Private Club Succession Planning

“To improve is to change, so to be perfect is to have changed often.” With this advice, Sir Winston Churchill described the necessity of embracing change in governing and leading. While change in private clubs is constant, succession planning is often overlooked for more pleasant sorts of change. This is because succession planning implies unwanted or unexpected change.

As a matter of good governance practice, club boards should adopt a comprehensive policy for what happens when the general manager (GM) leaves, dies or is incapacitated. Each board’s policy will differ. The best time to discuss and draft that policy is when there is no urgency and the board can benefit from the perspective, understanding and good judgement of the GM.

And once you have the policy, keep it current to reflect changes that arise. The twelve questions below are designed to guide what you want to include in your policy.

Board Focus – The board is duty-bound to ensure that the club is protected.

  1. Do we have a strategy for developing GM successors within the organization?
  1. What is our agreement with the GM concerning requirements for advance notice for a voluntary retirement?
  1. Who should be Acting GM when the GM is away from the office for lengthy travel or illness? Who should immediately assume GM duties if the GM dies suddenly?
  1. Is our situation such that an Interim GM should be appointed before a search is begun for a permanent GM?
  1. Assuming plenty of time for the next GM search, who should be on the search committee? How will they be selected? Do we favor using a search firm? What tentative budget should be anticipated? Should the search committee recommend one or more than one candidate to the board? Can the Acting or Interim GM be a candidate during the search for a permanent GM?
  1. If the GM dies suddenly, what process should be followed to find a successor while the Acting GM is leading?
  1. Who determines when a physical or mental disability is such that the board should appoint an Acting GM? How will that be done?
  1. What benefits do we provide to the surviving spouse if the GM dies while in office?
  1. Do we have a policy of incentives to keep the GM and other key leaders?
  1. What is our severance policy should the board terminate the GM?
  1. What insurance should we have on the GM to help cover the costs of interim leadership, a search, or benefits to the family should the GM die?
  1. Do we want to plan to allow the successor GM to serve some time as part of the transition? If possible, transitional management can be highly effective for the incoming GM to call upon the institutional knowledge of the predecessor.

GM Focus – The existing GM is an invaluable resource to guide the board in understanding how his or her job duties are prioritized, executed and measured. Each GM should be asked to participate in the succession planning process and his or her inputs should be carefully integrated into the eventual plan.

The GM should provide guidance on matters of interim management and leadership, existing documentation of mutual understandings and contracts.

Third-Party Guidance – Legal and accounting assistance should be called upon to address such matters that the board must address to ensure that the club acts within its legal and ethical limits. Accountants should provide guidance concerning the booking of costs and benefits to ensure accuracy and alignment with tax filings. Insurance providers serve as a great resource for confirming established—and lacking—coverage areas to ensure that nothing is missed in the transition.

Change is a good thing although often unwelcome. Boards are responsible to plan and manage as much change as the club requires. Forward planning is a primary means of minimizing transitional risk.

For further reading, see the NCA Board Leadership Institute’s white paper, “Chief Executive Succession Planning for Private Clubs” at nationalclub.org/clubgovstandards.

This article was authored by GGA Partner Henry DeLozier for the NCA’s Club Director – The Magazine of the National Club Association.

Standards and Your Success

Before railroads spanned North America there were no time zones. As railroads began to shrink the travel time between cities, from days or months to mere hours, local times made scheduling a nightmare. Railroad timetables in major cities listed dozens of different arrival and departure times for the same train, each linked to its local destination. How could someone plan ahead or run the railroad on time when there were so many different times in play?

The solution was a uniform time-keeping system developed and introduced by the powerful railroad companies, which agreed to divide the continent into four – and eventually five – time zones that closely resemble those in place today.

Managing a golf course is a little different from running a railroad. But there is a similar need for uniformity and consistency. As with most things with lots of moving parts, multiple stakeholders and outside influences beyond your control, a smooth-running operation starts with a plan. For golf course superintendents, building a dependable agronomic plan requires extreme focus in two important areas: standards of excellence and standards of measurement.

