Month: May 2020

Running Toward Change

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This article continues a series of communications from GGA Partners to help private club leaders address challenges confronting their businesses and their employees because of the global health crisis. Today, Henry DeLozier suggests that change on a massive scale is no longer something that should surprise us.

Technology’s tools give clubs a way to prepare for the new normal.

We’re hearing a lot these days about the “new normal” and how the coronavirus has forever changed the ways we work, shop, travel and interact.

But wasn’t it not long ago that we were talking about another new normal? Remember the new normal that followed the financial crisis of 2007-2008, which led to a global recession? That pivot from the previously abnormal to a new normal ushered in more stringent guidelines for financial institutions and in a much larger sense ushered out the sense of trust we had in many other institutions and the people who ran them.

And although the term was not yet in vogue, didn’t the seismic shift from analog to digital – the tipping point came in 2002, when the world began storing more information in digital than in analog format – qualify as a new normal?

All of which led some creative soul to design a bumper sticker that said it all: Change Happens. (You may remember it with a synonym for change.) The most adaptable among us learn to deal with change; the most successful turn it into a competitive advantage. How do they do it?

Don’t be surprised – be prepared.

When he first heard Bob Dylan’s 1965 anthem “Like a Rolling Stone,” Bruce Springsteen said, “[It] sounded like somebody’d kicked open the door to your mind.” With that song, Dylan changed how artists thought about making music. Major change often seems to arrive suddenly – with the speed of a stone rolling down a steep hill – and without warning. Its capriciousness makes us anxious. But if we know it’s coming, we shouldn’t be surprised. We should be prepared.

An embrace of the tools that technology now affords us is an important key to our preparation.

Derek Johnston, a partner in our firm, says although club leaders could not have anticipated the pandemic, they could have been better prepared.

“Many clubs were ill-prepared to quickly analyze the potential impacts of the coronavirus pandemic, to run initial scenarios, to easily gather more information, to test their hypotheses with their membership and, ultimately, set a course of action,” he says.

That is not to say that clubs have responded poorly. On the contrary, club leaders have performed in truly admirable fashion. Many clubs just had to work much harder than those that had already implemented data analytics processes and plug-and-play dashboarding tools, like MetricsFirst or continuous member feedback tools like MemberInsight.

“Some club leaders still question the need to bother with data analytics tools and programs. This misunderstanding is simply misguided,” Johnston says, adding that the term “analytics” seems to intimidate some and conjure visions of data overload and complexity. Another fallacy, Johnston says. “Data analytics, when executed properly, is intended to actually simplify information and present insights in very crisp, clean, and easy to understand ways.”

Ginni Rometty, executive chair of IBM, told Fortune magazine editor Alan Murray, “There is no doubt this [coronavirus] will speed up everyone’s transition to be a digital business.” She identified four areas of impending change: 1) the movement to the cloud; 2) the move toward automation; 3) the overhaul of supply chains, and 4) the movement toward new ways of doing work. Each force will happen in accelerated fashion, she predicts.

Rometty is not alone in her assessment. Almost two out of three respondents to a recent Fortune survey of Fortune 500 CEOs expect technological transformation to accelerate. Doug Merritt, CEO at Splunk, a big-data platform, pointed out two important observations: 1) a rapid digital transformation and 2) the elevated importance of gathering and interrogating data.

Top-performing clubs will similarly leverage the pandemic to implement advanced methods for executing work and providing services. Retooling such routine practices as monthly billings, guest policy tracking, and point-of-sale transactions will happen quickly. Likewise, separating work from jobs will trend even more in the wake of the pandemic.

“Clubs that are actively maintaining both real-time operating dashboards and strategic dashboards, combined with a proper financial model, are taking preemptive steps toward dealing with change,” Johnston says. “When it happens – and we know it will – they will experience far less conflict amongst their management team and their board. Ultimately, their preparation will enable better decisions, faster.”

