Governance in private clubs can too often resemble what is seen on the evening news: factions, resentment, distrust, skepticism, cynicism. In troubled times, sound governance is essential.
In our continuing Whitepaper Series, Senior Partner Henry DeLozier highlights the three keys to effective governance and proactive steps leaders can take to address and improve it at their club.
TORONTO, Ontario – GGA Partners, a global consulting firm, has released In Pursuit of Innovation, the fourth in its series of thought leadership whitepapers. This authoritative guide explores how surviving in today’s competitive landscape depends on the ability of clubs and organizations to unlock their creative potential and offers up several guidelines to allow freedom of thought and imagination.
In Pursuit of Innovation highlights the way companies must continuously transform in order to survive and how a constant pursuit of innovation will guard against failure, whether gradual or sudden. The paper clarifies exactly what constitutes innovation, where it comes from, and how club leaders can practice innovative thinking to unlock a culture of creativity.
“Our experience with thousands of private clubs over nearly three decades shows us that without innovation clubs become stale, membership falls until it eventually flatlines, competitive advantages diminish, members become dissatisfied, and talented staff look elsewhere,” explained GGA Partner Henry DeLozier, one of several authors of the piece. “Innovation can come from anywhere inside an organization, and we think it should be encouraged from all corners, from the folks raking bunkers to the person answering phones to the accountant balancing the books.”
Innovation happens at the intersection of problems, opportunities, and fervent minds but must be deliberately sought, practiced, and encouraged at all levels. “It’s normal in any business to want to maintain the status quo. It’s comfortable, it’s safe, and it’s easier than making changes,” said DeLozier. “In reality, the status quo only works for so long. If you’re going to grow, you must innovate.”
In Pursuit of Innovation illuminates four common roadblocks to an innovative culture and identifies the steps necessary to unlock a culture of creativity.
In addition to innovation, GGA Partners has published new whitepapers on strategic planning, branding, and governance which are accessible via the firm’s website.
About GGA Partners
GGA Partners™ is an international consulting firm and trusted advisor to many of the world’s most successful golf courses, private clubs, resorts, and residential communities. We are dedicated to helping owners, asset managers, club and community leaders, investors and real estate developers tackle challenges, achieve objectives, and maximize asset performance.
Established in 1992 as the KPMG Golf Industry Practice, our global team of experienced professionals leverage in-depth business intelligence and proprietary global data to deliver impactful strategic solutions and lasting success. For more information, please visit ggapartners.com.
Media Contact:
Bennett DeLozier
GGA Partners
602-614-2100
bennett.delozier@ggapartners.com
What happens when board members clash, causing conflict, disruption and moving the club backwards instead of forwards?
We outline the dangers of conflict, and advise on how to turn dispute into a positive, constructive outcome and ensure all board members are a true asset to the club.
Effective non-profit boards deliberate as many and govern as one. At least, that’s how it should work. Unfortunately, many club boardrooms up and down the country are more akin to a newsroom; rife with bickering, contempt, and dysfunction.
It’s understandable. Passions run high, these overtake rational, pragmatic logic and suddenly what is intended to be a progressive, forward-thinking environment becomes one paralyzed by indecision.
What should board leaders do in the face of these circumstances? Aside from preventing it from getting to this point, it’s imperative to restore levels of cooperation, deliberation and thoughtful leadership – quickly.
There are two ways of doing this: the first addresses the issues immediately and sets the standard both now and into the future; the second addresses the onboarding process, ensuring all board members are clear in what they are signing up for and what is expected (and not expected) of them at the outset.
The launch point for improving club governance and reducing boardroom conflict is a Board Policies Manual (“BPM”). Think of it as a boardroom bible, describing the sound principles and guidance for effective club governance.
Crucially, its guiding principles will mitigate any potential flare ups of conflict, and be the standards and expectations all board members sign up to. How? Just one example is the inclusion of specific, dispassionate requirements to support the decision-making process, based on data and insights, rather than allowing personal opinions and perspectives to creep in.
