Boardroom Briefs September/October

briefs Salary benchmark for exempt positions

By David Lacey

The U.S. Department of Labor (USDOL) has issued its new guidelines for exempt positions; that is, positions not eligible for overtime pay. These new rules will be effective December 1, 2016.

USDOL has raised the salary benchmark for exempt positions from $23,660 to $47,476, almost double the earlier level.

The immediate effect on a country club should be to audit how many current exempt positions are paid less than the new benchmark. Then, the club is expected to take action; either to increase the base pay to the salary benchmark whenever there is a gap between the actual base and the new salary benchmark of $47,476 or a related personnel action: change the employee’s classification from exempt to non-exempt and then track hours worked and overtime.

The salary adjustment action by the club should occur on or before the effective date. We urge fast action because USDOL has targeted the hospitality industry as

one of three market sectors where employment-related abuses have occurred now and in the past; and USDOL intends to correct them.

At a country club the most likely departments where a pay gap may occur will be: membership; IT department; human resources; and the finance department.

Also, the new rules do not apply to: 1) seasonal employees with a specific start and end date to their employment; 2) employees currently classified as nonexempt and who earn overtime (1.5 times the hourly rate) for all hours worked over 40 hours in a work week; and 3) teaching pros whose sole compensation may be lesson fees. For this third group, their income is defined

ClUb CUltUre Creating Club Culture- p11 governanCe Is Your Board a Board? - p5 Budgeting with Context - p9 greenS Case Study: Dealing With Drought - p3 hUman reSoUrCeS Salary Benchmarking for Exempt Positions - p1 memberShip Think Differently About Youth Programming - p5 Marketing Performance of Your Website - p7 trenDS Food Photo Booth - p7 teChnology Benefits of Club Software Providers - p13 wellneSS Health Clubs Now Offer Golf Simulators- p3 5 Ways to Measure Your Success- p13

These changes have occurred after more than two years of discussion and debate (at times very heated debate between USDOL and employers). The emphasis now is on compliance for all country clubs. If a club follows the guidelines described above, compliance can be achieved quickly and easily, perhaps with minimal negative financial effects on the club’s budget. BRB CliCk here for more on the U.S. Department of labor’S (USDol) new gUiDelineS for exempt poSitionS. theSe new rUleS will be effeCtive DeCember 1, 2016.

briefs

table of Contents boarD Habits for Today’s Board Meeting - p9

as totally variable and they do not have a fixed base salary.

SEPTEMBER /OCTOBER 201 6 VOLU ME 1 | ISSUE 5

boardroom briefs is complimentary to boardroom magazine subscribers.

This newsletter offers content that goes beyond the buzz, by surfacing and summarizing important industry information. Each issue will offer practical insights from industry experts with a focus on fit for boards, board presidents and paid management.

John g. fornaro / Publisher Dee kaplan / Advertising

heather arias de Cordoba / Editor Dave white / Consulting

If you have a story idea, please contact heather@boardroommag.com or call (949) 365-6966.

For more information please visit www.BoardRoomMagazine.com. Interested in advertising, please email dee.kaplan@gmail.com or call (310) 821-0746.

ContribUting writerS anD inDUStry reSoUrCeS Skip Avery / executive vice president, Chambers / savery@chambersusa.com Henry DeLozier / golf management consultant / hdelozier@globalgolfadvisors.com Bonnie J. Knutson Ph.D. / professor, The School of Hospitality Business, MSU / drbonnie@msu.edu Priya Kumar / director of marketing, Northstar Technologies, Inc. / priya.kumar@globalnorthstar.com David Lacey / managing director, human resources services, Hirshorn Boothby / dlacey@hirshorn.com Rick Ladendorf / founder & president, Prevo Health Solutions / rladendorf@prevohealth.com Mike Phelps / CEO, Pipeline Marketing / mike@pipeline-inc.com Philip Newman / partner, RSM / philip.newman@mcgladrey.com Joanna Roche / spa & fitness director, The Westmoor Club / Joanna.Roche@thewestmoorclub.com Robert Tibbetts / clubhouse manager, The Kansas City Country Club / rtibbetts@kccc.com USGA / USGA Green Section Publications / www.usga.org