Getting the Right People on the Bus

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This article continues a series of communications from GGA Partners to help private club leaders address challenges confronting their businesses and their employees as a result of the global health crisis. Today, in the second of two articles on strategic people planning, Patrick DeLozier (Director, GGA Partners) and Jodie Cunningham (Partner, Optimus Talent Partners) highlight the importance of talent planning and optimization for a post-COVID-19 future.

Now’s a great time to re-examine job requirements to ensure the best fit for your club

In our first article on strategic people planning we discussed the first two phases of talent optimization: 1) adapting your business strategy and 2) plotting your revised organizational structure. In part two, we will focus on phases three and four: 3) selecting the right talent and 4) inspiring people development and engagement.

This part of your strategic people plan centers on filling roles in your organization with people best suited for the job. It’s a process that author Jim Collins in Good to Great likened to bus drivers (leaders) getting the right people on the bus (team), the wrong people off the bus, and the right people in the right seats (roles).

One cautionary note as we begin: Someone who was right for a specific role pre-pandemic may not be right for the same role now. Your business has changed, and some people may need to change seats. Others may need to get off the bus.

Phase 3: Select the Right Talent

Define the job. Before you start inserting applicants and rehires into the selection equation, you need to define your jobs. Without clarity, anyone involved in the hiring process will simply be guessing about those best fit for the job. The answers to a few basic questions will help form a solid job description.

 

  • What are the most important and frequent activities of this role?
  • What specific knowledge, skills and abilities are required?
  • What skills and experiences are complementary to those of the current team?
  • What behavioral style and temperament is best suited in this role?
  • Is independent decision-making or collaboration more important?
  • Does this role require social interaction or a more analytical, introspective approach?
  • Are normal working conditions in this role stable and consistent or constantly changing and pressure-filled?
  • Does this role require a big picture, strategic view where risk taking is welcomed, or is it more task oriented and risk-averse in nature?

To win the war for talent, your managers must be fully invested in driving the hiring process from start to finish. When you train managers to use people data in the hiring process, they will make smart, objective decisions, as opposed to desperate or bias-filled ones. Managers should enter the hiring process with the following information, knowledge and understanding.

 

  • A plan for all three phases of the interview process: before, during and after the interview.
  • A list of functional and behavioral-based questions that ensure consistency across all interviews.
  • An understanding of how to probe for (and evaluate) detailed applicant responses.
  • An understanding of the information they should and should not share regarding club culture, benefits and working experience? (Remember, the applicants are interviewing the club as well.)

Phase 4: Inspire People Development and Engagement

Once you have hired your team, it is critical to keep them engaged and ensure they work effectively together. To do this, you need to be mindful of four forces that can lead to employee disengagement:

 

  • Misalignment with the job. Poorly defined positions, sloppy hiring practices and evolving business needs can create a mismatch between employees and their roles. A bad fit will ultimately affect motivation and productivity.
  • Misalignment with the manager. The relationship between employees and their managers is the most critical contributor to engagement. But many managers are poorly equipped or not trained to effectively understand their employees’ individual needs. They struggle to communicate with and motive their employees.
  • Misalignment with the team. Team-based work is more critical than ever, yet poor communication, insufficient collaboration and an inability to manage tensions inherent to teamwork extract a major toll on productivity and innovation.
  • Misalignment with the culture. To be productive and engaged, employees need to feel they belong. When they feel out of sync with their organization’s values, or when they lose trust in their leadership, their own performance suffers. The result can be a toxic work environment that undermines productivity.

As clubs emerge from a pandemic-enforced hibernation and begin to re-establish business operations, now is an ideal time to evaluate the roles and responsibilities that make your club function efficiently and effectively.

Carefully defining each important job, making sure those involved in the hiring process are well-prepared and being alert to employees who may not be the ideal fit will help ensure that you have the right people on the bus and that they’re in the right seats. Your club’s success depends on it.

RelationSHIFTS: COVID-19 and a ‘New Normal’ for Clubs

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This article continues a series of communications from GGA Partners to help private club leaders address challenges confronting their businesses and their employees as a result of the global health crisis. Today, Laurie Martin (Founder/CEO, Life Interrupted Inc.) offers several tips for club leaders to consider while navigating the ‘new normal’.

