Alison Savona Senior Consultant
Kirk Reese Executive VP
750+
PROJECTS OVER 20 YEARS
350+
CLUB & PRIVATE EQUITY CLIENTS
Barbara McAuliffe Senior Consultant
Dan Denehy President
EXECUTIVE SEARCH
Club Management Financial Management Golf Operations Food and Beverage Agronomy Athletics Resort Management Membership
Karen Alexander Senior Consultant
Robert James Vice President
CONSULTING
Erin Redgate Marketing Associate
Governance Strategic Leadership Consulting Operational Reviews Performance Management Executive Compensation Club Assessment and Acquisition Management Advisory Services Club Surveys
NANCY M. LEVENBURG
PLIGHTS AND INSIGHTS
Nancy Levenburg, Ph.D., is a Professor in the Seidman College of Business at Grand Valley State University in Grand Rapids, Michigan. She has published numerous articles in business and professional journals, and has assisted over 200 organizations with strategic planning, marketing strategy, and improving operations. She is the President of Edgewater Consulting, and is a member of Spring Lake Country Club in Spring Lake, Michigan. For more information, contact her at: levenbun@gvsu.edu or 616-331-7475.
Measuring Post-Event Performance “There is always space for improvement, no matter how long you’ve been in the business.”- Oscar De La Hoya Your private club just finished hosting a big special event for someone – maybe a member of your club, or maybe it was an event hosted by someone from the general public. Perhaps the event was a bridal shower, or a wedding reception, or a Chamber of Commerce dinner. The big question now is, do you know how well your club performed? That is, was your client thoroughly satisfied with all aspects of planning and hosting the event at your club? Why Is post-event feedback important? First of all, this event could be just the beginning of a future relationship with your client – the first of many more events to come. For example, the bride who just had a bridal shower at your club will obviously need a venue for the wedding reception. So how well you did with planning and hosting her shower might well be the key to securing her wedding reception gig.
A few years down the road, children may enter the picture… will that wife (now a future mom) opt to host a baby shower at your club? Then, what about children’s birthday parties? Anniversary parties or other family gatherings? Or, what about that Chamber of Commerce dinner? A successful first-time event could be pivotal in securing their regular monthly meetings… and a steady stream of revenues! See what I mean? It’s vital that the first-time client is thoroughly satisfied with all aspects of your venue – including your location and facilities, food and service. 14
BOARDROOM | JANUARY/FEBRUARY 2020
A second, and very important reason why seeking postevent feedback is important is that it can be instrumental in improving your club’s future performance. If anything was amiss, you want to know about it… and you want to know about it NOW so that it can be corrected. Feedback is fundamental to continuous improvement. What feedback do you need? How the client perceives the event coordinator’s responsiveness is critical. Surely questions or concerns arose as the event was being planned… did they respond to them quickly, accurately and helpfully? Was the event well-organized and well-coordinated? Did your club adhere to the client’s timeline? Was your club able to accommodate any special requests, such as vegan, vegetarian or kosher meals? Wheelchair access? Highchairs? Was the food appropriately portioned and attractively presented? Was it delivered to guests at the correct temperature? How friendly was the staff? Did they welcome guests graciously into the club? Did the club adhere to any BEO (banquet event order) that was prepared? Was the final invoice for the event delivered to the client when promised? How do you obtain feedback? While some private clubs use web-based surveys (such as Survey Monkey) to get post-event feedback, one event planning firm recommends an in-person wrap-up immediately following the event, either within a few hours or the next day (so that their experiences and thoughts are still fresh in their minds). In addition, there’s a couple of questions that should always be asked of clients: 1. What did the club do well with the event that it should continue doing in the future? 2. Could the event have been improved? If so, how? Were there any items or concerns that were overlooked? 3. If you had it to do over, would you choose to host your event at XYZ Club? 4. And finally, is there anything else (e.g., suggestions or feedback) you’d like to add? Seeking clients’ feedback on hosting their event at your venue gives you one more opportunity to express your gratitude for their business. They could have hosted their event at any number of places, but they chose your club. Be sure to thank them for that… and do so graciously! BR
RICHARD KOPPLIN
BOARDROOM BASICS AND BEYOND
Dick Kopplin is a partner in Kopplin Kuebler & Wallace, an executive recruiting firm providing services to the private club industry. The company has offices in Scottsdale, Arizona, Jupiter, Florida and Cleveland, Ohio. He can be contacted at (480) 443-9102 or via email: Dick@kkandw.com
The President’s Council on the Club of the Future Insights and A Common Language for Club Presidents “Driving sustainable success by embracing strategic governance over operational governance.” That was the theme for the first President’s Council held recently at Medinah Country Club and hosted by the club’s president Joe Gattone and general manager/COO Robert Sereci. More than 140 club presidents, board members and general managers representing clubs from the United States as well as Canada attended the one-day event. Fifteen nationally recognized speakers and prominent educators in the private club world presented a stimulating and thought-provoking program for the day. As well, Joe Gattone, president, Medinah Country Club, John Adams, president, Scioto Country Club, Erik Becker, president, Cherokee Town and Country Club, Jeff Mapstone, president, The Country Club of Rochester, and Joe Trauger, president, Mount Vernon Country Club participated in a panel discussion let by Tom Wallace of Kopplin Kuebler and Wallace and Jim, Butler, CEO of Club Benchmarking. The concept of The President’s Council is the result of recurring comments from board members and specifically club presidents, seeking a club leaders’ forum to receive insights from the club industry’s premier consultants. Additionally, there’s a strong desire to build lasting connections with other club presidents and board members facing similar leadership challenges. The council provided the opportunity to share ideas, think creatively and examine the best club governance practices while networking with other board members. Steve Diamond, president of Lake Charles Country Club commented, “Discovering the resources that allow our board to make data driven decisions was great. Learning about the tools at our disposal to track member satisfaction and member retention was absolutely worth the travel.” Willie Mount, an accomplished leader in her own right as mayor of Lake Charles, a former State Senator and past president of Lake Charles Country Club observed, “I was pleased to see accomplished women here. I discovered that several of the managers from major clubs were women, and there a number of female past presidents of the Club Management Association of America. This council provided a fascinating view of the club industry as a whole.” SEE BOARDROOM BASICS | 108 16
BOARDROOM | JANUARY/FEBRUARY 2020
lifestyle master planning • clubhouse design + detailing • furnishings
Clubhouse Master Planning
Boardroom Magazine Excellence in Achievement Award Winner
contact: Craig J. Smith csmith@c2limited.com
Christina H. Romann cromann@c2limited.com
Tel: 203.259.2555 www.c2limited.com
JERRY MCCOY
WINNING STRATEGIES
Jerry N. McCoy, MCM, is the president of Clubwise, LLC, a consulting firm specializing in strategic planning, master planning, operational audits and governance issues. Clubwise is the 2017, 2018, 2019 strategic planning, capital funding and facility enhancement company of the year. Jerry received the Lifetime Achievement Award for BoardRoom Magazine in 2018. He can be reached at www.clubwiseconsulting.com or CMAAMCM@msn.com
Capital Investment Projects I Can’t Believe They Did That
The club industry is booming with capital investment. All over the country, clubs are renovating and innovating. Some areas it’s just a contest to see who can build it bigger and better. That’s OK I guess, if the environment calls for it, or the competition is forcing it on you. However, over the years we have run into so many circumstances that either have stalled club projects, wasted club money or built something less efficient than it should be, causing long term operational issues. Let’s take a look at a few of the actual situations over the year that have actually occurred. To address the problems, we have combined the circumstances of more than one club together to get the examples. Club number one: This group of clubs have backed themselves into a corner. Either through bad management, questionable governance or aggressive special interests to get them in the situation they are in today. They have placed themselves in a very difficult position. Their membership is receding because of tired facilities, tight budgets, aggressive dues increases. They also have some significant debt from long ago work that was needed. Now they assume they need a consultant to fix the problem. Let me say that it’s never too early to do strategic and financial planning. If every business waited until there was a crisis before they planned for the future, our economy would be in the dumper. Can these clubs be saved? Sometimes, with aggressive planning, a willingness to change and the will to undergo some pain. It’s really fun to be part of success stories from group one clubs. Club number two: These clubs are in reasonable financial condition. The problem is they don’t know what they want to be when they grow up. For an extended period of time the leadership has been arguing about what to renovate and where the money should be spent. They have more total capital needs than they want to take all at one time. 18
BOARDROOM | JANUARY/FEBRUARY 2020
In general, they can’t come to a conclusion on what is important now and what the resources should be directed. The problem is they forgot what business they are in. You have to remind them they are in the dues business. That means they have to retain and grow membership. A great rule of thumb in the club industry says “If you want to know what you club should look like in five years ask anybody who has joined in the last two years. This is your present market. If you are providing high value and satisfaction to this group, they are more likely to invite their friends and business associates to join. Remember, these are new members. They have some friends in the club. They also may have large social circles outside the club who they socialized with pre-membership. Club number three: These clubs have been fooling around the issues for some time and they are ready to go. This rush to judgement causes a lot of problems. They waste money unnecessarily on planning fees because of lack of research. They have aggressive timelines. Because of the rush, normally the financial plan may miss critical parts that provide sustainability. The problem is that it is better not to do something than to do it wrong. Wrong either operationally or financially. Financial mistakes are a major concern as normally they are budget shortfalls. Poorly managed projects cause members to lose trust in the leadership. The next time the club needs a project they will be less willing to support the project because they don’t trust those in charge. Club number four: These clubs are overly aggressive in taking projects to the members. They appear to be wasteful or are focused on facilities that the members feel unnecessary, or that negatively impact other area of the club. I’m aware of three of my larger clients that have taken big projects to the members that were initially turned down until they were pared back. The problem here is the leaders don’t care what the members think. They believe they know what is right and they try to drag the members along kicking and screaming. Normally the members fight back causing ill feeling. Club number five: These are the club leaders that feel they know more than the professionals. The committee is overly involved in the schematic design and operational planning. They promote designs that don’t function well operationally or waste labor over the long term. These clubs can take a well thought out project and turn it into a nightmare. What they don’t understand is that the long-term issues built into the project will be blamed on them for years to come. And guess who has to deal with the aftermath. Your favorite GM. Don’t let your project mirror the mistakes of these clubs. Be proactive. There are so many resources available and definitely share this article with your board. B R
The Award-Winning Agency For Private Clubs 7x
Website Company Of the Year Winner
36x
Interactive Media Award Winner
info@membersfirst.com | 508-653-3399
Visit Booth 1222 at the CMAA Club Business Expo between February 10 - 11, 2020
See for yourself at www.membersfirst.com
COVER STORY PACKAGE |
BY DAVE WHITE, EDITOR
Sawgrass Country Club’s
Fritz Skeen Selected
Boardroom’s Distinguished Club President for 2019 “What makes Fritz Skeen a unique president is his ability to communicate with our diverse membership and collectively blend those voices and ideas.”
– Donna Fiedorowicz, Chair of Golf Committee, Sawgrass Country Club And so goes the praise for Fritz Skeen, president of Sawgrass Country Club of Ponte Verde Beach, FL, a Boardroom Distinguished Club upon his selection as BoardRooms’ Distinguished Club President for 2019. BoardRoom magazine this year is recognizing 24 Private Club Presidents and Board Chairs of the Year – 2019, for practicing what they preach – leadership for the betterment of their clubs – board presidents or chairs who serve as the volunteer leaders of their club. It’s the 12th year BoardRoom magazine has recognized the industry’s top private club presidents for their outstanding work. This year nominations and applications were received from different clubs throughout Canada and the United States. “Our selection of the top 24 presidents and Fritz Skeen as our Distinguished Club President signifies another successful search through the nomination of leaders who have contributed so much to their private clubs and their member experience,” expressed John Fornaro, Boardroom magazine’s publisher and CEO. “We honor board leaders, exemplary individuals, who go beyond the basic requirements of governance and work collaboratively with the club’s management. The award underscores the role that a board president and his leadership play in driving a club’s success and contributing to the club’s long-term health. “The non-profit private club industry is the most difficult industry of which to be a board member or manager. Board members, who are also the shareholders (owners) of the club, are also the customers. Often fraught with conflicts of interest, a private club can be very challenging to manage,” Fornaro added. “Through the process of collaborative governance, the general manager, the club’s president and the board members are meant to work collaboratively. We recognize board presidents that don’t delve into micromanaging. “Micromanagement is not only frustrating for management, but also wastes board members’ often limited time to do their actual job, which is directing … setting policy, and not managing the organization or operations. That’s management’s job,” Fornaro emphasized. “This is a wonderful achievement for Fritz Skeen,” acknowledged Gordon Welch, APCD, the spearhead behind the Boardroom Institute, the on-line training arm for private club board members. “Congratulations. The Association of Private Club Directors (APCD) is thrilled to recognize this outstanding achievement and award,” he added. The impetus for BoardRoom’s Top President recognition program comes from its sponsors, the Association of Private Club Directors, the parent organization of Boardroom magazine, and Kopplin Kuebler & Wallace, one of the country’s leading private club industry consultants and executive search firms. “Kopplin Kuebler & Wallace has been fortunate over the past number of years to partner with BoardRoom magazine in recognizing the dedicated individuals who are willing to serve their club as ➤ 20
BOARDROOM | JANUARY/FEBRUARY 2020
PICTURED LEFT TO RIGHT: C.W. COOK, GM/COO AND FRITZ SKEEN, CLUB PRESIDENT
from Cover Story | 20
president,” expressed Dick Kopplin, partner in KK&W with Kurt Kuebler and Tom Wallace. “Our travels allow us to meet with dozens of club presidents every year and we’re always impressed with their level of commitment to the betterment of their clubs. That’s why we are so happy to assist BoardRoom in honoring these unpaid volunteers who give so much of their time to improving the governance and management at the clubs they love,” intoned Kopplin. “We know this year’s nominees offered so much selection, but we are pleased to see the recognition of President Skeen as BoardRoom’s Distinguished Club President of the Year. He embodies so many of the qualities we see in outstanding club presidents. He is someone who listens to his fellow board members and just as importantly to the club members. “We salute these unpaid volunteers who are truly committed to enhancing the club experience for their fellow members. Along with BoardRoom magazine, we salute them and want them to know we appreciate their efforts,” Kopplin added. A CLUB HONOR
“While I personally appreciate this award, I think that it’s really an honor for our club and the Sawgrass Country Club presidents and boards of today and yesterday,” President Skeen expressed. “At the time I joined Sawgrass Country Club, the board moved to the strong general manager/COO model. The succeeding presidents and boards made good critical decisions on adding a monthly operating capital and facility funding fees. “This allowed the club to build a 6,000 square foot fitness center, renovate our 27-hole Ed Seay-designed golf course, keep our 13 tennis courts in great shape and do a $3 million renovation of our beach club, with only short-term borrowing,” Skeen added. “Today with a new 65,000 square foot members’ clubhouse being erected, we will have a moderate increase in that facility funding fee and have a fiscally conservative plan in place that funds the repayment of the clubhouse loan. “ Sawgrass Country Club was founded in 1974 by Jimmy Stockton and developed into one of our nation’s premier residential country clubs. Jimmy Stockton hired Ed Seay, before he became partners with Arnold Palmer, “to design a championship golf course to resemble Troon, if Troon had palms and ponds.” Ed Seay succeeded, and Sawgrass Country Club was born. Sawgrass Country Club hosted one of the PGA TOUR’s premier events, The Players Championship, for five years from 1977 to 1981, after which the tour moved the championship to their newly developed and present home TPC Sawgrass. Jack Nicklaus, Ray Floyd, and Lee Trevino were a few winners of The Players Championships held at Sawgrass Country Club. Today, Sawgrass Country Club is a premiere member-owned private club in Ponte Vedra Beach, Florida, bordering the Atlantic Ocean and conveniently nestled approximately 30 minutes from Jacksonville or St. Augustine. Sawgrass with 1,475 members is at full capacity with a wait list. 22
BOARDROOM | JANUARY/FEBRUARY 2020
Several changes highlight the achievement of President Skeen during his term as president. They include: • Increased depth of the board orientation • Successful onboarding of new GM/COO • Continued increased emphasis and funding for ongoing facility maintenance • Implemented an ongoing members satisfaction survey through ClubIQ, instead of a large survey on a biannual basis. “Fritz Skeen has done a great job as President of Sawgrass Country Club for the past year and a half or so,” said Kurt Kuebler of KK&W, who has watched the work of President Skeen. “First, he oversaw the hiring of a new GM/COO at a critical time in the club’s history because there had just been membership on a vote/approval for a new $20 million golf clubhouse. “It was critically important navigating those waters as the former GM/COO had been there for nine years and exacting communications were key to member support and approval. President Skeen did an outstanding job of reassuring members, gaining their support and keeping them informed while at the same time being actively involved in the search for a new GM/COO. “Since then, the project is well underway, the new GM/COO has hit the ground running in a highly supportive governance model that Fritz has been able to steward – allowing the GM/COO to do exactly what they asked him to do upon arrival….run the operations, while leaving the policy, governance and strategic issues to the board,” Kuebler explained. “Fritz has encouraged C.W. Cook, that GM/COO, to be a highly active “thought partner” with the board and treats him with appropriate respect and is deferential to operations. At the same time, he provides GM Cook with outstanding guidance, input and support, when asked to do so. He hasn’t pushed his objectives but has taken his fiduciary role as the ’steward’ or chair of the organization to heart.” A major impetus for President Skeen has been the educational process for the club’s board of directors. “The process begins with our Leadership Development Committee, which has replaced the club’s nominating committee,” explained the club’s GM/COO C.W. Cook. “This group of members does the interviewing and selection of candidates and develops the slate of board candidates. In addition, the LDC solicits members to apply for assignments to committees and then selects members for the various club committees. I consider the LDC the most important function in our governance,” Cook added. “The process is intended to develop members for potential board service via committee participation and to provide current committee members a method to expand their understanding and involvement. Implementation of the process results in a more open selection of committee members and encourages greater member participation in club governance. “The goal is to provide a methodology where those volunteering for committee service can do so and those interested in board service can be given additional committee exposure, which strengthens our club’s leadership in years to come and provides a solid human resources matrix for our overall club governance,” GM Cook outlined. “Once elected to the Sawgrass Board of Governors, the new board members go through a two-day orientation, with the GM, club president, other existing board members and various members of the management team. “This includes a tour of all the facilities at the club, a review of club financials and an explanation of the monthly financial package, a complete review of our membership programs, types of memberships and the various membership metrics. “The president covers how the board meetings operate and issues of club governance, with emphasis on our GM/COO model,” Cook explained. “Simply put, our model is that the board of governors deals with the gray and the GM/COO deals with the black and white. We also spend time on our mission
President’s Background Contributes To Sawgrass Country Club’s Experience Fritz Skeen, BoardRoom magazine’s Distinguished Club President for 2019, has put his years of experience as a member of a private club to great work. After joining Sawgrass Country Club in 2004, Skeen jumped into the club governance process and served seven years on the club’s board of governors’ committees including legal and bylaws, leadership development and membership committee. Fritz Skeen and his wife, Helen Morse, have been members of Evanston Golf Club, Skokie, Il, where he also served a term on the club’s board of directors. He’s completing his fifth year on the Sawgrass board of governors. Now retired from IBM, Fritz Skeen held a variety of sales and marketing management
and executive positions, related to Information Technology and Communications. In the process of his career, Skeen was located in Lexington, Kentucky, Raleigh, NC, Los Angeles, CA, White Plains, NY and Chicago, IL. Some of his positions with IBM included, Branch Manager, Chicago, IL; Regional Manager, Los Angeles, CA; Group Director Telecommunications Product Marketing, NY and General Manager, Chicago, IL. He received his BBA from the University of Kentucky in 1972 followed by his MBA, also at the University of Kentucky in 1973. Fritz Skeen is tireless supporter for his alma mater, the University of Kentucky. He has held numerous leadership positions with the UK Alumni Association culminating with serving as the president of the Association in 2018-2019.
from Cover Story | 22
and vision, our core values and our general strategic themes. This year we updated our strategic plan, which we do every three to five years, and the BOG spent several additional days in session on the strategic plan,” President Skeen explained. In updating the strategic plan, the primary effort has involved defining strategic statements across 10 functional club areas. “The strategic statements were tied together through the focus of the member experience. Together they help define what the members will experience as “The Sawgrass Experience,” said GM Cook. “One of the keys to Fritz being a successful club president is that he takes the time to listen to its members and acts in a fair and measured way.” – Bill Edge, Chair of Legal & Bylaws Committee
“Action plans then were developed and along with the functional area strategic experience statements analyzed to create six overarching strategies for Sawgrass Country Club. These six statements embody the strategic efforts and action plans across all the functional areas. As a final step metrics were defined that will help us monitor our progress towards achieving our strategic goals,” Cook added. Sawgrass Country Club also makes itself the beneficiary of outside resources, for both board and club members. “We provide our board members with copies of BoardRoom magazine and The Private Club Advisor and find both to be helpful and educational. Additionally, we have been users of Club Benchmarking for a number of years and have developed a level of confidence in that information and what it provides to us. This is particularly helpful 24
BOARDROOM | JANUARY/FEBRUARY 2020
Skeen and two fellow UK alums also have restarted the Jacksonville UK Alumni Club, where he continues to serve on the board. BR
when we are looking at our budget development process,” President Skeen stressed. How does President Skeen view this educational growth for board members? “All our board members are vitally interested in seeing our club work well and fully support the GM/COO,” the Distinguished Club President explained. “We view that we have made it to the point that through our orientation and ongoing meetings we continue to improve our education on how to properly function as a country club board.” What does all this mean for the club’s GM/COO C.W. Cook? “During our time together, we’ve dealt with many challenges (as all clubs do), but I’m no longer amazed at how President Skeen handles these challenges because I’ve simply become accustomed to his approach,” expressed GM Cook. “He ducks no situation, no matter how difficult it is. He responds to every email he receives in a transparent fashion. He follows up with some difficult phone calls to simply talk through things as a gentleman does. He invites civil discourse and always remains civil. People know that they can trust him because he always has the club’s best interests at heart. “Probably one of the most admirable traits is that he’s not afraid to reverse a course of action if he feels that we’ve got it wrong. We all learn from our daily interactions with Fritz Skeen!” Cook emphasized. “All of this is exactly how we see the best run clubs function. It just doesn’t happen that way very often and never without a true ’steward’ in the president’s role,” concluded KK&W’s Kuebler. Yes, Fritz Skeen has demonstrated that time and again at Sawgrass and as a result both member satisfaction and staff satisfaction are exceptionally high at the club. And what can be better than that! BR
2019 Top Private Club Presidents & Board Chairs of the Year BoardRoom magazine for the 12th year, is recognizing 24 presidents as Private Club Presidents and Board Chairs of the Year – 2019 for practicing what they preach – leadership for the betterment of their clubs. Private club board presidents play a huge role in the professional operations of their club as volunteers working diligently with their board of directors and general managers, striving for well informed, but not emotional decisions. BoardRoom magazine’s 23 most outstanding private club presidentss and board chairs for 2019, plus the selection of Fritz Skeen, president of Sawgrass Country Club, Ponte Vedra Beach, FL as BoardRoom Distinguished President for 2019, exemplifies the focus on the leadership responsibilities, the accountability and the management of the board, while providing a healthy respect for the club’s macromanagement. “This kind of recognition for volunteers who give so much to the club has been long overdue, and since the first awards were presented 12 years ago, there’s been a steady growth in the nominations by club general managers and others in the private club industry,” exclaimed BoardRoom publisher John Fornaro.
These board presidents, chosen from clubs in Canada and the United States and other parts of the world, understand the importance of working, effectively and efficiently, with their volunteer boards and the dedication that’s required from everyone with whom they work. They practice what they preach – outstanding leadership to maintain best practices and an extraordinary member experience for their members clubs. Systems alone do not insure a good board. Key elements include commitment, competence, diversity, collective decision making, openness, transparency, effective communication with management and the membership, fiscal responsibility, development and establishment of the club’s mission, vision and policy direction, especially through establishment of a strategic plan. Successful board presidents draw upon the expertise of other board members, the club’s institutional memory and stewardship of the club’s resources. As well, board presidents provide new board members and future presidents with information they need to perform effectively as board members.
Congratulations to BoardRoom’s outstanding private club board presidents and chairs for 2019. Fritz Skeen . . . . . . . . . . . . . . . . . . . . . . . Sawgrass Country Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA John Alle (advisory chair). . . . . . . . . . . . Alexis Bove. . . . . . . . . . . . . . . . . . . . . . . Patrick Britt . . . . . . . . . . . . . . . . . . . . . . Tim Condon. . . . . . . . . . . . . . . . . . . . . . . Charles J. Davidson. . . . . . . . . . . . . . . . Andy Fromm. . . . . . . . . . . . . . . . . . . . . . Shawn Ghatan (advisory chair). . . . . . . Barry Gordon . . . . . . . . . . . . . . . . . . . . . Albon Head. . . . . . . . . . . . . . . . . . . . . . . Randolph Heartfield. . . . . . . . . . . . . . . Bob Hill . . . . . . . . . . . . . . . . . . . . . . . . . . Howard Liebman. . . . . . . . . . . . . . . . . . Jeff Mapstone. . . . . . . . . . . . . . . . . . . . John Morris. . . . . . . . . . . . . . . . . . . . . . . Jeff Pero . . . . . . . . . . . . . . . . . . . . . . . . . Dana Roberts. . . . . . . . . . . . . . . . . . . . . Gordon Roberts. . . . . . . . . . . . . . . . . . . Dr. Lloyd Rothouse . . . . . . . . . . . . . . . . Adrian Sakashita. . . . . . . . . . . . . . . . . . Jim Steinmeyer . . . . . . . . . . . . . . . . . . . Richard Straughn. . . . . . . . . . . . . . . . . . Steve Sunshine. . . . . . . . . . . . . . . . . . . . Scott Urdine. . . . . . . . . . . . . . . . . . . . . .
The Riviera Country Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Waynesborough Country Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Norwood Hills Country Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diablo Country Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Union League of Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . San Francisco Yacht Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Riviera Country Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Addison Reserve Country Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Fort Worth Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thunderbird Country Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mountaintop Golf & Lake Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Boca West Country Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Country Club of Rochester . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dedham Country and Polo Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lake Merced Golf Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jonathan Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . River Crest Country Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Colleton River Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hacienda Golf Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Academy of Magical Arts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mountain Lake . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shady Canyon Golf Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Desert Mountain Golf Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private Club Presidents and Board Chairs of the Year Major Sponsors
26
BOARDROOM | JANUARY/FEBRUARY 2020
USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA
Maximize Your Return on Investment!
Our team, has an unparalleled over 400 combined years of club and hospitality management experience and we have successfully worked with over 1000 clubs since 1996. We are not just another search firm we are your partners and trusted advisors dedicated to ensuring your success. Executive Placement = The right fit, longer tenure and less turnover Food & Beverage Training = Better bottom line and member satisfaction Operational Review = Efficiency and creativity in all departments Model Club Board Governance = Efficient governance in less time Team Development = Performance with a smile and a purpose
Whatever your need is we can fine tune your operations guaranteeing your return on investment!