Case Study: Dealing with Drought Barona Creek Golf Club Lakeside, CA - Sandy Clark, CGCS, superintendent issue: Barona Creek Golf Club is located in drought-prone Southern California, about 30 miles northeast of San Diego. Water quality is good at Barona Creek, but availability is a challenge. During multiyear droughts, the irrigation retention ponds sit empty because of lack of rainfall. After all the stored water is used; a limited supply of only 300,000 gallons of water per day is available for irrigation. As a result, there is often not enough water to irrigate the entire course. The major challenge faced by the maintenance staff is allocating their limited water resources in a way that keeps the golf course playable and open for business, even in dry years. action: To combat chronic water shortages Barona Creek Golf Club constructed an onsite water reclamation facility, removed 12-15 acres of irrigated turf, developed a Drought Emergency Plan, and implemented a deficit irrigation program that involves irrigating fairways to replace only 65 percent of the water lost through evapotranspiration. Course officials, with the help of the golf course architect, have

implemented these additional strategies to save even more water: • Eliminated perennial ryegrass overseeding • Removed two acres of bermudagrass from an alternate fairway • Removed 12 alternate teeing grounds • Added waste areas • Replaced maintained turf around teeing grounds with native plants results: Barona Creek Golf Club, past winner of Golf Digest’s green Star award for outstanding environmental practices, continues to lead the industry in water resource conservation. The course, with the help of timely rains in 2015, has reduced water use an astounding 55 percent compared to 2013. They use and reuse every drop of available water from two lakes, six ponds, four retention reservoirs and an on-property reclamation facility that includes catch basins to capture rainwater from building rooftops.

Furthermore, the bermudagrass fairways have built up a tolerance for low-water inputs and have retained excellent playing quality. Should Barona Creek run out of

stored water, its Drought Emergency Plan would go into effect. Greens would get the highest watering priority, then tees and fairways, and finally frequently-played rough areas. In a future phase of their water saving efforts, Barona Creek Golf Club hopes to save an additional eight to nine million gallons of water annually by turning off 150 sprinkler heads located along cart paths. BRB © United States Golf Association.

Green Section Record. All rights reserved.

Reprinted with permission.

Competition? health Clubs now offer golf Simulators

By Rick Ladendorf

LA Fitness in Aliso Viejo, CA recently converted two racquetball courts to four simulator hitting bays and is set to poach golf related revenues from the club industry.

Members can take lessons or bring their friends and play their favorite course indoors in a fraction of the time it takes to play a round of golf. As an added value, local restaurants deliver food and adult beverages to the players for a truly exceptional experience.

Ultimate HD Golf has plans to roll this concept out nationwide with technologies not currently available in most private clubs. A real shame, as most golfers would love to pay an additional fee to have MySwing, a full-body 3D system and Trackman, a Launch Monitor technology at the club. According to the International page 3

|

boardROOM briefs

Health, Racquet and Sports Association (IHRSA) there are 52 million people that workout regularly in a gym or fitness center and LA Fitness, a big-box health club chain is testing a concept that may take business away from the private club

industry, one member and one swing at a time. So, what can the private club industry do to keep the golf enthusiast members “inside the gates”?

1. Find a space and buy a simulator, Trackman and MySwing.

2. Place a Trackman on the driving range and offer lessons.

3. Partner with a local health club and provide golf instructors and technology in exchange for shared revenues and members.

The line between fitness and golf is blurring and if it’s a trend, private clubs without fitness facilities will likely see a decline in revenues, usage and possibly retention. BRB

think Differently about youth programming

By Skip Avery

There’s no question that most clubs provide some kid-friendly amenities. Instead, it’s a question of to what degree – and finding the right balance for your membership.

By focusing on youth programming, you’re not just creating legacy members – you’re also providing value to their caregivers.

But you don’t need a full-blown childcare center or Kid’s Camp to make your club family-friendly. Instead, it’s about choosing programs wisely, incorporating kids into club activities, and funding facilities that members respond to.

Here are five ways to think differently about private club youth programming: Strive for year-round engagement: Don’t relegate youth activities to holidays. Any club can hold an Easter Egg Hunt, but offering year-round programs that include children pays off. We held our first mini drive-in at Nakoma Golf Club in 2000, parking the golf carts on the driving range for that classic drive-in feel.