Its introduction will unite board members, clarify points of disagreement, and have everyone focused on what is truly in the best interests of the club, in any matter.
Introducing new board members can inject a welcome sense of energy and perspective, providing you have the right people to do the job from the outset. There are three practical steps you can take to ensure this is the case:
1. Board Selection Criteria – Use an uncontested board election process. This requires a reliable Nominating Committee to recommend a slate of candidates in the same number as the number of board positions open.
Providing you have a highly respected and trusted Nominating Committee, known for their good judgement and integrity, you will recruit level-headed, pragmatic, forward-thinking individuals.
The key to a trustworthy election process is the trust and respect earned by those who serve in club leadership roles. Members’ respect of the individual members of the Nominating Committee will reflect in the overall trust of the committee’s work.
2. Board Code of Ethics – All board members should be provided with (and accept, in writing) the ethical requirements of board service. Such requirements typically include:
3. Business-like Governing Practices – Club members expect their board members to take a business-like approach to corporate governance. In fact, most reference points for governing practices tie directly to members’ experiences with boards of publicly traded companies, where board conduct and process is held to a high standard.
The same should apply here. Board disciplines such as the board’s function to speak as one unit and its authority to speak for the club are expected, as are financial reporting and disclosure standards.
And yet…
In contentious times, some board members cannot be dissuaded from causing conflict within the boardroom.
You can put in place the tools to mitigate conflict, but these are only tools. Tools which require genuine leadership and execution from the board president and fellow board members to be effective.
“Going rogue”, or in other words disrespecting the duty of sound governance, should result in fellow board members confronting the rogue board member firmly and fairly. While there is tremendous value in a board member who sees a different point of view, if these views carry no weight or evidence under scrutiny, they can and should be challenged.
You can never legislate or plan for human behavior, but you can (and should) put control measures in place to keep board members focused on what matters. That’s what will make them a true asset to the club.
While directors carry ultimate responsibility for the financial resources of a club, it’s the relationship between the board of directors and club manager that can often determine just how well managed the finances actually are.
Bobby Crifasi, General Manager of New Orleans Country Club, reveals the formula which keeps his club on a sound, sustainable financial footing.
A mismanaged and uninformed approach to financial management can seriously damage a club’s ability to make sound business decisions.
And as the buck stops with the board of directors, it is they who must carefully measure the future financial needs of their club, plan for the sources and uses of funds, and ensure the economic sustainability of the club. Doing so is no small challenge and requires:
As one of several duties, that can be a lot to ask of volunteer board members. This is where top-performing club managers step in. The more they can equip their board of directors with the information they need to fulfill their duties, the greater the guarantee of them making the soundest possible business decisions.
Bobby Crifasi manages New Orleans Country Club (NOCC) with style and grace that belies a savvy financial manager. First educated and trained as a certified public accountant, during his time Bobby has seen the Club through a natural disaster in Hurricane Katrina which led to $5 million in unplanned renovations. On a day-to-day basis, Bobby ensures that the Club remains on solid financial ground by keeping his board fully informed on the Club’s financial facts.
“All of our financial information is sent to the board in advance of the board meeting,” explains Crifasi. “I receive our financial reports by the 10th of each month and that allows a week or so to investigate any variances before the financial information is sent with the board package. If there was anything of significance that I thought the board should know sooner rather than later, I would report on it at the House Committee meeting or email the board directly.”
Keeping the board informed of financial performance metrics is a key for Crifasi and his team, “What we do is provide a lot of financial data comparing this-month to this-month-last-year and year-to-date-this-year to year-to-date-last-year comparatives on a monthly basis. We do good, old-fashioned spreadsheets with all this information monthly.”
Among the keys that are faithfully tracked at NOCC, Crifasi emphasizes the mission-critical factors in the balance sheet and income statements, “On a monthly basis we focus on key balance sheet items like cash, notes payable, and any other balance sheet items that may have changed significantly during the month. In addition, we look at our Statement of Income and Expenses and talk about any variances during the month and the factors that may have caused that. We track initiation fees and dues to ensure we are on budget with those as they represent such a large part of the financial picture.”
