Tag: Innovation

Appreciating Depreciation – A Plan for Funding Capital at Your Club

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Appreciating Depreciation…
A Plan for Funding Capital at Your Club

Many clubs are trying to create a capital plan to ensure assets are maintained and amenities, both now and in the future, meet the needs of its membership. The plan would have been relatively easy to create and maintain had the appropriate process been followed from the onset.

However, economic challenges, directors’ personal agendas and not appreciating the impact of depreciation, have left clubs with both deferred maintenance of assets and a lack of appropriate cash reserves to fund the club’s capital needs.

A common miscue by most clubs is not to consider depreciation of assets as an operating expense. Put another way, all members of the club should pay for this use the same way they pay for golf course maintenance expenses, clubhouse expenses or any other expenses based on use. These operating expenses are factored into annual dues to fund operations – why not think about capital maintenance in the same manner?

Unfortunately, many clubs chose to ignore depreciation, as a non-cash expense, and charge members for only cash expenses. As such, there has been no matching of “use costs” per member for the capital assets of the club. This results in those clubs having to fund capital expenditures based on absolute need and current cash surpluses. As assets deteriorate over time, this often leads to choices being made on which assets to maintain – leading to deferred capital costs – which then needs to be addressed using other funding methods such as assessments to the membership. Continuously raising capital dues can put clubs outside of the market, especially when competing with non-equity clubs who typically do not charge capital dues. This form of funding capital expenditures can impact both financial sustainability and a club’s brand in the marketplace.

Below, we outline steps to ensure support the financial sustainability of your club:

1. Understand Maintenance Capital Needs: clubs need to understand the annual cost to maintain their existing assets over a 20-to-30-year period, similar to a reserve study for a condominium.
This study is more than just a financial exercise, as professional engineers will be able to opine on the impacts that weather, improper installation or unusual usage, among others, can have on the useful life of an asset. After examining the life expectancy of existing assets, factoring in the costs to repair and replace assets at the end of their useful life or the extension of life span of certain assets to smooth annual costs your club can develop a plan to fund the maintenance capital to maintain the conditioning of your existing assets.

2. Quantify Your Sources: evaluate your incoming cash flows that can be used for funding maintenance and growth capital expenditures.
With your reserve study providing a thoughtful estimate of maintenance capital expenditures, it is time to understand how this can be funded under your current funding structure and begin to contemplate changes, if needed to fund the depreciation of your club’s assets. This includes an estimate of expected cash to be received from entrance fees, operating surpluses, and any other capital fees, net of required debt servicing costs to service existing debt.

Since many clubs did not historically charge members the depreciation cost, then over time deferred capital has occurred. In light of this methodology, new members must contribute to both capital maintenance of existing assets and new capital. As such, from a matching principle perspective – one would suggest that entrance fees should be used to fund both capital maintenance and new capital projects.

3. Comprehensive Strategic Planning: understand and document member’s expectations for the Club, including an in-depth study of current and expected utilization of club assets.
Steps 1 and 2 ensure an understanding of the “now”, but clubs are dynamic organizations and the members of today will look very different in 2, 5 or 10 years. This is where a strategic plan, informed by market trends, operational efficiency, member’s expectations, vision and importantly utilization of club assets, becomes critical to capital planning. This plan will help answer important questions in capital planning such as:

• What do my current and future members want from the club?

• Based on current and projected utilization do we have the right assets? Are they of sufficient quality to continue to meet and exceed expectations?

Determining and documenting who you want to be as a club will guide your capital planning and focus. This is a critical step in planning the growth capital expenditures that will need to be funded to meet member’s expectations for the future of the club.

4. Facility Planning: develop a comprehensive campus(es) plan for your Club allowing members input and understanding of the master plan.
Utilizing what you have learned from the strategic plan and utilization study, engage relevant architectural experts (i.e., structural, landscape, golf, etc.) to develop a facility master plan. This will help ensure that capital projects are phased and completed in a way that is not detrimental to future projects or your campus.

The facilities master plan needs to be approved by the membership and any new capital improvements would be approved by the membership along with the funding plan of each such improvement.

This should include periodic communication throughout development, including explaining the research and findings to members so that they are given enough information to vote intelligently on the plan and individual projects.

