Author: Linda Dillenbeck

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.

Good beginnings create a sound future. A challenge in many private clubs is that every year is a “new beginning” as new board members are seated and outward-bound servant leaders are replaced. Four important considerations will make leadership transition more effective and favorably impactful at your club.

Plan and implement board orientation earnestly
Most new board members consider themselves well-versed in governance, strategy, finance and leadership, which is good as these are the cornerstones of effective club governance.

The catch is that most board members—especially in these skeptical and conflicted times—bring certain baggage with them into the boardroom. One of the most important first steps when new board members are empaneled, is to confirm shared and basic understandings, such as:

Boardroom confidentiality is essential to trust within the board and beyond. Most private club boards follow established corporate board practices requiring all board members to execute confidentiality and nondisclosure commitments. A growing audience of club boards now imposes dismissal from the board when confidential information is leaked from the boardroom.

Conflicts of interest—as is common in corporate America—are carefully monitored and not permitted in top-performing boards. Annual renewals of non-conflict statements are common practice.

Review and understand the club’s governing documents—bylaws, rules, and board policies manual—to ensure that all board members understand the club and the gravity of their duties.

Confirm the club’s strategic priorities
Most clubs have developed a strategic plan, which is an overarching plan of action for the business of the club, in addition to such important strategic components as the (a) master facility plan, (b) capital maintenance budget (replacing existing assets), and (c) capital improvement budget (adding new amenities). The fact is that one of the primary duties of a board is to attend to the financial well-being of the club by focusing on the balance sheet.

An advanced understanding of the club’s goals and objectives requires focused one-on-one discussions with the board chair and new board members—if not all board members. This step should be a priority before the first board meeting.

Charter committees with great intention
Committee charters are the job description that guides the work of club committees by providing structure and an understanding of what the committee is—and is not—to do. Excellent examples of committee charters are readily available.

Among the most frequent mistakes made by most board committees are (a) much ado about nothing while accomplishing very little of the strategic priorities, (b) executing personal agenda items rather than strategic goals and objectives, and (c) inadequate reporting vertically to the club board and horizontally to other board committees.

The current best practice standard includes committees for finance, nominations, and audit. Committees for golf, greens, tennis and house are now identified as operating committees and are guided by the club’s manager/CEO.

Communicate. Communicate. Communicate
The most frequent complaint among ordinary private club members is, “Communication around here stinks.” In these skeptical times, club members doubt their boards’ dedication, capabilities, and successful performance in the absence of a steady flow of relevant board communications.

Members are eager to know what the club is doing. And, in the absence of effective board communications, tend to fill in the blanks of unexplained and inadequate results.

The most effective club communications are characterized by (a) redundant messaging to ensure that most members receive primary messaging from the board; (b) multiple media usage to address the broad generational spectrum present in most clubs today, and (c) personalized communications which address topics that are most interesting to each member and reducing the flow-through of communications about club activities that are not of interest to particular members.

The best-performing club boards take club governance seriously, and the transfer of leadership within the club is mission-critical to the club’s future.

This article was written by GGA Partner Henry DeLozier and appeared in the October 19, 2024 edition of BoardRoom Briefs.