On a practical level, NOCC uses a rolling budget process to enable adjustments as conditions require, “We have a rolling budget for the food and beverage operation which is adjusted each month to reflect additions or deletions to the banquet business as well as current forecasts for our restaurant business.”
Given the significant impact of rising labor costs in private clubs, Crifasi adds, “We also look at labor in each department to ensure it is tracking as projected.” GGA observes that labor expenses are typically the largest category of expenses for facility operators, with benchmarks generally ranging from 52-58% of total expenses for public, semi-private, and resort facilities and slightly higher at 55-62% for private member clubs.
Astute financial management starts with the key information boards require to make sound decisions. Crifasi’s meticulous approach and proactive relationship with his board has helped to simplify an area that other managers can often find complex, providing a financial foundation for the long-term success and stability of NOCC.
If you want to follow in the footsteps of this top-performing manager, four-point approach to financial interaction with board members will provide an invaluable process to work from:
However big or small the event, there’s always reason to inject creativity and innovation to make it memorable for all involved. This is an approach Medinah Country Club has pioneered for over 95 years. So, what are they doing, and what can you learn? We turned to General Manager and Chief Operating Officer, Robert Sereci, for the answers.
While we have brought innovation to many events, at Medinah Country Club we view innovation as a strategic advantage that we leverage across all facets of club operations. From food and beverage to technology, innovation plays a critical role in our success.
Despite our significant recent investments in amenities, we realize that, ultimately, these amenities are only vehicles to facilitate relationships and strengthen our community.
Our approach to events focuses on larger, traditional club events like Easter, Mother’s Day and Halloween, while consistently developing smaller events, focused on appealing to a targeted demographic who share similar interests and passions.
We also work around the seasons. Many are surprised that a golf-centric club like Medinah hosts events around ice skating, sledding, and cross-country skiing in the winter months. But this keeps members engaged, mixing with other members and makes the club more a part of their everyday lives. We even host roller skating, where we convert our ballroom into a roller rink!
Family involvement is also key, and offers an opportunity for us to be creative. For instance, we invite families to join our executive chef for an educational experience as he taps our trees for maple syrup, to learn about egg production from our farm hens, and to learn how honey is harvested from our three bee colonies, all on our club property.
We also sprinkle in ingredients which are true to Medinah, and showcase the best of what we have to offer. Our Medinah Food Truck regularly roves around the property serving parties, and we use our portable wood burning oven or smoker to supplement indoor and outdoor club events.
In our case, my team and I drive this commitment. I suspect this is not that different for most other clubs. Club Boards genuinely demand innovation from their management team, yet they embrace and find comfort in conformity. Clubs are notorious for conforming with the majority and have learned to embrace the status quo in order to align with the opinions and behaviors of neighboring clubs. This pressure to conform can have a significant negative impact on management’s engagement, creativity, and ability to innovate, and ultimately the club suffers.
Innovation is not important for innovation sake. As more clubs expand their offerings and amenities become ubiquitous, we, as clubs, must shift our focus from building structures to building memories. Like the corporate world outside our gates, we have migrated into an “experience economy,” where our members place greater importance on experience. Fitness centers, spas, and racquet courts are now the norm and very few members get impressed by these shiny new toys. Today’s members are looking for, and paying for, memorable unique experiences. These unique experiences are what makes successful clubs stand out in the eyes of the current and prospective membership.
Capturing ideas is the easy part – getting buy-in and execution is the hard part.
There is no shortage of ideas. My team and I look not only to our peers for ideas, but more importantly, we look at what others outside of our industry are doing and determine if and how it is applicable to us. The truth is, many of our innovative ideas at Medinah may be innovative for the club space, but in reality, they are almost common practice in the public space. Clubs are too quick to dismiss ideas from other segments by thinking “that would never work here.” While that may sometimes be true, we seek out those principles or ideas that would work and determine what we would need to do in order for those ideas to be successful at Medinah.