Key themes to communicate to members include:

  • Maintenance capital is funded in an understandable manner (I use it, I pay for it) based on an informed plan to ensure management is not missing and not planning for critical capital expenditures. No longer is it based on absolute need, it is based on a comprehensive plan with the future in mind.
  • The strategic plan for the future is clear and socialized with membership. Those charged with governance have a clear mandate and the research to back decision making to continue to enhance the club’s value proposition. Current and projected utilization, market trends and club vision are defined to inform future capital planning.
  • A facility master plan ensures the continuity of the campus remains (or is improved!) and growth capital projects (and importantly funding plans) are approved by an informed membership.

Overall capital planning and funding of capital expenditures are key to maintaining a club’s brand, financial sustainability and member satisfaction. Do not fall into the trap of funding by scarcity, instead take the steps to clarify capital funding for members, management and those charged with club governance.

This article was written by Founding Partner Stephen Johnson and Evan Van Eerd.

One Size Strategic Planning Does Not Fit All

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Too many private clubs struggle with the strategic planning process, yet it is essential to stay relevant, financially sustainable, and impactful. One reason is the time required to produce a quality the plan. Another is the fact there is significant confusion in the marketplace about what a true strategic plan entails.

Part of that confusion comes from the fact that the landscape of strategic planning for private clubs is increasingly diluted with off-the-shelf solutions, data, and products promising fast results, yet failing to deliver real strategic direction.

Renowned economist Michael Porter has often stated that “the essence of strategy is choosing what not to do”. To follow that thinking, your strategic plan must go beyond basic tools and templates. It must be based on a deep understanding of your club’s unique needs, research-driven, and adaptable to evolving challenges.

COOKIE CUTTER STRATEGIC PLANS DO NOT WORK

Strategic planning is not a one-size-fits-all exercise. Your plan should be unique to your club and market conditions, avoiding these common risks associated with adopting a generic approach:

Lack of Strategic Direction – Many off-the-shelf solutions focus on operational tasks rather than defining a clear vision for the future.

Misalignment with Club Needs – Generic plans often fail to account for the specific challenges, culture, and goals of your club.

Inflexibility – The private club marketplace evolves rapidly. Ready-made plans do not account for changing conditions that can quickly become obsolete.

Wasted Resources – Without a tailored plan, clubs end up directing resources to low-impact initiatives that do not drive value and satisfaction for members.

RESEARCH & ANALYSIS ARE CRITICAL

A strong strategic plan is built on data and analysis—not assumptions. Many clubs rely too heavily on data alone to drive their strategy. Unfortunately, without proper analysis and insight, all that data is just noise.

Leveraging the following structured research allows you to make informed decisions aligned between your vision, market realities, and stakeholder needs:

Stakeholder Insights
Gathering data on stakeholder behaviors, preferences, and engagement is essential to help tailor your strategies to what truly matters to your stakeholders.

Market and Membership Analysis
Analyzing market trends and understanding your members’ needs and preferences ensures your strategy is aligned with their expectations and effectively positions your club in the marketplace.

Financial and Operational Health
Reviewing revenue streams, cost structures, and operational efficiency ensures your plan is visionary, feasible and based on reality and will avoid overly ambitious goals not supported by capabilities.

Aligning Vision with Market and Financial Realities
Your club’s vision must align with what can realistically be achieved in the marketplace and within your financial constraints. A strategy that does not account for these factors may set the club up for failure.

A PROVEN APPROACH TO DRIVE RESULTS

Here are five approaches to guide your strategic planning process:

  1. Align Internal Capabilities with Objectives
    For long-term success, make sure your club’s internal capabilities—such as talent, systems, and processes—are aligned with strategic goals.
  2. Prioritize High-Impact Initiatives
    Focus on initiatives that deliver the greatest value and prioritize them in your strategy. Instead of jumping on every trend, identify the projects or initiatives will drive the most significant outcomes based on thorough analysis and clear insights.
  3. Scenario Planning
    Incorporating scenario planning into your strategy allows you to anticipate and prepare for different alternative futures, whether they involve economic shifts, regulatory changes, or shifts in member expectations.
  4. Link Strategy to Execution
    According to GGA’s Club Leaders’ Perspective research, less than half (48%) of clubs with strategic plans are monitoring progress against goals. A strategy must be actionable with progress tracked to assure your plan priorities are translated into measurable actions that achieve the desired outcome.
  5. Balance Short-Term Wins with Long-Term Goals
    While it is important to demonstrate progress with short-term wins, your strategy should also prioritize long-term sustainable growth. Balancing both will keep your club leaders focused on the future vision while maintaining momentum.