Country Club of St. Albans took a new spin on this tradition with a Dive In, allowing the kids to watch a movie from their pool floats.

During the winter, we hosted a movie night in the clubhouse. build Compelling Junior Sports programs: More sportsoriented clubs should strive for strong Junior Sports programs with dynamic staff and first class Golf Learning Centers. You can also introduce sports to children early using games like Snag Golf or setting tees out at the 150 markers.

look beyond recreation: Not everything needs to be about sports and outdoor activities. During the off-season, give members a date night where parents drop the kids off and enjoy a romantic dinner at the club while the kids enjoy fun activities.

Find staff members that already have a bond with the children and a high level of trust their families. Personalized interactions are essential for the success of youth programs.

Don’t think in absolutes: Avoid falling into the all or nothing trap. If you can’t afford to go all-out on children-friendly facilities right now, consider financially conservative options until you’re in a better position. Always recognize what options best suit your club culture. After all, sometimes simplicity is all you can achieve at the moment – and that’s okay. When it comes to youth programming, something is better than nothing!

Search for inspiration everywhere: Clubs shouldn’t be afraid to share ideas, particularly for youth programs. If you’re struggling to connect with children, look to other clubs that are doing it right. See what facilities and programs they’re utilizing to resonate with members. If you attend a networking event, discuss what other general managers are doing to engage with their youngest members. BRB

is your board a board?

By Bonnie J. Knutson

Boards are made up of members who are affected by the same demographic, cultural, social and economic trends that impact every other member. Yet, it often seems as if boards are the last thing to evolve in a club.

Whether by tradition, inertia, or downright anxiety, we tend to keep club governance the way it always has been. It is the “if it ain’t broke, don’t fix it” mentality. Sometimes known as the “old boys’ network.”

I once read an article in Fortune Magazine called, “Lessons of the Fall.” The author interviewed several big-time CEOs about what they learned from all the scandals and firings that had received so much recent media attention. Thinking about his board of directors, one chief executive lamented that “looking at the company through a little hole once a quarter at a four-hour meeting, board members don’t know much about the company.”

Can the same be said about your club board? How much does each board member really know their club? How well do they really understand its challenges and opportunities? A key element of knowing is being able to understand how important issues affect the life of the club. A few months ago, I attended a leadership conference for board members of non-profits that was page 5

|

boardROOM briefs

dominated by two major trends. One, of course, was the need for the board to reflect the member profile of the organization – gender, ethnicity, age, tenure, participation. Does yours? Such a reflection allows them to know more about the club because they can better relate to some of the issues, needs and wants of the various membership categories or segments.

The other was the increasing need to recruit and add members with highly skilled functional skills to boards – accounting, marketing, human resources, etc. This way, the board gets a highly specialized expert who is probably more attentive to the trends and innovative solutions than someone with little or no experience in the field. Again, does yours?

Riding both of these trends can brighten your club’s future. Your Bottom Line will thank you! BRB

Club trends fooD photo booth The Kansas City Country Club enjoys showcasing its culinary team and their creations. The team sends out weekly updates regarding the specials on the menu and are now including photographs of the food items to entice members to try something new and exciting.

“We started by taking a few simple snapshots of our food while it was in the kitchen and e-mailing the membership, “ explains Robert Tibbets, clubhouse manager at The Kansas City Country Club. “The unintended side effects were photos with poor lighting or unattractive backgrounds, which made our plates, look less desirable.

It’s tough to focus on the food in an industrial setting, so we were looking for a way to take photos that would feature the food and improve the lighting.

“Our solution? A photo booth which allows us to frame our dishes in a much more professional manner, which makes our food the star of each photo.”

The photo booth is simple to set up and involves plugging in a few lights and snapping the photo. The complete kit comes with different shades and filters which allows the photographer to change up the color scheme.

When the photos are complete, the small photo booth can be folded down and stored on a bookshelf or counter.