As a leader, you have made it through the initial weeks running on adrenaline as you and your organization have had to pivot quickly to address the COVID crisis. While you continue adapting to your makeshift workspaces at home, and preparing to keep your people safe, the realities of emotional, physical and psychological upheaval are revealed

Over the past few weeks, I have noticed a common thread of stresses related to adaptation and uncertainty. Phrases like: “Since I’ve been home, I have never worked this hard”, “I need stress-debriefing techniques to keep my sanity” and “I can’t stand this!” demonstrate the need to acknowledge the tensions in our surroundings and start a conversation about finding stability and hope.

Now, clubs around the world are moving into position to open slowly and methodically. As a leader, your fears and concerns for employees and their families, members, and the general public are heightened. The focus has been on best practices to deter or stop COVID-19 from coming to the club.  Now, employees have become essential workers and their stress levels will be heightened.

Leaders will need to create best safety practices that work for their clubs.  They will also need to provide a support system to help employees and members deal with the enormous changes of the new normal at clubs.  Employees will be looking at each other wearing appropriate personal protection equipment and following a series of new safety protocols and wonder if the masks or shields will protect them. Members will now be playing their sport very differently and question whether the club will ever be the same again.

There’s no question, this pandemic has created a different way for clubs to operate now and likely in the future.  The templates of tasks and best practices that clubs around the world have received are only a small part of what employees and leaders need to consider.  Each club is unique, with its own practices and services. As a leader, you will have to determine what works best for the club. You may consider to have a second opinion from an external professional working in risk management/health and safety professional guiding you to opening day.

Here are some tips to consider while coping with the new normal at your club:

Embrace the new normal

Our professional and personal lives have shifted and it is important to accept the reality that things will never go back to the way they were. Create new plans, or enhance previous plans and enjoy the freedom to be creative.  Use the skills and knowledge you’ve accumulated through this crisis.

Choose your thoughts

If we do not choose positive thoughts, we will face sadness and experience that “I give up” feeling. Try to remain optimistic and choose thoughts that will motivate you. You must believe you can do something, or you won’t even try. You can overcome negative thoughts with positive ones.

Stay connected

Fear isolates and distances people. As a leader and an entrepreneur, it is your responsibility to keep your family, friends, employees, colleagues, board of directors, and members connected and updated. Communication, collaboration and transparency are key during this difficult time. Promote video chats, share resources, reach out and ask how everyone is doing, encourage more casual interactions, and spread optimism. This is also an opportunity to learn new things to enhance your knowledge and streamline your business.

Share your feelings

It is beneficial to demonstrate the emotional side of your leadership, especially in tough times where members, friends, family, and colleagues are anxious or uncertain of the impact of COVID-19 on the economy. Now is the time to reach out and ask how others are dealing with working from home or with the stress of COVID-19. It’s also good to share your concerns. Sharing your own vulnerability will help others to do the same. Remember, we are all experiencing similar feelings of grief, stress, uncertainty and living day by day.

Accept diversity

It is important to remember that each one of us has a unique home life. Our lifestyles, habits and priorities all differ, which is coming to light as we collaborate from our homes. Some may be experiencing additional challenges such as financial burdens, potential job loss, death of a loved one, divorce, fear of going back to work, etc., and it is important to be mindful of this. Additionally, our methods of coping differ, so be gentle and try to keep an open mind.  It’s important to create time out for yourself too.

Stay away from deception and misinformation

There is a great deal of fear associated with the COVID-19 pandemic and, unfortunately, this fear has triggered a wave of insecurity, and misinformation. It is important to distance yourself from this when possible. Ignore negativity and work from facts not rumours. Educate yourself by reading reputable, peer-reviewed sources and recognize and address your own fears. Contact an external resource you know in the club industry that provides education and tools that can be resourceful.