MAKE STRATEGY COUNT

Strategic planning is not just a box to check—it is a critical process that shapes your club’s future. Taking the time to build a thoughtful, research-driven strategy aligned with your unique goals and market conditions will ensure you have the guide to drive real, long-term success.

This article was written by Managing Director and Partner Michael Gregory and appeared in NCA’s Club Director Magazine.

5 Reasons To Survey Employees During Peak Season

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If you are a private club leader who is hesitant to run an employee survey during your peak season…you are not alone.

Many businesses, especially those with strong seasonal cycles like private clubs, worry about survey fatigue or skewing results during their busiest periods.

However, postponing employee feedback until the “quiet season” might mean missing out on crucial insights.

Here are the 5 Reasons capturing real-time employee insights, even during peak periods, can be incredibly valuable:

Capturing Reality in the Moment: Your busy season is when your operations are truly tested, and your employees are experiencing the most intense demands. Surveying during this time captures real-time perceptions of workload, resource availability, communication effectiveness, and overall employee experience under actual operating conditions.

Identifying Stress Points & Strengths: You can uncover critical stress points and potential areas for burnout or inefficiency as they happen, not months later when the memory has faded. Conversely, you can also identify what strategies and support systems are working well during high-pressure times.

Actionable Insights for Immediate Impact: Feedback gathered during peak times can lead to adjustments that directly improve the current employee experience, rather than waiting for next season. This immediate responsiveness boosts morale and trust.

Informing Future Planning: Understanding how your team feels and performs under pressure provides invaluable data for future staffing, training, resource allocation, and operational improvements for subsequent busy seasons. It’s a key piece of the puzzle for sustainable success.

Benchmarking Against Real Conditions: For organizations like private clubs, the “busy period” is often the standard operating condition. A survey during this time reflects the true employee journey for a significant portion of the year, offering a realistic baseline.

While we always recommend thoughtful planning, don’t let seasonality be the sole reason to delay vital employee insights. A well-designed, focused survey can be a powerful tool for understanding and supporting your team, even when every table in the restaurant is full!

Let’s connect to talk about the test time to survey your employees.

Eric Hutchison
Director, GGA Partners
eric.hutchison@ggapartners.com
614.271.9355

 

What Club Members Want

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Knowing what members want and need is a primary focus in most private club boardrooms. Club leaders are inundated with special requests and sometimes selfish recommendations from internal sources at their clubs. The advice often comes with the assurance, “Everyone agrees with me.”

The challenge for club leaders is to discern how many members equal “everyone?” Are you and your three golf buddies “everyone?” Or is it you and the other three at your bridge table? How many people equals “everyone”?

Seven items round out the list of what members want, according to GGA Partners™ 2024 Club Members’ Perspective report. While traditionally important areas of club life were noted, such as dining, golf and club facilities, nuanced recommendations surrounding the overall experience emerged. From increased communication effectiveness to the use of systems to increase ease of access, members want more, but they also want increased efficiency and a focus on initiatives that simultaneously enhance the world around them.

Dining Experiences
Improve the quality, consistency, and variety of food, create more casual dining options, enhance outdoor dining spaces, consider themed dinners and special events and address inconsistent service.

Golf Course and Practice Facilities
Continual emphasis on maintaining and improving the golf course, enhance the practice facilities, including driving range, short game areas and golf simulators.

Clubhouse and Facilities
Renovate and upgrade locker rooms, bathrooms, and lounge areas, consider indoor amenities like a fitness center or spa, focus on maintaining a high standard of cleanliness and décor and consider a more sustainable approach.

Member Experience
Increase communication with members, offer more member events and activities, cater to a broader range of age groups.

Social and Recreational Facilities
Add recreational amenities that provide more opportunities for social interaction. Consider family-friendly amenities like playgrounds, kid’s areas, or other activities to create greater interaction.

Service and Staff
Members want improved booking systems and better communication with members, maintain a high level of professionalism among staff, provide ongoing training in customer service and improve transparency in club management.

Environmental Sustainability and Initiatives
Calls for environmental initiatives, such as adopting electric vehicles and reducing plastic waste.

The Club Members’ Perspective report is part of GGA Partners’ research initiative intended to understand what key stakeholders currently see and what the future holds for an increasingly complex and exciting area of the hospitality business. This research series explores unique views from within the private club, golf, resort, and residential community segments.