Quality isn’t expensive, it’s priceless!
EXECUTIVE SEARCH FIRM OF THE YEAR 13TH YEAR IN A ROW
WWW.KKANDW.COM
/
480-443-9102
CLEVELAND / DENVER / JUPITER / NAPLES / NEW YORK / SCOTTSDALE / WASHINGTON D.C.
Make Sure to Sign Up for our Sessions at the CMAA 2020 World Conference Culinary Leadership at a Higher level / Saturday, February 8 / 7:00 am - 3:00 pm Three Key Leadership Lessons for Every Club Executive / Wednesday, February 12 / 9:45 - 11:15 am Please visit booth #828 at the Club Business Expo Monday and Tuesday, February 10th & 11th
RON CICHY Dr. Ronald F Cichy, O.M. is professor, The School of Hospitality Business, Michigan State University
EXECUTIVE COMMITTEE
Your Values and Beliefs A person’s values are visible in the ways that they act and interact with others. An organization’s values can be thought of as the culture. Culture contains the driving force, the mainspring of the organization. The key is to align each person’s values and their organization’s values. But where do a person’s values originate? They are formed when we are being raised in the influence of family, friends, and others we come into contact within the course of our lives. Also, with strangers. We see values in some that we want to emulate. We see values in others that are the opposite of what we believe. Here, you learn what not to do, how you do not want to behave, and who you do not want to be. An understanding of values is essential if people are going to lead with genuine and honest hearts. Leadership begins in the heart of the person and expands to the hearts of others. Leadership is authentic and rooted deeply in trust. Values add value to life. They contribute through an understanding of who you are. When you are by yourself looking into a mirror, who do you see? When faced with a situation that tempts you to compromise your values, what do you choose to do? Your mettle is tested in different, often in difficult, situations. How do you respond? An organization is made up of people, each with their own values. But the culture of an organization is not simply the
sum of the individual’s values. Rather, it is the individual’s ASK – attitude, skills, and knowledge – each one uniquely contributing to the culture. If a person is fortunate enough to understand their values, they can begin to live into each of them each day. In the moment, the now, are where you find values. As a start, we have prepared your values and beliefs assessment. Read each item, and based on your definition of what it means, choose 20 values that represent you by circling 20 on the list. Now review your list of 20 and draw a second circle around 10 of the 20. These are your top 10 values. Ask a friend, do these accurately portray me? Are they who I am? Values together with mission (purpose) and vision (ideal future) define the core of a person. A person’s actions give an indication of the character of the person. How you behave reveals your values. How do you care about other people? How do you act toward yourself and others? The mission describes why each person exists. Why do others (e.g., family, friends, co-workers, strangers you meet) feel that you add value to the relationships? Why are the relationships important to you? What unique purpose do you have? The vision is what you intend to create beginning in the present and extending into the future. What will you be? What will be happening if your life is ideally effective? What are your B1G DREAMS? B R
YOUR VALUES AND BELIEFS
Mark your top 20 values. From that list, select your top 10 values by placing a circle around these ten. r accountability to “make it yours” r active listening r act without another’s push r anticipation r appreciation r avoid judging others r becoming ADROIT r be in the moment r B1G DREAM r broaden perspectives r caring r coach others to build upon their strengths r co-create reality r desired results r display values to others in actions and words 28
BOARDROOM | JANUARY/FEBRUARY 2020
r do beliefs and values align: personal and organization? r drive and action r emotional intelligence r empathy r engagement r focus r genuine care for others r going above and beyond r health and wellbeing of you r health of the planet r honest and sincere r how you treat others r improvement r initiative r inspiring each other r justice
r kind generosity r knowing and feeling where the other is coming from r know self r learn from each other’s experiences r networks: face-to-face and through social media r open to learning r peace r practice to make permanent r proactive r purpose in the now r relationships r see the outcomes r self-awareness r self-discipline
r self-driven r self-motivation r self-starter r significance r S.M.A.R.T.E.R. Goals r strive to be the first r take control with confidence r take first step when given an opportunity r TALENT r trusting r trustworthy r truth r trying honestly to see things from the other’s point of view r wisdom r other __________
“As a private club, our members and guests expect the same caliber of Five-Star service that Forbes Travel Guide offers. Forbes Travel Guide worked with our leadership team to create custom standards, tailored training, and quality assessments which have been implemented throughout the club. We value our partnership with Forbes Travel Guide and look forward to continuing to raise the bar at The Union League of Philadelphia.” Jeffrey P. McFadden
Chief Executive Officer/General Manager The Union League of Philadelphia
IN-PERSON TRAINING TAILORED TO YOUR CLUB
ONLINE SERVICE TRAINING
SERVICE EVALUATIONS AND DETAILED REPORTS
For more information please contact
David Tyson
Vice President Private Clubs, Global Partner Services
dtyson@forbestravelguide.com partner.forbestravelguide.com
CUSTOM CLUB STANDARDS DEVELOPMENT
LARRY HIRSH Larry Hirsh, CRE, MAI, SGA, FRICS is the president of Golf Property Analysts (www.golfprop.com), a leading golf and club property consulting, appraisal and brokerage firm based in Philadelphia.
EXECUTIVE COMMITTEE
Where’s the Goal Line?
Understanding the Club’s Culture Having seen numerous clubs from the inside as a consultant, appraiser and member, I’ve often wondered how club leaders, boards and members perceive the goals of the club. There are typically more objectives than there are members and the challenge is to balance all the individual interests with what promotes the greater good for the future of the club. Most clubs have what I call “special interest groups”, often segmented by gender, age, golfing or other sport skill level and for sure financial capability. When clubs make decisions, the interests most represented are often those groups with the most representation on the board. While the purpose here is not to question how clubs govern or the decisions they make, I hope to explore and shed light on the motivation behind those decisions and what leadership’s goals are. Many clubs, especially those with financial challenges, make decisions focused on the club’s fiscal condition. Often, that means that necessary projects are postponed or even ignored to make the budget balance. Many such clubs are fearful of imposing assessments, which sometimes precipitate member flight. Conversely, clubs not so financially challenged might seek to embark on pet projects of board members, which may not be in the best interests of most members and which can drive up the cost of membership and make even the most desirable clubs vulnerable. It’s critically important for clubs to continue to provide value in membership and as a “luxury product” balancing the cost with the value is increasingly important. People join clubs for different reasons. They like to tell people they belong and they like to show off their club. Other segments of membership simply seek out the recreational and athletic opportunities while some enjoy the social activities and business networking that clubs offer. Most clubs have segments of the membership focused on the prestige in membership element as well. It is those clubs focused on prestige that often make decisions that can lead to decline. While a very few clubs, whether through sheer size of membership or because of a lack of competition, or even because they’re just financially capable can survive such decisions, most can’t and need to plan for the future recognizing that no club is bulletproof. Many boards become so insulated to the world outside club boundaries and are so enamored with their club that they often forget that only a few years down the road can bring decline and distress, even to the most desirable clubs. They need to identify a path to long term success. This includes not only satisfying current members but anticipating the desires of future members 30
BOARDROOM | JANUARY/FEBRUARY 2020
who will populate the club and allow it to thrive with stability. It’s the prestige element that often causes clubs to go off the rails. The “pet project(s)” are done and the club incurs debt and while few members use the new facility, many members leave and seek a more cost-effective option. Additionally, when a club seeks prestige as its primary goal, they often attempt to fabricate it with onerous rules and policies that make the club less comfortable and “stuffy.” The next generation resists and won’t pay for it. The real question here relates to a club’s goals. Is the goal to be prestigious? Stuffy? Some, a very few, can succeed at that and move forward. More often, it’s the club that finds the right balance between recreational value for the dollar, fiscal responsibility and overall desirability (not just prestige) that experiences the greatest success. Of course, every club has its own “culture”, which can be defined as “a whole way of life” or “the behaviors and beliefs characteristic of a particular social, ethnic or age group.” It’s critical for leadership to understand that culture and not take for granted that membership will concur with leadership’s direction as it relates to both current and future membership. A club is made up of many elements. The property, the golf course, the athletic facilities, the food, the clubhouse and the location. It’s not just a golf course and it’s not just about the physical elements. When club leadership misreads the culture, the club can suffer, no matter how prestigious they think they are. What’s your club’s goal? Like everything else in life, establish realistic goals. No club is bulletproof. B R
EXECUTIVE SEARCH “The executive search process was well-executed with timely updates and coordination. I was very impressed with the communication, updates, and accessibility. Any club would benefit from their contacts, resources, and experience in the business of golf.” Nick Jacovides, Club President - Bayville Golf Club
GBN recruits the most accomplished General Managers, Directors of Golf and Head Professionals from across the golf industry. Our search team diligently researches, plans, recruits and coordinates all aspects of the recruitment process which ensures exceptional results. We have intentionally combined the highest level of industry experience with global expertise in executive search. The result is an unparalleled outcome for our clients.
Patrick Seither
PRESIDENT/CEO
Bob Ford PARTNER
Dave Ransom PARTNER
“We retained Golf Business Network (GBN) to assist us in the search for our new Director of Golf at Mediterra. The professionalism, knowledge of the industry, and timely communications that the GBN team displayed throughout the process contributed heavily to the success of our search. The firm’s great database of talented candidates and the team’s attention to detail were key in providing the most comprehensive selection of finalists for our property. I would confidently recommend GBN to anyone looking for a top tier search firm for any golf staffing needs.” Carmen J. Mauceri, CCM The Club at Mediterra For more information, please contact Patrick Seither at 919-372-8220 GOLFBUSINESSNETWORK.COM
STEVE MONA Steve Mona was recently named director of governance and leadership, Club Benchmarking. He can be reached via email: smona@clubbenchmarking.com
EXECUTIVE COMMITTEE
New Year Reflections Turning the corner on another new year, I’ve been reflecting on my travels over the past 12 months and thinking about some of the experiences I consider highlights of the year. One educational opportunity stands out: The President’s Council on the Club of the Future, held recently at Medinah Country Club in suburban Chicago. As education goes, it was a very full day and as I listened to one powerhouse presentation after another, I thought to myself how beneficial it would have been for any private club president or general manager to attend, both for the unparalleled education and for the networking opportunities. No less a private club expert than Dick Kopplin, founder of Kopplin Kuebler & Wallace, said the gathering of 72 club presidents and 66 general managers was the largest in which he had participated in all of his 46 years in the private club business. Kopplin Kuebler & Wallace co-presented the conference along with Club Benchmarking, whose founder and chief innovator Ray Cronin and CEO Jim Butler were in also in attendance. So what were the key points that club presidents and general managers were able to take away from the day? Kurt Kuebler and Tom Wallace, partners in KK&W spoke about the four keys to good governance, defined as follows: 1) Defining the roles and responsibilities of each constituency – board, committees and staff. 2) Establishing board member strategies in response to member inquiries and comments. 3) Developing the mission statement, and 4) Setting the standards expected from the board Cronin spoke about fact-based governance. He implored clubs to determine their key success factors, then to populate their board with people who can contribute to those success factors. He also emphasized that the board’s role is to protect, preserve and grow the assets of the club. Cronin said that Club Benchmarking’s research shows clearly that the operating budget is not the financial driver of private clubs; rather, capital income drives the financial success of clubs. He also pointed out that clubs are obliged to pay for the facilities their members are enjoying through recurring capital dues in order to properly replace club assets as they become obsolete.
32
BOARDROOM | JANUARY/FEBRUARY 2020
Butler spoke about the use of a balanced scorecard to assess a club’s strengths and weaknesses. He strongly encouraged all clubs to adopt a capital funding policy, noting that 62 percent of clubs are not generating enough capital income to replace and upgrade their current assets. He also spoke about the importance of innovation, noting that incremental, evolutionary and disruptive innovation are all necessary for private clubs to thrive in the future, and said clubs should use a net promoter score as a tool for evaluating the opinions of members and employees about the club. Many other speakers provided compelling insight into the world of private clubs. As the day neared an end, I thought of the 3,400 member-owned private clubs in the U.S. and how important they are as recreational and social outlets for their members. Despite being an avid golfer myself, a key takeaway from the day stressed an improved understanding of the need for clubs to offer a wide variety of amenities to their members and to not be solely dependent on the golf experience if they hope to sustain long-term success. In my role as director of governance and leadership for Club Benchmarking, it’s inspiring to see just how much expertise and objective data exist in the private golf club industry. My key takeaway was an affirmation of my commitment to help private golf clubs become exposed to the resources of the industry that can assist them in operating more effectively, for their members, for their communities and for the game of golf itself. B R
WHITNEY REID PENNELL
EXECUTIVE COMMITTEE
Whitney Reid Pennell, president of RCS Hospitality Group, is a celebrated management consultant, educator, and speaker. She was recently recognized as one of BoardRoom’s Top Club Influencers. RCS continues to offer innovative solutions through RCSUniversity.com, an online virtual training portal for employees and managers. For more information, phone (623) 322-0773; or visit the RCS website at www.consultingRCS.com.
Women in Leadership Is It Supply or Demand?
It’s been well documented for decades that companies with diverse boards have a better return on investment citing better acquisition and investment decisions and less aggressive risk taking. A similar case can be made for diverse management teams. Beginning January 1, 2020, California’s new law requires at least one female director on all publicly traded companies headquartered in the state. Arguably, gender diversity on boards is long overdue, but so is diversity of all types especially since the Millennial generation is larger (87 million) and more ethnically diverse (44 percent minority) than the Baby Boomer generation (72 million, 28 percent minority). We need to acknowledge these changing times and embrace diversity, starting with representation of women in club industry leadership roles. As of 2018, the S&P 500 companies’ workforces, comprised of 45 percent women, had fewer than five percent female CEOs. This is thought provoking, because it seems we’re well past disproportionate representation of genders in leadership positions. Consider these statistics regarding women from the Center for American Progress. Women: • Are 50.8 percent of the U.S. population • Earn 57 percent of undergraduate degrees and 59 percent of master’s degrees • Earn 48.5 percent of all law degrees and 47.5 percent of all medical degrees • Earn 38 percent of MBA and other generalist degrees and 49 percent of specialized master’s degrees • Account for 47 percent of the U.S. labor force and 52.5 percent of the college-educated workforce. I find the statistics fascinating, because when we consider upcoming generations of members, managers and board representation in the age of the #MeToo and #InviteHer movements, why do clubs suffer from an uneven number of women leaders in management and on boards? Is it a case of supply and demand? Unconscious bias? Leftover ‘yesteryear stereotypical thinking’ that is slow to change? There are many opinions on this topic. Recently, I attended a regional industry meeting along with a multigenerational and diverse gender group, with an educational session about gender differences and also a panel discussion about gender representation in clubs. One of the panelists was asked, “Why don’t you recruit more women to CEO/ COO positions?” The response? That there was a lack of supply until just recently. Many managers in the room found the gender presentation to be overly stereotypical and likely more about personality differences than gender. Based on comments, the Millennial generation view themselves on completely equal footing, regardless of gender. They simply do not prescribe to the yesteryear ideas and will push us all forward. The conversations of the day suggested 34
BOARDROOM | JANUARY/FEBRUARY 2020
that not much has changed with generational thinking since reading a 2016 Harvard Business School boardroom study. The study found that when men aged 56 to 65 were asked, “What is the primary reason that the number of women on boards is not increasing?” the number one response was “lack of qualified female candidates.” Interestingly, the study also noted that 70 percent of women aged 56 to 60 cited boards’ unwillingness to make diversity a priority as the number one reason. Basically, in the study, men in the Baby Boomer generation were more likely to see the lack of women in the boardroom as a supply problem while their female counterparts see it as a clear lack of demand. During the industry education meeting, there was a clear divide in perception. However, no one was willing to have an open, honest conversation about the idea of supply versus demand for women in leadership positions, or the different views of gender that obviously fall along generational lines. All companies need diversity of thought, experience, skills and backgrounds on their boards and in their managerial leadership. It’s true that when companies are able to leverage individual differences positively, the collective organization becomes better at problem solving, strategic planning and able to create a more successful and financially viable future. Clubs will thrive when they balance management position responsibilities, the demands on one’s time, and the values of the person who holds the position, thereby encouraging worklife balance while supporting promotion and growth. For boards, mentoring and networking programs can do wonders for encouraging more diversity –not only of gender and age, but also race, religion, thoughts, skills and experience. B R
FRANK VAIN Frank Vain is president of McMahon Group, a consulting and planning firm service to private clubs. He can be reached at fvain@mcmahongroup.com
EXECUTIVE COMMITTEE
It’s the Member Experience That Counts “For a social sector organization, performance must be measured relative to mission, not financial returns.” – Good to Great and the Social Sectors, Jim Collins There’s no doubt that private clubs are doing a much better job of running their money and understanding the key metrics in their business model these days. The combination of a nasty recession and changing marketplace will do that. Principles like we’re in the “dues business” and recognition that food and beverage is an amenity rather than a profit center, seem finally to have taken hold. Clubs have also improved their focus on generating funds for annual capital repairs and replacements, often adding fees to assure there is money to address these needs even when initiation fees aren’t generating enough revenue. Having once thought of the repairs and replacement budget as an optional item, club leaders now understand that clarifying these requirements and establishing a known source of funds to address them is one of their most important duties. Left unattended, deferred maintenance results in unsatisfactory conditions or large catch-up assessments in the future, both of which have obvious negative consequences. There is no doubt this is making our industry stronger.
A replacement reserve study should not be confused with a strategic or facility enhancement plans. It is a helpful piece of information towards the development of an effective financial plan, but it assumes a relatively static environment. Knowing what it would cost to replace the assets you have in future dollars is not the same thing as planning for the club of the future. This knowledge is helpful for replacing things like a golf course irrigation system or kitchen equipment, but it doesn’t lead to the type of transformative projects like modernizing the social and dining spaces, adding a fitness center, creating a resort-style pool or any of the other myriad projects that retain and attract members. For those things, a private club board needs clarity of mission and a vision of where the market is headed. And believe me, the market is headed in a far different direction than most boards fully grasp.
No one pays the sorts of fees it takes to belong to a premier private club because it has a strong balance sheet or a replacement reserve program. They are pursuing visions and dreams; they want access to premier facilities and special programs, and most of all, to share experiences with their family members and friends. While adopting practices that are common in for-profit businesses is a good thing, club leaders should not be confused. Running a non-profit club like a business is not the answer. Clubs are social organizations that derive much of their revenue from activities that look like normal businesses, but they exist to fulfill a mission, to inspire people to aspire to join them. No one pays the sorts of fees it takes to belong to a premier private club because it has a strong balance sheet or a replacement reserve program. They are pursuing visions and dreams; they want access to premier facilities and special programs, and most of all, to share experiences with their family members and friends. They want to be part of something special, to be fulfilled. The purpose of a social organization is to meet social objectives. They exist to execute their mission. 36
BOARDROOM | JANUARY/FEBRUARY 2020
The first rule in attracting new members, which every club needs each year to replace normal attrition, and in many cases, to grow back to levels they last saw before the Great Recession, is to have something great to offer. It’s the member experience that drives club success, not the balance sheet. Prospective members join a club because it has the facilities, programs and services they believe will provide them a better, more enjoyable life. While getting your financial house in order is fundamental, it is important to remember, finance doesn’t drive your strategy; solid financial performance is the result of an effective strategy. B R
LICHTEN
LICHTENARCHITECTS.COM
GORDON WELCH For more information or a copy of BoardRoom Institutes complete board assessment contact Gordon Welch at gordon@BoardRoomInstitute.com or call (918) 895-2723.
BOARDROOM PERSPECTIVES
A Private Club Board Member It’s A Job Like None Other!
This is a critical time of year. Boards are changing and many of you, as board members or working with private club boards, have questions. In recent months, I’ve had boards question their size and structure. What is the perfect size for a club board? That depends on the board, their authority, committee involvement and your strategic plans. The clubs we work with have a low of five board members to a high of 42 board members. BoardRoom Institute recommends a board of 9-11 with three-year terms. Board presidents generally serve a one-year term. Clubs that have major events or construction may extend the president’s term to two years for continuity. Private club budgets are sometimes a factor in the number of board members. Private clubs with budgets of $10 million have an average of 12 board members, whereas smaller clubs with budgets of less than $3 million range from 12 to 16 board directors. In considering board size, evaluating the pros and cons of board size can help get it right. However, there is no “one-size-fits-all” for the number of members serving on a board. The pros of smaller boards strongly outweigh the cons. Smaller boards tend to meet more often because it’s easier to accommodate everyone’s busy schedules. Board discussions are generally shorter and more focused than those of larger boards, which should lead to faster and better decision-making. Since smaller boards spend much time together, they form close bonds and are typically willing to give everyone a fair say. However, there’s one glaring negative to smaller board size for private clubs. Being a volunteer board, board members are usually volunteering for additional events and activities because of the lack of other volunteers. Board members who serve on the board and invest much of their time and energy in board and committee work as well, often feel overworked and overburdened and believe these activities take too much time away from family, recreation and paid work. Having larger numbers of board members gives boards the advantage of “institutional memory”, where long-time board members remember much of the organization’s history. Larger numbers of board directors bring a larger network, as directors are likely to know many local business professionals. Board dynamics also differ with larger boards. Board discussions are typically longer with larger boards, as they bring forth a greater variety of perspectives. On the flip side, having many opinions around the table allows quieter members to kick back and disengage, causing them to feel like their voice has no meaning. 38
BOARDROOM | JANUARY/FEBRUARY 2020
It’s also easier for cliques to form with larger boards, which can isolate some board members even further. Many large boards alleviate some of these problems by using an executive committee as a steering committee. Having many board members places a larger burden on the club general manager/ COO, who is required to meet all their expectations. Larger boards also tend to have more committees, which means the club might need to hire more paid staff to manage them. Finding the right size for a private club is somewhat the same as finding the right size for a corporate board. Both types of corporations need to answer two questions: 1) What do they need to accomplish, and 2) do they have the right expertise on the board to achieve it? According to a recent study, the optimal number of directors for boards to make a decision is seven. Every added board member after that decreases decision-making by 10 percent. Clubs can use that as a starting metric. It’s generally best to have an odd number of board directors, although the bylaws may state that they can use the board chair’s vote as a tiebreaker. Most private club boards have staggered terms for board members. Board members can disengage quickly when they don’t find meaningful purpose during their tenure on the board. Private club boards that assess board composition strategically will make the most of board members’ talents and expertise. As in the past, we highly recommend asking potential board members to apply for the job! It’s a job like none other. Board members must bring a talent or skill to the board table with them. It’s a big job and everyone needs to be ready, willing and able! B R
Own Your Look.
1.800.711.5885 sales@ambassadoruniform.com www.AmbassadorUniform.com
RICHARD MCPHAIL
FOOD & BEVERAGE COMMITTEE
Richard McPhail, CCM, is a founding partner of “Club-Edge”, offering analytics and operational technology to the private club market. He can be reached at (239) 223-2741 or at rmcphail@club-edge.com. For more information visit the company website at www.club-edge.com.
The Elephant in the Club - Part VI The Club Restaurant
Why are we losing money in the club restaurants? After spending most of my career managing private clubs, I’ve heard that question thousands of times. This probably comes up more than any other topic in club-world from every board, committee and from the general membership. In answer, many private club managers very correctly point out that club dining is a “member amenity”, without the same operating parameters and goals of a public restaurant. Since private club dining is an amenity, the objectives (to serve the wants of its members) and differences between a club and a restaurant can justifiably go on and on. I am somewhat tempering my defense of some food and beverage losses. This does not mean that losses will not be incurred, rather that the size of some of those losses can often be managed to minimize their impact on the club budget. If you consider that private club “restaurant” losses do not even include rent, utilities, taxes, insurance, capital replacements, etc. (which are included in the club master budget in a separate line items category), the real differences between a club dining amenity and a typical “for-profit” restaurant become more sizeable. I’m old enough to remember when club members used to sign a “chit” for their member charges…the good old days when you just scribbled your signature on a hand-written card (but be sure to write legibly including your member number in the designated area - the lower the number, the more prestigious). Many managers and boards remember when the more logical POS (point of sale) technology became available and it seemed to take forever for pri-
40
BOARDROOM | JANUARY/FEBRUARY 2020
vate clubs to embrace this new technology, while at the same time many restaurants were already using it for years. To be fair, this is the way many private clubs have always addressed and adapted to change. Slowly. For many reasons, that can often be an attribute since successful clubs are all about historical culture and continuity. Everyone knows that the restaurant business is a tough game. A mismanaged restaurant is “here today, gone tomorrow.” To tackle that constant challenge, today’s restaurants are using technology to better manage their time, staffing and to maximize their profits. New technology helps improve all facets of their operations to improve efficiency and increase profits. Technology is also utilized to reduce food purchasing costs, automatically code invoices to accounting, properly price menus, reduce revenue discrepancies, identify product losses, and more easily identify missing sales, shortages and theft. This technology is also readily available to the private club industry. My point is that with today’s amazing technology most clubs are still ordering food through their “favorite” salesperson, using antiquated “Excel” spreadsheets to count and report inventory, still cannot tie actual bar utilization to actual member charged sales and cannot easily show the true cost of a member menu item or catered event. One clear difference between clubs and public restaurants is that clubs are not “forprofit”. The club staff is rightly focused on meeting the wants and needs of the membership. In a similar manner, public restaurants are focused on their customers who also vote with their feet. The key for private club restaurants is to strike a balance. Implementing available technology can help your management team maximize the opportunity to improve your club’s bottom line. BR
SOLVING THE PROBLEMS OF TOMORROW’S PRIVATE CLUB. TODAY. Drawing on 62 years of experience and institutional knowledge from over 200 private clubs nationwide, ClubLife Management is uniquely positioned to navigate the challenges facing tomorrow’s private club, today. We keep our clients ahead of the curve – delivering unrivaled network benefits that drive member enrollment, retention and satisfaction, unparalleled buying power, flexible deal structure and an industry-leading approach to digital marketing.
clublifemanagement.com Powered by ClubCorp®
BRUCE BARILLA
HOUSE COMMITTEE
Bruce Barilla has 20 combined years of golf locker room experience at The Greenbrier and Butler National GC; along with having worked 50 professional golf tournaments to date including managing the locker room for the Barbasol Championship. He is president of Locker Room Consulting: www.lrcgolf.com
Locker Suite
Beyond The Next Level! When working as a locker room attendant in the late 1970s at Butler National Golf Club, the thought came to me that it would really be something if each member had their own private shower and dressing area. Well, some 40 years later the idea has expanded to what I call the Locker Suite. NOTHING ELSE LIKE IT
Many private country clubs and golf clubs claim to have the finest facilities and best service. The Locker Suite accomplishes this and more. Having the availability and offering the opportunity for members to rent a Locker Suite for either themselves or for their guests puts the club in a league of its own and takes the locker room beyond the next level. WHAT YOU GET FOR THE MONEY
Each Locker Suite includes separate heat/AC controls, dimmer switches, full size closet, wood hangers, custom storage cabinets, clothes hooks, PGA tour size and business type umbrellas, security safe, Swiss Shower, separate extra-large deep soaking whirlpool tub, gas fireplace, monogrammed robe, flat screen TVs, audio system, heated towels,
42
BOARDROOM | JANUARY/FEBRUARY 2020
scented damp chilled face towels, heated floor, separate sink, dressing area, high-end grooming amenities of choice, hot lather machine, ladies make-up counter/mirror with adjustable chair or men’s grooming station, built-in bench, shoe shine service, valet service, water closest, room divider pocket doors for privacy, tinted windows for fresh air, and twice daily housekeeping service. Other amenities of the suite include refrigerator/freezer/ ice maker, glassware, coffee maker, snack pantry, microwave, room service, combination dining table work desk featuring a computer/printer/fax with two leather chairs, house phone, bookcase, daily newspapers, choice of magazine subscriptions, covered screened-in patio or balcony, patio furniture, retractable outside wall, custom lockable entrance door with personalized name plate, doorbell, daily vehicle detailing service, reserved outside parking spot or attached one car garage with electric door opener and direct access to the Locker Suite. Individual members can have exclusive use for an annual fee, or the club can rent each available Locker Suite at one per person for a daily fee when members want to “wow” their guests. And there are optional amenities for guests Do you know that your guests like a certain beverage or treat? The club, with advance notice, will be sure the refrigerator is stocked, snack pantry is full and that the freezer has the ice cream brand and flavor they like. How much will it cost? I think $25,000 annual rent is reasonable. One day rental for one guest per Locker Suite can be $250 a day. Each club can set its own price details. Why make available the locker suite? Most members become wealthy the old-fashioned way; they work. Not just 40 hours a week either. While I believe in charity, I also consider having a private Locker Suite a product of reaping the result of long hours sowed when it comes to education, career choices and investments. A manager in the Cleveland area told me he knew of two members at the club who would each rent one immediately. What about those members at the club where you manage? It not only will provide them enjoyment but will make you look good as well! For a detailed drawing go to: http:// www.lrcgolf.com/html/lkrsuite.html B R
The choice is yours, and it’s simple. “We tried this ourselves.”