Standards of Excellence. A baseline understanding is necessary to describe which standards of care and upkeep will be achieved and sustained. Establishing dependable standards requires several sub-plans:

  • Mowing and Cutting: Describing how the greens, tees and fairways will be kept is a top priority. Good plans describe frequency, intended cutting heights and mowing patterns. Photographs help laymen understand the look, fit and finish the superintendent expects. Because of the manpower and money required, the mowing plan is the foundation of an overall agronomic plan.
  • Cultural Practices: Aerification, verticutting and other mechanical programs reflect the facility’s course philosophy; that is, how management wants the course to look and play. Implementing this philosophy to achieve the desired results requires precise description and illustration of each practice that management and crew understand completely.
  • Irrigation: The efficient and sustainable use of water is mission-critical in most locales where water use regulation is commonplace. A good plan shows water usage by day as measured in gallons and dollars.
  • Fertility: Increasing regulation demands that golf courses execute thorough planning and reporting of consumption and usage of all chemicals, especially pesticides and fertilizers. The agronomic plan is an ideal platform for superintendents to demonstrate their knowledge, expertise and commitment to sustainability.

In addition to these examples of sub-plans, superintendents must consider an arboreal plan to include the planting, feeding, pruning and removal of trees on and adjacent to the golf course. Describing how lakes and streams will be kept, preserved and cleaned is another important element of a comprehensive agronomic plan.

Standards of Measurement. In each section of the plan, superintendents should describe in words and images how standards of excellence will be maintained. These standards must be measured to be effectively managed because, as we often hear, things that get measured get managed. Here are three metrics to consider:

  • Units of Consumption: A sound agronomic plan describes the volume of all consumables, including time and distance. This is where superintendents really shine. Demonstrate your scientific training and make it easy for your controller or finance committee to understand the depth of your knowledge and measurements that are most important to agronomic success.
  • Cost per Unit Consumed: Connect consumption units to the budget with easy-to-follow calculations. Run the numbers and show how they were calculated. As all who do the work know, the granular consumption is where budgets either work or do not work. Use the measurements to educate those who supervise or opine on your work. Examples of cost-per-unit references are gallons-per-day for water, man-hours for the tasks required, and kilowatts consumed for running pumping and irrigation systems.
  • Labor Costs: More than half of a typical golf course budget goes to labor. This segment is one that is escalating significantly. Describe the work that is being done, the cost per hour of the worker and the overhead calculations for benefits. The more thorough the detailed backup, the more powerful your argument.

This article was authored by GGA Partner Henry DeLozier for Golf Course Industry.

Compliance Matters in Private Clubs

Despite media reports to the contrary, the compliance requirements of all organizations have grown in recent years. The amount of time spent on compliance by private club boards, management and line staff has increased proportionately. The best approach is to be proactive and minimize, or better still, eliminate the risk of non-compliance. Global Golf Advisors recommends two measures to protect both management and the board from a costly and embarrassing non-compliance event.

The first is for management to develop a “compliance checklist”. It can be a simple Excel workbook that includes all the current requirements by department, the timing for reports/inspections, the person responsible and most importantly, the name, signature and date the item was completed. Why a simple checklist? Because the volume and complexity of our knowledge has exceeded our ability to consistently deliver it correctly, safely or efficiently. This was best described in a recent bestselling book, The Checklist Manifesto: How to Get Things Right, by Atul Gawande. Used correctly, a compliance checklist gives the GM one less thing to worry about.

The second is for boards to insist on a compliance statement/report at every meeting. The board cannot be expected to know whether the club is in compliance. Yet, in many cases, directors may be held accountable by outside agencies. The directors would certainly be held accountable by their fellow members if the club was closed even briefly for an environmental, labor or safety issue. It is something directors should require to fulfill their fiduciary duty and to avoid any litigation. Each time the Board meets, the GM/COO reports that “To the best of my knowledge, the club is in compliance with all known municipal, state and federal regulations as of (insert date).” You can also provide updates with this sample statement: “Specifically, the club received acknowledgement on (insert date) from (insert name of agency) that the club remains in compliance.

Compliance matters in private clubs. The board and management each have a role to play.