“The booth has such a small footprint, it stays out of our way the rest of the week and we can carry on without a dedicated space,” says Tibbetts. “Best of all is the small price tag. For under $100 we were able to dramatically enhance our presentation and the membership has been raving about the need to try our specials because they saw them online.” BRB

marketing performance of your website

by Mike Phelps

Frankly, most private club websites aren’t set up for great membership marketing. While Pipeline doesn’t build websites, we do help them perform better. Here are some basic tips to improve the membership marketing performance of your club website: Don’t provide all the information. The human brain is drawn towards clarity and away from clutter. Our survival instincts force our brains to conserve calories and discard information we don’t need. Introduce too much information and the brain tunes out in order to conserve calories.

So resist the urge to list every amenity and feature – just break them down into broad strokes. Just like a first date, you should only provide enough information to be relevant and create interest.

Dumb it down. Most of us are so close to our clubs that when we talk about them, we talk over the heads of our audience. In marketing we call this the curse of knowledge – or the gap between the level we should be communicating at, and our actual level. We want to shrink this gap as much as possible and communicate at an introductory level without getting overly primitive. Instead of touting your Har-Tru Hydrocourt tennis courts, explain how as a member you will enjoy the game more than ever playing on the club’s state-of-the-art surfaces. include an easy to understand tagline. The tagline is a critical piece of information that describes what you offer and how it will make life better. It should be prominently displayed on the home page above the fold (before someone has to scroll down). Say it clearly and don’t get poetic. For example: “The private club lifestyle your entire family will love.” Remember, people don’t always choose the best solution, they choose the one that is easiest to understand. have an obvious direct call to action. Determine the primary purpose of your website and then create a clear and easy to understand direct call to action matched to that purpose. If your objective is to create interest in membership, then an example might be “Learn more about joining” or “Visit the club”. If your purpose is to engage members, then consider a direct call to action like “What’s going on at the club?” Make the button stand out and remember the top right corner is the most valuable real estate for a website – a great place for a call to action. visually display the benefits your members experience. Images are really important. They need to show resolution to an internal conflict that your potential member is facing. Pictures of smiling, happy, excited members are always better than pictures of golf courses and clubhouses. Testimonials are great too, but use them sparingly. BRB

page 7

|

boardROOM briefs

¾ j±Í L s Ý ±¾ 8±¾ I¾± Í È Ö ±s¾ 8 È « Âþ

&OXE %HQFKPDUNLQJ KHOSV ERDUGV XQGHUVWDQG WKH FOXE V NH\ ILQDQFLDO DQG RSHUDWLRQDO GULYHUV VR WKH\ FDQ VWD\ IRFXVHG RQ VWUDWHJLF LVVXHV DQG VWRS ZDVWLQJ YDOXDEOH WLPH GLVFXVVLQJ WKLQJV WKDW VLPSO\ GRQ W PDWWHU ,W V DQ DIIRUGDEOH RQOLQH EXVLQHVV LQWHOOLJHQFH WRRO WKDW EULQJV UHOLDEOH FOXE LQGXVWU\ GDWD WR WKH WDEOH VR \RX FDQ JHW GRZQ WR EXVLQHVV LQ WKH ERDUGURRP

È ±×« ȱ Í « ÂÂ

budgeting with Context

by Phil Newman

“It sucks the energy, time, fun, and big dreams out of an organization. It hides opportunity and stunts growth.

It brings out the most unproductive behaviors in an organization, from sandbagging to settling for mediocrity.”

Jack Welch, retired American business executive, author, chemical engineer and chairman and CEO of General Electric Given that budgets are the cornerstone upon which managing the business side of private clubs has always been built, this description of the budget process from Jack Welch is rather alarming!

Budgets have been the tools that club boards, COOs and staff have lived and, in too many cases, died by over the years.

Sadly, too often there appears to be a critical link missing in the budget process – the strategy link.

Strategic planning has been one of the most significant trends to engulf the private club world in the last decade. Everyone is talking about, many are doing it but too few are connecting the dots from their strategic plan to the daily operation, management and funding of the club activities.

How often have you read a grandiose goal in a club’s strategic plan that was never backed up by a specific commitment to fund the training or action step required to achieve that goal?

The often quoted goal “to be recognized as the finest golf course in the city of Gotham” is rarely backed up with a realization that it may require significant increases in the golf course maintenance budget of the club.