“We hired Creative Golf Marketing.”
“Creative Golf Marketing’s expertise refined our focus and dramatically improved our strategic membership plan. They attracted the largest single influx of new members in the history of our Club.“ Don Smith President, Board of Directors Edgewood Country Club
PHILIP J. HARVEY Philip J. Harvey, Sr. is founder of Preferred Club, Venture Insurance Programs. He can be reached via email: Pharvey@ventureprograms.com
INSURANCE COMMITTEE
Protecting Your Club from Price Increases The New Year will no doubt bring change to the club industry, some welcome and some not so appealing. What most club owners want to know is how those changes could affect their bottom lines. While we don’t know what change the new year and new decade will bring, one thing we see, as insurance professionals, is that the market for club insurance is tightening. Though this could lead to higher insurance cost for some, there are steps club owners can take to keep their costs in line as the market adjusts. A CHANGING MARKETPLACE The fact is commercial insurance buyers will face sizeable price increases across the board across most lines of insurance, and this will impact policyholder pricing for a variety of business sectors. What is causing the sudden market change? Several factors are turning the market in both coverage availability and pricing. A recent report published by the leading trade association for agents, brokers and carriers cited the most notable reasons for the tightening in the marketplace – a combination of persistently low interest rates dampening insurer returns on investment portfolios combined with extreme catastrophic weather and wildfires, which have had a compounding effect on both insurer and reinsurer results since 2017. Some of the compounding factors to the club industry are having extreme effects on property and liability lines of business. Golf courses and their surrounding facilities are experiencing property damage caused by wildfire, freezing and overexposure to windstorms. As a result, insurance underwriters in this specialty business have taken a beating and no longer possess appetites to provide extended coverages and low deductible limits. This mini-hard market could produce rate increases of 15 percent or more for policyholders with light loss histories, to 100 percent for more challenged policyholders with poor loss histories. Liability policies are also headed for change. According to insurance broker Willis Towers Watson’s 2020 Insurance Marketplace Realities, a seller’s market is expected to move the insurance pricing models on 19 lines of business. Social inflation is the main driver of pricing in the liability marketplace. Clubs and other businesses tend to be held accountable for social ills involving members and their guests. As a result, key liability coverages are being restricted and, in some cases, excluded from numerous carriers serving the club industry. At the same time, policies related to directors and officers and employment practices coverage, which encompasses sexual harassment and wrongful termination, will become more difficult to come by. Other areas to feel the effects of the market tightening include exposures in 44
BOARDROOM | JANUARY/FEBRUARY 2020
the cyber market where ransomware incidents are increasing dramatically. Pricing adjustments will also be substantial in terms of umbrella liability coverage, where the marketplace will experience a reduction of available limits and elimination of extended protection for employment practices and sexual abuse and molestation to third parties. WHAT CAN CLUB OWNERS DO? To protect their businesses from a sharp hike in insurance rates, claims-related costs and limited coverage options, club owners should focus on the risk management aspects of their operations. In other words, they should be thinking about what they can do to mitigate some of their risk exposures. For example, club owners can mitigate their risk exposures by keeping a close eye on the premises they occupy and by implementing quality employee training. Club management should be vigilant in overseeing operations and hold their supervisory staff accountable for their actions. We are in a quick-paced, changing legal environment wherein the expectations of club members and employees are more self-oriented than in the past. Additionally, club owners should work closely with advisors and take advantage of user-friendly analytical tools to assist with decision-making to reduce risk exposure and differentiate the club in the marketplace. Clubs need to continue investing in risk control measures. The least expensive loss is the one avoided! All in all, 2020 will be a changing market wherein the number of accessible carriers serving the club industry will be fewer in number than have existed during the past 10 years. Though the changing market could present higher rates and more limited coverage options, it also presents the opportunity for club owners to conduct their own risk management assessments, find ways to mitigate risk exposures and to gain some control over rising costs. BR
MASTER PLANNING
ARCHITECTURE
INTERIOR DESIGN
PROCUREMENT
Crestmont Country Club, West Orange, NJ
Designing Traditions P R I VAT E C LU B S & H O S P I TA L I T Y
STUDIO JBD AND JEFFERSON GROUP ARCHITECTURE Peter Cafaro / pcafaro@JBDandJGA.com / 401.721.0977
ROBYN STOWELL
LAW & LEGISLATION
Robyn Nordin Stowell is a partner in the law firm of Sherman & Howard L.L.C. in Scottsdale, Arizona. Robyn may be reached at (480) 624-2736 or by email at rstowell@shermanhoward.com.
Do You Make New Year’s Resolutions? I’m not a big fan of the big, broad, life-changing resolutions that require a person to give up something they love or take on something they hate. My guess is – and the surveys tend to prove this out – that people last only a few days or maybe weeks working on a resolution that includes the words “always” or “never.” However, I am a huge fan of taking small, repeated steps that over time become good habits. So, here is my suggested habit for club managers and boards: Make a list of the items you really should review or clean up but you put it aside because, like committing to clean out all the closets, garage and basement in your
Governance Issues • • • • • • • • •
Conduct board orientation (make it better every year) Adopt a board code of conduct Find your state’s nonprofit corporate statute Make a cheat sheet of just the statute sections that apply to your club Make a cheat sheet of your bylaws – you can fit the key items on one page Add a section to your board book for cheat sheets Start using a consent agenda for board meetings Evaluate ways to make committees more productive Review your minutes > Do you include appropriate items and detail? > Do you avoid inappropriate details (no member personal information?)
Documents • Review your bylaws > Note all the mandatory provisions > Mark what you are not doing • Mark ideas to make life easier (electronic voting, member meetings by ballot) • Investigate making needed changes • Make a plan to implement those changes • Review your discipline procedures > Do they follow state statutes and laws? > Do you follow your procedures? • Review your joining documents and procedures > Consider ways to make them more useful > Add useful items: Email address, consent to electronic notice • Review your rules > Are there sufficient general rules to fill in specific rules? > Are you enforcing the rules? > Remove rules you aren’t enforcing • Tax Exempt Status/Public Accommodation > Are you managing non-member income? 46
BOARDROOM | JANUARY/FEBRUARY 2020
home, the whole list just seems too overwhelmingly large to start. The good news is you can break the list down into little steps and tackle them one at a time, when you have a few minutes here or there during the off season. To get you started, I provided the following lists, broken out by category. Of course, I’m interested in legal and governance issues, so no “improve the menu” items here (you can add your own non-legal categories). I’ve written BoardRoom articles that cover a few of these topics in greater detail, so there are additional resources available on topics of most interest to you when you are ready to start. BR
> Are you complying with all requirements (Form 71.17)? > Are you “open to the public” unintentionally by too much nonmember access? • Data / Cyber Security > Is your document retention policy up to date? > Do you follow it? > Have you had your cyber security tested? > Do you have adequate cyber insurance? > Get information on laws governing personally identifiable information (PII) > Be sure you are complying with PII laws • Employment Issues. > Update employee handbook > Changes in laws • Conduct recurrent employee training > Safety > Harassment > Document knowledge / lack of claims • Evaluate social media issues / what club can control • Insurance > Have you carefully reviewed your coverage in detail lately? > Is coverage adequate for your facilities, services and risks? > Do you understand your deductible, reporting requirements, and restrictions (does carrier control legal counsel, settlement, etc. and is that okay)? • Are your policies up to date? > Do you have the Form 990 Policies (conflict, document retention, whistleblower, etc.)? > Do you monitor, follow and enforce these policies? > Does your document retention policy consider cyber issues, personally identifiable information laws and potential litigation issues?
Michael McCarthy GM/CEO of Addison Reserve Country Club worked with Xhibtz Contract Furnishing for their custom LOUNGES, UPRIGHT CHAIRS, BAR CHAIRS, SIDE TABLES and CUSTOM TOWEL BINS.
JARRETT CHIRICO
RACQUET COMMITTEE
Jarrett Chirico, USPTA, PTR, PPTA, PPR is director of racquets at the Baltimore Country Club. He can be reached at: (410) 889-4474; by cell (310) 405-3949 or via email: jchirico@bcc1898.com
Creating a Successful Pickleball Program Pickleball is here to stay! Taping lines, sticking up a net and putting your tennis pro on court to teach a sport they don’t know won’t result in a successful pickleball program. Nor will simply providing pickleball programming to your membership. Many clubs still fail at growing something that ultimately sells itself because they don’t understand the passion and dedication needed to inspire your membership to try something new, fun and enriching. The simple fact is: Tennis participation is flat to declining. Over the past five years, pickleball has experienced unprecedented growth. In 2015, over 250,000 played pickleball. Today, that number has ballooned to more than 3.7 million. In the next two to three years, pickleball is predicted to hit 10 million, and in another five years it will double in participation. Ten years from now, pickleball will be the number one racquet sport in the USA. Racquets professionals fear participation in pickleball will result in a decline in their tennis programs when it is just the opposite. Pickleball allows juniors to get on the court earlier and adults to stay on the court longer! The best 10 and under programs start on the pickleball court and when someone ages out of tennis, pickleball will keep them coming back to the club. It doesn’t matter if someone is playing tennis or pickleball at your club, what matters is that your members are present, participating and engaged in your programming! So how do you start? 1. The investment - Get yourself and your professionals certified, so they have the confidence to execute your programming and take it to the next level. You can’t fake your way through pickleball, and you only have one shot at a good first impression. The Professional Pickleball Registry (PPR) is the world leader in pickleball education/certification and is officially recognized by USA Pickleball. PPR goes above and beyond to ensure its students are expertly educated on every single facet of the sport. PPR provides an educationally sound way of teaching that ensures improvement. The first step is calling PPR at (843) 842-9777 and getting certified. 2. Programming - Understanding how to monetize pickleball is knowing how to program pickleball. I’ve said it a million times, pickleball is not tennis! You will not have the same people doing the same clinics at the same time every week. If you want to monetize pickleball, provide your membership introductory lessons, open play, tournaments, clinics and social events. 3. Pricing - Don’t outprice yourself! The value is in the engagement and retention of your membership. I started a program years ago that brought in over $100,000 a year in pickleball revenue alone. We had 1,000 members on our active playlist and never charged more than $10 per person to play. If you focus on member engagement, the sky is the limit. 48
BOARDROOM | JANUARY/FEBRUARY 2020
4. Get your members excited! - The best thing any director can do when starting a pickleball program is to hire someone who will excite your membership. I’ve employed some of the best professionals over the years, and every time we have sold out camps, clinics and special events. By marketing to your members to inform them the number one player in the world is coming to visit, you will be surprised how quickly your events sell out. Above all, make sure your directors and managers are passionate and invested. Hire the right staff that understands the value in all your racquets sports. Investment and belief in a total racquets program is important to the success of any of your racquets’ disciplines. The numbers don’t lie. You can put four people on a tennis court, but on that same court you can have 24 people playing pickleball. Picture how quickly your total racquets program will grow. If you haven’t started pickleball, not thought about it, don’t have the need/space or worse, claim you’re busy enough, then your racquets program will suffer in three to five years. Pickleball is the future of your racquets programming. Trust me when I say, pickleball is here to stay! B R
DAVE MOYER Dave Moyer is a USPTA Master Professional and director of tennis at The Country Club at DC Ranch. He can be reached via email at dmoyer@ccdcranch.com
RACQUET COMMITTEE
Creating A Vision For Your Racquets Program • Write down what you want the final outcome One of the most quoted movie lines of all time comes from the great baseto look like. Without a clear vision of where you ball movie, Field of Dreams. want to go, you can’t set out to build something As Kevin Costner’s character is walking through the cornfield, he hears special. This should include every detail from a voice that tells him “If you build it, he will come” (most people change staffing, facilities, member participation, prothe line to they will come instead of he will come). gramming, etc. If you have a staff, get with them He listens to the voice and creates a vision for what the field would look and create new ideas so that everyone is on like and the ghosts of players in the past as well as tourist do come. I’ve board and working together as a team. always believed in this line when building a tennis program. If you have a • After you have met with your staff, you need vision for what you want the program to look like and then work towards to evaluate your staff to make sure you have building the program within that vision, the people will come, and you will the right people in place to achieve your vision. have tremendous activity within your racquet sports program. If not, start the interview process to find those When I started at The Country Club at DC Ranch in February 2011, we persons. Create a new position if you don’t want had no tennis shop, no bathrooms, no staff except for me and virtually to move anyone out. no tennis activity. To some, that vision would look pretty bleak, but I • Lay the foundation and build it by creating started working towards creating what I wanted the program to look like programming that will get members involved and then worked hard to achieve it. and don’t be afraid of small numbers to start. We now have a beautiful tennis shop with bathrooms and merchanWhen our new junior director came on board dise, four USPTA professionals and a front desk staff. Participation has we were on the same page with our vision for grown over exponentially. the program. We needed more opportunities Up until this past year our junior program was floundering with spofor classes each week and even if only one kid radic participation. I created a vision for the program, starting with the showed up, they would get the same energy and type of tennis professional needed to lead it and then went out and hired enthusiasm as 10 kids. By adding class options that person based on the vision. but also never canceling because of small numIn just 13 months our junior tennis revenue is up over 200 percent and bers, he was able to slowly build each class into is showing no signs of slowing down. By creating that vision and then a two to three-court clinic. hiring the right person to share in that vision, we’ve been able to achieve • Communicate your vision clearly to the great things. members. The ladies league teams presented one So how do you go about creating that vision so that you can build your of the biggest challenges I’ve had in our growth racquet sports program at your club? because we were in constant growth mode, which meant ladies were switching teams a lot each year. We went from two teams to four teams and continued to add until we got to the nine teams we have now on only six courts. The challenge was made easier because I was always communicating why we were doing things the way we are. We still had some hurt feelings, but they all understood the vision for the program. • Don’t be afraid of failure or change. If something doesn’t work, try something new or do it again differently. Your program should continue to evolve! B R 50
BOARDROOM | JANUARY/FEBRUARY 2020
In golf, it’s important to choose your partner carefully.
Golden Horseshoe Golf Club, Virginia, managed by KemperSports
Uniquely dedicated. Distinctly dierent. Custom Property Management.
500 Skokie Blvd., 4th Floor, Northbrook, IL 60062 847-850-1818 | www.kempersports.com
JOHN R. EMBREE John Embree is CEO at the United States Professional Tennis Association and can be reached via email: john.embree@uspta.org.
Exciting News to Share If you have been following my messaging over the last year, you are well aware of the changes that the USPTA will be undergoing as a part of our new accreditation status from the USTA. In case you may have missed it, here is what you need to know. Commencing on January 1, 2021: To become a USPTA certified tennis professional, new applicants will be required to accumulate 1,200 hours of hands on learning/work experience (generally eight months to 12 months) at a club or facility under the watchful eye of an approved USPTA mentor. In addition, 300 hours of on-line and/or face-to-face education will be part of the new standards of the new certification pathway. The credibility of our members and the safety of their students are paramount for the USPTA. For that reason, we are excited that every USPTA member in good standing will be Safe Play trained and complete a background screening every two years. This cost will be absorbed by the USTA. The tennis public can rest assured that USPTA professionals will be well vetted and of the highest standards in order to ease the decision about who will coach their children. The continuing education requirement will increase 25 percent from 12 hours to 15 hours for all USPTA members who are required to participate. The USTA will be promoting these new higher standards to those who employ tennis professionals, so that these new higher standards mean something in the marketplace. Without question, this is a paradigm shift for our association. It is going to be a “heavy lift” to make sure that our entire membership and any new professionals entering our industry understand what will be taking place 12 months from now. As difficult as this will be, this initiative underscores our stated mission of “elevating the standards of tennis-teaching professionals and coaches” and will help tennis attract and retain more players. As a part of the new certification pathway, I am pleased to announce an upgrade to the recreational coach membership category that will make it more attractive to those first-time professionals, high school/ college players or part time coaches who want to be a part of the new USPTA. Launching in Q1 of 2020, the recreational coach category will become USPTA Instructor, which will be a new certified category that includes liability insurance for the same dues of $199. This USPTA Instructor level will require applicants to have face to face training in the newly developed Teaching Essentials 1 (two-day workshop), which focuses primarily on the all- important job of teaching entry level programs for beginning youth and adults. In addition, it will require approximately 16 hours of on-line learning that will include 52
BOARDROOM | JANUARY/FEBRUARY 2020
Coach Youth Tennis, plus Safe Play training, background screening along with CPR and AED. The remaining hours will be filled by other on-line courses that will be communicated once we are ready to go to market. More details on this category and the impact on recreational coach members will be coming soon. In collaboration with the USTA, the Teaching Essentials 1 workshops are scheduled to start late in January so that interested professionals can attend. Please see the calendar in the back of this ADDvantage section for workshops near you. We will have a complete schedule of dates and locations of these workshops throughout the year. These Teaching Essentials 1 sessions will be administered under the capable tutelage of Steve Keller and Craig Jones of the USTA, in addition to other USPTA coach developers. The feedback from the initial pilots held in 2019 has been phenomenal. If there are any USPTA members who wish to host one of the TE 1 workshops, please contact to me with your club information and potential dates so we can bake it into our planning. I cannot guarantee that your facility will be able to hold one of these workshops, but we will do our best to make it work. Finally, and because of the popular demand, we have extended the PTR equivalency for PTR members who wish to join the only fully accredited tennis teaching organization through August of 2021. Over the course of the next 12 months, we will be highlighting the changes that are coming with the hope that no one will be caught unaware when 2021 rolls around. The USPTA is the clear-cut leader in education and we will be positively impacting how tennis is delivered in the USA. Let’s get after it! B R
DAVE DOHERTY
GREEN COMMITTEE
Dave Doherty is president/CEO and founder of the International Sports Turf Research Center, Inc. (ISTRC) and holds three patents regarding the testing of sand and soil based greens. He can be reached at (913) 706-6635 or via email: daveistrc@hotmail.com
Communication: It Works! One question in particular stands out in my No matter where we are in our lives, age, work place, friends, family and mind. “How do we know that after spending anyplace else that one can think of, we need to communicate. this much money we will have what we want?” Without communication we’re unable to make the best decisions Each member of the panel commented, that our lives require. I once read that we each make over a thousand based on their expertise, and with answers decisions a day. I can’t imagine making those decisions without some based on each individual’s knowledge oboutside influences. tained from over a year of communicating A number of years ago, I’m in Calgary, Alberta, Canada as part of a with each other, and with knowledge gleamed panel discussing, with club members, a complete multi-million-dollar from the club’s twice a month meetings with renovation of a golf course and answering their questions as to why or members. why not this proposed action is necessary. The communication resulted in a team of On the podium, along with me: the club president directing the meetoutside experts being able to answer that paring, the club’s COO and general manager, the president of the architicular question, and all of the questions asked tectural firm that the club had chosen (if the members approved the that evening, based on science and individual resolution to go forward with the rebuild), as well as the U.S.G.A. Green experience. Through communication the memSection representative. bers approved this project.
All of us need to use all of the resources that we have available to us and seek knowledge and understanding based on common sense and science where and whenever we can find it. Communication leads to knowledge, which leads to informed decision making. Anyone who thinks that they can sail the ship by themselves is in for a rude awakening! Conservatively estimated 300 members attended. Everyone on the panel has been involved with this project for well over a year. My firm and I personally have been involved with this club for many years and we had a wealth of information to share regarding the physical properties of their greens, tees, fairways and bunkers, and what they needed to achieve their goals for the club. The meeting, scheduled for about an hour and a half, lasted over four hours. Member after member asked questions; questions written down. This club’s management had been having town hall meetings and break out meetings with members on average of twice a month for over a year. Now that’s what I call COMMUNICATION.
54
BOARDROOM | JANUARY/FEBRUARY 2020
The successful courses that my firm and I work with throughout North America and around the world normally have one thing in common, and that’s communication. All of us need to use all of the resources that we have available to us and seek knowledge and understanding based on common sense and science where and whenever we can find it. Communication leads to knowledge, which leads to informed decision making. Anyone who thinks that they can sail the ship by themselves is in for a rude awakening! BR
Angela Grande Design Interior Design ▪ Architectural Collaboration ▪ Custom Designed FF&E ▪ Procurement agrande@agrandedesign.com (917) 873-2425 www.agrandedesign.com
2018 & 2019 BOARDROOM EXCELLENCE IN ACHIEVEMENT WINNER FOR YACHT CLUB DESIGN
Architect: Hart Howerton
Photo: David Sundberg / Esto
LISA CARROLL
PERSONAL DEVELOPMENT
Lisa Carroll, SHRM-SCP, is a search executive and consultant with Kopplin Kuebler & Wallace, LLC, a consulting firm providing executive search, strategic planning and consulting services to the private club industry. Lisa can be contacted at (561) 596-1123 and at lisa@kkandw.com.
Got Grit? Got Grit!!! What’s Grit? Recently, in preparation for a webinar with the CMAA’s Women in Club Management group, Annette Whittley, a colleague at Kopplin Kuebler & Wallace and I discussed topic ideas with Corinne Grimaldi, CMAA’s senior director, community strategy & outreach and Shelley MacDougall, life and business coach with New Reality and CMAA. As the four of us were brainstorming about a topic, Annette and I both mentioned the word “grit” simultaneously. “Grit” has been the focus of both Annette’s and my last couple of years. It was my “word” for 2019 after reading the book, One Word That Will Change Your Life by Gordon, Britton and Page, which walks you through the benefits and the process of identifying one word of primary focus for the new year. Each year you find a new word on which to focus. It is a simple yet impactful process. So, what is grit? We found several definitions including “courage and resolve; strength of character” and “firmness of mind or spirit; unyielding courage in the face of hardship or danger.” In Angela Duckworth’s book Grit: The Power of Passion and Perseverance, the author shares her research and insights on talent, effort and achievement and the huge impact that effort has in achieving one’s goals. Those goals don’t happen without passion to sustain your effort over time and perseverance to drive your effort even in the face of obstacles and rejection. Who has Grit? In our webinar we mentioned three gritty women who meant something to us including Amelia Earhart and Sheryl Sandberg. The third gritty person I want to focus on is Patricia Ann Schiestl who worked most of her 40-year career at Jupiter Island Club and Fishers Island Club. She retired in 2017 as general manager at Fishers Island Club and passed away in November 2019. I had the great fortune to know Pat and her husband Stefan through CMAA and had dinner with them in the spring of 2019 while Pat was in the throes of her battle with cancer. She traveled and lived life to its fullest, even after she became ill. Throughout her career she exuded warmth and hospitality with everyone she came in contact with and paved the way for today’s women club managers. Pat had grit and grace – a powerful combination. Grit traits include courage, tenacity, focus, mental toughness, resilience and confidence. These words embody passion and perseverance. The added influence of grace is, in my humble opinion, a superpower.
58
BOARDROOM | JANUARY/FEBRUARY 2020
Grit is what you do – with passion and perseverance. Grace is how you do it – your approach and your way of dealing with people and situations (think gravitas). It is your EQ. So how do you channel your inner grit? According to Duckworth, have an interest that you are passionate about, practice your efforts to strengthen that interest, have a purpose or mission and always have hope in order to persevere. You accomplish this by selecting your tribe – the family and friends that support you, continuing your lifelong learning journey and having interests that bring you joy outside of work as well as at work. Taken one step further, I recommend sharing the One Word book with your team members and asking each associate to come up with their own “word” for 2020. You can also have the team come up with a team word to focus on in the new year. The book walks you through the team building steps as well and the individual steps to finding your one word. Life is joyful and it is stressful. Having grit helps us deal head on with obstacles, better manage our day-to-day stresses as well as deal with monumental trials and tribulations. Grace helps us recognize and appreciate the joy that everyday life brings our way as well as successfully lead and be role models to our teams. As Pat has asked us to remember this quote from author and motivational speaker Vivian Green, “Life isn’t about waiting for the storm to pass, it is about learning to dance in the rain.” Want grit? It’s time to dance in the rain! BR
SUSAND@SBBDESIGNS.COM 404.237.7745
CASE STUDY - SPECIAL TO BOARDROOM
Creative Solution Saves Milwaukee Athletic Club For decades, the Milwaukee Athletic Club was THE heartbeat of the Milwaukee social scene. Founded in 1882, it was an Olympic gold-medal-winning amateur club. Twenty-six years later the club moved into a 12-story building housing three restaurants, cocktail lounges, a ballroom, barber shop, library, private meeting and guestrooms, and full-service athletic facilities. It was, and still is, the only full, private athletic and social city club. It was THE place to be and be seen…until it wasn’t anymore. The Milwaukee Athletic Club (MAC), experienced 12 years of net member loss, 30 years of deferred maintenance with a board and management hoping things would get better.
