Tag: director

Being Flexible for the Future

Date:

“Forecasting is very difficult,
especially with regard to the future.”
Yogi Berra?

Preparing for the Future

Even if the late Yogi Berra didn’t utter this statement, it’s an easy attribution. Like so many of Yogi’s statements, it tucks a truth inside a pithy, if nonsensical saying. We can speculate on the future, guess at trends, or engage a soothsayer, but we can never be certain of our forecast.

Yet as club leaders we are called upon to plan, invest, and adapt. Despite our inability to predict the future, we know the risks of sticking to the status quo. So how do we prepare for the new law, the gathering trend, the abrupt change in the economy, or other externalities – especially those that are unforeseen?

There are two issues relating to a club’s preparations for the future: recognizing the need to change, and taking the appropriate action

A club is best prepared to recognize the need to change by developing a well-constructed strategic plan and maintaining it as a dynamic document (i.e. revising it as new information becomes available). The more considered and current the strategic plan, the better prepared the club will be to respond to evolving conditions.

Next, in order to take the appropriate action, the club needs a Board that is three things: thoughtful, decisive, and nimble.

Thoughtfulness and decisiveness are features of the Board’s character and competence, and are best achieved by sound election processes to recruit Board members based on their merits (i.e. their ability to serve professionally in a culture of cooperation and respect).

Nimbleness, on the other hand, has to do with the flexibility afforded the Board via the club’s governing documents – its bylaws and Board policies. The Board’s agility is based less on the quality of its members than on its documented processes.

When the Future Arrives

Good doctors do two things well: make accurate diagnoses, and prescribe effective treatments. Similarly, effective club Boards do two things well: assess the impact of new laws, growing trends or shifting styles, and then take the action appropriate to address the impact.

So, what can a Board do in the present that will equip it to respond to the future when it arrives?

For years we at Global Golf Advisors have strongly recommended that club Boards develop and maintain a Board Policies Manual (BPM), which contains all of the Board’s standing policies in a succinct, well-organized document. We also recommend that bylaws be amended to afford flexibility for the Board to carry out its fiduciary responsibilities in a professional, transparent manner. The two actions must go hand in hand.

A club’s bylaws are actually “member policies” – instructions from the members to the Board. Members will be reluctant to cede authority to the Board without knowing how that authority will be used, and that’s where the BPM comes in. If the bylaws instruct the Board to maintain a publicly available BPM that clearly lays out how it will govern, then the members can be well informed as to how their Board is serving them.

Our advice is simple: include in the bylaws only the basic requirements, and let the Board formulate and publish in a BPM those policies it believes will allow it to govern effectively. Why? Because when the future arrives – say, a new law is passed, a new trend is affecting the club, or new amenities are being demanded by the members – a Board needs the flexibility of responding without having to go back to the members for a vote.

Of course, there are limits to ceding authority from the bylaws to the BPM. We are not advocating a carte blanche transfer. But in our experience, most club bylaws can be streamlined so they contain only the basics, thereby leaving plenty of room within which the Board can operate. The BPM is the centerpiece to the Club Governance Model*, which is the standard for excellence among the club community. There are many reasons for a club Board to develop and maintain a BPM. Preparing for the arrival of the future is just one of them.

For further advice on creating and maintaining a Board Policy Manual (BPM) for your Club, connect with GGA Director, Fred Laughlin.

*GGA’s Guide to Implementing the Club Governance Model is available to club leaders and Board members on request.

Embedding a Culture of Progression and Longevity Among Board Members

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Each new set of Board members are faced with the same conundrum: the desire to achieve things and make a difference, but only a limited term with which to do it. The answer to this issue, is to instill a sense of mission and to focus the attention of Board members on longer term issues. GGA’s Rob Hill delivers the key insights.

Formulate a proper orientation

Every board, just like a club, has its own culture which is defined by its traditions and practices, and every new board member deserves a focused introduction to this culture if they are to be expected to adapt and contribute from the outset of their term.

Orientations vary greatly, but no matter the approach, they offer an extraordinary opportunity to focus new and existing members on the club’s vision, mission and the long-term strategic business priorities of the board.

It’s also the ideal environment to emphasize the progress made by the club and immediate actions to be undertaken, both of which underline the responsibility the board holds: to advance a plan, to make meaningful progress, and for this be aligned to an overarching strategy so that there is continuity of effort.