Set boundaries

If you live with others in your home, working in tight quarters can cause increased stress nd frustration. It is important to establish boundaries. Determine who is going to be in which room, when, and set an agreed time limit for how long.  This will help minimize disruptions.  Having a clear conversation about how to reasonably share your home space will ultimately reduce conflict. You may want to consider setting boundaries on screen time and media exposure which can reduce the feelings of being overwhelmed and help you gain control of your situation.

Create a routine

If you are working from home, building a routine will help you foster a sense of normalcy and allow you to stay on track. Wake up at your usual time, get dressed as you would normally, have your coffee and breakfast, get your kids ready, stick to some type of exercise regimen. Create a good night-time routine and stay away from reading emails before bed.  This will keep your immune system healthy and boost your resilience.

Take breaks

Taking breaks throughout your workday is pivotal to productivity. Take a 5-10-minute break every hour to stretch, take deep breaths, drink water, have a healthy snack or get some fresh air. You should also take some time to have your lunch each day. Support a local business in your area by ordering food through a delivery service.

Practice self-care

As leaders, it is natural to put the needs of your family, employees and members before your own. However, it is important to take care of yourself too. Take care of your body, your mind, and your spirit.  Make time to unwind.  Practising self-care will reduce your stress, clear your mind, and help you to better support and work with others.

Don’t forget hope

While COVID-19 is impacting our daily routines, it is comforting to know that there are still moments of strength that help us realize we can get through this together. Communities coming together, inspiring stories, businesses opening, and people connecting while respecting physical distancing are all signs of hope that we shouldn’t ignore.

A ‘new normal’ for leaders

As leaders, you’ve already felt the stress and emotional upheaval when the clubs were closed down for the pandemic.  Now you get to experience the stress of anticipating when they will open again, and question whether you’re doing everything you can to keep people safe.  Hopefully, leaders are doing their due diligence by taking the templates and customising the best practices and creating policies in place, ordering personal protective equipment and supplies ahead of time.  Asking for a second opinion by reaching out to the services of risk management or health and safety experts familiar with the club industry to guide them to a new normal for pre- and post-opening day.

Although these days are filled with uncertainty and we continue to feel overwhelmed, disconnected and out of control, it is important remember we are all in this together. There will be an end to this pandemic, and we are going to learn a lot about ourselves as leaders and as people.

 

Laurie Martin, CTTS, EPC, founder of Life Interrupted Inc.

She is an innovator with an ability to change the way club leaders think, both professionally and personally, and to enhance their lives.  Laurie brings over 25 years of risk management and crisis education experience, and more than 17,000 hours of accredited frontline experience.  She educates by using a solid process for preparing for any crisis or critical life interruption, before, during and after.  Laurie’s techniques keep leaders and their teams connected, resilient, focused and to stay safe.  All programs provide education credits.  To learn more, contact Laurie at laurie@lifeinterrupted.ca, or, visit lifeinterrupted.ca.

Talent: The Big Differentiator

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This article continues a series of communications from GGA Partners to help private club leaders address challenges confronting their businesses and their employees as a result of the global health crisis. Today, in the first of two articles on strategic people planning, Patrick DeLozier (Director, GGA Partners) and Jodie Cunningham (Partner, Optimus Talent Partners) highlight the importance of talent planning and optimization for a post-COVID-19 future.

A strategic people plan turns vision into reality.

“You can design and create and build the most wonderful place in the world. But it takes people to make the dream a reality.”

– Walt Disney

Every club has a strategy and a corresponding expectation: If it executes the strategy effectively, it will grow and prosper. Underpinning its strategy are detailed plans – financial plans, marketing plans, capital plans and agronomic plans. The most successful businesses, including the most successful private clubs, also have what we consider the most important plan – a people plan.

Creating a people plan – one that aligns the goals of an overall strategy with the talents and passions of your team – is a discipline known as talent optimization. Just as Walt Disney turned over the execution of his vision for “the most wonderful place in the world” to smart managers and thousands of Disney cast members, today’s astute club leaders turn to their teams of dedicated staff to implement their vision for long-term success.