In 2016, David Kriete, a third-generation MAC member was elected board president. He developed an aggressive plan for he knew the club would be out of business before 2018 without it. He enlisted a strong board and committees of successful businessmen and businesswomen to strategize and combine talents to help secure the club’s future. “I chose to run for the board out of love and passion for the club. I grew up here and have so many memories of me and my parents participating in club activities. I wanted to be part of ensuring the club not only survived, but thrived once we figured out a game plan,” said Kriete. “Step one entailed discovering the problems from the members’ perspective. Step two included listening to management and staff to learn their perspective, and the steps following this discovery phase would be the crux of finding a long-term and sustainable solution,” he added. 60
BOARDROOM | JANUARY/FEBRUARY 2020
Like the Olympian athletes who founded the club, the Herculean effort began. All ideas and options were scrutinized including looking at new business models, hosting weekly finance committee meetings, vetting potential business partners and even relocation. In December 2016, the board recognized it needed more. They enlisted the guidance of Strategic Club Solutions to help with a membership drive and eventually serve as its interim management team. By June of 2017, the board was ready to entertain proposals. “We explored sale-leaseback options, condo-sale options, downsizing options, and the sale of the hotel operation. Selling any portion of the club was difficult to entertain because in doing so we’d forfeit significant amounts of top line revenue,” said Kriete. “During these grueling strategic meetings and discovery, however, a new option arose....” Two MAC Members, developers Josh Jeffers of J. Jeffers and Co. and Tony Janowiec of Interstate Development, suggested a sale-leaseback, reducing the club size to fit the membership and leasing the hotel and banquet to Sage Hospitality to run a boutique MAC has branded a fourstar hotel experience. Because of the building’s history, they were able to leverage their experience with historic buildings as well as securing state and federal historic tax credits. “We wanted to keep the MAC at its home. We were confident we could secure impactful tax credit dollars,” says Janowiec. Over that following year, the club developed a plan and the members supported it. The MAC relocated temporarily to a vacant restaurant that was adjacent to a local downtown fitness facility. “We got lucky. The temporary clubhouse is located two blocks from the club. Members are able to park in their same lot and we didn’t have to suspend their membership while under construction,” said Ryan Doerr, president of Strategic Club Solutions, who worked with the club through the process. The MAC used the transition as an opportunity to present an aggressive Legacy Membership campaign before doors were closed to construction. It was a success, yielding 77 new members in a membership of 798. Demolition began in April of 2019 and club construction is to be completed in late summer 2020 with the hotel to be ready in the Fall of 2020. The MAC reimagined will have the newest athletics, pool, cabanas, spin studio, Pilates, massage, physical therapy, indoor golf center, rooftop bar and lounge, co-working spaces, member lounges, meeting rooms, and luxurious locker rooms. The hotel will feature 95 rooms plus a public restaurant and spa, public event spaces, and banquet rooms. “The club is refocusing its brand and purpose to be the heart of Milwaukee business, athletics and wellness. I have no doubt this will be something extraordinary and worth every minute of the past years’ efforts,” expressed Kriete. Something all MAC’s members will certainly agree with and appreciate. B R
C
M
Y
CM
MY
CY
CMY
K
KEVIN F. REILLY
EDWARD T. YODER
CLUB FACTS & FIGURES
Non-Member Revenue Reporting Requirements The IRS is putting all clubs on notice that it will be stepping up its enforcement of non-member revenue reporting. At the end of last year, many clubs received the same form letter from the IRS, Letter 6176 (4-2019) Catalog Number 72211B. It appears to have been generated by the IRS and sent to many 501(c)(7) exempt organization reporting non-member income, regardless of the non-member percentage of gross receipts. The IRS letter is a good reminder that a 501(c)(7) membership organization is exempt from federal income taxes based on its membership activity. To maintain its exempt status, a club should be serving its members. A club can receive up to 35 percent of its gross receipts, including investment income, from sources outside of membership without losing its exempt status. No more than 15 percent of gross receipts can come from non-member use of club facilities and services.
Clubs may not engage in a non-traditional activity. This can, in and of itself, jeopardize the tax-exempt status. However, the IRS has provided an unofficial five percent safe harbor for non-traditional activities. This five percent is part of the 15 percent mentioned earlier. For an example, the sale of alcoholic beverages by a club for off-premises consumption is non-traditional. One large source of unrelated business income is reciprocal income. The issue as to whether reciprocal income is, or should be, treated as member income has been raised a number of times. It seems that the result is clear. Reciprocal income is income received from members of clubs not your own. As a result, it is non-member income. Prior to 1971, the definition of a guest of a member was broader than it exist today. Under that definition, a member from a reciprocal club could potentially be treated as a guest. However, since
One large source of unrelated business income is reciprocal income. Reciprocal income is income received from members of clubs not your own. As a result, it is non-member income. Prior to 1971, the definition of a guest of a member was broader than it exist today. Under that definition, a member from a reciprocal club could potentially be treated as a guest. However, since that time, the IRS has been clear that such income is non-member income. This is a good time to review the rules. Gross receipts are defined for this purpose as receipts from normal and usual activities of the club including charges, admissions, membership fees, dues, assessments, investment income (dividends, rents, etc.), and normal recurring capital gains on investments, but excluding initiation fees and capital contributions. Income received from members of other clubs using your club under a reciprocal agreement is non-member income and is subject to the 15 percent limit as well as UBI tax. 62
BOARDROOM | JANUARY/FEBRUARY 2020
that time, the IRS has been clear that such income is non-member income. The IRS issued a general counsel memorandum (GCM 39343) concluding “it seems clear that the Service’s current position is to treat income derived from a social club pursuant to a reciprocal agreement with a social club of like nature as income from non-members. Absent any formal modification, the Service must, of course, continue to follow the rule…” ➤
Provided your club is maintaining gross receipts below the 35 percent and 15 percent thresholds and maintaining adequate records of non-member activity, you should have no problems maintaining your federal tax exempt status. from Club Facts & Figures | 62
The Service has not addressed the issue since the publication of the GCM almost 30 years ago but its position has never been rejected in any court proceeding. However, it is unclear whether it has ever been challenged. Several years ago, the exempt organization examination branch questioned whether this position was still applicable. In an internal response, the IRS upheld the GCM and indicated that it should still be enforced. While not unexpected, it is a blow particularly to large city clubs with rooms since a large portion of that revenue comes from usage of the club by members of reciprocal clubs. Two safe harbors are provided to determine if income is member income. If payment is made directly to the club by a member or the member’s employer, a host-guest relationship will be assumed: 1. Where a group of eight or fewer individuals, at least one of which is a member, uses the club’s facilities. 2. Where 75 percent or more of a group using club facilities are members. In all other situations, a host-guest relationship must be substantiated by the club. The classic example of this is where a controller of a corporation hosts a meeting of his accounting staff at his club and his employer pays the cost of the meeting. In this situation, the staff are guests of the member because their presence is related to a direct business objective of the employee-member. Alternatively, if the controller sponsors a meeting of his corporation’s board of directors at the club, the persons invited are not guests of the member since the directors’ presence is not related to a direct business objective of the particular employee-member. The IRS Letter pointed out the record requirements as described by Revenue Procedures 71-17. Clubs are required to maintain records of all non-member activities. Adequate records must be maintained to substantiate that there was, in fact, a member in a group of eight or fewer or that 75 percent of a larger group were members and that payment was made directly by members or their employers. The club need not inquire about reimbursement where payment is made directly by the member. The information that must be obtained in all situations involving groups of more than eight (even if a member pays the club directly) includes the date; total number and number of non-members in the party; total charges; charges attributable to and paid by non-members, as well as a statement signed by the member indicating: • Whether the member has been or will be reimbursed for such non-member use and, if so, the amount of the reimbursement 64
BOARDROOM | JANUARY/FEBRUARY 2020
• The name of his employer, amount of the payment attributable to the non-member use; the non-member’s name and business or other relationship to the member, and the business, personal, or social purpose of the member served by the non-member use where the member’s employer reimburses the member or makes direct payments to the club. If a large number of non-members are involved and they are readily identifiable as a particular class of individuals, the class rather than the individual names of the non-members may be recorded, and • The donor’s name and relationship with sufficient information to substantiate the gratuitous nature of the payment or reimbursement where a non-member, other than the employer of the member, makes payment to the club or reimburses the member and a claim is made that the amount is paid gratuitously for the benefit of a member. Be forewarned that the IRS may follow up on this form Letter with additional enforcement in the near future. Provided your club is maintaining gross receipts below the 35 percent and 15 percent thresholds and maintaining adequate records of non-member activity, you should have no problems maintaining your federal tax exempt status. Should you have any concerns about your revenues from outside of your membership or the IRS Letter, please contact PBMares for specific guidance. B R Kevin Reilly, JD CPA CGMA is a partner with PBMares, LLP located in Fairfax, Virginia and has specialized in the club industry for more than 25 years. He may be reached at (703) 385-8809 or by email at kreilly@pbmares.com. Ed Yoder, CPA is a tax partner with PBMares, LLP and is located in its Harrisonburg office. He may be reached at (540) 434-5975 or by email at eyoder@pbmares.com.
SEE THE DIFFERENCE EXPERIENCE MAKES.
clubsystems group
1-800-356-4242
|
www.clubsys.com
|
sales@clubsys.com
MICHAEL C. DAVIS
RANDY RUDER
EXECUTIVE COMMITTEE
Focusing On the CMAA 2020 World Conference and Club Business Expo The year is 2020 and the pace of change is not slowing down so it’s time to focus forward and visualize our success. The upcoming CMAA’s World Conference & Club Business Expo, February 8-12, at the Gaylord Texan Resort & Convention Center in Grapevine, TX, has been designed to help you take the long view of your club so you can make better decisions in the short term. Get focused by exploring how your daily decisions and actions become the catalysts that lead to you and your club’s future success. Our general and business sessions will feature restauranteur and hospitality guru Danny Meyer; author, speaker and 9/11 survivor Ari Schonbrun; fighter pilot, PGA Golf Professional and the founder of the Folds of Honor Lt. Colonel Dan Rooney, and vice chairman, Global Wealth Management and senior client advisor at Morgan Stanley, Carla Harris. More than 80 concurrent sessions will be presented by industry experts, consultants, and practitioners including Ritz-Carlton Founding President and COO Horst Schulze and CEO of H&R Block, Jeff Jones. These sessions will address the complex challenges facing today’s club management professionals – the latest thinking on data intelligence; club governance; recruiting and hiring talent; technology trends; member engagement and retention; competing in today’s competitive marketplace, and more. The networking event will be a spectacular taste of Texas experience as Ridglea Country Club hosts the club tour, featuring talented and innovative club chefs from the Dallas/Ft. Worth area. Ridglea Country Club has now celebrated over 60 years of history and tradition, and generations have come to know and love the charm of Ridglea, an elegant club where modern meets tradition. 66
BOARDROOM | JANUARY/FEBRUARY 2020
The 2020 Conference will offer multiple new events and activities, including: Open space - OpenSpace is run by participants, for participants, in an informal, relaxed and open environment. You come up with the topic or challenge, set the agenda for what’s discussed in the “pod”, and invite colleagues and new connections. The “pod” can be reserved for 30-minute conversations. Expanded offerings in the Club Business Expo – This innovative two-day showcase highlights the products and services of more than 250 exhibitors spanning the full industry supply chain. Visit the new Satellite Lounge and bid on additions to your cellar at the Wine Society Live Auction. A new networking opportunity - Cap off a great conference week with an after-hours event at the Gaylord Texan’s Glass Cactus Nightclub! CMAA After Dark will bring together CMAA members, chapters and partners for a fun evening on property on Tuesday, February 11. You may not be familiar with Grapevine, TX, but it is Vintage Texas. Enjoy the city’s rich history, a Northern Texas experience and unique event venues with all the modern-day technology necessary to operate a first-class World Conference. Historic downtown Grapevine offers a small-town feel with more than 80 locally owned shops, restaurants, winery tasting rooms, and boutiques. Be sure and visit one of Grapevine’s seven winery tasting rooms to find out just why Grapevine has become the headquarters of the Texas Wine Industry or visit its two local craft breweries. Dallas/ Fort Worth International Airport is conveniently located just 10 minutes away. We hope to see you in Grapevine to take the opportunity to get focused and change your perspective! B R Randy Ruder, CCM, CCE, of Beach Point Club in Mamaroneck, NY, is the 2019 chairman of the Club Management Association of America (CMAA), and Michael C. Davis, CCM, CCE of the Park City Club, Dallas, TX, serves as the local chapter host. For more information on the event, please visit www.cmaa.org/conference.
ROBERT A. SERECI Robert A Sereci, CCM is GM/COO of Medinah Country Club, located in Medinah, IL. He can be reached at (630) 438-6825, or via email: rsereci@medinahcc.org
ON THE FRONTLINES
Are You Stressed Out or Burned Out? I got a call from a fellow club manager who wanted my advice on how to deal with burnout. He’s been in the club industry for over 20 years and he felt that he was starting to burn out. After some probing from me, it turns out he wasn’t burned out at all. Rather, he’s stressed out. Why is it some people get burned out and others don’t? The answer is in understanding the difference between the two. Stress and burnout are not the same thing. And while we know that stress often leads to burnout, it is possible to handle the onslaught of long hours, high pressure and member issues in a way that safeguards you from the emotional exhaustion, cynicism and a lack of confidence in your abilities that characterizes burnout. The key is tapping into your emotional intelligence. Here are some EQ techniques that work for me and may work for you. Don’t be the source of your stress. For too long I was my own factory of stress. Whether we like to admit it or not, too many of us create our own stress, with its full bodily response, merely by thinking about confrontational board meetings or anticipating unpleasant employee encounters that might be stressful. Club managers who have a high need to achieve or perfectionist tendencies may be more prone to creating their own stress. (I have strong personal views on perfectionism so more on that in future articles).
Recognize your limitations and shortcomings. Becoming more aware of your strengths and weaknesses will clue you in to where you need help. Listen to others and ask for help. A word of caution, club professionals who are insecure in their role experience this far more often. Please believe me when I say that I know this from personal experience! While you may not be aware of your insecurities, chances are your team is! Meditate. I know what you’re thinking - esoteric nonsense, only practiced by long haired, bearded hippies humming away. Don’t let these stereotypes steer you away from reality. I too, was very skeptical but after giving into this practice I realized that it actually works. Mediation practices help us to deal with immediate stressors and long-term difficulties. You don’t have to take my word for it, do your own research. I was introduced to TM (Transcendental Meditation) while managing the American Club in Hong Kong. To be honest, I only agreed to do it so I can spend some time with my wife Jennifer who expressed interest in TM. Eight years later I continue to practice TM daily (20 minutes, twice a day) and with absolute certainty I can tell you that TM has helped me become a better husband, father, friend and leader. SEE FRONTLINES | 71
68
BOARDROOM | JANUARY/FEBRUARY 2020
© 2019 NANA WALL SYSTEMS, INC.
NanaWall® HSW systems’ single track sliding glass walls integrate within traditional architecture, working around existing structural columns and other remodeling challenges. Navigating segmented curves and angle changes, our walls can also incorporate commercially-rated swing doors that convert to sliding panels and hide away. Learn more about our limit-surpassing innovations at nanawall.com/hsw.
BILL BOOTHE
TECHNOLOGY PERSPECTIVE
Bill Boothe is president and owner of The Boothe Group, LLC, an independent consulting firm that helps clubs understand computer technology, make good decisions and receive the highest value from their technology investment. During his 28 years in the club industry Bill has assisted more than 400 private clubs. Bill can be reached at bboothe@boothegroup.com.
Tips on Negotiating Software Contracts After 30 years of consulting with more than 400 private clubs, when it comes to acquiring new software, we’ve learned a thing or two about keeping clubs out of hot water. Doesn’t matter whether it’s enterprise software to run the entire club or a one-off application, the guidelines are pretty much the same. So, let’s get started with our tips. 1. (Almost) everything is negotiable: Start with that premise in mind. Don’t accept the “we use a standard contract that’s the same for every club” line – in most cases it’s not true. 2. How do we control support cost increases? Easy, add language that caps annual increases to the COL (hard-nosed position) or the COL + X% (more reasonable position). Remember, if all goes well, you’ll be using the software for many years. So, controlling annual increases is much more important than getting one-time discounts on the acquisition cost. 3. What about software performance guarantees? Forget it. All vendors cover themselves with language that essentially says they will make a reasonable effort to resolve software glitches (whatever that means). A better way to gauge the reliability of the software is to check with other clubs using it. If they give it the thumbs up, you should be good to go. 4. How much training should we get? Lots, for a club management suite, 10-20 days of onsite/online training, depending on the size and complexity of your club. Training days must not include converting the data from your old system or any configuration/set-up time. Clubs have a tendency to go cheap on training to save money, and it often comes back to bite them later. Buy lots of training. If you end up not using it all, the vendor should not charge you for the unused portion (get that in writing). 70
BOARDROOM | JANUARY/FEBRUARY 2020
5. What about customizations? Ugh, please try to avoid software customizations. In most cases you can make a simple procedure change to use the exiting features offered. Customizations are one of the biggest headaches clubs experience as they become “one-off” features for the vendor to support. Plus, in many cases this special programming ends up being wiped out with each new software update, only to be reloaded and wiped out again in a later update. 6. What software is included? Make sure the contract lists each software module that you are expecting to receive. Don’t accept fuzzy descriptions such as “our club management suite” or “the reservations package.” Know exactly what you’re getting before you sign. 7. How should we handle the initial deposit and final payment? Many vendors will ask for a 50 percent payment at contract signing and the other 50 percent “upon delivery.” That means you’ve paid 100 percent the day the software is installed on your club’s network server. With that arrangement, any financial leverage you might have goes out the window. Instead, negotiate to pay 25 percent up front, 25 percent upon delivery, 25 percent at go-live and 25 percent 90 days following go-live. Keep some financial leverage until you’ve been using the system for 90 days and have an idea of how well it is meeting your expectations. 8. Can I negotiate the contract jurisdiction to be my state? Unlikely. Software vendors are generally not willing to open themselves up to litigation in multiple states. Plus, lawsuits against these vendors are virtually unheard of, since the contracts generally limit awards to less than what it would cost the club to litigate. A better method of protection is to check with other clubs that have purchased the solution(s) you are considering. If those clubs are happy, you probably will be too. 9. What if we’re not happy? Make sure that you have an “out clause” that guarantees you can get your money back if you’re not satisfied after the system is up and running. Ask for at least 90 days from your go-live date to determine your satisfaction. BR
from Frontlines | 68
I know this is a bold statement but it’s true. I was so accustomed to stress and all the accompanying pains that come with it, that I completely forgot what it felt like to be stress free and painless. Club management is not for the meek. The average outsider has no idea of the amount of stress we are exposed to – be it our own or by others. Whether its mindfulness or TM, I urge you to explore meditation and learn more. Your wife and kids will thank you. Reframe. Reframing is simply reevaluating your perspective in a given situation. Do you view a situation as a threat to something you value? Changing your perspective (or cognitive reframing) transforms distress to eustress, which has a significant effect on your ability to bring your stress level down. Not all stress is bad. Whether or not you get stressed during a negative event depends on how you perceive that situation. Therefore, some managers get sick and depressed while others don’t. We take things personally, as if negative reactions from others are an attack on our character. Usually, that’s not the case. When boards reject my ideas, rather than getting upset, I reframe their objections as their way of saying they don’t understand my point of view. It’s not an attack on me. You can do this too! Think back to your most stressful day at the club, and then imagine on that very day your wife calls informing you that your child has just been diagnosed with cancer. In an instant, that same work stress becomes a non-issue. Why? Because in that instant you were forced to reframe and, as a result, your work stress became insignificant given your child’s cancer diagnosis. While this example is extreme, it illustrates the principle.
Forget the past. Seriously! To grow as a person and as a professional you must selectively forget the past. But thanks to Freud’s repression theory, deliberately trying to forget things, as a path to peace of mind, still has a bad reputation. Your psychoanalyst sister-in-law will advise you that the very fact you want to forget something is the very reason why she suggests you seek professional help. And she is correct. However, I am not referring to deepseated psychological issues. I’m referring to the countless everyday things we’d rather and should forget – moments of excruciating embarrassment, failures, disappointments or stressful future events you can’t do anything about right now. Are you imprisoned by the past or can you free yourself from it? Do you carry the past with you like a sacred lamp or are you able to set it aside in order to direct your energy on something new? Manage the past, present and future successfully and you will thrive. Manage them poorly or not at all and you will struggle and possibly fail. Walk in their shoes. De-escalate conflicts by putting yourself in the other person’s shoes. Conflicts often leads to stress so it’s best to de-escalate them when you can. Be inquisitive, ask questions, listen deeply. Keep your attention to the other person and focus on what the person is trying to tell you. By seeking to understand their perspective, you’ll be in a much better position to gain their trust and influence them. Much of our stress in clubs is our own doing. We are so focused on what we want to achieve that we leave no room for others. As a result, we practice no empathy, which is ironically a prerequisite for servant leadership. Most general managers forget that none of this is about them. It’s about the employees and the membership. What’s your purpose? Why is it that some people can be extraordinarily well-paid but feel empty, while others can work digging ditches and feel fulfilled? Part of the answer is purpose. As I noted recently in a recent article and my seminar at the 2018 CMAA conference, for most people, purpose is built not found. Working with a sense of purpose day-in and day-out is an act of will that takes thoughtfulness and practice. Having observed friends and colleagues working with and without purpose for years, I’d suggest that you consciously and deliberately find purpose in your work, regardless of your position. Remind yourself why you are working. Chances are you are not working for fun. Most of us don’t have that luxury. While we do enjoy our jobs, we also work to earn money and pay our bills. For most of us, work in and of itself is a meaningful act of service. As parents we work hard to provide for our families and for many this includes our aging parents or relatives. Some of us work hard to support organizations and causes dear to our hearts. While it is possible, I suspect it’s rare to find someone working with only their personal needs in mind. But if you do, there with them you will find someone who is stressed out and more than likely burnt out as well. Why do you work? B R
JANUARY/FEBRUARY 2020 | BOARDROOM
71
LYNNE LAFOND DELUCA
CULINARY & CATERING
Lynne LaFond DeLuca is executive director of the Association of Club Catering Professionals (ACCP). In 2014, Lynne was named “One of the Most Influential Women in the Private Club Industry” by Boardroom Magazine and in 2016 was awarded the Gary Player Educator of the Year Award. She was recently named as the recipient of the BoardRoom Gary Player Educator of the Year Award for 2019. She can be reached at: (805) 338-7640 or via email: Lynne@TheACCP.com
F&B and Event Trends that Adapt Well for Clubs Food and beverage continues to be in the spotlight as we enter 2020! Inspired menus and experiences are taking the club industry by storm and they are one of the easiest things to update and change in your club that cost little to no money. No capital dollars spent here, except for maybe new printed menus and as we know, it can make a huge impact in the member experience as well as F&B revenues. 1. Live action stations that allow you to customize and get it exactly how you want it. We have more dietary restrictions and allergies than ever before! Rarely will someone order something exactly as it appears on your menu with no changes, eliminations or substitutions. We are now used to ordering even something as simple as a cup of coffee exactly how we like it, from size to flavorings, decaf or regular and a whole new variety of milks to choose from. This has created a desire and need to have every aspect of what we eat and drink customized to our palate. Build-your-own live action stations can accomplish this in a fun, interactive way and are great for both member events and private events. 2. Grow it fresh and organic. Clubs with both acres and acres of land as well as city clubs with only a rooftop are finding ways and spaces in which to create organic gardens. Raised-bed herb and vegetable gardens, fruit trees, bee colonies for fresh honey, chicken coops for fresh eggs, maple trees for fresh maple syrup, hot houses for fresh tomatoes year-round… the more creative the better and your members will love and embrace the concept. The harvesting of these crops also makes for very experiential, hands-on member events. 3. Mini, gourmet versions of comfort-food desserts. Even with our healthy organic tendencies these days, we are still eating desserts! Think basic staples like banana pudding, fruit pies, whoopie pies and chocolate cake but twist them into Banana Pudding Parfaits, which combine layers of vanilla pudding, banana slices and wafers to create this miniature version of a southern staple. Fruit pies take on a whimsical twist when they are presented as hand pies and your members and guests can eat while mingling – serve with napkins – no plates required! Whoopie pies can come in all flavors (like strawberry with sprinkles!) and the mini version allows you to try more than one creative flavor. Take it to the next level and combine with trend number one – turn it into a live action station and allow people to choose their choice of filling and cake flavor. Everyone’s favorite chocolate cake is a great base to experiment with other flavors and takes on a new life when made into mini cakes with infused bourbon, espresso or Kahlua. Or, try something more organic and herbal and top it with a lavender ganache. 4. Global travel-themed menus. Our Millennial generation is traveling more than any generation before, as they would rather spend ➤ 72
BOARDROOM | JANUARY/FEBRUARY 2020
VISIT US AT THE CMAA WORLD EXPO BOOTH # 1336
from Culinary & Catering | 72
money on “experiences” and travel, than “things.” This adventurous spirit is also creating adventurous palates for tastes of foods from around the world. Global fusions also make for fun and extremely unique member events. 5. Healthy and plant-based options. This is all the buzz and our clubs, being a haven of lifestyle, sports and common interests can embrace this full force. Gone are the days where the only healthy options in a club were at the fitness facility. This should translate into all F&B outlets at the clubs. Healthy does not have to be bland or tasteless. Creating the biggest buzz are options like “allergen-free” (Any product or menu item without ‘trigger’ ingredients (usually milk, soy, eggs, wheat, peanuts, tree nuts, fish, and shellfish) can easily be labeled ‘allergen-free’ for a new audience. Manuka honey from New Zealand is considered an anti-inflammatory and makes for an exciting addition to drinks and a nutritious food-based supplement or juice bar add-on. 6. Air-fried everything! Oh, we still love our fried foods, but this healthier twist is all the rage. Air-fried chicken tenders, French fries and donuts are a given, but look for creative fruit and veggie-based side options, like sweet potato, green beans, parsnips, chickpeas, and apple slices. 7. CBD Infusion. While this will take some education, CBD is about to explode as one of the most exciting new food and beverage categories in decades. You can soon expect to find CBD-infused products galore, in everything from wellness shots to coffee drinks and chocolate, sparkling waters, teas, energy drinks, and alcoholic beverages. 8. Bright and bold colored foods. Multi-sensory impact, including appealing colors and creative plating will rank nearly as high as taste in 2020. Those who can plate up a dish that is Instagram-worthy or other social media are winning. The challenge will be for our chefs to ensure that no artificial colors or additives are used to achieve a dish’s visual appeal. 9. Home meal kits. Notice how many new companies there are that will deliver meals ready to be cooked, where everything is prepped and ready to go? Or even in grocery stores where all the ingredients for one meal is ready for you to cook. Our members want the fresh ingredient, home-cooked meals but time, family commitments, after-school sports and homework sometimes prevent them from cooking the way they would like and prevent them from coming to the club for dinner. 10. Secret locations for events. Everybody loves a good secret, so when you combine the unknown with an event location, you have pure magic. This usually works best with smaller groups, depending on where your secret location is. It can be an outdoor spot on the golf course, a roof top, your vegetable garden, or any space that would not normally be considered a dining room such as a gym, fitness studio or tennis court. Just make sure you tell guests how to dress and where to meet to be escorted to the secret location for the event. Food and beverage trends should be incorporated into both your member dining outlets as well as your catering and private event menu options. This also makes for great content for newsletters and social media outlets. Always looking for a new theme for your member events? Food and beverage trends are a perfect solution – combining the menu ideas into the overall design of an event make for a fun and educational experience! BR
74
BOARDROOM | JANUARY/FEBRUARY 2020
DISCOVER DISCOVERTROON TROONPRIVÉ PRIVÉ Your Your Club. Club. Your Your Culture. Culture. Our Our Resources. Resources.