While many clubs go out of their way to squash nonconformity, at Medinah, we encourage it. I genuinely promote constructive nonconformity. That type of thinking is how we introduced the Tiny House Hospitality Package during the recent BMW Championship hosted at Medinah. The goals were twofold:
How can we create a unique memorable spectator experience and capture additional hospitality at a mid-range price point? The answer – place several Tiny Homes at specific locations on the golf course.
This was the pitch – Ever dream of watching a professional golf tournament from your backyard? Now you can. Introducing the Tiny House Hospitality Package for the 2019 BMW Championship. Invite your friends and colleagues to watch the top 70 players tee off just feet from your fenced backyard. In addition to witnessing the tournament up close, you will have access to a tiny house with all the accommodations of a home.
Not only was this the first time a Tiny House has been used in this way, but also the first time a Tiny House has been featured on a course during a professional tournament. This was a massive success and will likely now be a standard hospitality offering for future tournaments. The positive press we received was truly remarkable.
In order to foster innovation, you must have a culture that not only encourages those who are innovative, but, more importantly, doesn’t penalize those who fail. Too many clubs focus on the ideas and innovation, and not enough on developing a culture of trust, where innovation and creativity is celebrated.
As the COO at Medinah, I have worked tirelessly to strengthen the trust between myself and the board. The board has provided me with a large safety net. In return, I have provided my team with an even larger safety net, allowing them to take risks and challenge the status quo. There are very few mistakes my team can make that I cannot get them out of.
Clubs must become comfortable with the unknown. If you want to accomplish something unique and memorable, you must be willing to take on risk. In general, clubs are culturally rigid and, as a result, are very risk averse. Club boards and members have a very low tolerance for failure and so club managers take fewer risks, thus, innovation comes to a standstill. Arguably, clubs with greater recognition and resources can afford to take more risk, but I believe the exact opposite to be true. When a small, unrecognizable club fails, the city may be aware; however, when a club with a global brand fails, the whole world will know.
Global Golf Advisors (GGA) and Simply Voting have formed an exclusive partnership to provide a secure voting platform designed to allow private club members a simple and easily accessible manner in which to cast ballots during club elections. GGA will begin offering the Simply Voting system as a stand-alone service or in combination with this governance guidance platform to private clubs worldwide.
Founded in 2003, Simply Voting Inc. is a full-service provider of secure, hosted online elections. Multiple independent third-party audits have validated the integrity and security of the platform. The company has worked with over 2,000 organizations across the world including government entities, political organizations, educational institutions and unions.
“Engaging private club members to participate in important elections can be a challenging and expensive proposition,” stated GGA Manager Martin Tzankov. “The Simply Voting online system eliminates the need for paper ballots and multiple mailings. Members have the ability to access the voting platform at their convenience and once identity is authenticated, a tamper proof ballot is provided that is easy to understand, complete and submit.”
The Simply Voting system is equally easy for club managers. In addition to voter authentication and tamper proof ballots, the system provides a branded club website, computerized tabulation of results and a variety of reports.
“Online voting is quickly becoming the accepted practice across business, government and organizations to provide an efficient and effective method to ensure election integrity,” commented GGA Director of Private Club Services Michael Gregory. “We view the Simply Voting system as complementary to our governance and strategic advisory services and another opportunity to assist our clients in maximizing their operating efficiency.”
“As we sought to introduce our voting system to the club industry, we felt it important to partner with a company whose corporate values aligned with our promise to deliver an excellent product with honesty and integrity,” commented Simply Voting President Brian Lack. “Global Golf Advisors, with its excellent reputation, was the natural choice. We believe the company has the depth and breadth to ensure our shared goal of providing an efficient voting system to private clubs will be met.”