What drives members’ priorities? Eric Brey, Ph.D., and GGA Director guiding the firm’s research initiative advises, “It is important for club leaders and operators to remember that members have an emotional relationship with their clubs less so than a transactional relationship.”

This article was written by GGA Partner Henry DeLozier for BoardRoom Briefs, appearing in the May 8, 2025 edition.

 

It’s Survey Season

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“Clubs that do not objectively survey their members and rely on ‘perception’ are more likely to perceive higher overall satisfaction than clubs who actually measure.”

GGA Club Leader’s Perspective 2024 Research Survey

Perception vs Reality
If you are a winter season club and nearing the end of your peak season usage, it is important to reflect on the year that was and begin planning for the year ahead to continuously improve the member experience.

By conducting an annual member survey, you avoid the risk of blind spots when it comes to understanding the real member experience at your Club.

Now is a Good Time for a Member Survey
The benefits of working with GGA to conduct your member survey now include:

Optimal Timing
Members can evaluate their experience this season while it is on their minds.

Support for Planning Season
Updated, accurate and reliable data and insights will support goal setting and strategic initiatives.

Performance Review Insights
Results will provide objective metrics to support departmental goal setting and evaluation of managers.

Year-Over-Year Feedback Blueprint
Set the stage for year-over-year consistency and valuable trending feedback in the years to come.

Demographic Insights
What did your new class of members think of their first season? A GGA survey will help you cross-section the attitudes of a multitude of demographic profiles.

Updated Benchmarking and Trends
Updated benchmark comparisons and broader industry satisfaction trends will help you prioritize areas of focus and anticipate future member needs.

Now is the time to gain valuable insights from your members to replace perceptions with reality. A GGA member survey will provide you with an understanding of your members’ experiences and expectations that will allow you to continuously improve for the year ahead.


For more information, contact:

Michael Gregory
Managing Director & Partner
michael.gregory@ggapartners.com

Planning for the Next Business Cycle

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The sun does not shine on the same dog’s back every day.

This folksy reminder should be a point of focus in private club boardrooms because most clubs have full memberships with wait lists, giving club leaders the sense that happy days are here to stay. It was not that long ago that the majority of private clubs were scrambling to find new members while some of that majority—roughly one in five—faced economic failure.

During these good times, what should you be doing now to prepare for an economic downturn or a slowdown in membership demand?

Become the Employer of Choice
Private clubs throughout North America have steadily rebuilt their staffing levels to “full.” At the worst of the pandemic, many clubs were operating with less than 75 percent of their workforce while laboring to recruit more team members. While this objective is not an easy one, personal and personalized services, which are the backbones of the private club value proposition, require reliable and well-trained staff.

Many club leaders have been of the mind that their club simply needed to “throw money at prospective employers,” and they have been surprised to learn that those attracted to private club services seek fulfillment that comes from several important benefits:

• Being a part of a good team. Those who would be in personal services at private clubs want what club members want…belonging. The best employees know that they are capable, well-trained, and of valuable service. They want to belong to a team where their attributes have value and recognition.

• Being recognized as a reliable teammate. Recognition is important to everyone and, especially, to those who are team players.

• Being proud of their employer. Staff members know the best clubs – and employers – in town and want to join the winners. Club leaders must be alert to doing the right things right in the eyes of their staff.

Focus on Capital Reserves & Capital Planning
Many clubs aggressively spend new-found capital—from government programs and new members joining the club—on long-deferred capital maintenance projects and improvements. In many clubs, generations of club leaders dismissed the notion of making capital investments when they did not see ready access to capital through debt or capital calls on members.

Club boards should focus now on the capital maintenance projects that will update, repair, or replace existing assets on their clubs’ balance sheets. Capital reserves should begin to be built for the next round of capital needs.

Extend Your Club’s Brand Reach
In good times, club leaders think their clubs are great. In bad times, such as before the pandemic, many club leaders were afraid of their clubs’ brand because either they did not know what to do with it or because the brand pillars had been ignored for decades. There are three easy steps to improve your club’s brand reach are:

1. Improve board communications with members. Members expect the club and its board to be transparent. Improving board communications can be as simple as the board committing to a regular schedule of updates on topics of interest to members or as advanced as adopting a style guide that brings forward an editorial agenda that tells what topics the board will be communicating and when.