This article was authored by GGA Director and Governance expert George Pinches.

CMAE’s Benchmarking Initiative

Press Release – Warwiskshire, UK (7th March 2017) The Club Managers Association of Europe (CMAE) has launched the most comprehensive club and golf benchmarking study ever undertaken in Europe.

Delivered by the independent experts at Global Golf Advisors (formerly KPMG Golf Practice), its aim will be for the first time to measure vital operational performance metrics and industry-wide trends against which clubs can benchmark their own performance.

CMAE President, Marc Newey, said “For too long, Europe’s club leaders have gone without access to comprehensive and reliable industry benchmarking data. This extraordinary initiative, will address that, empowering club decision-makers with highly relevant industry trends and best practices. We invite and encourage clubs to grasp this opportunity to contribute to a better-informed industry”

“Participation is open to city, sporting, racquet, golf and yacht clubs as well as resort and real estate properties throughout Europe. There is no cost to participation and for those clubs that do contribute, CMAE will present them with a complimentary copy of the comprehensive European Report. National reports may also be available through CMAE Alliance Partner Associations.”

The study will gather, analyse and report on data relating to;

  • Membership absorption and attrition levels, rates and categories
  • Staffing and Remuneration
  • Food and Beverage
  • Utilisation
  • Capital Maintenance and Development
  • Golf Course Maintenance

Rob Hill, Managing Partner of GGA’s EMEA Office said “As advocates of informed decision-making, we commend CMAE on taking the lead on such an ambitious and valuable study. We are honoured that CMAE has chosen our analytics platform to facilitate the confidential accrual and reporting of industry data, and we very much look forwarding to publishing the first European Report later this year at CMAE’s 2107 European Conference.”

To learn more and participate in the initiative go to www.cmaeurope.org/benchmarking

Can Yoga Save the Golf Club?

Country clubs pushing to keep membership up are trying harder to keep female members happy with souped-up gym facilities

GGA was recently asked to weigh-in on a piece which ran in the Wall Street Journal regarding trends in the evolution of amenities at private clubs.  WSJ authors relied on GGA’s most recent research on National Club Trends and comments from Partner Henry DeLozier to validate the trend at many clubs where focused development surrounding fitness-related amenities is being leveraged to attract non-traditional member demographics such as women, millennials, and non-golfers.

Read the full article from Rachel Bachman and Brian Costa here.

 

 

Mustering Millennials for Private Club Membership

Will Millennials join private clubs? Do Millennials care about amenities? How much are Millennials willing to pay for golf? In the private club world these questions are commonplace for managers, club Boards, membership sales staff, and anyone charged with the duty to continuously fill the club’s membership pipeline with ‘new blood’.

Research initiatives have pounced the club industry’s need for data surrounding Millennial habits, preferences, and wallets. Excellent reports have been published by organizations such as the Club Managers Association of America (CMAA) and the National Golf Foundation (NGF).  GGA recently teamed up with Kris Hart and Matt Weinberger of Nextgengolf to gauge just how many ‘degrees of separation’ there are between Millennials and private clubs.

If you didn’t already know, Nextgengolf is the leading entity for 18 to 34 year old golfers in the United States. Nextgengolf is an inclusive organization with the mission to provide golfing opportunities and make the game of golf more relevant for college students and young adults.

A fusion of GGA’s 25-year history of private club research and Nextgengolf’s profound relationship with young golfers afforded a survey of more than 1,000 avid Millennial golfers who were asked about their golfing habits and stance on private club memberships. Research revealed the following high-level trends about Millennial golfers:

  1. Flexibility and customization is key
  2. Referrals are very important
  3. Non-golf amenities matter
  4. Primary target audience – low-handicap Millennials
  5. Opportunities exist to better capture Millennials at private clubs
  6. There are barriers which private clubs must consider

Find out more survey findings in the infographic below or view the full report here.

This initiative was spearheaded by Nextgengolf (Kris Hart, CEO, and Matt Weinberger, COO) and Global Golf Advisors (Michael Gregory, Senior Manager, and Bennett DeLozier, Senior Associate).

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