As you face the challenges brought on by this crisis, there is no better time to examine your staffing model and create a strategic people plan to guide your new normal. In a post-pandemic future, your people strategy must change because the world has changed. There are four important phases to navigate to adjust your talent optimization plan:

Phase 1: Adapt your business strategy

Based on how business has changed recently, ask yourself:

 

  • What are you trying to accomplish?
  • What does success look like?
  • How will you flex to meet the demands of your new normal?
  • What new processes/products/services will you offer?
  • What processes/products/services will you eliminate?
  • Operationally and culturally, what’s working? What’s not working?

Recalibrating your strategy will involve tough decisions. You will need to assess the strength of the business, an exercise that will force an examination of people in key management positions, as well as support staff. For help, reach out to your network and bounce ideas off your colleagues. Enlist professional consultants to brainstorm best practices. And don’t be deterred if you hear “that will never work.”  Most great ideas start with critics who recite those exact words.

This is the perfect opportunity to hit the reset button. Think about all the times you wished you could make changes but allowed circumstances to delay acting. Now is the time to give yourself permission to pivot, to try new things and to take calculated risks.

Phase 2: Plot your revised organizational structure

As you finalize your new business strategy, you need to flex your people plan.

 

  • Take time to reimagine how your team should be optimally structured
  • What does your perfect world organizational chart look like?
  • What talents do you need more of? Less of?
  • Don’t think “specific people, specific titles, specific pay rates”
  • Instead, think “positions, responsibilities, behaviors, skills and talents”

As you create this new organizational structure, keep in mind how your operation is changing.  Will there be more curbside service in the future? Will there be fewer group activities? Will there be a greater need for virtual activities? Will there be a less formal food and beverage operation? Will there be a greater need for technology integration?

The Future Is Now

Let’s be clear about why a club business strategy is important:

 

  • It determines where the club is going
  • It gives a sense of direction for the entire club, employees and members alike
  • It supports smarter decision-making

Your club business strategy, which communicates key aspects of why and how the club operates, includes:

 

  • Objectives the club wants to achieve
  • Its services, products, stakeholders and members
  • Guidance on how the club competes and operates in its segment
  • Financial resources required to achieve the objectives and support the operating model

Talent is arguably the last big differentiator a business has. It is what stands between average clubs and innovative clubs. In our next article, we will dig into phases three and four and discuss the process of selecting the right talent to support your revised business strategy and creating a plan to develop that talent for long term success.

Planning For a Crisis

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This article with authored by Henry DeLozier for Golf Course Industry magazine.

On March 4, 2015, a single-engine, World War II-era training plane crashed onto the Penmar Golf Course in Venice, California, shortly after takeoff from a nearby airport. The pilot, who sustained only minor injuries, was none other than Indiana Jones, aka Harrison Ford.

Coverage of the plane’s crash and its famous pilot was extensive in local Southern California markets and across entertainment and mainstream media. A New York Times story the next day quoted spokespeople for the Los Angeles Police Department, the LA Fire Department and the Federal Aviation Administration – but not from the Penmar Golf Course. Public relations professionals would call that an opportunity squandered.

What if Indiana Jones landed on your golf course … or your data system was breached and hundreds of members’ credit card numbers were exposed or, heaven forbid, an employee died after being infected with COVID-19? Are you ready to deal with major media opportunities and crises professionally and in a way that, depending on the event, either enhances or protects the club’s and the course’s reputation and brand?

We like to say that you can’t predict a crisis, but you can – and definitely should – plan for one. The same goes for an opportunity to shine your brand. Here are four important steps to do both:

1. Designate a spokesperson.

Everyone on staff – especially at the management level – should know who has the authority to speak to media regarding these types of events. Usually there is only one person with this authority. Consolidating official comments and responses through one spokesperson – ideally someone with media training – keeps messaging consistent, reduces the likelihood of inaccurate information being disseminated and clarifies sources for media. Everyone at the course and around the club should know to direct all media inquiries to the appointed spokesperson.