This sense of collective effort – of accountability, of building on the work of others, of advancing a plan closer to its successful conclusion ­– is often inspiring for new board members.

Focus on the future

Clubs traditionally start meetings with minutes and committee reports that contain minutiae and operational items that are reflective of what has already happened, but ideally a Board should be focused on strategy (the future) and policy.

Everyone (Boards and GM’s) would rather spend their time on the concrete things and events that they can touch and feel, rather than the conceptual – strategy and planning.

You have to challenge these instincts using a “Consent Agenda”. Effectively, the Hon Sec and Club Manager should carefully plan not only the details of the agenda, but, crucially, the order too, in order to keep strategy at the forefront of Board business.

It takes several meetings and a commitment up front, but over time it helps to shift the emphasis toward the future.

Face resistance with facts

Should a Board successfully navigate the strategic planning process and adopt a long-term plan, it should not make the mistake in thinking that the hard work is over, or that all of its future members will support it without question.

It is common for plans to be questioned and tested. After all, if Board Members are to be tasked with the implementation of a plan, it is only right that they can challenge elements they doubt. Board governance is most successful when Members ask the right questions, put forth new ideas and challenges, and continually refresh and renew the Club’s goals.

Where a Board Member is strongly resistant to elements or the entirety of a strategic plan, this is often the result of either: a belief or conviction based on their experience, or a feeling that a plan only serves as a straitjacket which prevents them from imposing their own will on the Club.

In such an instance it is important that facts are established. That way, any questions of validity or appropriateness are based on evidence rather than purely belief or emotion. Board Members can passionately state a personal position in opposition to components of a plan, but they should be expected to support their positions with facts.

Foster a shared vision

 A strategic plan is certainly a powerful tool for facilitating continuity of tenure. However, it should never be considered a silver bullet. A strategic plan, no matter how good it is, will not cure all ills.

Long-term success requires alignment of the entire club. Only when the board, executive leadership, committees, members and staff are fully aligned behind a shared vision, when you consistently communicate your successes and progress, when the entire club believes in and sees the positive impact of strategy does real momentum build. Indeed, over time, this becomes integral to the fabric of the club’s culture. It becomes a habit.

Key takeaways

  1. A Board orientation is a powerful tool for maintaining continuity and momentum. It is a matter of educating volunteer leaders on the mechanics of the Club, the responsibilities they have toward it, how the Board functions, and, importantly, the strategic goals and actions toward which the Board is working.
  2. It takes determined and committed leadership to keep a Board focused on the Club’s future rather than obsessing on the past. Tools such as a consent agenda can support this focus, as will enlisting the strategic action plan as the central focus of each Board meeting.
  3. Successful plans are built on intelligence and facts. This not only makes them more likely to succeed, but will protect them from those who are resistant to change.

This article was authored by GGA Partner Rob Hill.

Staying Sharp

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In his business leadership bestseller, “The 7 Habits of Highly Effective People,” Stephen Covey talks about the need to balance productivity and effectiveness in order to maximize potential.  The most successful leaders maintain their personal equilibrium, Covey says, by staying sharp through an ongoing process of personal change and improvement.  He likens the lifelong journey to “sharpening the saw,” which he says needs to happen across four dimensions: physical, spiritual, mental and social/emotional.

Staying sharp is a disciplined process that takes shape over a period of time.  For anyone who wants to develop a plan for self-improvement, increasing motivation and creativity will be critical.  Here are some ideas that may help:

  • Rest your mind.  Diverting one’s attention from the problems of the day and, especially, work-related problems, invigorates the mind for expanded innovation and problem-solving.  A rested mind improves your memory and your mood.  A rested mind also empowers self-knowledge for those already skilled in their jobs.  Self-knowledge helps us be receptive to talking about other people’s problems, needs and expectations.  Improving self-knowledge helps managers learn from their mistakes and deal effectively with criticism and feedback.
  • Manage your time.  Leaders skilled in time management use their time effectively and efficiently, which allows them to focus efforts on priorities.  They are less likely to be overwhelmed by the wide assortment of challenges and demands in their jobs.  Effective time managers can address a broader range of activities and delegate with greater clarity because they recognize a start and stop to discussions, tasks and problems.