® ® NoNo two two private private clubs clubs areare alike, alike, and and at Troon at Troon Privé, Privé, wewe want want to help to help youyou keep keep it it
that that way. way. Of Of course, course, that that requires requires a different a different approach approach from from other other management management companies. companies. AsAs Troon’s Troon’s private private club club division, division, wewe don’t don’t own own or or lease lease clubs—we’re clubs—we’re a proven a proven third-party third-party professional professional services services organization organization that that provides provides best-inbest-inclass class systems, systems, processes processes and and resources resources to the to the member-owned, member-owned, self-managed self-managed private private clubs clubs wewe serve. serve. ToTo learn learn more more about about Troon Troon Privè, Privè, contact contact thethe team team at at 480.606.1000, 480.606.1000, or or visit visit TroonPrive.com. TroonPrive.com. Clockwise top:top: FireRock FireRock Country Country Club, Club, Fountain Fountain Hills, Hills, Arizona; TheThe Club Club at Cordillera, at Cordillera, Edwards, Colorado; Colorado; Clockwise fromfrom Seven Canyons, Sedona, Arizona; The Club atArizona; Cordillera, Edwards, Colorado; ElEdwards, Macero St. James St. James Plantation, Plantation, Southport, Southport, North North Carolina; Carolina; Cimarron Cimarron Hills Hills GolfGolf & Country & Country Club, Club, Georgetown, Georgetown, Texas. Texas. Country Club, El Macero, California; Cimarron Hills Golf & Country Club, Georgetown, Texas
P RPIR VAT I VAT E E C LCULBUSB O S FO D F IDS ITSIT NIC NTCIT OI N O N| |WW WW W.T W.T R ORO ON OPNRPIR VIEV. E C.O CM OM
Your Members Enjoy Privileged Access and Preferred Rates at Over 300 Clubs Around The Globe
NICHOLAS WILHELM Nicholas Wilhelm is managing partner and chief sales officer at CedarCreek Systems. For more information, contact CedarCreek Systems at CedarCreeksystems.com.
FOOD & BEVERAGE COMMITTEE
The Value of Inventory Automation For Private Club Operations In an elite, high-end environment like the private club industry, technology has become an integral fixture in the landscape. Committed members who pay regular dues expect the benefits that come with the exclusivity they pay for including popular, seasonal menu items to high-end liquor options. Club owners and managers must always be prepared to pivot their day-to-day operations to their guests’ requests and needs. This demand for quality makes improved automation for food and beverage controls, along with inventory management, essential for streamlining club operations. A complete automated inventory system gives club owners and managers the tools they need to overcome the adversity aligned with manual or partially automated input. Beyond helping with finances, these systems can help clubs reach peak efficiency and improve productivity to optimize sales. Here are a few ways a complete automated inventory solution can positively impact private club operations: Improvement in inventory control and accuracy: Inventory product movement needs to be tracked, maintained and recorded properly in the private club industry. Food, wine and spirits can become forgotten and pushed to the back of the storeroom, unfortunately rendering them obsolete and a waste of money. A complete automated inventory system is connected to every step in a club’s supply chain. By receiving a comprehensive view of purchasing, payment, stocking and transfer activity, you can take full control of inventory functionality to determine if you need to stock up on popular items or defer from ordering. Reduced labor costs: Incomplete inventory solutions take excessive time and time equals money in this fast-paced industry. Many clubs anticipate spending three or more hours to record inventory a night, but more typically, the process takes several people all day to achieve accuracy. This means paying someone, if not multiple people, to complete the manual inventory of data while their valuable skills and abilities could be used elsewhere. After fully automating your systems, the cost savings can be invested back into your business. Decreased mistakes caused by human error: When individuals are tasked with this complex business process, accidents are bound to happen. Many judge the inventory of wine, liquor and spirits by the “thumb to eyeball” method, which is inherently inaccurate. A scribe will manually record a number in a spreadsheet and hand it off to an accounting team, who is then charged with recording purchases, invoices, transfers and on-hand EOM inventory. 76
BOARDROOM | JANUARY/FEBRUARY 2020
Each step in this disjointed process opens up the chance for human error. From a misjudged inventory level to a miscalculated report, your business could lose valuable resources. This can add up over time. According to Medium, the hospitality industry alone loses an estimated $9,000 a month because of human error. Less wasted time and resources: A complete automated inventory system eliminates the time crunch that comes with manual input. You can add, edit, delete and transfer inventory and information in real time. Private club operations can benefit specifically from software like bar code scanners, which improve business efficiencies by bringing inventory management and billing systems together in one streamlined process. Recorded product movement in real-time: No other POS or content management system (CMS) can provide real-time results like a complete inventory management system. At best, POS and CMS can provide good records of pours and track inventory to include in your financial statements, but a fully automated inventory system provides a complete picture of day-to-day activities in real-time. This allows you and your management team to make faster and more informed decisions regarding inventory management. Streamlined operations: A top fiduciary responsibility of club operators is to manage finances in the most efficient way possible, providing complete transparency. Manual inventory management may have worked in the past, but it’s a dated business practice. Today, there are a variety of diverse digital tools and software available to give companies the leverage they need to reduce human error and speed up business processes. A complete automated inventory management system enables clubs to optimize business operations with instant business intelligence and accountability, ultimately saving their most precious resources: time and money. B R
PRESENTING
Beverage Solutions LUXURY BANQUET & EVENT FURNITURE
Serve your guests in style! The mobile bar offers a stainless steel worksurface, an insulated ice well with drain, speed rails, glass racks & optimal storage space. Our residential style back bar has plenty of presentation space and can serve multiple uses. Southern Aluminum’s mobile bar and back bar is the perfect serving solution to your next banquet or event.
The Linenless Table Company 800.221.0408 www.sa-tables.com
NANCY BERKLEY Nancy Berkley is an expert on women’s golf and junior girls golf. Nancy shares news about women’s golf – along with her opinions on www.nancyberkleygolf.com.
NANCY’S CORNER
Do You Offer Golf Hospitality? A general manager of a BoardRoom Distinguished Club would not allow members to grab a menu and find their own seats in the main dining room. That’s not the hospitality standard demanded by a Distinguished Club. Yet many general managers allow new members to make their own way to the golf course and the game. In a recent article (The State of the Golf Industry – Flat Will be the New Up, BoardRoom November/December 2019), I highlighted the number of traditional golfers age six and up in the United States who play at least one round of nine or 18 holes annually. That number, as measured by the National Golf Foundation (the NGF) in Jupiter, Florida, has remained flat in the U.S. for over two decades, averaging about 27 million golfers annually. The flat statistic troubles me because I know that “interest” in golf is increasing. Good news! The NGF recently unveiled a new measure of golfers, counting people age six and older who have “touched” the game of golf in some way. The number still includes those who annually play nine holes or more, but the new measure includes those who are interested in the game, read golf magazines, watch golf on television, take lessons, play just a few holes, or only hit balls on an outdoor or indoor range. Using this new measure, the NGF reports that the total number of current and potential golfers who touch the game in some way or another is 107 mil-
80
BOARDROOM | JANUARY/FEBRUARY 2020
lion Americans. (That’s one-third of the U.S. population.) Subtracting the 27 million committed golfers, about 80 million women, men and children are in your target market for a traditional golf course experience. To tap into this market of interested golfers requires your golf club to apply better golf hospitality standards. Here are my suggestions: 1) The best place to start is with a personal tour by the director of golf for all new or potential members. On a golf cart this should take less than an hour. It’s essential to have a have a four-seater or six-seater golf cart to accommodate couples and families. And don’t forget to install seatbelts, especially if children will be with the family. It’s on this tour that the club’s golf professional shares his enthusiasm for the club’s golf programs. 2) The next hospitality step is providing every new member with a complimentary golf lesson. Now the golf professional and staff will have a better idea of where new members are on the learning or playing curve and what current members would be a good fit for exiting golf groups. 3) Here’s an easy hospitality practice! Ask your teaching staff to regularly come out on the course and casually inquire: “How’s it going?” If a member says, “My putting is terrible today,” that is a great opportunity for your professional to say, “Let me watch you putt and see if I can spot anything that will help.” And don’t forget young golfers. I know of one very private club that ➤
from Nancy’s Corner | 80
sets aside a course Friday afternoon for “kids-only” accompanied by the club’s instructors. (4) One of the most challenging golf-hospitality issues is integrating new members into the existing golf programs and tournaments. An industry colleague introduced me to Damon J. DiOrio, Chief Executive Officer of the Desert Mountain Club in Scottsdale, Arizona, a BoardRoom Distinguished Club.
Good news! The NGF recently unveiled a new measure of golfers, counting people age six and older who have “touched” the game of golf in some way. The number still includes those who annually play nine holes or more, but the new measure includes those who are interested in the game, read golf magazines, watch golf on television, take lessons, play just a few holes, or only hit balls on an outdoor or indoor range. Using this new measure, the NGF reports that the total number of current and potential golfers who touch the game in some way or another is 107 million Americans. (That’s one-third of the U.S. population.) Subtracting the 27 million committed golfers, about 80 million women, men and children are in your target market for a traditional golf course experience. 82
BOARDROOM | JANUARY/FEBRUARY 2020
Following are golf hospitality practices at Desert Mountain Club. 1. A program “3 and a Pro:” Three new members are invited to play a round of golf with one of the golf professional team members. Members meet the professional team and get to ask questions about the course and their golf shots. 2. Quarterly “New Member Mixers” for all the members that have joined the club within the last two years with the golf professional team in attendance to meet all new members. 3. The annual major Member-Member tournaments for women and men provide a special program that pairs new members up with other new members to make sure they participate in this large prestigious golf event at the club. Desert Mountain Club demonstrates A-plus golf hospitality! Incorporate it into your golf program. BR Nancy Berkley is an expert on women’s golf and junior girls golf in the U.S. Nancy is a member of the World Golf Foundation Women’s Committee, and a member of the National Golf Foundation. Nancy is a graduate of the University of Minnesota, Harvard University, Rutgers Law School and has a degree from the Professional Management Program of Harvard Business School. She shares news about women’s golf – along with her opinions on www.nancyberkleygolf.com. Nancy has served on the governing boards of two golf clubs and currently is on the green committee and marketing committee at Frenchman’s Creek Beach & Country Club. She is a contributing writer for LPGA publications.
2019 BoardRoom magazine “Excellence in Achievement” Award Winners
Are online elections causing you headaches? myDirectVote is a fast, secure, easy-to-use, industry-leading and feature-packed voting software preferred by clubs nationwide. And it’s for much more than director elections. Use it for votes on sale of capital or land, budget or bylaw approvals, referendums and proxies.
LEARN MORE
event.gosbs.com/mydv
Visit us at CMAA! Booth #1416
JANUARY/FEBRUARY 2020 | BOARDROOM
83
BONNIE J. KNUTSON
MEMBERSHIP MUSINGS
Bonnie J. Knutson Ph.D. is a people watcher. A professor in The School of Hospitality Business, Broad College of Business, Michigan State University, Dr. Knutson is a member of the Country Club of Lansing and the Michigan Athletic Club. She can be reached via e-mail: drbonnie@msu.edu
Alexa, Make Me A Tee Time Customization: It’s no secret that personalMy grandparents immigrated to the United States from their small, rural ization is a driving force for all members. To town near Lake Como in northern Italy. paraphrase the 1969 song popularized by Frank Nonno and Nonna arrived at a time when technological advances Sinatra, “I want it my way…” Clubs can be set were on the cusp of becoming part of everyone’s life. For instance: up so that these VIVAs mimic our own smart • Homemakers were excited to give up their “ice box” for the home features such as turning lights on or off, new-fangled electric refrigerator. It gave them more space in the opening or closing window blinds, controlling kitchen, but most importantly, kept leftover food longer. the room’s temperature, and even changing the • Then there was Henry Ford’s Model T. First produced in 1908, television. 15 million rolled off the assembly line within two short decades. But that’s just the beginning. What about being • From 600,000 at the turn of the century to almost six million able to access your personal playlist, your music in 1910, telephones exploded to 20 million by the beginning of or Netflix-type subscription services and even World War II. your Amazon Prime account? All these by using just a voice command while you are in the locker We are now on the cusp of another technological advance. Meet room. What about being able to access your faSiri, Echo and Cortana. Like its cousins, Siri and Cortana, Alexa is vorite workout app in the fitness center. one of a new generation of voice-activated virtual assistants (VAVA) I guarantee that the exercise routines I have that are changing how we switch what we see on our flat screens, on my phone are a lot better than what I can how we remember to lock our cars, adjust the thermostat, turn off currently get in a traditional full-service club. the lights, or ask a question. And the best features of all would be the one I It is also on the cusp of transforming how we can operate our jokingly call ET phone home where you can see clubs – for both members and for employees. While VAVA is less your family pop up in living color on the televiof a novelty today and is increasingly becoming integrated into our sion screen by simply saying “Alexa, make me a daily lives, it is still in the very early adopter stage for many – espetee time.” cially for clubs. And like any new technological development, there Connectivity: Every club wants and needs a are always pros and cons for adoption. So, let’s look at what I’m callstrong and special connection with its members. ing VIVA’s Top Three Cs. Here’s where VAVAs can be a glue to help build a convenient and personalized two-way experience to strengthen that bond. For example, Alexa can be programmed to welcome members with a personalized message when they walk into a pro shop. She can answer their questions about the club’s menu, the fitness center, upcoming special events, or even what is happening at the club that day. And it can be done in real time too. Communicate: There’s no question that Alexa will change how guests communicate with staff. The questions are whether she will replace the telephone or even the club’s receptionist. A VAVA system can make it simpler for a member to request extra towels, forgotten sox, lunch from the 16th hole, and even a spa service. 84
BOARDROOM | JANUARY/FEBRUARY 2020
This more direct request from guest to staff has several advantages. First, it should reduce misunderstandings or errors in what the member wants. Secondly, it should make for a faster response time because the requests would be quickly and correctly routed to the appropriate department(s). Finally, it should free up staff time to focus more on personal interaction with and service to the member. And after all, isn’t that what a club is really all about? But as sportscaster, Lee Corso, would say, “Not so fast.” As down the road it may be, not everyone is excited about a VAVA future for clubs. Employees have concerns about the impact it, as well as other new technologies and automated services, will have on their jobs. We are already seeing robots delivering food and Roombas cleaning rooms. We are already seeing wearable technologies being integrated into the workplace in the form of watches, hats, and microchips embedded into uniforms. Can Alexa, Siri, Cortana and all their clones be far behind? We can expect that many employees will have strong objections to being replaced by a “device that uses speech recognition to perform an ever-growing range of tasks on command” with its real smarts on the Internet. But the two big elephants in the VAVA room are privacy and cost. In the era of Snowden and Cambridge Analytica, we can’t be surprised that many members would want an Alexa-free club. And we can’t discount the ever-presence threat of
being hacked. Part of this reluctance comes from the fact that, when the VAVA devices are on, they are “listening” to everything that is happening in the room. Then there are the horror stories that pop up on social media about Alexa or Echo gone wrong. Complaints about Alexa waking people up in the middle of the night without prompting. Complaints about Echo recording a private conversation in a home and then sending it to someone in the contact list. Finally, there is the reported case of a man who allegedly received 1700 Alexa audio recordings of another user. Stacey Grey, policy counsel for the non-profit Future of Privacy Forum, pointed out that a [business] would be highly unlikely to use Alexa to eavesdrop, the fact that privacy policies regarding the Echo could be difficult to nail down is a problem. I agree. I expect that, like any new technology, eventually VAVA devices will get integrated into our routines and just become part of our daily lives. And as this happens, costs will come down and adoption will come up. General acceptance of their integration into clubs, however, is a long way off and will depend, in large part, on members being willing to yield some privacy in return for some convenience. Will yours? Your Bottom Line will thank you! B R
RAISING THE STANDARD TO
RAISE OUR GAME USPTA is the first and only USTA accredited tennis teaching professional organization. Together, we will set a new standard of excellence and provide even more opportunities for those who teach tennis to grow and advance.
To learn more, go to usta.com/raisingstandards © 2019 USTA. All rights reserved.
JANUARY/FEBRUARY 2020 | BOARDROOM
85
MARIAN MCGILL Marian McGill, CCM, is assistant general manager, Superstition Mountain Golf & Country Club
MEMBERSHIP COMMITTEE
Changing Tide In Membership Demographics Like most private clubs, the average age of a Superstition Mountain Golf exclusive Culinary Club program. Through the & Country Club member skews toward retirement age. optional program, members pay a modest annual That said, we’ve seen an influx of younger members and know that fee and then receive a 50 percent discount on all to keep our club active and vital we must attract the next generation regular purchases at the restaurant and bar – not of golfer. And they are coming. According to the National Golf Foun- including beverages. Since then we’ve seen an increase in food and beverage sales and our dining dation, golfers are getting younger. room is full nearly every day. The young adult category (18 to 34-year-olds) is the sport’s bigThere will always be a place for fine dining and gest customer age segment with 6.1 million on-course participants formal dinners, but we’ve added several more cain 2018. There were another 4.1 million off-course participants last sual options to our regular lineup. Monthly food year (thanks Top Golf) and more than 5.3 million indicate they are truck events, carryout pizza, pasta bars and wine “very interested” in taking up the game. While the tradition of excellence and luxury should remain, to stay and bruschetta specials have become member favorites. We encourage our culinary team to be relevant in the modern – and future – age, clubs must evolve to creative and develop fresh, new ideas to keep match a younger membership. members engaged. This ensures the club is their We’ve found that often, high initiation fees become a barrier for first choice when thinking of going out for dinner. younger members. The monthly dues may fit into their budget, but A more casual offering than golf, tennis or the initial lump sum can be difficult. That’s why we’ve developed executive golf memberships available to those ages 40-49 and asso- even pickleball, a few years ago we added two Bocce courts with an outdoor seating area ciate memberships for those 39 and under. complete with a fire pit, beautiful views of the Each comes with lower initiation fees and appropriate monthly dues. We’ve found this has helped infuse our club with younger blood. Superstition Mountains and food and cocktail service. It’s been such a hit we’ve had to expand Engaged members that take full advantage of the club’s services and our league program. activities…and will be able to do so for many years to come. We’ve also relaxed our dress code to allow A shift from many traditional clubs, our memberships do not indenim in the main dining room at all times. This clude a F&B minimum. In 2017, Superstition Mountain created an removes any barrier for members who enjoy a more relaxed environment, or have dressed more casually for Bocce, to enjoy dinner at the club versus looking elsewhere. Our fitness programs are also continuously expanding to offer members the latest in classes, personal training and technology. Our online fitness resource allows members to stay connected with us on the go with personalized programs available 24/7 through our private online portal. Golf will always be the gold star at any private club, and our two Nicklaus-designed courses do not disappoint, but to maintain a vibrant membership base we must be so much more. New event offerings, dining programs and wellness services go a long way in attracting and retaining the next generation of member. B R 86
BOARDROOM | JANUARY/FEBRUARY 2020
Wearing Too Many Hats? We’re here so you don’t have to.
PAYROLL TAXES BENEFITS ONBOARDING TIME & ATTENDANCE
The Club Payroll People 8x Payroll Program of the Year
Boardroom Magazine Excellence in Achievement Awards
HR COMPLIANCE
clubpayroll.com JANUARY/FEBRUARY 2020 | BOARDROOM
87
ROSIE SLOCUM
MEMBERSHIP COMMITTEE
Rosie Slocum, MCMP is director of membership & marketing, BallenIsles Country Club, Palm Beach Gardens Florida. She can be reached at (561) 627-3372 | www.ballenisles.org www.facebook.com/ballenislescountryclub www.instagram.com/ballenislescountryclub
Budget Building Blocks Consider yourself to be in an exclusive group if you are one of the small percentage of clubs that have a wait list to join. For the rest who may be looking for creative ways to get your club lifestyle brand out to the marketplace to draw in new members, you might consider funding a marketing program in the annual operating budget. If you already have, re-examining it on an annual basis could improve the return on your investment. Even with a wait list to join, lifestyle marketing is within reason. The building blocks of a marketing budget require having the right people in place to manage the process and create a strategic plan, which, among other factors, involves researching where funding will be spent and surveying where members come from. Creating an industry SWOT analysis and investigating the competition is also important. Ask for the moon and you may get the stars! Determining an amount to ask for in a marketing budget can be tricky. This will vary depending on the financial status of your club and/or analyzing other funding sources. Ask for an amount in the top range of what you believe it will take to succeed in your program and you may end up somewhere in the middle. From there, you can back in your strategic plan as it relates to the total approved budget and best use of marketing dollars. Demographic studies to determine where your existing club members are coming from, can be done by collecting data from membership applications, if the information is available or sending a survey to new members who joined over the past year or two. This information will give you a zip analysis and your base target market. If you are in a seasonal area, your target market may change during the year. Such as, a club in the southeast may focus on a southern market in-season and in the northeast off-season. Strategic plan projects should have related costs and a priority list where to spend budgeted dollars. Projects might include some of the following: • Print advertising (industry publications) • Digital advertising (industry related) • Creative (cost of ad production) • TV commercial (production) • Search engine optimization (outsource) • Email marketing (production) • Marketing firm (outsource) • Social media (outsource) 88
BOARDROOM | JANUARY/FEBRUARY 2020
• Public relations (press releases and media event coverage outsource) • Prospective member promo (food and beverage) • Realtor relations (breakfasts, informational meetings, preferred program) • Collaterals (brochures, welcome package) • Photography (stills and videography) • Website updates (refresh site and add landing pages) • Catering promo (print, digital, photography, landing pages) • CRM (track prospects) • Survey monkey (survey internet subscription) • Local Market (youth program sponsorships and local publications) • Club Industry Awards of Distinction (BoardRoom magazine) • Additional Staffing needs - projects in-house Decide which projects will go in your annual marketing budget then use an excel spreadsheet to log items by month/year keeping your work itemized and organized. Adding imbedded notes is very useful to track exact details for each vendor and project. Keeping a file of signed contracts will be reminders of commitments made. The accounting department can provide monthly financials to monitor spending versus budget, which will keep projects in line. As well, keep close watch for vendor billings to monitor they are submitted in a timely manner. Create club website and Google analytics to show where people are spending their time on the website and what marketing efforts are working. If a marketing project is not producing the desired result, consider either replacing it with something else or if contractual, eliminate it when it expires. CRM (customer relationship management) software is an effective tool to keep track of prospects and create reports. Some are customizable to fit your club’s needs. Your website system may have features to push contacts reaching your site to the CRM automatically, which saves time on data entry. Reminders can be set up within the CRM to follow-up with an invitation to visit the club or provide other information. Marking a contact “closed” is the desired result! It can be difficult to pinpoint exactly where all new members come from. There may be a number of sources and you may not capture them all. Sharing your club lifestyle to a targeted audience will get your brand out to the marketplace and keep everyone talking. B R
P R E S E N TAT I O N is E V E R Y T H I N G “There is truly nothing I could suggest for High-End Uniforms to improve. They have always come through for us. High-End Uniforms is just an ideal vendor, from generating uniform ideas all the way through to delivery.”
-Tylor H., Purchasing Manager Come see us at the Club Business Expo in February--Booth #1022,
EXCELLENCE in ACHIEVEMENT AWARD WINNER
or connect with us to schedule an initial, no-obligation design consultation. Share your club’s story and uniform needs with one of our experts, then let us assemble an array of unique apparel options for you to consider.
E I G H T YE A R S RU N N I N G
2012 to 2019 (707) 746-7011 SALES@HIGHENDUNIFORMS.COM
BoardRoom Magazine
Visit us online to see our collection. WWW.HIGHENDUNIFORMS.COM
Elegant. Durable. Stackable.
EustisChair.com sales@eustischair.com
Phone: 978-827-3103 Fax: 978-827-3040 JANUARY/FEBRUARY 2020 | BOARDROOM
89
AJ REDETZKE AJ Redetzke is vice president, marketing, Creative Golf Marketing. He can be reached at (800) 526-8794 or vial email: AJ@creativegolfmarketing.com
MEMBERSHIP COMMITTEE
Calendars Are Not Just for Holidays and Birthdays First, the most important thing you do to market It’s a new year, time to throw out that old calendar and get the new one your club is NOT designing your spring membership set for 2020. offering. Rather it should be how you communicate The golf shop already has a calendar that has all of its major golf with your members and how to keep them engaged tournaments on it. The golf course superintendent knows exactly in the membership process and help them to underwhen he will aerate the greens and the fertilizers that will be put stand their role as owners of the club. down and when. The marketing calendar reinforces this message The food and beverage department has a calendar with Easter and helps to organize the club’s marketing strateBrunch, Mother’s Day and the club’s Fourth of July Celebration, but gies. having the general manager, club president the two most important calendars I want to talk about may not exist and membership director simply mention it each at your club. month in their portion of the monthly newsletter The first calendar that your club probably doesn’t have, but desperis not enough. ately needs, is the marketing calendar. When planning this calendar, Your marketing calendar should always have a the first thing you need to know is your marketing budget for the year. few things. First, is consistent communication to A recent Forbes article stated that marketing budgets for most inthe members, through whichever channel is most dustries fall somewhere between six to 11 percent of revenue. Now effective (usually email), each with a call to action I’m not naïve enough to believe that most clubs have nearly that providing a reason for them to bring their friends much budgeted for marketing, but I think it’s very important to recto the club. ognize the correlation between poor membership sales performance Every club has these events; it might be the 4th of at many private clubs and a lack of a marketing budget. July party with the best fireworks show in town, or Once you’ve identified your marketing budget, you can begin to it could be the Havana Nights pool party or weekly make decisions on where and what types of marketing channels you music on the patio during the summer months. may choose to spend your marketing budget on, although most of The key is to communicate with your members my discussion will focus on low cost marketing methods. far in advance, reminding them how great these The marketing calendar at one club is going to vary wildly from the events are and that you want them to bring cancalendar at another, but there are several important points I want to didates for membership to come experience the make about the marketing calendar. club at its best - provide the ideas and make it easy for them! The next thing that should be put on your marketing calendar, several times a year, is a referral request from current members. This can easily be accomplished through a “Forward to a Friend” email. You should send electronic copies of the marketing documents that explain the membership offering and send it out to all members requesting that they forward it to a friend. The best practice here is to use a landing page to capture lead information so that club staff can follow up appropriately to try and close any leads. By following this schedule, you will be constantly reinforcing the importance of membership referral. The last and most important thing that should be on each of your marketing calendars is an end date to the membership offering! This allows all 90
BOARDROOM | JANUARY/FEBRUARY 2020
the messaging to change as you come to the conclusion of the prime season so that you can leverage the dreaded fear of missing out. Properly leveraging this common human emotion results in huge surges as the opportunity comes to a close. The other calendar that you might not have, but that goes hand in hand with your marketing calendar is your social media content calendar. While creating another calendar for your club might seem like a lot of work, it will actually make your life much easier. Having your posting schedule pre-planned will save a lot of time in the long run. A good social media representation will often require work from more than one person, or departments, and the calendar will help lower the stress level on your team members related to creating this content. If your club uses any of the available online tools like Hootsuite, you can also create your posts in advance and schedule them to go out automatically when you want them to. Tools like this allow you to focus your attention on social media to create several posts in a row, and keep the process organized and timely, instead of forgetting a post you have on the calendar and then having to create it last minute in a panic. A good social media content calendar will also include consistent posting activity. This trains both your members and any candidates for membership, who follow your profile, to expect content on a regular basis which enhances their opportunity to engage and interact with the club. This type of activity helps increase the reach of your organic posts, so be sure to communicate with your members how you want them to interact with your social media profiles. Don’t forget, this may be the first place a prospective candidate goes to find out information about you and we all know first impressions are everything! If your club doesn’t already have them, it’s not too late to make 2020 the year that you create a marketing calendar and a social media content calendar. Successful sales organizations make use of these tools and private clubs should be no different. B R
If your club uses any of the available online tools like Hootsuite, you can also create your posts in advance and schedule them to go out automatically when you want them to. Tools like this allow you to focus your attention on social media to create several posts in a row, and keep the process organized and timely.