2. Establish communications protocols.

The media react and report on their schedule, not yours. That means that you should have an established protocol that identifies and prioritizes what must be done, when it should be done and by whom. Having anticipated the media’s needs – including their first and most logical questions and the steps you’re taking to respond – puts you in control of the situation and keeps you from playing defense as the story unfolds. Other protocols include:

– Knowing which emergency responders should be notified. (Keep their contact information handy and updated.)

– Knowing who will notify the course owner, club president and board members.

– Knowing who will notify staff and what they will be told. (All employees must be notified of dangerous on-the-job conditions.)

3. Prepare for the unexpected.

Plan your work and work your plan. Knowing that unforeseen events always seem obvious in retrospect, develop an after-action perspective to anticipate circumstances that could arise:

– Request that your insurance provider conduct a risk assessment of the course, clubhouse and all club amenities. Conduct what-if evaluations with experienced professionals whose advice can be incorporated into your plans.

– Request a site review and evaluation from police and firefighters to anticipate problems that can be prevented or lessened.

– Assign key managers at your facility regular check-up actions to mitigate risks identified by the experts.

4. Inform and educate staff. 

Knowing what to do is critical. That’s why the military calls it training. Assume direct responsibility for training your team; do not delegate this important duty. When you thoroughly educate team members, they’ll understand that this is a mission-critical topic.

– Conduct department training meetings. Put the collective knowledge and intelligence of your team to work by asking line-level staff to identify any threats or risks.

– Rehearse the unexpected. Stage situational training during off-season or slow periods to help your team focus on preparedness.

What are the odds of Harrison Ford dropping unannounced onto your golf course? Or of a cyberattack or COVID-19 victim at your club? Not good, right? But is that a bet you want to take?

Webinar: A Changing Future for Golf Course Superintendents

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This webinar was originally aired by the Florida Chapter of the Golf Course Superintendents Association of America.

The Florida Chapter of the Golf Course Superintendents Association of America (GCSAA) and Henry DeLozier, GGA Partners, have a frank discussion on golf and what the future might look like for golf and golf course superintendents in Florida.

Speaking with Nick Kearns, Director of Green and Grounds at The Oaks Club and President of the Florida GCSAA, Henry shares his big picture perspective on changes resulting from the global health crisis and the details to which golf course superintendents need to be paying attention.

Spotlight:

 

  • Budgets will come under pressure, anticipated economic slowdown and its impact on golf course maintenance budgets.
  • The significance of the golf course superintendent and his/her ability to provide patrons a safe platform to enjoy golf will increase.
  • Emerging trends and best practices in the industry, pre-vaccine and post-vaccine.
  • Accelerated pace of change and impacts on supply chain.
  • Heightened expectations for expertise, prioritization, and communication.
  • And much more.

 

(29 minute watch)

The Change Study: Implementing Change (UK/IE Report)

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The second of three survey reports in the GGA Partners change research initiative, these survey findings focus on “Implementing Change” at clubs throughout the United Kingdom and Ireland. To discuss these findings and learn more about the research initiative, contact Rob Hill Partner, EMEA. 

The Management of Change in Golf and Private Clubs

As the global economy hurtles forward in complex and surprising ways, private clubs must adapt to survive. The wider world of golf is also facing dilemmas, as its market shrinks. But while innovation and disruption are the key elements driving broad economic change, private clubs cling to tradition and honour-established customs.

What is the best approach to reconciling these divergent tendencies? How can clubs preserve their identities while adapting to a changing world? How can club leaders drive the change that is needed for their clubs to thrive in the future? Where do private clubs fit within golf’s shifting cultural and financial environment?

Managers and members who are planning and navigating a path forward for their clubs need reliable data to make informed decisions. And while GGA Partners has provided reliable and actionable insights to clubs since its founding, we believe that club leaders need more than data. They need an ally to illuminate the issues. They covet a reliable voice to provide unbiased guidance based on evidence rather than anecdote.

The Change Study

That is why GGA initiated this research project to help us all understand the landscape for change in the golf, private club and leisure industries. We want to quantify the extent and character of the appetite for change and determine how barriers to change impede implementation. We want to identify any common characteristics present in effective change management, along with ascertaining the best methods for cementing innovations and measuring change over time.