Increasing membership satisfaction is a key goal of all private clubs. The Simply Voting system, with its accessibility, integrity and ease of use, will ensure members will be satisfied with the voting results of important club elections.
About Global Golf Advisors
Global Golf Advisors (GGA) has provided industry-leading advisory services to more than 3,000 clients worldwide including private clubs, hotels, resorts, residential golf communities, developers, homebuilders, government agencies and municipalities, financial institutions, investors and lenders. Operating out of three global offices in Toronto, Phoenix, and Dublin, GGA is a highly specialized consulting firm focused on club and leisure related assets with a professional services heritage as the KPMG Golf Industry Practice. The firm’s expertise lies in its ability to effectively meld club management and operational expertise with highly capable professional strategists and experienced business analysts. GGA personnel include former club managers with experience leading exceptional clubs, along with alumni of Arthur Andersen, Deloitte, KPMG, Pulte Homes, PwC, and Scotiabank Global Banking and Markets. For more information, please visit www.globalgolfadvisors.com.
About Simply Voting
Simply Voting Inc. is a full-service provider of secure, hosted online elections. Driven by dedicated staff who value transparency, high security, and the need for customized solutions, Simply Voting delivers excellence in providing secure, efficient voting solutions which create value for their client organizations. Launched in 2003, the Simply Voting system has been employed by over 2,000 organizations from municipalities, universities and unions to safely execute their elections. Many reputable third parties have audited the product, technical infrastructure, and corporate infrastructure, confirming the integrity and security of the system. For more information, please visit www.simplyvoting.com.
For additional information, contact
Michael Gregory
mgregory@globalgolfadvisors.com
416.524.0083
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:
Step Two – Evaluate Board Information
The following types of questions validate the quality and use of information going to the board:
Step Three – Evaluate Board Dynamics
The following questions assess the dynamics or growth and changes exhibited by the board:
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:
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.
Guest author – Lonnie Lister, General Manager, Portland Golf Club
Lonnie Lister attended the University of Arizona for a degree in music education. He worked on the wait staff at private clubs during his college summers and found that he was drawn more to club management than to a music career. Prior to joining PGC as its GM in January 2017, Lonnie was the GM at Skyline Country Club in Tucson, AZ where he spent 23 years working in various areas of the Club. Lonnie is active in CMAA and has served on the board of the Greater Southwest Chapter.
Portland Golf Club has a rich history, but like other private clubs it faces ongoing challenges.
The city of Portland has grown tremendously over the last decade, leading to dramatic shifts in both the market and demographics.
While this growth brings opportunity, it also brings about change. For us that change impacts a number of areas – specifically around membership recruitment and retention; staff hiring and retention, and being able to control operating costs without compromising the service we provide to members.
With this in mind, the board of Portland Golf Club voted last year to adopt GGA’s Strategic Intelligence (“SI”) platform, which features several components: a Market Scan, a Member Survey, and an assessment of the Club’s “Operational Vital Signs” which compares our performance to clubs of similar stature both within our market and in other markets.
Selective targeting
The initial Market Scan, which revealed potential member households within a two to five-mile radius of the Club, was fascinating. We learned that within a five-mile radius of Portland Golf Club there are more than double the number of golfing households than is typical for private clubs nationally. That was a welcome surprise.
Though our Club is still very selective, the Market Scan revealed that there was much more potential for outreach than we’d been aware of before.
As membership recruitment and retention was our number one issue, what we learned inspired us to send a “welcome letter” from the Club to home buyers in our prime market neighborhoods. This was not a recruitment package, but rather a gently informational welcome note – letting people who might be new to Portland know that this wonderful club exists nearby.
Taking the time to listen
As a club manager, one can often find themselves guilty of favoring (or at least focusing on) one ‘R’ over the other – namely, recruitment over retention.
But retention can fuel recruitment.
A Member Survey can inform what changes are necessary based on the actual needs that current members identify, which is vastly more effective. And the satisfaction and sense of positivity this can create reverberates beyond the four walls of the clubhouse.