JANUARY/FEBRUARY 2020 | BOARDROOM
91
BILL SCHWARTZ
FOOD FOR THOUGHT
Bill Schwartz is the founder and CEO of System Concepts, Inc. (SCI). Based in Scottsdale Arizona, SCI specializes in F&B procurement and inventory management and is the developer of the FOOD-TRAK Food and Beverage Management System. Bill can be reached at 480-951-8011 or bills@foodtrak.com.
What Should My Food Cost Be? Every foodservice operator knows what their food cost was for any in any recipe it is used in, what the yield of that given month, but the question they ask themselves is: What should it item should be and how many units were sold or legitimately distributed. have been? Consider two simple examples. We buy hamMore often than not, the reported food cost is compared to the burger patties by the pound and there are four budgeted food cost to determine this. And while that comparison is patties per pound, use them only in a hamburger valid for business reasons, it’s not valid for operational reasons and recipe calling for one patty per burger and sell the difference between budgeted and reported food cost is not an 100 burgers that week. indicator of how well managed the operation truly is. Ideal use of burger patties in pounds would be 100/4 or 25 pounds. If instead, we used bulk WHAT IT IS Three factors are involved in the basic food cost calculation – be- ground beef to make four-ounce patties and got a 95 percent yield (water loss, waste), we would use ginning inventory, purchases and ending inventory. This value is divided by sales to get the food cost percentage. I’m going to say this 4x100 to get 400 finished ounces sold and divide by 15.2 (95 percent x 16 ounces per pound) to number is never accurate. Inventory counts involve guesswork, estimates; items are counted get 26.3 pounds needed. If we actually used 30 pounds of ground beef, in the wrong units and many items are not inventoried at all. Plenty we would be five pounds over in the first example of items go by weight and I rarely see scales used when taking invenand 3.7 pounds over in the second. Converting tory. Processed items like sauces, soups, salad mixes and thawed the ideal use to dollars and doing the same calcuproducts are routinely skipped. lation and accumulating it for all 500-1,000 food
Ideal food costs should change every meal period every day. Clients who find comfort in steady food cost numbers might be fooling themselves...Budgets and expectations for target food costs should reflect seasonality, weather, consumer demand, menu makeup, catering activity and inflation. Food cost budgets should never be held to a consistent number month-to-month, even though it is perfectly fine to set an annual target. This is especially true if operators are held responsible for fluctuation in food costs on a monthly basis. Some items are extended at the wrong cost and some purchases are entered in the wrong period. In short, the extended inventory value is never correct and it is used twice in the formula for food cost.
items in inventory would give us the ideal food cost for the whole operation. Easy peasy!
WHAT IT SHOULD BE
Changing inventory values, changing food pricing, changing sales mixes, changing recipes, changing yields – all these factors change every day, with some changing every meal period. How, then can food costs be expected to be the same month after month? ➤
Three entirely different factors are involved in the ideal food cost calculation – recipe, yield and sales. Ideal food cost can be defined as using exactly the correct amount of food required to manufacture all products sold or permissively distributed. You need to know how much of each purchased item is called for 92
BOARDROOM | JANUARY/FEBRUARY 2020
WHAT IT SHOULD NEVER BE
Clubwise Strategic Planning
Capital Funding
Facility Enhancement
Jerry McCoy, MCM President
Strategic Planning - Master Planning - Operational Audits Food & Beverage Analysis - Membership Surveys
770-248-1047 - www.clubwiseconsulting.com JANUARY/FEBRUARY 2020 | BOARDROOM
93
from Food for Thought | 92
Ideal food costs should change every meal period every day. Clients who find comfort in steady food cost numbers might be fooling themselves. Chefs can accomplish any food cost they want by simply manipulating the inventory values. Budgets and expectations for target food costs should reflect seasonality, weather, consumer demand, menu makeup, catering activity and inflation. Food cost budgets should never be held to a consistent number month-to-month, even though it is perfectly fine to set an annual target. This is especially true if operators are held responsible for fluctuation in food costs on a monthly basis. WHY IT’S NOT WHAT IT SHOULD BE
If we assume – even though we know better now – that all the accounting data is correct (inventory, and purchases), only six things can cause the food cost to be higher than it should be – waste, spoilage, poor yield, over-portioning, employee theft and purveyor theft. Software exists that can help identify actual and ideal food costs and usage and pinpoint the variances and plenty of other helpful data, but the best defense is a good offense. I find five key things can help keep food costs to a minimum – whatever that may be. Keep costs in check by (1) using purchase orders for any food purchases from any vendor. If possible, get quotes from each vendor and use their pricing on the PO. Reduce employee dishonesty by (2) considering inventory to be an audit function. Never allow only foodservice people to perform this task. Reduce purveyor and employee theft by (3) using someone from the accounting department to receive goods and rely heavily on purchase order/invoice reconciliation. Reduce waste by (4) using clear trash bags and waste reporting forms. Reduce over-portioning by (5) training staff on correct portions and watching the line closely with a focus on portion size. Taken together, these five steps will help make the food cost numbers more accurate with less chance of internal or vendor shenanigans. It might be tough to figure out how to do this, but for most clubs, the result is at least a $20 to $30,000 savings per million in food and beverage revenue. B R 94
BOARDROOM | JANUARY/FEBRUARY 2020
JANUARY/FEBRUARY 2020 | BOARDROOM
95
PHILIP G. NEWMAN For a complimentary copy of the tool discussed in this article please contact Philip Newman at Philip.newman@rsmus.com
FINANCE COMMITTEE
Business Decisions in Turbulent Economic Times The U.S economy has been signaling that the decade-long business cycle upswing following the global financial crisis of 2008 is nearing, or has reached, its pinnacle. This should be recognized as neither good news, nor a surprising development, given the proliferation of risks to the economic outlook. Shifting fiscal policy, trade tariffs and threatened currency wars, as well as volatile stock markets have all contributed to creating a challenging decision-making landscape for all businesses, including clubs. In such a climate, timing is everything. It is safe to say that inertia is almost always a factor when forecasting economic cycles and when making investment and operational decisions based on those forecasts. It is only human nature to make personal or business judgements based on past experience, extrapolating from the current environment. Unfortunately, a business decision to expand capacity or amenity offerings can sometimes take years to implement, only to find that technology and tastes have moved on or that the demand for additional service offerings has been dampened by unforeseen events such as the financial crisis that have distorted economic growth in the modern era. Clubs that invest in the face of a downturn risk that new facilities might be underused leading to greater pressure on dues. Conversely, if clubs fail to invest in the face of an upturn, they risk losing members and the almighty dues dollar to other clubs or alternative leisure facilities. This is a sustained management and board room challenge for clubs of all sizes. So how can a club manage through such turbulence?
Casting our minds back to the dark days of 2008 when many clubs were caught unprepared by the sheer viciousness of the financial crisis, one of the issues that exaggerated the challenge for our industry, and businesses in general, was that much of their middle management tier had known nothing but the glory years of club life thanks to, again, another extended economic boom. While more tenured club managers could call on their experiences from previous economic downturns, they too, had seen nothing like the Great Recession, given it had been roughly 80 years since the Great Depression. It was at this time that RSM created a planning tool for use by the club general manager/COO to facilitate a strategy meeting with the club’s board of directors. So, when a leader of one of the most prestigious clubs in the U.S. recently called looking for this tool, it seemed that now might be a good time to dust it off as we review the state of the industry. The approach we took in designing the tool was to break down the various components of strategy, namely: Business strategy; financial and risk management; operational effectiveness, and people. Critical decision questions were then designed for each component to try and guide club leaders and management through the labyrinth of issues that a club is faced with when the economic parameters within which they operate are shifted significantly. While technology has moved on and some club business practices have changed, many of the core issues remain from 2008. Consider some of these issues – Do you have definitive answers at hand or does your club need to evaluate them? Business strategy: Overall, which of the following major strategic directions has your
96
BOARDROOM | JANUARY/FEBRUARY 2020
club decided to pursue during these difficult economic times and why did you select it vis-à-vis the other strategic directions? • Wait it out and make a decision at a later point in time. • Wait it out, reduce expenses and try to maintain current levels of service. • Reorganize (downsize) club operations and reduce services. • Evaluate the level of acceptable non-member activity. • Make significant investments to position for the turnaround. • Cease operations through sale or liquidation. Financial and risk management: Are you accurately forecasting cash receipts, expenses and labor costs? • Do you have a rolling 18-month cash forecast? • Are you using “lead measurements” that help predict near-term financial performance (event cancellations, rounds of golf vs. anticipated covers, member dissatisfaction in specific areas)? • Have you reached the point where your annual budget is no longer valid? • Are you heading toward a financial “circuit breaker”? Operational Effectiveness: Is everything on the table and up for evaluation? • “Sacred cows” (personnel, procedures and services). • “Traditions”
People: Reduction in force (RIF) issues: • Are there short-term steps that can be used instead of a permanent workforce reduction? • Cut if you must, but with precision. • Focus on recruiting and retaining top performing talent. • Pay for performance. Don’t make the mistake of spreading limited bonus or payroll resources across average or low performers. • If layoffs become necessary, view them as your chance to optimize or right-size your workforce – weeding out the low performers and letting your best talent grow. • Take advantage of other’s mismanagement of the layoff process. Lots of ‘A’ players getting cut from the workforce – hire them. The old adage – “Fail to prepare? Then prepare to fail”– is all too appropriate when we are facing economic downturns. But yet is part of our collective responsibility to protect and preserve the industry we all love and are passionate about. There are many chapters yet to be told in the near-term economic story, none more important than the upcoming national elections in 2020 and hopefully tools like the one discussed here can remain gathering dust on a shelf. BR
Lifestyle Design TO ENHANCE THE MEMBER EXPERIENCE
Bringing members closer together with spaces that foster community and camaraderie. STRATEGIC PLANNING MASTER PLANNING ARCHITECTURE INTERIOR DESIGN PROCUREMENT
SIGN UP FREE! for club industry trends & insights
BALD HEAD ISLAND CLUB North Carolina
Follow @chambers1899
MD 410.727.4535 / FL 239.673.1790 / TX 972.253.3583 / DC 202.851.3201 / MN 612.295.0725
JANUARY/FEBRUARY 2020 | BOARDROOM
97
PETER NANULA
FINANCE COMMITTEE
Peter J. Nanula is chairman of Concert Golf Partners (www.concertgolfpartners.com), an owner, operator and all-cash buyer of private golf and country clubs. He can be reached at (949) 715-0602 or via email: pnanula@concertcapital.com
The Difficulty of Breakeven Budgeting Close your eyes for a moment and picture your favorite local restaurant! I’ve got mine - really good Northern Italian cuisine, friendly staff, great service, been in business for years. When we show up for dinner, there are usually about 60 people there and I typically get the penne with salmon for $27. Now imagine your go-to restaurant has a breakeven budgeting process. If they start averaging only 50 people for dinner service, what would they do? They might raise the price of the penne with salmon to $32.50. That will even things out, right? Think about that same restaurant a year later. Maybe some new restaurants have opened nearby, or the weather hasn’t been great. Dinner service drops to 45 patrons per night. If they raise the penne price to $36, total revenues will be the same. But penne with salmon still costs around $27 at the other restaurants, not $36. Is it any wonder that the dinner crowd keeps shrinking? For obvious reasons, this is not how most businesses operate, but this is the dynamic at so many equity clubs across the country: They must set their annual expense budget based on a forecast of how many members they might lose and how many they might recruit, in the various member categories. So when the number of members declines a bit, the remaining members have to pay more to balance the breakeven budget. In many cases, the operating assessments necessary to get the budget back on track lead to even more member attrition. Your favorite restaurant does not operate this way. Each week, managers set labor schedules and order food based on detailed data about typical usage patterns for that week in earlier years. If covers are running below the previous year or the current budget, then next week’s labor and food orders get changed. This dynamic scheduling and just-in-time budgeting are adjusted all year long. There are no fixed annual budgets, except for truly fixed costs like utilities and rent. The likelihood of a year-end scramble or a surprise operating loss is minimized. Professional club hospitality firms – such as ClubCorp, Concert Golf Partners, or Arcis Golf - don’t use breakeven budgeting. They operate like hotels and restaurants. They look three or more years out and make their operating budgets and capital investment plans based on where they want to position the club in the local private club market. MAKING ADJUSTMENTS
Then they make adjustments each week based on data and member feedback. And they do not fear a few member losses or encounter 98
BOARDROOM | JANUARY/FEBRUARY 2020
operating losses if recruitment levels are below plan. They are not merely trying to break even; they are trying to build a successful club business for the long term, and they are in a position to weather the ups and downs of the economy and the golf industry. How? First, they have capital to support dozens of clubs, not just a single club. And their source of capital does not walk in and out of the club’s front door every day – they have their own capital and do not charge their members extra if the company is having a bad year. They also react weekly to member trends, not annually with a single breakeven budget. How can equity clubs break out of this “break even or else” cycle? Some clubs set their annual budget targets to achieve a surplus. This way, if things don’t go quite as planned, there might still be a cushion at year-end. Other equity clubs build a capital reserve for future years, when the economy is doing poorly or the club encounters difficulties. Many partner with a professional club hospitality company to take advantage of their capital and business model. Others continue to cut costs and hope that they can somehow keep pace with the other clubs in their town. This tends to be a short-term approach. It works until, suddenly, it doesn’t anymore. Boards would do well to allow their general manager the freedom to adapt more dynamically, to build capital reserves in good times or to partner with a professional club hospitality firm with capital. B R
ill r G e h T e k i hef L C r u o Y s e o D sing? U y l t n e r r u They Are C
Professional Grade
800-326-9575
WHY CHOOSE BIG JOHN?
Intense Searing Heat
Cast Iron Cooking Grates
www.BigJohnGrills.com
Built to Last
Bellefonte, PA JANUARY/FEBRUARY 2020 | BOARDROOM
99
MIKE MUELLER
EXECUTIVE COMMITTEE
Michael Mueller, PGA is a Career Consultant serving the Carolinas Section. He can be reached at (919) 552-3781 or mmueller@pgahq.com.
Developing the Career Planning Roadmap With the current labor environment characterized by low employment and high employee mobility, clubs around the country are faced with the difficult task of attracting, developing and retaining top talent. While competitive compensation and attractive benefits will continue to be important, employers are now looking for additional ways to provide additional value to both current and prospective employees. Many employers worry about the associated costs of additional benefits, but what if there were a low-cost solution that not only benefits the employee, but also your club? Research has shown that that actively engaging employees in career planning has several tangible benefits including, but not limited to: • Increased awareness and alignment between the employee and the organization • Development of relevant professional skills • Increased employee performance • Improved employee attraction, retention, and motivation. With those benefits in mind, the PGA Career Planning Model was developed around the central tenet that you must consider all aspects of an employee’s life during the career planning process. Simply focusing on work related or “career” issues fails to recognize that our personal lives and our “work lives” are so intertwined that it’s both lazy and dangerous to consider one without the other. The five stages of the PGA Career Planning Model include: 1. Values assessment - Your time, energy and resources are all finite, meaning you need to be deliberate and intentional about how you choose to spend them. But how do you best make that decision? What deserves your attention from the infinite list of choices? Defining your values allows you to align your actions with the things that are most important in your life. Left undefined, you might spend our days chasing “shiny objects”, but never really getting ahead. 2. Articulating goals – Career goals are often set that can best be described as “What I want to be when I grow up”, with attaining a certain job title or position as the desired outcome. While it’s fun to dream, this type of goal setting is often limiting, as shifting values will change long-term goals. Instead, ask yourself this question: “One year from now, what do I want to have accomplished that I will be most proud of?” Your response to that simple question should be your goal or goals and while landing a new position might still be the answer, the presence of the word “proud” ensures that the values you identified were considered. 3. Limitations assessment – You now understand both what you consider important and what will make you proud and now is the time to identify the things that are holding you back. Limitations come in many forms, including geography, skills, finances, values and health (among others). Your limitations are a career anchor, holding you in place instead of allowing you to move forward. Denying any or all your limitations make it significantly more difficult to navigate both your life and career but identifying and embracing them is a critical step in the career planning process. 100
BOARDROOM | JANUARY/FEBRUARY 2020
4. Plan development - How do you take the insights from the first three steps and turn them into a plan to help you design the future you desire? Breaking down your goals into manageable and attainable plans allow you to align those activities with your values and address limitations. Be specific during this stage and put your plan in writing with due dates. 5. Identify mentors and share your plan – With your plan in hand, seek out people who care about your personal and professional success as much as you do. Like limitations, mentors also come in many forms and identifying those who can serve in different roles will provide you with a team of advocates. For example, one mentor may provide “tough love” by always being brutally honest with you, while another plays a more supportive role when you need a confidence boost. Both mentors will be valuable resources and you should share your plan with each of them, as they can hold you accountable and provide necessary support. It is important to note that this career planning process is not only for those seeking advancement or new opportunities, but rather for anyone who wants to align the work they do to their values, gain new skills, level up in their current role, or simply feel more in control of their future. In short, the guided process is a roadmap to personal achievement, fulfillment and becoming the best possible version of yourself. BR
The Next Generation of Club Leaders: Do You Have What it Takes to Get the Job Done? Clubs change. Members change. The world changes. Make sure you have the technology to see the way forward and the tools to steer your club to the best outcome, no matter what lies ahead. Membership Analytics Predictor (MAP), the club industry’s first predictive analytics tool
Mobile strategies that go beyond the interface to impact all of your club operations
Get A Private Club President’s Perspective on Club Technology when the president of Coldstream Country Club reveals his 12 insights to make your club run smoothly in 2020 and beyond. Visit clubessential.com/insights to register. Going to CMAA? Visit us at booth #911.
Payments solutions delivered by one trusted and secure partner from start to finish
Raising the bar for member engagement. FRANK LE DONNE Haig Point Club
ADDISON RESERVE COUNTY CLUB LIGHTS UP AT NIGHT WITH A NEW LOOK
PHOTO BY GIDEON HELLER
JANUARY/FEBRUARY 2020 | BOARDROOM
101
BENNETT DELOZIER
EXECUTIVE COMMITTEE
Bennett is a manager with Global Golf Advisors and specializes in analyzing communications platforms, practices, and social media tactics. He also assists clients in planning how to embrace changing marketing trends in the club industry which indicate a shift toward the implementation of technological and digital marketing systems and tactics.
Lifestyles, Values, and Experiences How will Millennial attitudes, preferences, and habits shape their outlook on private clubs and their interest in joining one in the future. These are vital questions for private clubs and recent research on avid Millennial golfers offers some interesting topics and insights with a particular focus on: • The willingness of skilled (low-handicap) Millennial golfers to pay more per golf experience, their increased likelihood of joining a private club, the factors influencing these low-handicap preferences, and tactics for clubs to attract these golfers. • The fact that, for Millennials, golf alone is not enough to attract them to become private club members. Millennials are seeking an experience that is, or can be, more than golf – referrals and recommendations work, family access is important, non-golf amenities matter, and the key is flexible, customizable membership offerings (even if it means paying more annually). • The belief that trends in casual dining relate favorably to the habits of Millennial golfers. Namely that the importance of socialization to Millennials and the positive impact of socialization on overall club satisfaction ratings suggest that competitive food and beverage offerings can appeal to Millennial values on the basis of offering low-stakes opportunities for socialization. • The experimentation by clubs to appeal to Millennial lifestyles and activities through their off-course interests. Fitness, wellness, and health services are tactics clubs are using to convey and promote relevance to young, active lifestyles. Millennials will continue to respond to these services and to messaging that communicates the variety of positive attributes a club has to offer that appeal to their own value sets. Despite targeting a golf-focused audience of Millennials and gauging their opinions on clubs at which golf is a primary asset and service of-
fering, it’s interesting and noteworthy that key indicators and motivators for Millennials are so significantly shaped by an emphasis on lifestyle. While indeed true of Millennial golfers, this sentiment it is not at all isolated to this group but rather reflective – if not symptomatic – of broader trends afoot the future in the club industry. • Clubs are continuing to navigate transforming expectations in casual dining experiences, menu optionality, and rapidly changing food and beverage trends. • Likewise, these evolving expectations are manifest within the human resources space where club communicators and leaders are pressured to morph to current demands for sourcing capable employees with new compensation requirements and compliance practices. • More and more clubs are adopting and implementing business intelligence tools to enhance their capacity for data-driven decision-making in support of efforts to adapt traditional club experiences to mirror shifting membership demographics. • Evolving points of emphasis for adaptation increasingly relate to fitness and wellness in clubs as well as the development and allocation of capital funds for clubs marred by deferred spending during the recessionary cycle. The Millennial emphasis on lifestyle is reflective and complementary of industry-wide escalation of expectations where interests are trending toward a desire for clubs to offer enhanced behavioral experiences. Members and staff are seeking to define themselves by how they live versus what they own; employee work-life balance is increasingly important and members want customized, unique experiences. For clubs, this means accelerated emphasis pressure to convey the value proposition and relevance of the club to the lifestyles of its members, guests, and staff. B R
102
BOARDROOM | JANUARY/FEBRUARY 2020
January2020Halfpage_7.1W_4.7H 1/2/20 1:33 PM Page 1
LOCKER ROOM AMENITIES
CMAA Business Expo Booth #618!
P: 800.274.8742
Follow Us
F: 800.274.8262 www.DuffysTriC.com
On Twitter
Family-Owned & Operated Since 1978
Ushering in a new way to find hospitality talent for private clubs We connect you with the best:
THE LEADING EDGE IN PRIVATE CLUB RECRUITMENT
• • • •
Chefs Sommeliers Sales, Marketing, and Catering Managers Restaurant, Dining Room, Bar, and Banquet Managers
Goodwin Recruiting offers: • • • • •
Deep pools of hospitality candidates Two decades of experience Offices coast-to-coast 700+ restaurant and club clients Contingency-based fees
Goodwin Recruiting matches talent to the culture of your club to maintain the traditions you have created. Connect with us today at:
www.goodwinrecruiting.com JANUARY/FEBRUARY 2020 | BOARDROOM
103
MICHAEL LEE
GREEN COMMITTEE
For more information about the GCSAA Grassroots Ambassadors, contact Michael Lee, GCSAA manager of government affairs, at 800-472-7878, ext. 3612, or mlee@gcsaa.org.