The aim of this research is to provide club and business leaders with the insights and tools they need to successfully navigate the changes which we believe all clubs and organizations are sure to face in the months and years ahead.

Key Insights from the Implementing Change Study

A summary of the key findings in this second report, of three, include:

Landscape for Implementing Change

  • Club Members are shown to exhibit the lowest tolerance of change amongst stakeholders with 84% of respondents believing members show moderate, little, or NO tolerance for change.
  • Prior to the COVID-19 crisis, 74% of clubs were in the midst of implementing new processes, products, services and/or policies requiring organisation-wide change.
  • The majority of clubs are currently implementing changes to their governance model or practices (62%), in capital planning capabilities (52%) and in technological enhancements (51%).
  • According to almost three-in-four (71%) club leaders, the management of change is Very or Extremely Influential on its overall success.

Characteristics of clubs that successfully manage the implementation of change

  • 84% of respondents agree that leaders should rely on evidence / intelligence to inform planning for change projects.
  • 83% of respondents agree that a club’s / organisation’s leadership must demonstrate true ownership and commitment to making change happen.
  • 78% of respondents agree that stakeholders must be kept informed throughout implementation on progress and impact.
  • 78% of respondents agree leaders should clearly communicate change-related projects and their intended outcomes with all appropriate stakeholders before implementation commences.
  • The Manager is the principal influence on effective change management. The most influential communication channels flow from the Board to the Manager, and on down the chain of command from Manager to Staff.

Measuring the Impact of Change

  • Fewer than half of club leaders (44%) ‘usually’ or ‘always’ use metrics to measure the impact of change.
  • For club leaders who are inclined to consistently apply metrics in measuring the impact of their change initiatives, there is a strong reliance on membership response (75%) and on the improvements to performance (71%) that result.

Coping with the COVID-19 Crisis

  • Overall, club leaders represent themselves to be reasonably satisfied with their organisation’s response to the COVID-19 Health Crisis (average rating 7.7 out of 10). 40% rate themselves as ‘highly satisfied’ (9-10).
  • The majority of club leaders (65%) have found member communication the most challenging aspect of leadership through the crisis.
  • By May 1st 2020, 91% of clubs throughout the UK and Ireland have applied to use the temporary wage subsidy schemes delivered by the respective governments, allowing them to put staff on furlough with the government covering between 70 and 80 percent of regular pay.
  • 8% of clubs classify their current cash position as Critical. A further 29% classify theirs as Concerning.

Subscribe to access the full Implementing Change report.

Tactics for Financial Stewardship in a Crisis (Part 2)

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This article continues a series of communications from GGA Partners to help private club leaders address challenges confronting their businesses and their employees as a result of the global health crisis. Today, in the second of two articles discussing financial stewardship, partner and head of transaction advisory, Craig Johnston, outlines information and tactics which should be considered in developing your club’s financial plans in times of crisis.

As businesses across North America begin to re-open, ever-changing social and economic circumstances further complicate the decision-making process, and now more than ever it is imperative that business leaders have access to the critical information which impacts their business.

In the midst of a crisis, we believe prudent financial stewards should embark on a phased approach to financial planning and analysis. The three phases are:

1. Cash Preservation

2. Sustainability

3. Opportunity

The immediate focus should be on cash and cash preservation. The familiar adage Cash is King takes on even greater importance in crisis situations. Next, the focus shifts to reviewing key risks to long-term sustainability and developing plans to reduce and combat those risks. Once a game plan is understood for sustainability, business leaders should explore opportunities to enhance member experience, reduce operating or capital costs, and increase return on investment.

To navigate these three phases, two critical financial platforms are required: a detailed annual budget and a club financial model.

Often these platforms are considered one in the same, but they are not. A detailed annual budget should be designed on a monthly basis and based on agreed upon key performance indicators (KPIs) and specific circumstances for the year. A club financial model should be designed on an annual basis and based on historical and budgeted KPIs as well as other economic inputs. The monthly budget is important to support cash preservation analyses while the financial model supports long-term sustainability scrutiny and enhancement opportunity exploration.