What was critical for us was surveying our membership in a way that was specific to the Club, not just a broad-brush approach. This meant we could directly address concerns of our membership and maximize the effectiveness and insights of the survey. Already this has delivered responses that are candid and honest, and provided a robust foundation to inform strategic decisions.
Reassuring the Board
The SI platform has also been incredibly helpful in reassuring the Board that the Club is operating efficiently.
We can see in the Operational Vital Signs report that in almost every measure Portland Golf Club is performing well. Where we find anomalies, we can take a closer look to understand what these are, and we can then decide if they are something we need to act upon or factor into our strategic decisions.
One such anomaly we found at Portland Golf Club was that most golfers prefer to walk, explaining why our cart revenue is below national benchmarks. This is not a trend we see changing, so rather than acquire more carts or attempt to upsell them at every opportunity, we decided to focus our efforts in other, more fertile areas for business development.
Going deeper
There’s no doubt Portland Golf Club has embarked on a journey which places strategic intelligence at the forefront of the decisions we make.
Now we are in the second year of our SI subscription and have engaged in a Market Analysis to take a deeper look into what we learned from the original Market Scan.
As analysis looks at trends, rather than simply a snapshot of the market, this will allow us to plan better in what is clearly a fast-changing region.
Portland’s metro region now numbers more than 2.4 million people. Almost 50% of the adult population has a college degree, and in Portland Golf Club’s primary market areas that percentage is even higher.
Armed with this knowledge, we can embark on our membership recruitment and retention activity with a clear sense of who our prospective customers are and where they are situated in relation to the Club.
Empowering the manager
Given my history working in a number of different roles in the club environment, I have always felt very comfortable on the operational side of the business. However, the three most important issues we face at Portland Golf Club are all byproducts of local market growth outside of our Club’s operations.
Strategic research is providing us with data and insights we need to address each of these issues and is helping the Club in both the short and long-term.
This journey is changing the way I think and the way our team strategizes. It provides me with more data than I have ever had available to me at other clubs and is full of relevant information that we depend on daily. Our management team and committees routinely refer to the intelligence reports, our budgeting process benefits from the availability of current data to support assumptions, and our Board meetings are more productive and efficient.
I now feel that there is a greater connection between the service we deliver on the ground to the level and breadth of service prospective members are looking for – because we are armed with the data and knowledge to have confidence to be more aware of market needs.
Moving forward
So, where do we go from here? Whereas before we were a Club reacting to changes and adjusting plans for the following year, now we are a club looking 2, 3, 4, even 10 years into the future.
For a time, it felt as though the city of Portland’s growth was getting away from us. Now, we are ready for how it will develop and who will move here, giving us the ability to refine the value proposition that this Club offers them both now and well into the future.
The Policy Governance Principle of Rigorous Monitoring must be applied consistently through Board Policy. Performance is best measured against agreed-upon criteria. Some of the items listed below are of a tactical or practical nature. However, they support Policy Governance principles and the Club Governance Model.
The Board’s Role in Goal Setting
The Board has an important role in not only establishing its own goals, but also in ensuring that the General Manager (GM) has every opportunity to be successful when establishing his/her annual goals. The Board is responsible for the following items:
Make Monitoring Club Performance a Board Policy
Monitoring club performance should not be left to chance. It must be set out in writing and agreed to, in advance, by the Board and GM. Monitoring is Board policy. The following items explain how to incorporate monitoring club performance into policy:
Management’s Role in Goal Setting
Management must take an active role in setting goals and monitoring performance. A passive approach leads to undefined and unattainable goals resulting in poor performance reviews. As the Board’s only employee, the GM not only participates with the Board in setting his/her goals, the GM then communicates these goals to the management team. Ideally, the GM’s goals, and therefore the Board’s goals, are consistently communicated to every staff member to align all activity and maximize the use of club resources. Management is responsible for the following items:
This article was authored by GGA Director and Governance expert George Pinches.
“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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