On the other hand, managers who are unskilled in time management are disorganized and wasteful of time and other important resources.  They tend to drift from problem to problem, leaving co-workers confused about priorities.  The resulting inefficiency only seems to grow with time.

  • Pursue work/life balance.  In a servant-leadership capacity, balance is sometimes fleeting because we’re always putting the needs of others before our own.  Nevertheless, pursuing balance between the professional and the personal is critical to effectiveness in each.  This balance is a direct result of taking time to sharpen the saw; it prevents leaders from becoming one-dimensional and fully capable.

Normally one is considered to be out-of-balance when he or she overdoes one at the harmful expense of the other.  At one end, workaholics seem to find never-ending demands for working while those lacking balance place greater emphasis on on-the-job fun and activities at the expense of effective professional conduct.  A clear signal of being out of whack is the inability to address priorities on either side of the balance point.

Bringing harmony to your four-dimensional needs – physical, spiritual, mental and social/emotional – helps managers be more productive and fulfilled in their lives.  Covey says it’s often a matter of working smarter rather than working harder.  Here are a handful of activities to consider while sharpening your own saw:

  • Invest time and energy into learning.  Learn a new language or how to play a new instrument.  It is difficult to worry about problems at work when your mind is at work learning.
  • Read about the lives of great leaders and the challenges they overcame to reach their potential.  We’re inspired by the trials and perseverance of others, which have a way of making our challenges a little less daunting.
  • Travel to a new city, region or country.  Travel provides a literal and figurative escape that often clears our minds and brings new perspectives to problems and challenges.

Finding balance not only takes time to sharpen our saws, it also takes a plan.  We can all learn from one of the great woodcutters in history, Abraham Lincoln, who said, “If I had six hours to chop down a tree, I’d spend the first four hours sharpening the axe.”

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

Board Self-Assessment: 5 Steps to Evaluate Your Performance

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Effective boards set goals and work to achieve them.  The best, top-performing boards execute an annual self-assessment of their performance.  This is the time of year to evaluate how your board performed in 2018.  To conduct a proper self-assessment each board should take the following five steps.

The self-assessment is a simple performance evaluation survey which requests answers ranging from “strongly disagree “to “strongly agree” with three levels of moderation in between (“disagree, neutral, and agree”).  This evaluation will yield the performance evaluation as a measure of results from one to five.

More detailed guidance for board self-assessment can be found in the NCA’s Board Toolkit (available to all members as a benefit of membership).

Step One – Evaluate Board Structure

This section of the assessment explores how well the board does its business.  Questions address issues of board organization, committee engagement and performance, and resources such as time allocation and staff support.

Questions in this step include the following:

  • The board has the right number of members.
  • The board has the right number of meetings.
  • There is adequate time in board meetings to address matters of importance.
  • Board meetings efficiently use time and human resources.
  • The board has adequate indemnification and D&O insurance coverage.
  • Board committees are constructive to effective club governance.
  • Committees have the right number of members.
  • Committee reports are timely submitted and require the proper amount of board review.
  • Committee assignments and charters reflect the best advice of the board.
  • Committee performance is right for the club’s current needs.

Step Two – Evaluate Board Information

The following types of questions validate the quality and use of information going to the board:

  • The club’s Board Policy Manual adequately communicates the duties and expectations of individual board members.
  • The board benefits from adequate pre-read time, information and materials to enable it to be effective.
  • Information provided the board is fully vetted and applicable to current and emerging conditions at the club.
  • Presentations by officers and staff are accurate and unbiased.
  • The board has adequate access to internal and external advisors (e.g., auditor, legal and risk management) to make informed decisions.

Step Three – Evaluate Board Dynamics

The following questions assess the dynamics or growth and changes exhibited by the board:

  1. The board addresses the right issues for the club.
  2. The board does what is right.
  3. The board clearly and timely communicates goals, objectives and results tithe members.
  4. The board properly balances its guidance and supervision of the general manager.
  5. The board promotes a culture of accountability at all levels of club governance.