GCSAA Abassadors Take Golf’s Message to Capitol Hill The Golf Course Superintendents Association of American (GCSAA) is looking to recruit 153 Grassroots Ambassadors by the end of 2020 to join the 382 ambassadors currently serving in their volunteer advocacy roles. The GCSAA Grassroots Ambassador program matches a member of GCSAA with each member of Congress to build strong relationships between them. Once this goal has been met, all 535 members of Congress will have been paired with a GCSAA member serving as their “go-to” resource for golf course management issues. GCSAA commends 20 states for pairing every member of their congressional delegation with a Grassroots Ambassador including: Alabama, Arkansas, Colorado, Connecticut, Delaware, Idaho, Iowa, Kansas, Massachusetts, Michigan, Montana, Nebraska, Nevada, New Mexico, Oklahoma, Rhode Island, South Dakota, Utah, Washington and Wyoming. The remaining 30 states still have ambassador openings. Grassroots Ambassadors are well versed on key issues concerning golf including water management, labor and the continued availability of products used to maintain the course. As GCSAA continues to search for enthusiastic members to serve as ambassadors, the GCSAA Government Affairs Committee recently expanded the pool of eligible candidates to include not only golf course superintendents and assistant superintendents, but also retired superintendents, chapter executives, college students, and equipment managers. Being part of the Grassroots Ambassadors program allows members to advocate for the industry and provides a unique opportunity to share their stories of professional land management with lawmakers. With regulatory pressure on the rise across the country, the need is greater now more than ever. “I love what I do, and hope others will consider joining the Grassroots Ambassador program,” Kyle Barton, a Michigan ambassador, said. “It feels good to open someone’s eyes to the job we do each and every day to take care of the environment while also providing great course conditions for our members.” Barton recently hosted Rep. Haley Stevens (D-MI) for a meeting and tour at his course, Tam O’Shanter Country Club in Bloomfield, Mich. “As a member of Congress, I appreciate hearing from constituents like Kyle who are engaged in advocacy and are a resource for me and my staff in the district,” Stevens said. Ambassadors meet twice a year with members of Congress and their staff. The Public Affairs Council reports that 83 percent of Congressional staff say meeting in person is the most effective way to influence the decisions made by congress, thus ambassadors are asked to discuss federal issues impacting golf course management either through 106
BOARDROOM | JANUARY/FEBRUARY 2020
Being part of the Grassroots Ambassadors program allows members to advocate for the industry and provides a unique opportunity to share their stories of professional land management with lawmakers. “I love what I do, and hope others will consider joining the Grassroots Ambassador program.” Kyle Barton, Michigan Ambassador hosting a site visit at their golf course or by scheduling a meeting in a congressional district office. All ambassadors receive the training and resources needed to become effective advocates for the profession. Ambassadors also receive education and service points for their efforts. In addition, they have the opportunity to win GCSAA’s Grassroots Ambassador Leadership Award, which offers four individuals each year the chance to attend the annual National Golf Day in Washington, D.C. at no cost. In addition to year-round online training, GCSAA offers the Grassroots Ambassador Academy at the annual Golf Industry Show where ambassadors interact with grassroots trainers and learn the art of advocacy and engagement. To attend Ambassador Academy, they must be currently serving as a Grassroots Ambassador. B R
from BoardRoom Basics and Beyond | 16
Michael Gardner, general manager/COO of Lake Charles Country Club added, “The cross section of clubs represented here is what really impressed me. Golf clubs, country clubs, city and yacht clubs from all regions of the country had people attending. Then there was the cross section of industry top service experts who provided eye-opening insights to club presidents and board members.” Another attendee, Mike Fleig, general manager at Greeley Country Club said, “The President’s Council not only provided insights but also a common language that will allow our board president and me to communicate effectively. We now have some new tools to enhance current club initiatives which will contribute to our club’s future success.” Other additional comments received following the full day at Medinah included: • It’s great to hear from club presidents around the country on the state of private clubs as it relates to capital funding, membership recruitment and board governance. • Trying to inform the club board of directors about what is important and what not to be worried about in the club environment is critical. This seminar really opened the door on solving this problem. • The power of having both the general manager and board president together to hear of “best practices” by recognized third party experts is immeasurable. This is a program that should be continued and even consider having multiple venues in regional locations.” In reflecting on the day’s program Jim Butler from Club Benchmarking commented, “The overwhelming positive comments from the day and great feedback will provide us with some great ideas to improve the President’s Council in the future. We look forward to additional outstanding future events.” For many years we have believed there’s a need to bring club general managers and board presidents together for a day of discussion and education. The President’s Council format has confirmed our belief that there is a real need for this type of forum and we are already planning for our next events. The President’s Council planning committee is currently working on dates and locations for 2020 and will focus on an east coast event and a west coast event. Based on all of the feedback from the successful President’s Council at Medinah Country Club it’s apparent that future events will also be completely subscribed. B R 108
BOARDROOM | JANUARY/FEBRUARY 2020
LEGAL COMMITTEE BY ROB HARRIS
Truck Driver Hit by Errant Golf Shot Loses Lawsuit A ruling from a British Columbia tribunal exonerated the Beach Grove Golf Club for a shot that left the premises and struck a passing vehicle. The presiding tribunal member did find that “it is more likely than not that a golf ball from the respondent’s golf course damaged the applicant’s truck.” Seems like a reasonable conclusion to make, as golf balls don’t ordinarily collide with passing vehicles unless there is a nearby golf course. However, that was not enough for the tribunal, even with evidence presented that similar events had occurred. According to the tribunal, other cases finding liability involved evidence that the layout of the tee and hole created a public nuisance. In the case before her, however, the tribunal member noted the absence of “evidence about the design of the course or any specific hole or tee in relation to the road.” The takeaway for lawyers is clear. It may not be not enough to present a golf ball, driver and damaged car to the court. A court may expect more exacting proof that poor golf course design instead of simply a poor shot caused the harm. BR
HapYpeyar
888-324-5020
New New Decade, New Year, New Investments... Heatherwood Hills Country Club Birmingham, AL
Oakwood Golf Club
Mount Mitchell Golf Club
Pine Ridge Golf Club
The GC at Hilton Head Lakes
Confidential Listings
Skyland Lakes Golf Club
Burnsville, NC
Lake Wales, FL
Hardeeville, SC
Beverly Hills, FL
Fancy Gap, VA
Florida
Cross Creek Country Club Stonewall Golf Golf Club Gainesville, VA
Mount Airy, NC
• Brokerage • accelerated Marketing
Discreet and Confidential
• Consulting Services
HildaWAllen.com
• acquisition advisors • Property evaluations Value, Potential Value
VA Lic#0225100045, 0226010231; FL Lic#: BK3036361, CQ1019764, SC Lic #1334 GA Lic # 46193, 16764, NC Lic#: 193434, C14312; AL Lic#000069831, 000075072
H O S P I TA L I T Y GROUP
strategic planning F&B consulting executive recruiting training & development
RCSU – online training
Effective virtual classes
consultingRCS.com 623.322.0773 JANUARY/FEBRUARY 2020 | BOARDROOM
109
INNOVATIVE
IDEAS
A New Revenue Stream Pours In With Online Wine Shop Champions Run in Omaha, Nebraska has generated an additional revenue stream through private wine sales to members. With an appropriate off-sale liquor license, the club was able to add a retail component to their wine program. “We have a liquor license that allows us to distribute and package the wine,” said Champions Run Creative Director and Director of Aquatics & Fitness Ben Lorenzen. In its initial stages, club members simply called their orders into the clubhouse manager, then would pick up their orders the following day. In this way, the club sold $55,000 worth of wine in 2018. The idea has culminated in an online wine shop launched in mid-January of this year. Strong member demand for rare, boutique wines helped spark the ChampionsRunWine.com concept. “We have over 150 members in our wine club which has become its own subculture at the Champions Run.”
110
BOARDROOM | JANUARY/FEBRUARY 2020
Kris Ryan, clubhouse manager at Champions Run, curates the wine selection from small distributors, and takes cues from members at club tasting sessions. Members enjoy membership pricing (cost plus 20 percent), at prices that are less expensive than they can find anywhere else. The club plans to offer additional discounts to wine club members. Members place their orders online and still pick up their purchase at the club the following day. The online store is stocked with approximately 125 wine labels, including the club’s own private label wine. In addition to boosting wine sales, the website also serves as a space to advertise upcoming wine events at Champions Run. The program continues to grow and the club hopes to double their revenue to $110,000 in wine sales in 2020 with the help of their new online component. B R
MEGHAN THIBAULT Meghan Thibault, Innovative Ideas editor, is a professional writer and communicator with a passion for storytelling. A writer at heart, Thibault has been involved in the hospitality and club industry in Canada, the Caribbean and Hawaii. She is currently a member and on the membership committee, at Mid-Pacific Country Club in Kailua, HI. To submit an idea or story for this section, please email ideas@boardroommag.com
LedgeRock Golf Club Engages in Market Expansion
With so many private club closures and redevelopments taking place, LedgeRock has become laser-focused on its golf offerings and regional/national market expansion. “The private club market is certainly changing faster and more dynamically than any time during my 30 years in this business,” said LedgeRock’s General Manager Gerry Heller. In response, and with the guidance of consultant Larry Hirsch of Pennsylvania-based Golf Property Analysts, Heller and his club are taking a twopronged strategy: Reinvesting in the Rees Jones-designed golf course with renovations slated for 2020 and offering invitation-only membership options to regional and national membership candidates. You won’t find any tennis courts or swimming programs at LedgeRock. Instead, Heller is building on the strong reputation of their 212-acre, nationally ranked golf course and one of the Northwest’s premier practice facilities. National members can play up to 20 rounds of golf per year and enjoy access to all of the club facilities, including overnights at the onsite Kohl Lodge, but they must reside at least 100 miles from the club. Regional or non-resident members cannot own or rent property within 35 miles of LedgeRock Golf Club and can play up to 50 rounds per year. However,
their dues and initiation fees are slightly more expensive than the national membership price. Both membership offerings are priced below that of full membership at the club. Candidates looking to join LedgeRock under one of the private club’s new membership categories must be invited to do so and are subject to the board of managers’ approval. An influx of new members joining LedgeRock from now-defunct clubs in the area signaled the potential of a new strategy that would capture those members left without a club due to closures in the region. “It’s awful to see clubs closing. We know these people as colleagues and neighbors. But golfers don’t just stop playing because their club went public. All these closures have naturally widened the circle of what we’d consider our market,” said Heller. “With lodging here and our unique golf-only approach, we’ve recognized our niche, and folks are eager to buy in.” B R
P h ot os b y: L ar ry L am br ec h t
Located in Mohnton, in suburban Philadelphia, LedgeRock Golf Club, a Boardroom Distinguished Club, is bucking private club trends by broadening its membership categories to include regional and national candidates.
JANUARY/FEBRUARY 2020 | BOARDROOM
111
INNOVATIVE
IDEAS
Heighten Engagement with BBQ Grill or Smoker Here’s one way to attract men for a cooking class! Late last summer, the Philadelphia Country Club’s culinary team led by Chef Fritz Gitschner hosted a BBQ cooking class designed to attract the club’s male members. The class rounded out the club’s cooking series for the club’s members. “It was a fun way to engage our male members in our cooking class series,” said clubhouse manager Ashly Ryan of the event, which drew an audience of about 10 to 15 attendees. “Chef Fritz taught the different styles of BBQ and followed it up with a full dinner on the terrace.” Chef Gitschner took the class outdoors to demo the intricacies and art of the barbecue, and also to showcase one of the club’s recent capital investments: a custom-built smoker. “It looks like a tiny locomotive,” said Ryan. The barbecue class presented an opportune moment to demonstrate the value of the club’s recent expenditure, as members were able to experience the smoker firsthand. Chef Gitschner previously lived in Houston, so he took his authentic Texan barbecue skills with him to Pennsylvania. He touched on all the critical elements of the art, including matching the types of wood with different kinds of meat, sauces and marinades, and more.
112
BOARDROOM | JANUARY/FEBRUARY 2020
“What you’re smoking is greatly affected by the woods you’re using,” explained Ryan. “Some woods burn hotter than others.” A casual, family-style BBQ dinner followed the cooking class with servers standing by with cold beer. While it has been otherwise challenging to spark the interest of male club members in cooking, Ryan told us, the BBQ how-to was a big hit and a great complement to the club’s summertime offerings. The club’s cooking series helps PCC fill in during slower times. Culinary classes often take place on Mondays when the club is closed. The series also featured a vegan cooking class and a baking class in the club’s kitchen. Each cooking class is a small, intimate affair inspired by member requests or expressions of interest. B R
MEGHAN THIBAULT Meghan Thibault, Innovative Ideas editor, is a professional writer and communicator with a passion for storytelling. A writer at heart, Thibault has been involved in the hospitality and club industry in Canada, the Caribbean and Hawaii. She is currently a member and on the membership committee, at Mid-Pacific Country Club in Kailua, HI. To submit an idea or story for this section, please email ideas@boardroommag.com
Parent-Child Events Build Lasting Family Traditions With the New Year ahead of us, it’s a great time to plan some unique events to engage club members throughout 2020. You’re likely in the throes of executing your club’s health and fitness programming, helping your club’s members adhere to their New Year’s Resolutions. But now is an excellent time to start planning your summer event season. The annual CMAA Idea Fair is a great place to get inspired, especially the Philadelphia Country Club’s family-focused event ideas, and the parent-child theme popping up throughout the club’s event programming. In response to requests for father-son activities, PCC planned its first annual Father-Son Campout on the golf course. It sold out a month beforehand. Ranging in age from six to 12, 18 campers enjoyed an evening of fun-filled activities that included capture the flag, cornhole, a projected movie, a campfire, and of course, s’mores. The following morning, young campers shared stories of their adventures with other members and club staffers over an impromptu group breakfast at the clubhouse. Club staffers set up the campout on a practice hole on the back nine, Clubhouse Manager Ashly Ryan said. “They couldn’t see the clubhouse, which added to the fun!” she shared. Staff also helped to facilitate games for the kids, and of course, libations for the fathers. From a logistics standpoint, male managers from the PCC team stayed overnight with attendees to provide appropriate security and supervision. All campers had to be at least six years old and accompanied by an adult to enjoy the experience.
To round out their roster of parent-child events, which have included a Mother-Daughter Tea Party and a Father-Daughter Dance, PCC also held a Mother-Son Scavenger Hunt this past November. After quite a bit of planning and logistics by the club’s event coordinator, mother and son teams unlocked clues and overcame obstacles throughout the clubhouse. Each clue would lead to the next challenge. All of these activities grew from PCC’s Father-Daughter dance, held close to Valentine’s Day, which includes a buffet dinner and a DJ. Other spinoffs have included the Mother-Daughter Tea held over the holidays, where club members decorate gingerbread houses together and enjoy some one-on-one time. Parent-child events like these help to engage families, make lasting memories and serve to cement family traditions that ideally can happen year-after-year at your club. B R
JANUARY/FEBRUARY 2020 | BOARDROOM
113
GREGG PATTERSON Gregg Patterson is president of Tribal Magic and can be reached via email: GJPAir@aol.com
TRIBAL MAGIC
The Five-Minute “Once-a-Day-Every-Day” Training Workshop I spent all this money (AAARRRGGGHHH!!!) for a Known By Everyone Who Matters Top Dog Hospitality Consultant to deliver his patented guaranteed to turn ‘em around in an eight hours all day, all staff service workshop.
Manager Sue takes another swig of high octane high and mighty French pressed caffeine and begins explaining the basics of real-world employee education.
And (AAARRRGGGHHH!!!) the team cheered, leaped around and shouted hurrah, then promptly forgot what the top dog taught! All that money, all those hours, all that free coffee! And when all this expensive workshopping got done, The Wanna Be Country Club ended up with ZILCH within 24 hours of the top dog’s exit. The board’s bummed! I’m bummed. My dog’s bummed! AAARRRRGGGHHH……. Manager Joe of The Wanna Be Country Club is close to tears, pulling his hair, moaning and groaning, lost and defeated. Manager Sue – the big time, long time GM of The High and Mighty Country Club – gives Manager Joe the look, drinks deep from her steaming mug of high and mighty high-octane French-pressed, no-preservatives-added, guaranteed to deliver the buzz coffee, looks around her office and sighs.
Sue clears her throat, coughs, takes a sip and begins. “People learn in small chunks, one morsel at a time. Training done right is continuous, it’s incremental and it has to be done, forever. If you’re looking for quick and easy, fast and cheap you’re going to be mighty disappointed.” Manager Sue sips. Manager Joe sniffles. “A one shot, one day, professionally delivered training program is a good first step in priming the team for a rahrah “forever learning” training mindset. But if you want to create, deliver and sustain a high-octane service culture, and if you want the marginal to get good and the good to get better, you’ve gotta have an ongoing “Forever Learning” training program that’s cheap, quick, fun and effective.” Manager Joe wipes his eyes, clears his throat, gives Manager Sue the help me look and says, “Save my club, save my staff, save MY JOB! Teach me the “how tos” of the Five Minute “Once-a-Day-Every-Day” Training Workshop!!!”
ONE AND DONE, DON’T GET IT DONE!
Never-ending training is a must-do. It needs to be done often in small, bite size pieces. Once you understand the Don’t Dos and the Must Dos, you can generate your own How Tos. Five-Minute-Service-Workshops work. They’re fun, quick and effective and a great team building exercise to boot. “Manager Joe, I’m sure Mr. Top Dog delivered the wake-up call you paid for, inspired your team with the service vision, injected ‘em with the service buzz and roadmapped a lot of service how-to’s they needed to do to make great service happen. What he failed to do is explain that you and your supervisors needed to deliver lots of five-minute training workshops to every employee every day to make all that service stuff stick.” Manager Joe gives Manager Sue his weepy, I’m a loser, I’m a nothing, I’m a worthless has-been who never was look, sniffles and croaks, “Huh?” 114
BOARDROOM | JANUARY/FEBRUARY 2020
Manager Sue drinks deep from the mug, feels the caffeinated buzz and begins with the basics. TRAINING DISLIKES
“When it comes to education, first graders, college freshmen and staffers have a lot of don’t likes in common, and you’d best remember those don’t likes when it comes to educating the staff.” Manager Sue gives Manager Joe her best you’d-betterbe-writing-this-down look.
“Don’t do boring. Don’t do long, windy and wandering. Don’t do abstract this doesn’t apply to me and never will. Don’t do too much too quickly. Don’t embarrass. And don’t tell ‘em to shut up and just listen.” Manager Joe nods, enthusiastically scribbles in his notebook and shouts “Got it!”
one question workshop can then be delivered.
LEARNING LIKES
The start of shift upbrief. The team gathers at the start of every shift. One of that department’s how-to questions is pulled from the hat (i.e. How do you open a bottle of vino?), an employee answers and discusses the question, gives an example from reality and demonstrates after which a short video is shown of a staffer doing that thing right. The team is reminded that the question will be discussed during that day’s coaching walk-around.
“And when it comes to educating kids, Millennials, Boomers, old geekers and sacred cows, there are a number of learning likes that underpin successful on-the-job education. Here are a few.” Joe gives his always-rolling-ballpoint pen a test, flips to a new page in his notebook and records Sue’s learning likes. • Staffers like trainers who have The BUZZ for the stuff they’re teaching • Staffers like learning stuff they can use • Staffers like education that’s quick, pithy and FUN • Staffers like interactive “question and answer” sessions • Staffers like talking about stuff they’ve done that day • Staffers like hearing stories with messages that matter • Staffers like watching videos of stuff done right featuring people they know • Staffers like teaching other staffers stuff they’ve already mastered • Staffers like short, you-won’t-lose-your-job-if-youget-this-wrong” tests, and • Staffers like being rewarded and appreciated for learning and doing. Manager Sue pauses. Joe stops writing. Sue gives Joe the look. Joe sniffles. Sue sips deep from the mug. And continues. FIVE-MINUTE TRAINING TACTICS
“There are hundreds of teaching tactics you can use to deliver the five minute “once-a-day-every-day” training workshop. Each of these tactics needs to embrace the training Likes and avoid the training dislikes. Here are a few of the quickies I’ve used to make training-that-sticks happen.” Sue speaks and Joe writes. Prep – The Notepad. Require staffers to carry a notepad and to write lots, often: member names, stories, things that went well or poorly. Debrief the notepad impromptu during the coaching walk-around and during the daily debrief. Prep – This is the Job Questions. Every job is made up of dozens of specific tasks, each of which can become a question. Each question, once written, can then be asked, answered, video-ed, explained and taught. A five-minute
Prep – This is how we do the job video series. Each task becomes a two-minute loving hands at home video shot by the team, of the team. One video to be shown at the upbrief each day.
The coaching walk-around. The manager or supervisor walks the floor, gathers employees, reviews the morning’s “pulled question” and asks another question from the list of how-to questions for that job. The daily end-of-shift debrief. At the end of each shift, a debrief will be held. That day’s “pulled question” will be reviewed. An employee will be asked their question of the day and another will be asked to give their story of the day. Both are discussed. Teacher of the day. Each day one staffer is chosen to explain one of the dozens of tasks an employee is required to do. This teacher “staffer” can deliver the lesson during the upbrief, the walk-around or the debrief. Sue stops talking and Joe stops writing. And they smile……. START TRAINING
Never-ending training is a must-do. It needs to be done often in small, bite size pieces. Once you understand the Don’t Dos and the Must Dos, you can generate your own How Tos. Five-Minute-Service-Workshops work. They’re fun, quick and effective and a great team building exercise to boot. Manager Sue smiles, sips from the mug and gives Manager Joe the look. “Manager Sue, this Five Minute “Once-a-Day-EveryDay” Training Workshop is a winner! I feel the BUZZ!!!” Manager Sue smiles the smile of the helpful mentor. “Go back to The Wanna Country Club, work with your supervisors, start delivering your five-minute training workshops and… enjoy the journey! B R
JANUARY/FEBRUARY 2020 | BOARDROOM
115
Orient and Develop your Board of Directors Replace emotions with facts! BoardRoom Institute gives your club board access to top experts in the private club industry. Hundreds of years of combined experience and hundreds of thousands of dollars worth of information in over 45 educational videos. BOARD AND CLUB BENEFITS • 24/7 access • Affordable • Prevent club lawsuits • Accountability
GM BENEFITS • Reduce micromanagement • Collaborative governance • Creates a shared playbook
Until now, almost all board member education rested squarely on the shoulders of the GM/COO. This was, and continues to be, a tremendous responsibility. The good news is that this is no longer the case and help is available - The Association of Private Club Directors is here to help you. Robert Sereci, GM/COO Medinah Country Club, Medinah IL
A Few of BoardRoom Institute’s Industry Experts!
John G. Fornaro BoardRoom magazine
Gordon Welch APCD
Tarun Kapoor Kapoor & Kapoor
Jerry McCoy Clubwise Consulting
Randy Addison Addison Law
Michael Scimo President, Medinah CC
Robert Sereci GM/COO, Medinah CC
Gregg Patterson Tribal Magic
Kevin Reilly PBMares
Rhett Evans GCSAA
Rick Coyne ClubMark
John Embree USPTA
Jim Fedigan Jonas Club Software
Jim Butler Club Benchmarking
Phil Harvey Venture Insurance Programs
Pete Bevacqua President, NBC Sports Group
Philip G. Newman Partner - RSM US
BoardRoom Institute is brought to you by APCD. For more information please visit apcd.com or call 918-895-APCD (2723) to speak with a representative.
CHRIS BOETTCHER Chris Boettcher can be reached at chris@boettcher.com and currently doing hospitality consulting.
CLUB SERVICE
Who let the DOGS in? Here’s some ideas to cleanse any “problematic” board members that may be causing you some angst. We’ve all worked with some dogs, right? Every industry has them. In private club operations, sometimes we have them in place on a board when we arrive as managers. Sometimes they are on the board when we arrive as volunteers. Sometimes we make the mistake as a board member of putting a dog on our committees or even the board itself. They come in all sizes - big dogs, little yappers, medium sized ankle-biters; but they all have effects and behavior that can be damning. Once they are on a committee or the board, it becomes clear very quickly why they volunteered. Like a favorite bone, they don’t let a personal agenda item go easily. I have a more extreme suggestion when they are identified: shoo them away, on sight. They have no business in business. But before I get on a rant, let me make sure I’m not over my skis and clarify the dog-gone-DOGS in our midst and how to spot them through this initialism: D stands for a derailing personality: Derailing discussions, on the committee level or the board level is a first sign of a dog on the panel. I know, I know, sometimes it’s ok to let the dogs bark and whine; give them their day (15 minutes is too long) in the sun but hey, we’re running a business here. There are hundreds of people counting on YOU to make good decisions so they can put food on the table and send kids to school. This is not a charity. A luxury, yes. But you joined! Your fellow members are counting on you to make their experience everything they deserve. Support the program, work to help and serve your fellow members and don’t derail discussions with your own agenda, your friends’ comments or your third generation-member/Dad’s dislikes. O stands for overtly talkative: Overly talkative board and committee members yapping away at everyone’s expense make for really long and wandering meetings. Keep the group and agenda on task. I told my favorite controller at one club after a very long and pointless board meeting, he was unfortunate enough to be invited. If you put a clock on everyone’s forehead, and let
118
BOARDROOM | JANUARY/FEBRUARY 2020
it count the time they spoke, remember the one with the most time is not the winner. G stands for governance starved: Governance starved clubs don’t set goals, don’t reflect on their performance and don’t get much done. Poorly run committees and boards, with no guidelines, just existing for member ranting, are no way to run a business. Sure, it’s nice to placate those who want to vent or be “part of the community”, but all good performance starts with good goals. Based on thoughtful planning and guided by a clear communication system with your general manager/COO. Good committee chairs and board members keep focused on those goals and the strategic plan. S stands for should have known better: Should have known better than to make that member a part of any governance. It costs us time, money and energy better spent on goals, alignment and achievements versus placating a member who would rather micromanage the price of peas, the amount of air in the balls or the length of hole no.14.
GUS, THE DOG. USED WITH THE PERMISSION FROM MARK KREBS, DIRECTOR OF OPERATIONS AT THE COUNTRY CLUB, BROOKLINE, MASS.
For the good of our game as administrator of a business, don’t waste our time putting irrational, self-serving dogs on committees and boards or you’ll just be chasing your tail. If you are interested in joining club volunteer leadership, the first thing to do is think about that one thing you’d like to change about the club…and then forget it. You volunteer to serve the good of the club and the majority of members, not your own interests or the interests of one of your pack mates. So, what do you do? Clubs are a business and not a toy. People live and die working at them. They support local economic situations. Boards need to be mindful that our business of private clubs is not a game. Dogs are a waste of everyone’s time. Why did you put them there? Was there no safeguard in place to prevent a dog from joining the committee or board? Good nominating committees usually made up of presidents with equal votes that cannot be swayed back by the board keeps governance selection in line. A bit self-redundant but it keeps the direction consistent. Good guidelines for committees’ operations, powers and rotation each and every year so it does not become uncle Johnny’s life-time grounds committee assignment; or aunt Edna’s 10-year house chairperson position. Dogs love to lay around, bark and yap. If you already have them, grow the courage to remove them. And don’t give them the chance in the future with good systems in place. That will give the club and board the time to end the yapping and Lead ON! B R
digital signage We will miss you at the Expo But we’ll see you next year in Tampa
Call for a FREE DEMO and SHOW SPECIAL before APRIL 1st BOARDROOM MAGAZINES DIGITAL SIGNAGE OF THE YEAR WINNER 8 YEARS IN A ROW www.signera.net | 1-877-998-SIGN(7446) JANUARY/FEBRUARY 2020 | BOARDROOM
119
from Publisher’s Perspective | 10
3) Other thoughts. Today’s club management software focuses on data from the past. Departmental revenue and expenses, activity levels (covers, rounds, visits), membership changes (adds, changes, resignations), year-to-year trends, KPIs, ratios, benchmarking. All pointing backward. In the near future clubs will be using advanced technologies to accurately predict their futures – on a variety of fronts, including: Future membership composition: Predictive data will be generated to forecast membership trends. Members by category, age, activity and family demographics. Future member activity levels: Forecasting membership amenity usage. Dining and club events. Golf, tennis, fitness, wellness and social events. Future impacts on infrastructure: Predicting allocation of space (expansions, additions, retractions). Clubhouse design and utilization. Timing of capital projects. Future needs for capital funding: Forecasting the funding needed for individual capital projects. Timing of spending. Adequacy of current funding mechanisms. n n n
Henry DeLozier, principal, Global Golf Advisors Question 1 Four trends that impacting private clubs are (a) tax migration impacting clubs located in high state income tax as members reset their “primary residence” designation to states with lower income tax levels; (b) higher members’ expectations concerning business-like and trustworthy governance, (c) greater pressure on cyber-security, and (d) increased urgency for relevant and transparent club communications. Question 2 Members’ expectations are driving the necessity for advanced standards for club governance and improved/more sophisticated communications capabilities. Cyber security is an external threat overlooked in 120
BOARDROOM | JANUARY/FEBRUARY 2020
most clubs. Tax migration is widespread from Boston to Washington DC (Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Maryland) and into the Midwest (Ohio, Michigan, Illinois). These 2020 trends are a witches’ brew of advanced members’ expectations and external pressures (such as cyber security and tax migration) impacting private clubs. n n n
Frank Gore, chief analyst, BoardRoom’s Distinguished Clubs Question 1 As we see more and more violence in public places like restaurants, movie theaters, shopping malls and churches, safety is becoming a major concern of all consumers. The safety of members at a private club can be a great new selling advantage, a significant reason to join a club. Therefore, clubs must make sure in the coming years that the club is truly a safe place. Gated and secure entries – fenced and well lit; employees with background checks, name tags and photo badges for club entry etc. will need to be the norm. Question 2 Changes in the marketplace are driving these changes and private clubs need to take advantage of these trends and prepare. Question 3 As minimum wage continues to rise this will also be a challenge and great opportunity for private clubs. Restaurants to survive in the future are working on using more technology to take care of their customers. Ordering and bill paying will be accomplished by touch screens. Even cooking will be done by robots and technologies. Self-serve programs even using programs that identify a person’s eligibility to order alcohol by using their iris to determine eligibility will be the norm, allowing for selfserve alcohol. Not many years ago a gas station was well staffed with service employees. Today most gas stations have one employee usually standing behind a mini-market counter. All gas is provided by touch screens for payment and ordering. Even water and air for your tires is self-serve. It won’t be long until food service will go the way of today’s gas stations. A single employee will man many restaurants. Private clubs will become one of the few places were live people will provide personalized service. This also will become another reason to join a private club. Clubs will have to pay more for servers but will also be able to attract more members – another opportunity for clubs. n n n
Dick Kopplin, principal, Kopplin Kuebler & Wallace, a leading industry consulting firm. There are three positive trends that I’m observing in the private club industry. The first is a focus on what I’d call “data-driven decision making.” For many years I believe club boards and also general managers too
often listened to some of the most vocal voices in the club when it came to policy and operational decisions. Probably because of our current “feedback rich environment”, where we are all asked to respond on a regular basis to consumer surveys, the club industry has taken note and is also focusing on measurable feedback and data. I think that’s a positive and it allows boards and general management to take some of the emotion out of decision making. That also answers the second part of the question, which is what is driving this trend? I would say younger board members who are more inclined to engage in the latest technology to provide data for decision making are driving this trend. The second positive trend I’m seeing is the focus on the executive talent needed to lead the club. The general manager/COO today is viewed as a true thought partner to insure the club will not only survive but will thrive in a competitive club environment. The driving factor in this requirement is the realization on the part of club boards that their club is a multi-million-dollar business that requires full time executive leadership in the general manager’s office. The third trend I see in private clubs is the focus on “affinity clubs” within the club, or the concerted effort to make the club the focal point of as many aspects of the typical member’s life as possible. The driving factor here is the need to provide value for the member’s monthly dues and reinforce the fact that the club is truly the “home away from home” and is always “a feel good experience” for every family member. In traveling the country and visiting all of the clubs that I do, it’s great to see the private club industry in a much healthier state than it was a decade ago. Even the Millennials are discovering the value of private clubs and the value of associating with like-minded people.