2. Embrace rising generations of members. Clubs are regenerating as the most tenured members age out of active use of the club while newer and younger members are settling in. The oldest members want to be remembered, respected and included. Newer members want advanced capabilities, apps, and immediate access. Check your club’s bandwidth to ensure that the club’s capabilities are up to current standards for access and content.

3. Act on the club’s core values. Ensure that your communications content is timely, inclusive, and easy to understand. If, for example, your club claims to be a “family club,” ensure that programs and programming include everyone in the family and go beyond the easiest choices.

It is called a “business cycle” because events change with high predictability. It is advisable to plan now for economic changes, slow-down, or global events.

Creating Your Forward-Looking Capital Plan

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The process to create a capital plan begins with three questions:

1) Do you know how much capital your club requires to replace its existing assets?

2) Not including your ‘wish list’ of whiz-bang new assets like golf training technologies or new casual dining or state-of-the-art member services, do you know what your capital needs are?

3) And do you know how your club will source the required funds?

Like most club leaders, you may have answered these three critical questions with a cautious ‘no’. The fact is that few clubs are looking to the future with a bona fide capital asset replacement plan.

Here are three steps to take for beginning your club’s forward-looking capital planning:

1. Conduct a capital reserve analysis of existing assets.
Build an asset replacement spreadsheet with the following columns:

Asset Description | Useful Life | Remaining Useful Life | Replacement Value

This will yield a comprehensive view of current assets and provide the club and its future board members and operators with a clear-eyed understanding of the sums required over the upcoming 10- and 20-year time periods. With these steps, you have established your current capital needs on an annualized basis.

2. Itemize the assets you wish to add to your asset roster.
Contemporary design concepts that enhance member experiences are emerging, offering clubs greater relevance and engagement for members – new and old. Among the most popular new concepts are:

Sports Training Facilities like golf and tennis swing and stroke analysis technologies and the gamification of these technologies.

Al Fresco Dining Venues like porches and patios bring the indoors out and the outdoors in many clubs where COVID-era members grew comfortable with a little more personal space and sercouldle to navigate dining spaces more comfortably.

Swimming pools for all ages where club members require lap lanes for serious fitness swimmers, splash pads that are proving safer (than the old-school kiddie pool) for children, and resort-style pool areas for adult members.

Club leaders should plan boldly when considering new amenities. When the membership market cools, good fortune will favor the bold.

3. Identify the sources of funds that are needed.
This is the uncomfortable topic during which most club boards freeze up and seek to procrastinate. Many leaders are uncomfortable telling members that more money is required for the future.

Don’t sell your members short. If they were smart enough to join a fine club, they are smart enough to know – whether they like it or not – that club membership comes with extra costs. Furthermore, most members know that fiscal discipline and prudent financial planning are the primary duties of servant leaders. Three points to remember when thinking about club spending:

  • Members expect you to know and tell them what is required for the club’s successful future. Ignoring this fact causes members to distrust their board members.
  • Members are intolerant of board members who ignore their financial responsibilities.
  • Even those criticizing dues increases know there should be a capital plan.

Use the following best practice standards in sourcing needed funds for capital requirements:

– Begin with the understanding the monthly dues should be used to pay the club’s bills. Regular dues fund all expenses on the income statement – labor costs, operational and administrative expenses.

– Joining fees paid by incoming members are used for funding capital asset replacements. If these funds are inadequate to fully address capital replacement needs, clubs turn to debt, capital calls on members (assessments), and a combination thereof.

Planning for the future financial needs of your club should be a top priority. Following these steps will set your club on the proper path.

This article was written by GGA Partner Henry DeLozier for BoardRoom Briefs.

 

Building Member Trust

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Signs of distrust are everywhere, and private clubs abound with demands for greater transparency from club leaders as trust and trustworthiness are constantly being questioned.

Frustrated board members who work tirelessly in service to others can become demoralized by fellow members who demand “more transparency.” The incredibly nuanced circumstance comes down to three keys:

1. Say what you will do…and do it.
To achieve this simple-sounding advice requires that the board speaks with one voice and in writing. Too many board members become overly – and overtly – political when they are simply servant leaders within a membership of qualified leaders.

2. Communicate consistently.
Members – whether skeptical or not – want to know more. And no matter how much “more” the board provides, members assume that something is being withheld.”