Step Four – Individual Self-Assessment

Every board member must be accountable for his or her own work as a servant leader.  Questions that help to evaluate individual board member performance include:

  1. Engages in the board’s work.
  2. Understands the club’s strategy and strategic issues.
  3. Evaluates and fully understands club budgets.
  4. Understands and closely monitors the club’s financial performance.
  5. Respects the confidentiality of the board room in all matters.

Step Five – Board Communications

Members expect to know what the board is doing and what matters are being addressed.  Poor communication is one of the most frequently stated points of member dissatisfaction with club boards.

Communicate the board’s self-assessment and a composite assessment to the entire club membership.  Show the questions that were asked and the performance ratings that the board assigned to its own performance (not the individual scores).  Candid and genuine self-assessment of the board’s performance will build trust at the club.

Self-assessment is a form of the personal accountability that members expect of their leaders.  Communicating the results openly and honestly will make the club stronger and more capable of meeting the next generation of challenges.

This piece was authored by GGA Partner Henry DeLozier for the National Club Association’s Club Director quarterly magazine.  

Board Self-Assessment

Date:

Following board room performance standards now in use at most corporations, enables private club boards to improve their performance and the job satisfaction from their board service.  One business-like staple from the big companies is a board self-assessment.

Usually a board self-assessment is divided into four segments: structure, information, dynamics and individual board member self-evaluation.  Following are some examples of such a board assessment tool, which quantifies the qualitative elements into five parts ranging from “strongly disagree” to “strongly agree” (with disagree, neutral and agree in the mid-range).  Questions about the board structure include:

Structure

  1. The board members have the appropriate talent, experience, diversity, independence, character and judgment.
  2. Board meetings are well organized and planned to ensure an effective use of time.
  3. The annual board retreat is effective in focusing the board on key strategic issues.
  4. The board has the right number of committees, and
  5. Committee meetings are timely, when-needed and purposeful.

Information

  1. The responsibilities and expectations of board members are clearly communicated and understood.
  2. The board receives adequate pre-reading materials – including budget, financial and committee reports – in advance of meetings.
  3. Board minutes are appropriate for the club, accurate, and timely available for member review.
  4. The board has adequate access to internal and external advisors, such as independent auditor and legal counsel, and
  5. Presentations by officers and staff at board meetings are accurate and unbiased.

Dynamics

  1. Board devotes sufficient time to understand and appropriately influence the club’s mission and strategic direction.
  2. Board clearly communicates goals, expectations, and concerns about tactical solutions the club’s strategic plan.
  3. Board maintains current, accurate and complete understanding of the club’s financial performance and capabilities.
  4. Board monitors legal and ethical compliance consistently, and
  5. Board balances the assignment of authority with accountability for results.

Board Member Self-Assessment (rate your own performance)

  1. Full understanding of the club’s strategic plan.
  2. Able to make critical and informed decisions in a constructive manner.
  3. Focus on key strategic, financial and governance matters.
  4. Actively engaged in the work of the board, and
  5. Advocates in support of the club.

The consolidated – not individual – results of the board self-assessment should be published for member review with an invitation for comment and feedback.  This step engages members and enables individual board members to separate random member comments from quantified data.  Members favor the notion that the board is holding itself accountable to the club’s members and openly sharing the results with fellow members.  Although your club may not be a Fortune 500 company, it can certainly adopt useful standards of board accountability.

GGA’s Henry DeLozier penned this article for BoardRoom Magazine’s BoardRoom Briefs.

Board Priorities: Add Brand Management to Your Fiduciary Responsibilities

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There are typically three priorities that command the attention of private club boards: (1) developing and using sound strategy; (2) ensuring the financial security of the club; and (3) governing the club responsibly.  However, in these days of over-supplied markets and the ongoing regeneration of many clubs, brand management has become massively important to clubs.

Some board members claim that a private club is “private” and, therefore, not a commercial brand. These outdated beliefs are a sure-fire plan for damaging the long-term brand health of the club.

Private club board members share several fiduciary duties, which include the duties of care and loyalty, such as good faith, confidentiality and disclosure.  Directors’ duties also expand to the responsibility to protect the identity—which may include its trademarks, intellectual property and public-facing images.

Brand Planning and Security

What is your club’s brand? And how is it being protected?