Rick Ladendorf and Craig Marshall, co-founders, Mindful “U”, a division of Prevo Heath Solutions. The most challenging trend we see in the club industry is the increasing level of stress. We often hear, “Stress kills, and we’re in the stress business.” Stress facts of life • More than one-third of American workers experience chronic work stress, and almost two-thirds (65 percent) cite work as a significant source of stress. • One in four Americans reported that job demands interfere with their ability to fulfill family or home responsibilities. • 60 percent of all absenteeism at work is because of stress. • Stress costs American industry $60 billion a year. Trending causes of stress: • Many general managers have a dysfunctional relationship with their boards and too often the general manager is unable to align the operations with the club’s vision and board members’ personal agendas. • The leadership/management team is always striving to improve the member experience while keeping dues in check. Labor and employee benefit costs continue to rise, unemployment is at an all-time low, making it difficult to find qualified staff as organizations try to adapt to the Millennials’ way of thinking. • More younger members and employees say want to live and work in a healthy and nurturing environment. • Misalignment between clubs’ vision statements and operational plans continues to create complications and conflicts (leading to more work and stress). ➤
n n n JANUARY/FEBRUARY 2020 | BOARDROOM
121
from Publisher’s Perspective | 121
Social media distractions continue to proliferate at all levels Trending responses to stress: Fitness and wellness are becoming major draws for new membership (replacing golf as the number two most important amenity at many golf clubs). Fitness centers are evolving to wellness centers (featuring programs for mind-body connection – meditation, yoga, mindfulness). Wellness and mindfulness tools are showing up in fitness/wellness centers, pro shops, locker rooms, treatment rooms and calm rooms. Mobile apps like Headspace are helping reduce stress. (The Calm app is valued at over $1 billion). Where is this all leading? According to Carnegie Institute study, 85 percent of business success is related to attitude, with only 15 percent of success is based on skills and knowledge. Yet, over the years most employers have invested in education on only skills and knowledge. This is why today there is an increasing focus on: Mindfulness, collaboration, loyalty and employee satisfaction. Millennials in today’s work force want more from employers than ever before. More than money…
Question 2 If water is the new oil, then labor is the new water. Developing technological solutions for the ever-increasing labor crisis has to be paramount as clubs look at the next five years. While foreign labor and related visa programs are the seasonal solution for many clubs across the country, clubs cannot assume sufficient supply will always be there to solve the domestic labor shortage. The increase in data mining can help predict member usage and thus labor needs but while many other hospitality industry companies are already leaning heavily on technologies such as order kiosks and remote check in applications, many clubs fear their members won’t embrace such technology at their club. Such fears though fly in the face of the wider data available that supports the fact that as consumers, we are willing to modify our behaviours to use platforms like Uber, AirBnB and Grubhub. Technologies like these have been disruptors to the global economy. What will be the disruptor to the club world that we can harness to deliver enhanced member satisfaction? Surely it has to be anything that reduces the demand for labor that we just can’t find. Robotic and drone agronomic technology has to be perfected and embraced; outsourcing to third parties of back of house tasks or establishing labor sharing cooperatives with other clubs are all on the table. Our members, our industry and our nation continue to evolve, will your club? n n n
n n n
Mitchell Stump, CPA, Club Tax Newsletter and author of the Club Tax Book; Club Sales & Use Tax Book – FL; Club “It’s All About Golf” Book 2.0
Philip G. Newman, CPA, CIA, CGFM is a partner with RSM US LLP
1) What do you see as future trends in the private club industry that we should know about?
Question 1
a) Clubs will continue to pursue non-member revenue with a vengeance. b) Clubs will continue to fail to teach members the games they offer, using the old formula of requiring members to pay extra to learn the games. c) Clubs will continue to struggle as they do not offer anything a person cannot obtain a la carte. d) Clubs, like the Federal Government, love to spend other people’s money and build bigger and better facilities. e) Breaking the 501(c)(7) tax-exempt rules concerning the 15 percent non-member revenue limitation and the de minimis non-traditional revenue rules.
Like many industries, the hunger for more and more data to analyze and predict member behaviours and demands will revolutionize the club industry. Clubs need to properly budget for much more powerful data mining tools as well as the individuals who can analyze results and make them actionable. If club general managers/COOs are not investigating options already, they run the risk of being left far behind their competition over the next five years. 122
Hand in hand with this evolution will be the increased need for macro data outside of the club arena on the shifting demographic demands that will provide challenges and opportunities for all club operators. Whether it is keeping up with changing lifestyle and leisure choices of the next generation of club members or understanding how changes in tax laws can incent the U.S. population to change states, clubs that aren’t factoring these big picture issues into their strategic planning templates run the risk of missing out on once-in-a-generation changes.
BOARDROOM | JANUARY/FEBRUARY 2020
2) What’s driving these new trends? Is it in response to members’ demands, or are new trends driving the change that demand a response from private club boards and management?
a) Club management and club boards have been led to believe non-member revenue is extremely profitable and that the club cannot survive without this additional revenue. b) PGA and tennis professionals make good money teaching for a fee. Moving to a different paradigm appears to be out of the question. The pro makes great money but does nothing for the club. It is all about the pro! c) I can eat at a five-star restaurant seven days a week and not go to the same restaurant twice. I can join Gold’s Gym for $26.00 per month. Friendly people can be found at church, so your members are not friendlier. Your staff is not better than other clubs as you trade staff regularly. d) Build it, and they will come is the latest theory and almost every consultant in this club industry is selling it. e) Clubs are not interested in serving members as much as they want just to stay busy serving somebody. 3) Other thoughts a) There are so many reasons not to pursue non-member usage of clubs, including displacement of members during non-member functions; use of club assets for which members must pay millions to renovate and replace. Clubs could possibly hire fewer employees without non-member activity. Club accounting departments need to capture the true cost of non-member functions to document profit and loss of activities. If I can use a club as a non-member, why should I join? b) If the focus were on adding one new member at a club, paying joining fees and annual dues, they (the club) would offer complimentary lessons all day, every day. That would be the marketing ploy to get a person to join the club. Pay the professionals decent compensation and then change their job description. Teach members to play our games or find another job. It cannot always be about the pro making money and to heck with the club. (p.s. folding shirts and sweaters does not bring in one new member.) c) Clubs have become irrelevant. I do not need to be a club member to get what clubs offer. Clubs need to find differentiation. A BHAG. Continue to do the same year after year and expecting different results is called insanity. d) Build it and they will come happens in Iowa, in a cornfield…in the movies. Clubs can assess members $5 million to build something new but cannot find $100,000 to pay a pro to teach members the games we offer. Only with a full membership will clubs survive. e) I wrote an article about the death of 501(c)(7) clubs back around 1996 as the IRS clearly has rules to keep clubs from getting that tax status and keeping it. Clubs are breaking the rules every day and do not care about the tax status. ➤
The First and the Only Association specifically for the education and advancement of Club Catering and Event Professionals in the Private Club Industry to elevate the Member Experience
Benefits Education for Maximizing both Member Event Experience and Private Event Revenues and Experience • Webinars • Coaching and Resources Monthly Educational Newsletters • Networking Events Club Catering Professional Certification Program
Save the Date!
ACCP National Conference August 30 - September 1, 2020
Fairmont Miramar hotel, Santa Monica, CA “I came back completely renewed and motivated! I can’t wait to implement all of the ideas” -Tricia Cummings, Blue Hill Country Club “This conference was one of the most incredible experiences I have ever had! I cannot wait until next year!! -Olivia Pollock, Great Oaks Country Club “This conference really gave me a fire in my belly to come back to my club and do more...I want to share that inspiration with my team and hope that we can take our club to the next level!” -Amanda McCleery, Ballantyne Country Club Educating the Club Industry. . . One Catering Director at a Time
www.TheACCP.com
Contact: Lynne LaFond DeLuca Lynne@TheACCP.com JANUARY/FEBRUARY 2020 | BOARDROOM
123
from Publisher’s Perspective | 123
Frank Vain, president of McMahon Group, a consulting and planning firm service to private clubs. 1) What do you see as future trends in the private club industry that leaders should know about? Golf drove the country club of the past, but lifestyle interests like fun, family and fitness will drive the club of the future. This doesn’t mean golf is going away or unimportant, it just means it is increasingly a part of the experience, and the other aspects of the club should receive the same attention, service and capital outlays as the course. The disproportionate overspend on golf at the expense of the rest of the experience must end, so that clubs can attract members who are interested in associating with like-minded people through multiple social and recreational activities. 2) What’s driving these new trends? Is it in response to members’ demands or are new trends driving the change that demand a response from private club boards and management? It’s the changing values and expectations in the marketplace that is demanding change, and which must be satisfied, making it the heart of the challenge for clubs. According to our surveys, some 90 percent of existing members are satisfied or very satisfied with their club. That makes sense, otherwise they would quit and stop paying dues. Despite this base of support, about five percent of the membership will resign each year, mostly because of uncontrollable issues like death, infirmity and relocation. The challenge for the club then becomes appealing to the next generation of members, folks who are likely 30 or more years younger than the ones the club just lost. Unlike the older single member or couple that resigned, the prospective new member has a spouse and children who want and need to be involved to make membership relevant and valued. 124
BOARDROOM | JANUARY/FEBRUARY 2020
It is the inability to replace the slow, steady annual decline in membership that ultimately leads to a club’s demise. First, there is no way to offset the loss of whole dues dollars with cuts in operations and capital spending and, secondly, these cuts undermine value and accelerate the downward spiral. Ultimately, the consumer sets value, not the seller, which has been problematic for clubs, many of whom mistake traditions for bad habits or irrelevant experiences. They often underappreciate women and children and they can’t understand why the new members want a pool bar, or a children’s activity room, a full-service fitness center or a cool pub. Older members downplay potential capital projects as wishful thinking, frequently shunning them as a “build it and (hope) they will come” approach. The reality is that clubs, like any enterprise, must reinvest and reinvent so they can grow. So, it’s the new trends that demand a response from the board and management. Thus, the leadership needs to do its research and be a catalyst for change, even when some percentage of the membership likes things just as they are. When a club fails to adapt, they resort to marketing tactics to attract members, which only goes so far. Like all sellers, if their product doesn’t have real value, they are forced to make deals, like reduced or eliminated initiation fees, incentives for sponsors, separate dues rates for newer and tenured members and the like. The members brought in under these types of programs have low staying power. They are “renters” rather than members. Clubs that are relevant and have value don’t need these types of tactics, nor do they want to use them and erode their brand. As a final thought, many of these same demands from new members are present in the membership, but the group had other reasons to join, maybe family or friends, or it was the closest club to their house, or one in the right price range. They took the leap anyway, which is a good thing. Engaging with your younger members and recent joiners is an effective way to drive change. They are a good window to the outside world and should be invited to share their views and help bring about modernization. Clubs want to drive satisfaction across all age groups, but it is critical that members under age 50 and in their first five years of membership are ecstatic. New and younger members bring in new and younger members, if they are happy and satisfied. PUBLISHER’S FINAL THOUGHTS
There are many potential issues that could affect private clubs in the next five years, including these many trends our various industry contributors have outlined. Some of these will develop as a matter of fact, because of where the industry sits today with increasing technology, including social media, the needs and wants of members and other societal issues. Negative influences such as a recession, continuing water issues, staffing, lawsuits, wages and lack of funding for capital improvements certainly can also have an impact. So where should a private club focus first? Still paramount, I believe, is selecting qualified board members. This helps give private clubs a responsible board by developing strong leadership both with the volunteer board and the private club’s executive leadership.
Key to efficient and effective private club governance means, among other points, ensuring board members are aware of their roles and responsibilities. This is the key to almost all private club issues. Board member should possess these qualities. • Be objective, willing and anxious to learn • Good judgement and business sense • Be active with in the club • Make time to prepare, attend and take an active part in board meetings • Protect highly sensitive confidential material • Be willing to accept the responsibilities and obligations as a director • Work well with others • Be open minded • Represents the membership • Understand as a board member that you play a limited role, based on your roles and responsibilities • Discourage micromanagement of the club’s staff and management • Be willing to learn about the industry, including participation in annual board retreats which give board members a solid base from which to work and, • When speaking for the board, speak as one voice. Legally, the ultimate control of any corporation is the board of directors. In an equity private club however, the board is responsible to its members as users rather than investors. The board must take time to listen to the members, learn the issues, understand the responsibilities of directors and how their role differs from other key people, and make decisions based on what is in the best interest of the membership. The board must be informed, because board members occupy key positions between the membership and the hired general manager. The board’s primary role is to oversee the GM, establish operating policies and direct the club toward its overall objective – that of providing the membership with the member experience they desire. The Benjamin Franklin quote: “If you fail to plan, you are planning to fail,” remains true today, especially for private clubs that fail to plan. Successful clubs create a strategic plan, a five to 10-year strategic plan, that yes, allows for review, but which doesn’t bow to board members’ personal agendas. Failing clubs have no plans. They suffer from micromanaging and unproductive boards that focus on emotional or self-interests and not strategic issues. These clubs also suffer from a declining membership base that’s compounded when a recession hits. They suffer from outdated clubs and amenities, increasing staff turnover, declining initiation fees and higher dues. Mostly, the suffer from board members and management going in different directions instead of pulling in the same direction as one.
Fewer than six percent of private clubs today have a waiting list to join, and this with the best economy in 60 years. In 1991, 45 percent of private clubs had a waiting list to join, and that was during a recession. This is telling. At least, that’s the way I see it. B R John G. Fornaro, publisher WHAT’S THE MOST EFFECTIVE WAY TO PREPARE YOUR BOARD MEMBERS FOR THEIR ROLES AND RESPONSIBILITIES? BoardRoom Institute, BoardRoom magazine’s educational arm, which we’ve developed over a 10year period and which offers the most cost effective, efficient education for board of directors! BRI helps board members more fully understand information specific to equity clubs while being trained for the positions for which they’ve been elected. I will offer any club a 100 percent money-back guarantee to try BRI. Call Gordon Welch at (918) 914-9050 and learn more about these educational opportunities for your board members. It’s guaranteed to reduce micromanagement, increase your board’s effectiveness and increase your club’s success with your board and for your members.
Award Winning Agronomic Excellence Raising the Bar with Quality, Efficiency and Sustainability
For more information please visit our website at
www.golfmsolutions.com As featured in
Golf Inc. Magazine June 2019
JANUARY/FEBRUARY 2020 | BOARDROOM
125
The B Salsbury
Runs in: Jan/Feb, May/June, Sept/Oct
Thinking of replacing your club Thinking of replacing club management software?your Think again! management software? Think again! If your club accounting and POS software is 7, 10 or even 15 years old, you may be thinking of making a change. So were many of our club clients, who hired us to help them make that decision. Surprise! After a thorough needs assessment, 7 of 10 clubs decided to retain and improve their existing software. Money saved. Business interruption avoided. To learn more, contact us. 400+ CLUB CLIENTS - 30 YEARS OF EXPERIENCE.
(561) 281-0459 • bboothe@boothegroup.com (561) 281-0459 • bboothe@boothegroup.com www.boothegroup.com
www.boothegroup.com
126
BOARDROOM | JANUARY/FEBRUARY 2020
1010 East 62nd Street, Los Angeles, CA 90001-1598 Phone: 1-800-562-5377 • Fax: 1-800-562-5399
KE CAMPS THE COUNTRY CLUB SUMMER CAMP
We are the camp experts. It is all we do. Whether your existing summer camp is in need of overhaul, you want to create a camp from scratch, or simply want to take the pressure off your in-house team, KE Camps will do the work. Ensure your club is familyfriendly by partnering with KE Camps for Summer 2020.
The Club Managers’ Choice for Commercial Umbrellas
The World’s Strongest Umbrellas Wind Tunnel Tested To 75 mph
WWW.KECAMPS.COM DAN@KECAMPS.COM
BambrellaUSA.com • 561-288-8655 • info@BambrellaUSA.com
Wood seating specialist with custom capabilities.
COUNTRY CLUB TECHNOLOGY PARTNERS
Technology Planning for Private Clubs
Technology Master Planning • Club Technology Report Cards • Cost Reduction / Audits • Hosted IT Solutions • Surveillance Cameras • Cyber Security Analysis •
www.sttimothychair.com P 828.322.7125 F 828.322.9156
www.cctechplan.com |
contact: noel@cctechplan.com
JANUARY/FEBRUARY 2020 | BOARDROOM
127
The value of peripheral vision.
Executive search and consulting firm serving the private club and boutique resort industries.
denehyctp.com 203 319 8228
EVERYONE TEXTS, YOUR CLUB SHOULD TOO WWW.MEMBERTEXT.NET | (240) 630-4653
ADDISON RESERVE
Steve Berlin
ADDISON RESERVE
OUTSIDE DINING & PATIO FURNITURE CUSTOM OUTDOOR FURNITURE UMBRELLAS | CUSHIONS | POOL FURNITURE BOARDROOM MAGAZINE EXCELLENCE IN ACHIEVEMENT AWARD PURCHASING COMPANY OF THE YEAR EIGHT YEARS IN A ROW! 2018 & 2019 CUSTOM OUTDOOR FURNITURE
(954) 614-1505 | XHIBTZ1@XHIBTZ.COM | WWW.XHIBTZ.COM BOARDROOM MAGAZINE ADVERTISING INDEX 1000 Hills Fitness . . . . . . . . . . . . . . . 95 ACCP . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Addison Law . . . . . . . . . . . . . . . . . . . . 11 Angela Grande Design . . . . . . . . . . . . 55 Ambassador Uniform . . . . . . . . . . . 39 Amish Gazebos . . . . . . . . . . . . . . . . . 126 APCD . . . . . . . . . . . . . . . . . . . . . . . 116-117 Bambrella . . . . . . . . . . . . . . . . . . . . . 127 Big John . . . . . . . . . . . . . . . . . . . . . . . 99 BoardRoom’s Distinguished Clubs . . . 104-105 & 107 Boothe Group . . . . . . . . . . . . . . . . . . 126 Bozeman Club & Corporate Interiors . 59 C2 Limited Design Associates . . . . . 17 Castor Design Associates . . . . . . . . . 15 CC Tech Partners . . . . . . . . . . . . . . . 127 Chambers . . . . . . . . . . . . . . . . . . . . . . 97 ClubDesgin Associates . . . . . . . . . . . . 3 Clubessential . . . . . . . . . . . . . . . . . . . 101 Club Leaders Group . . . . . . . . . . . . . . 67 ClubLife Management . . . . . . . . . . . . 41
ClubPay . . . . . . . . . . . . . . . . . . . . . . . 87 clubsystems Group . . . . . . . . . . . . . 65 ClubTec . . . . . . . . . . . . . . . . . . . . . . . . 78 Clubwise Consulting . . . . . . . . . . . . 93 Corby Hall . . . . . . . . . . . . . . . . . . . . . . 73 Creative Golf Marketing . . . . . . . . . 43 CSR Data Breach Solutions . . . . . . . 123 DEI Foodservice Equipment . . . . . . 93 Denehy Club Thinking Partners . . . . 13 Duffy’s Tri-C Club . . . . . . . . . . . . . . . 103 DuVal International . . . . . . . . . . . . . 126 Emersa WaterBox . . . . . . . . . . . . . . . 53 Ethos Club & Leisure . . . . . . . . . . . . . 11 Eustis Chair . . . . . . . . . . . . . . . . . . . . 89 FOOD-TRAK . . . . . . . . . . . . . . . . . . . . . 6 Forbes Travel Guide . . . . . . . . . . . . . 29 Gasser Chair . . . . . . . . . . . . . . . . . . . . 33 GCSAA . . . . . . . . . . . . . . . . . . . . . . . . . 131 George Golf Design . . . . . . . . . . . . . 63 Golf Business Network . . . . . . . . . . . 31
Golf Maintenance Solutions . . . . . 125 Golf Property Analyst . . . . . . . . . . . 121 Goodwin Recruiting . . . . . . . . . . . . . 103 GSI Executive Search . . . . . . . . . . . . . 11 Harris Interiors (HINT) . . . . . . . . . . . . 35 High-End Uniforms . . . . . . . . . . . . . 89 Hilda W. Allen Real Estate . . . . . . 109 HFTP . . . . . . . . . . . . . . . . . . . . . . . . 56-57 Jonas . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 KE Camps . . . . . . . . . . . . . . . . . . . . . . 127 KemperSports . . . . . . . . . . . . . . . . . . . 51 Kopplin Kuebler & Wallace . . . . 5 & 27 Lichten Architects . . . . . . . . . . . . . . . 37 Marsh & Associates (MAI) . . . . . . . . . 23 McMahon Group . . . . . . . . . . . . . . . 49 MembersFirst . . . . . . . . . . . . . . . . . . . 19 NanaWall . . . . . . . . . . . . . . . . . . . . . . 69 Newstation Northstar . . . . . . . . . . . . . . . . . . . . . . 132 Peacock + Lewis . . . . . . . . . . . . . . . . 87
PGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 RCS Hospitality Group . . . . . . . . . . 109 Rogers McCagg . . . . . . . . . . . . . . . . . 83 RSM . . . . . . . . . . . . . . . . . . . . . . . . . . 119 Salsbury . . . . . . . . . . . . . . . . . . . . . . . 126 SES Lighting . . . . . . . . . . . . . . . . . . . . . 8 Signera . . . . . . . . . . . . . . . . . . . . . . . . 119 Southern Aluminum . . . . . . . . . . . . . 77 Sports Solutions . . . . . . . . . . . . . . . . 95 Strategic Club Solutions . . . . . . . . . 99 Studio JBD and Jefferson Group Architecture . . . . . . . . . . . . . . . . . . . . . 45 St. Timothy . . . . . . . . . . . . . . . . . . . . 127 Survey & Ballot Systems . . . . . . . . . 83 TechnoGym . . . . . . . . . . . . . . . . . . . . . 61 TROON . . . . . . . . . . . . . . . . . . . . . . . . . 75 USPTA . . . . . . . . . . . . . . . . . . . . . . . . . 85 WebTec . . . . . . . . . . . . . . . . . . . . . . . . 79 Welch Tennis . . . . . . . . . . . . . . . . . . . . 91 XHIBTZ . . . . . . . . . . . . . . . . . . . 47 & 101
BOARDROOM MAGAZINE COUNTRY CLUB INDEX John Adams, president, Scioto Country Club, Columbus, Ohio Kyle Barton, GCSAA Ambassador, Michigan, Tam O’Shanter Country Club, Bloomfield, MI Erik Becker, president, Cherokee Town and Country Club, Atlanta, GA Nancy Berkley, green committee and marketing committee, Frenchman’s Creek Beach & Country Club, Palm Beach Gardens, FL Steve Diamond, president, Lake Charles Country Club, Lake Charles, LA Mike Fleig, GM, Greeley Country Club, Greeley, CO Michael Gardner, GM/COO, Lake Charles Country Club, Lake Charles, LA Joe Gattone, president, Medinah Country Club, Medinah, Ill Josh Jeffers, member, Milwaukee Athletic Club, Milwaukee, WI
Tony Janowiec, member, Milwaukee Athletic Club, Milwaukee, WI Dr. Bonnie Knutson, the Country Club of Lansing and the Michigan Athletic Club David Kriete, board president, Milwaukee Athletic Club, Milwaukee, WI Nancy Levenburg, member, Spring Lake Country Club, Spring Lake, MI Jeff Mapstone, president, The Country Club of Rochester, Rochester, NY Marian McGill, CCM, assistant GM, Superstition Mountain Golf & Country Club, Gold Canyon, AZ Willie Mount, past president of Lake Charles Country Club, Lake Charles, LA Joe Trauger, president, Mount Vernon Country Club, Alexandria, VA
Preserve
HELPING CLUBS THRIVE
the places you love to play and support the team that makes it possible. Whether it’s a foursome in the pro shop or a four-top in the dining room, Jonas Club Software has an integrated solution to enhance the member experience from booking to final billing. Join us this year at the CMAA World Conference and Business Expo to learn about the newest ways we’re helping clubs thrive.
When you join Golf Course Superintendents Association of America, you’ll ensure superintendents have the resources they need to provide enjoyable playing conditions and a sustainable future.
Online Ordering MemberInsight
CRM MetricsFirst
Self Serve Kiosk SkyTab
BECOME A
Mobile Point of Sale Shift Manager
Club Management Software of the year Business Intelligence Software of the year CRM of the year
Visit Booth 1223 at the CMAA World Conference and Club Business Expo between February 10 - 11, 2020.
VISIT JONASCLUB.COM
Visit www.gcsaa.org/friend today to become a Friend.
T he Bo ardRo o m m ag az ine
C E L E B R A T I N G 24 Y E A R S O F E D U C A T I N G T H E P R I V A T E C L U B I N D U S T R Y ISSUE 287
|
VOLUME XXIV JANUARY/FEBRUARY
Vo l um e X X IV, Jan uar y/ Febr uar y 2 0 2 0
Fritz Skeen
Sawgrass Country Club 10 | PUBLISHER’S PERSPECTIVE
46 | LAW & LEGISLATION
THE NEXT FIVE YEARS WHAT CLUB TRENDS SHOULD WE KNOW ABOUT?
DO YOU MAKE NEW YEAR’S RESOLUTIONS?
16 | BOARDROOM BASICS AND BEYOND
ARE YOU STRESSED OUT OR BURNED OUT?
THE PRESIDENT’S COUNCIL ON THE CLUB OF THE FUTURE
68 | ON THE FRONTLINES
110 - 113 | INNOVATIVE IDEAS