Strategic planning has become important in most private clubs, riding the wave of membership growth across the U.S. Long a proven tool for the best-performing private clubs, strategic planning brings intention and clarity to the board’s efforts. Beyond the textbook matters of sound strategy, five strategic priorities have emerged as a part of the novel coronavirus pandemic.

1) Regeneration of Members
Baby boomers have long been the driving force in private clubs. Many are progressively aging out of clubs. The youngest Boomers were born in 1964 and are now 60 years old, while their older siblings—born as early as 1946—are well into their 70s. Boomers are now being replaced by GenX, who range in age from 59 (born in 1965) to 43 (born in 1980). Each group has different needs and wants, requiring understanding the priorities driving the decision to become and remain private club members.

Generation gaps are appearing in clubs where the most tenured members—the oldest by profile—do not wish to pay for capital improvements that younger members consider overdue. Most clubs are working through the generation gaps, and all boards are faced with regenerative choices.

2) New Priorities in Clubs
The new wave of members introduces a regenerative change in clubs’ priorities and needs. Four new-wave points of emphasis in most clubs include:

• Fresh-air Dining: The onset of the pandemic caused the need for open-air dining options. Members’ preference for fresh air and a sense of openness has persisted. New solutions for window treatments and patio spaces are taking the day.
• Facilitated Lifestyle: Members require more assistance to enjoy their clubs. Matters such as loading and learning how to use the club app, meeting new members who joined the club during the pandemic, and organizing emerging interest groups now require support from management and staff.
• Pickleball: Having swept onto the scene as an engaging and highly social activity, new demands for capital and square footage are placing this active adult sport at the forefront.
• Cyber-Security: Reflecting the world around the club, cyber threats are more prevalent in private clubs. It is time to audit your club’s cyber-security.

3) Investment in Capital Assets
Most clubs have benefited from increased capital funding as new members have restored capital reserves, enabling many to address long-deferred capital needs.

New capital projects are usually funded from Capital Improvement accounts while replacing existing club assets is typically considered Capital Maintenance.

The prevailing trend is catching up on capital maintenance projects – like new roofs, patio upgrades, parking lot resurfacing, and HVAC needs. Capital improvement projects include pickleball courts, swing simulators, sports training technologies, and golf course improvements.

4) Importance of Transparent Governance
In these troubled times, some clubs have begun to act out the behaviors from the evening news…name-calling…stubborn resistance to needed changes…and internal segmentation of member groups. The time for open and transparent governance practices is now. Topmost among the changes coming to club boards:

• Board Policy Manuals: Use of a BPM has spread actively into private clubs where the backbone of transparent governance is a clearly stated method of governing. The BPM tells members how their board will function and holds boards accountable for their efforts.
• Diversity and Inclusion: Leading clubs have taken responsibility for making their leadership profiles more diverse and inclusive. Although there is still much to be done, clubs have begun to embrace the tenets of DE&I.
• Robust Board Communications: Many club boards have increased the frequency and quality of content in their board communications. Members now expect to know what matters are important to their board.

5) New Focus on Brand Management
Clubs are brands, and the most sophisticated board members recognize the necessity of managing the club’s brand proactively and consistently. Many clubs enjoy solid brand ratings but have not understood the importance of intentionally projecting the club’s brand. The evolution of brand management in private clubs requires a thorough understanding of the U.S. Tax Code and the particular club’s obligations therein.

Following these insights as you develop the strategic plan for your club will ensure intention, purpose, and clarity in your efforts to achieve success.

This article was written by GGA Partner Henry DeLozier and appeared in the October 26, 2024 edition of BoardRoom Briefs.