Take another view of this misalignment – when department heads are asked to prepare their budget submissions for the year - are they aware of the elements of the strategic planning document that directly speaks to their department? Does the golf course superintendent know that he needs to be preparing a budget that supports the membership’s aspirations for the golf course?

At far too many clubs, the answer is no.

So as you work through your budget process, try and keep this in mind. You probably spent a lot of money, time and effort developing a strategic plan. Don’t waste that on failed implementation. Make sure your annual business plan supports the mission statement that came out of your strategic plan.

If you can then design a budget that is driven by your business plan, you will be on course to close the loop and actually achieve your strategic goals. BRB

Defining habits for today’s board meeting - part v When members of a private club join a club committee or join the board, they do so for a variety of reasons.

Some people are looking to enact change, some are problem solvers and enjoy the challenge, and others simply do so because they enjoy giving their time towards something they love.

Whatever the reason, these individuals have stepped forward to help guide the club on the predetermined strategic path.

Over time, as we speak with general managers, board members, committee members and board presidents, when referencing their board or committee meetings, we hear phrases like “lack of communication”, “misunderstood”, and “not listening”, even when their meetings or club conversations were not about complex ideas. So how can the board, committee members and the paid management communicate more effectively with one another?

USe SilenCe aS StrategiCally aS yoU USe worDS Many boardroom conversations become unproductive because the participants are too busy plotting their defense or worrying about what to say next, they aren’t really listening to each other. A great way to remedy this is to take advantage of page 9

|

boardROOM briefs

the silence. While you may think that silence is uncomfortable or nonproductive, it serves the conversation by allowing everyone time to process what’s been said and organize their thoughts before responding—without feeling rushed.

So, the next time you’re in a board meeting and the conversation deserves your full attention, find an opportunity to practice silence. Spend a few extra moments absorbing what’s been said, jot down some notes and intentionally thinking through your response before you speak. Learn to value and leverage those moments of silence instead of fearing them—effective communicators use this to build a better conversation.

Try using at least one of these strategies in your next board meeting, and see how you can up your communication effectiveness. Chances are the meeting will be more effective and everyone will find a new level of confidence and satisfaction moving forward. BRB

Creating Club Culture

By Henry DeLozier

Peter Drucker, the noted management guru, famously observed that “Culture eats strategy for breakfast.” Drucker was talking about corporate culture, practices and policies.

For private clubs, though, Drucker was correct. Culture in a club is governance – the practice of governing for the benefits of those governed. And, Drucker is correct that private club strategy – no matter how good and well-conceived – will be a victim to poor governance.

According to Fred Laughlin, the esteemed non-profit governance expert and an associate at Global Golf Advisors, in clubs that are well governed “the board speaks with one voice — in writing.

Following is a useful three-question test concerning the governance at your club: 1. Are we who we claim to be? The brand promise in most private clubs is that the club will provide an enjoyable lifestyle for its members. Lifestyle varies from club to club; the promise does not vary where the culture of the club is genuine.

2.

Are we doing what is right for the members? Often boards deliberate what is “allowed” under the by-laws.

And sometimes the proceedings are more basic down to what options the members will tolerate. Great boards – and board members – concern themselves with the moral compass that points to doing what is right.

Truthfulness, dependability, and openness are terms most often cited in private club surveys of their members concerning expectations of the board.

3.

Are we truly servant leaders? Servant leadership places the point of focus on those served ahead of focusing on those serving. Great and successful clubs share the characteristic of strong servant leadership.

Although it seems rather pedestrian, when you omit either one of two key concepts in the phrase, you invite dysfunctions.

1.

2.

Take out “one voice” and you have a board of factions — the president, the executive committee, a clique here, a group there, whatever. While diversity of thought and debate around the board table is healthy, speaking with multiple voices outside the boardroom confuses the members, frustrates the GM, and discourages the board members whose voice is not heard.

Taking out “in writing” means the board must choose another way to communicate positions and policies, which usually comes from the person with the most power or influence, the largest faction of followers, or the loudest voice. Such verbal policies are ephemeral, lasting only as long as the person or group stays in power…the term of the president.”

Strategy – especially data-driven and bold strategy – flourishes in clubs with cultures that foster great governance.