Tactical steps that work:

  • Establish a standard cadence for Board communications concerning financial and governance topics. See that the club delivers to the timeline and cadence it has promised.
  • “Brand” club communications to enable members to know which they want to delete without reading. Some members have grown weary of promotional messages from the club concerning food and beverage specials…they can easily be deleted. Everyone wants to know about dues increases and capital projects.
  • The branding need not be the stuff Madmen might develop, it can be simply the Club Financial Update or Board Notes.
    Address misinformation and the bad actors behind it. Correcting inaccurate information is a service to all members. Quietly holding the bad actors to account is the duty of the board and its executive committee. Put people on notice.

3. Keep score.
Report performance results…especially if there is a miss. Taking ownership of unmet promises or misses is a part of being trustworthy. Ready examples are:

  •  Summarize last month’s financial performance, explaining whether it was on-budget, under- or over-budget. Make it easy for members to understand the information being presented from the board and management.
  • Measure engagement results. How many people signed up for the member/guest? How many had to be turned away? How many dropped out preventing others from the chance to participate? How many members voted…and did not. Everyone wants greater accountability which is a 360-degree proposition.
  • Take ownership of the misses. Owning an error, and explaining the steps that will be taken in the future to avoid making the same mistake, is a part of being trusted.

Your club can proactively move toward a more civil and reliable community when the leaders take the lead in trustworthy ways.

This article was written by GGA Partner Henry DeLozier and appeared in the January 4, 2025 edition of BoardRoom Briefs.

 

Keys to Effective Communications

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3 Keys to Effective Communications

Year after year, private club members demand ever-greater transparency and expect their servant leaders to communicate more effectively. In our experience, club leaders are responding, but the fact is that communications are only effective if they are two-way. Leaders must deliver effective communications, but members must open and read what is sent.

To develop communications your members want to read, GGA Director Linda Dillenbeck, a seasoned communications and brand management expert, offers three keys for club leaders seeking to improve the quality and relevance of the information they send to members:

1. Keep communications short and simple. “Too often, board communications are filled with unnecessary or irrelevant information. Use simple words to engage and inform members,” stated Dillenbeck. “The average person will consume about 200 words before they stop reading and start skimming, so don’t waste time telling someone how to build a watch when all they really need to know is the time.”

2. Separate your key thoughts. Dillenbeck has observed that the internal and external club communications are often complicated, fuzzy, or downright confusing. “Not only do people, and your members, prefer short communications, they also want simple and straightforward messages, “stated Dillenbeck. “The most-read information is the one that separates thoughts into shorter paragraphs and uses subheads and bullet points. In that way, a member in a hurry can get the gist of the message without reading every word.

3. Repeat, Repeat, Repeat. Linda observes, “Your members, like all consumers, are faced with over 3,000 messages of one type or another per day, most of which are not read or retained. If a key message needs to be conveyed about club business, it must be repeated multiple times in multiple communications. Just when you are tired of talking about a subject is when your members are beginning to pay attention.”

Although club members consistently criticize club communications, club leaders consistently put quantity over quality while citing their many attempts to communicate. In most cases, more is not better.

Dillenbeck advises, “The first thing a club can do to manage communications is to develop a Brand Standards Manual.” This document serves as a guide for staff and board members by outlining the overall messages and tone to be used in all internal or external communications. Not only does this help those who may find writing a difficult task, but it also ensures that your messages stay consistent with the image you are projecting of your brand.

With a Brand Standards Manual in place, the board and management team should develop a timeline for communicating with members. “The rule to follow in this regard is to communicate only when there is relevant information to share,” added Dillenbeck. “That means sending a weekly update may not be necessary; rather, every other week may suffice. Otherwise, your messages will be unread.”

One concern many clubs face is measuring the effectiveness of communications. How does one know if members are getting the message? “The most reliable way to track effectiveness is to use an email service that provides data about how many members opened the email, clicked on a link or responded to a question,” stated Dillenbeck. “If the numbers are low, club leaders must ask members why they are not opening the correspondence through intermittent member surveys.

Effective club communications set top-performing boards apart from other well-intentioned club boards. It is said that one should not feed the pigeons because they return wanting more when – in fact – feeding your members a steady diet of interesting and helpful messaging keeps your club relevant in their lives.

This article was written by GGA Partner Henry DeLozier and appeared in the November 16, 2024 edition of BoardRoom Briefs.

 

Strategic Planning that Makes the Difference

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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.

 

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