Both platforms should be dynamic, both platforms should encompass all three financial statements, and both platforms are a must-have. By “dynamic”, we mean easily adjustable for various economic and club-specific KPIs and, by “all three”, we mean income statement, cash flow statement and balance sheet. (Yes, a club should set and approve a budget at the outset of every year, but that does not mean the platform it was developed under needs to be static.)

The information required to develop both platforms include:

  • Historical audited financial statements, including notes.
  • Detailed department financial schedules, including breakdown of fixed and variable expenses.
  • Membership information, including counts, fees, attrition rates and sales expectations.
  • Debt agreements and schedules, including covenant calculations, coupon rates and terms.
  • Labour contracts and employment agreements.
  • Supplier and vendor contracts and agreements, including terms and pricing.
  • Capital project listing, including historical expenditures, reserve studies and facilities plans.

The specific tactics under each phase of planning and analysis will vary from club to club, but some predominant examples include:

1. Cash Preservation

a. Analyze current club liquidity: evaluate the club’s current balance sheet, including available cash, receivables and payables based on an up-to-date budget, then leverage the monthly budgets to assess the near-term (three to six months) liquidity based on estimated revenues and expenses.

b. Scenario analysis: complete various scenario analysis within the annual budget platform (designed on a monthly basis) based on potential closure and re-opening scenarios. This requires a realistic evaluation of the impact of each scenario from department managers.

Based on the results of the above, determine if any near-term adjustments (staffing changes, discussions and negotiations with suppliers and lenders) are required for cash preservation.

2. Sustainability

a. Anticipate attrition rates: depending on the timing of annual dues payments, attrition rates during times of crisis can be significant. Running scenario analysis based on various levels of attrition and their impact on the club’s long-term sustainability is essential.

b. Estimate decline in membership sales: some clubs may rely on entrance fees to support operating expenses, or more predominantly capital maintenance expenditures. Evaluating the potential decline in new membership sales over the short and medium-term, and its impact on club sustainability is critical.

Based on the results of the scenario analyses, scrutinize the club’s operating model to address discrepancies between cash inflows and cash outflows. This may require moderate or significant reductions to the club’s operating profile, including hours of operation and levels of high-touch service, for example.

3. Opportunity

The review of enhancement opportunities may come about during the focus on sustainability, as the club looks at unique ways to better align cash outflows with cash inflows. However, for clubs where sustainability is straightforwardly achievable, the focus on opportunity will follow sustainability. Areas of opportunity include:

a. Staffing profile: use times of disruption to consider changes to your management team and right sizing of your staffing profile.

b. Debt re-structuring: meet with the club’s lender(s) to discuss revised terms to the current debt agreements. Interest rates are near all-time lows, and although the numerator on certain coverage ratio calculations has declined, a preferable rate or term may be available.

c. Capital projects: favorable prices may be available on large-scale projects or purchases during times of crises. Consider moving ahead with large-scale projects if the potential savings are meaningful and there is a high degree of confidence in the club’s financial sustainability.

Navigating through crisis in this phased approach – while adhering to the guiding principles of financial stewardship – will help clubs develop financial plans which offer short-term solutions and lasting success.

Podcast: The Changing Face of the Golf Industry

Date:

This podcast originally aired by the American Society of Golf Course Architects as part of their ASGCA Insights.

Speaking with Marc Whitney, Director of Communications at the American Society of Golf Course Architects (ASGCA), Henry DeLozier of GGA Partners provides his unique business perspective on the changing face of the golf industry in light of the global health crisis.

“Control the things that you can control. Adaptability for all parties is the key going forward. Now is the time for clubs and architects to come together. Architects can bring forward cost effective designs and ideas to make clubs more successful.”

Listen to Henry’s perspective on where golf finds itself today and how the industry can focus on the future while also learning from the past.

 

(13 minute listen)

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