Great strategy is simple in its description and thorough in its formulation. Effective and reliable strategy depends upon a culture borne of trustworthy governance. BRB

Capital inveStment roe/roi in ClUbS When every dollar counts, the ability to measure return on the club's capital investments is critical. The goal of capital projects is to attract and retain members.

Click on the graph to the left, this video takes a closer look at the investment return cycle and explains how boards and managers can use data to determine which investments make sense and to measure the results. BRB

page 11

|

boardROOM briefs

top benefits Clubs are looking for in their Club Software provider

By Priya Kumar

It used to be that dining POS and online statements were the epitome of club software technology. Today, these basics are standard on most off the shelf software; innovation in technology has gifted us with a great many more goodies and gadgets.

Here are top benefits that clubs are looking for in their software provider, to improve the member experience and increase operational efficiency.

Single Solution – Clubs are looking for one software solution provider to cover their operational and business requirements. The software provider not only has to offer system robustness and real time data through multiple interface points (such as desktop, tablet or smartphone), but also continually anticipate the everchanging club requirements, and constantly introduce these features in their software.

Simplicity - Member apps for clubs are the new kid on the block and are taking clubs by storm. Members love the convenience and simplicity of making dining and tee time reservations, viewing statements, updating their profile, paying club dues, etc., from their mobile device.

Additionally, personalized member service is also made simple through smart alerts and push notifications, enabled by location-based technology.

Speed and Convenience of Service – In order to provide exceptional member service, clubs are looking to place the power of the software solution in the hands of the staff wherever they interact with membership. The best office solutions are now mobile. In addition, members (and therefore, the club) now expect a responsive customized website - one that is seamlessly connected to the back office. This enables club staff and members to access the full website functionality from any online device; whether it be it a PC, laptop, tablet or mobile phone.

Stability – Last but not least, clubs are concerned about the consistency of their software provider. It is important for the clubs to know that their provider is a long-term partner who will be there in the future, without changing ownership, platforms, or development and support philosophies. BRB

page 13 |

boardROOM briefs

5 ways to measure your Success in Spa & fitness

By Joanna Roche

Feedback is critically important to both motivating staff, measuring success and benchmarking for improvement.

It’s important to understand the difference between quantitative research, which is based on numbers and mathematical calculations (aka quantitative data), and qualitative research which is based on written or spoken narratives (or qualitative data).

Here are five ways to evaluate your spa & fitness operation: Surveys – simple surveys kept to 10 questions on a narrow topic are very useful. There are two ways to approach survey taking – test a hypothesis with questions aimed at getting certain answers?

Or focus on satisfaction with a general approach on services?

Spending analysis – it’s always a good idea to know who your top spenders are. Your booking software should be able to generate reports that can show you spending habits and patterns over specific date ranges. You can analyze these using several filters – specific staff members, time frames, specific products, and specific services. Another tip would be to send thank you notes to the top 20 spenders every season – members like to be appreciated.

Utilization – this is all about the space being used and the service. How often or what percentage of time are your massage rooms booked? How many massages can you accommodate in a typical week and how many are you booking? You can roll this analysis out over all services and spaces and see patterns and trends in the data. This information changes often so to really understand it run the analysis regularly.

Staff Sales – always tells you about your best sales people your best service providers. Spa Managers should be looking at this data daily and again your booking software should be giving you multiple choices on how to view this data. word of mouth – what do you hear from both members and staff? A great habit to cultivate is to ask members for feedback. Once you have studied the data, ask the person who gets the most massages at your club for a coffee meeting – the purpose is twofold – to say thank you and to ask a few probing questions about the service and the staff member.

All of these methods can be used in both simple and complex ways. If this exercise is something you have not done before, start small and become comfortable with the methodologies and the outputs. The habit of feedback and analysis is critical to your club’s success. BRB

haute couture

Professional performer, controlled conditions. Do not attempt.

The defining characteristics of this chair include deep wood tones and clean, gently curving lines that bring to mind a finely crafted musical instrument like a violin or bass. Gasser chairs don’t merely perform, they dazzle.

gasserchair.com | 800.323.2234 Featured Chair: Sonata AFFILIA ATE TE 25 YEAR