A brand is a small piece of real estate “owned” in the mind of the consumer, according to Al and Laura Reis, authors of “The 22 Immutable Laws of Branding,” a marketing classic on branding commercial companies.  Some board members claim that a private club is “private” and, therefore, not a commercial brand.  These outdated beliefs are a sure-fire plan for damaging the long-term brand health of the club.

Brand health, which means admiration, trust and desirability, is an important duty for private club leaders.  Social media proliferation and unending public awareness and scrutiny of private clubs require the club board to pay attention to the club’s brand.  Club leaders should routinely execute a brand audit to validate the club’s market impact.

Strategic Planning

The club’s strategic plan is its long-term direction and scope of operations.  The plan helps the club stay focused on its priorities, and to fulfill stakeholder expectations.

Board members are responsible to fellow members to ensure that the club has a sound strategy and that the strategy is being faithfully enacted.  Directors are duty-bound to know the club’s strategy and ensure that it is preserved and routinely used.

A sound strategic plan extends for a period of three-to-five years and should be fully reviewed annually.

Financial Security

Directors are responsible to protect the financial resources of the club.  This means that directors must carefully measure the future financial needs of their clubs; plan for the sources and uses of funds; and ensure the economic sustainability of the club.

Economic sustainability requires that the club generates revenues adequate to pay the costs of the operation and to fund future capital needs of the club.

Board members must fully understand the club’s financial capabilities and limitations.  A key tool used to report the financial profile of a private nonprofit, tax-exempt club is a Department of Treasury Form 990, which each director should also understand.

Club Governance

Every club director should strive to provide sound governance to their club.  Effective club governance is built on the regular usage of the strategic plan and a board policies manual (BPM).

A BPM documents the methods that will be used in governing the club.  It also includes a description of the organization, the authority of the board and the manager, and the relationship of the board with the manager/COO.

The BPM is as fundamental to effective club governance as the strategic, financial and brand plans.  It must be developed and used on a regular basis.

Today, governing a private club is a bigger and broader job than at any previous time.  Brand knowledge and management have become just as important to the overall health of the club as other fiduciary duties, such as strategic planning and financial security.

GGA’s Henry DeLozier penned this article for the National Club Association’s Club Director Magazine.

Financial Indicators to Monitor

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What are the financial indicators that the club leadership should monitor to stay strong?

Canaries in a coal mine were the early-warning system that saved miners’ lives before technologies for detecting noxious gases came along.  Just as careful miners took caged canaries underground with them, club directors are wise to protect the club by implementing early warning tools—or Key Performance Indicators (KPIs).

Stephen Johnston, the founder of Global Golf Advisors and a former KPMG senior auditor for major accounts, explains, “The number one duty of every club director is to protect the assets of the club.”  To Johnston, the canary to be watched is full member equivalents (FME) of a club.  FME represents the total annual dues amount divided by the amount of a full-member’s annual dues.  Johnston warns directors that when FME metrics begin to slip, directors should beware.

Future attrition rates and the successful conversion rate from potential new members follow the FME metric.  Attrition signals retention success or concern while conversion rates presage new member recruitment.  Keep these KPIs singing a happy song.

Successful membership recruitment follows a 10 percent conversion rate—from bona fide member lead to accepted new member.  Therefore, this ratio instructs the board and management that the roster of prospective members must be ten times the number of membership openings.  Says Johnston, “If you want to add 30 new members, you will do well to develop at least 300 trustworthy leads.”

In addition to FME metrics, Johnston emphasizes the power of the cash flow statement.  For a club to be truly economically sustainable it must generate revenues adequate to pay the club’s bills and fund its future capital needs.  Johnston advises club directors that the annual “spend” on capital assets should be 7 to 9 percent of annual gross revenue.

The impact of the recessionary cycle caused most clubs to fall behind on capital replacement and maintenance so the cash available to catch up on deferred capital maintenance is a critical early indicator of future financial stress or security.

For the miners, early-warning was the difference between life and death.  For private clubs, monitoring early-warning KPIs is similarly crucial.

GGA’s Henry DeLozier penned this article for the National Club Association’s Club Director Magazine.

How to Be a Great Board Member

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“The most effective private club board members park their personal agendas at the door and work collectively for the betterment of all members.”

GGA Partner Henry DeLozier discusses “Servant Leadership” at the Board level in an article written by Mike Stetz for Golf Inc. Magazine’s March/April 2018 Issue.

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