4 Priorities for Private Club Boards

“When the ox is in the ditch, there is much work to be done.” In most private clubs, the “ox” is a troubling or confounding situation that could – or should – have been avoided. Noted private club attorney, Robyn Nordin Stowell of the Spencer Fane LLP law offices admonishes clients who have not called before putting the ox into the ditch. “Clubs are so well managed and led these days that after-the-fact guidance should be unnecessary,” she says.

Want to keep the ox out of the ditch at your club? Attend to four practices that reduce risk and keep your club on solid ground.

1. Execute twice-per-year legal reviews with your club attorney.
Meet with your legal advisors to anticipate emerging challenges or issues on which the club and its servant leaders should be anticipatory; Among the concerns one should voice are:

• Board Minutes – In your review of our board meeting minutes, do you see any matters of concern or legal risk that should be corrected? Board minutes should be reviewed to minimize misstatements which could pose future risks to the club or its directors.
• Membership Program and Representations – Membership demand since the pandemic has filled most clubs still using membership documents that were created before CY 2020 when most clubs were aggressively seeking more members.
• Governance and Disciplinary Practices – The board should review its disciplinary practices to ensure that those practices conform to current standards of best practice…and state statutes.

2. Conduct an annual risk assessment with your property and casualty insurance provider.
One of the most rapidly increasing costs for most private clubs is property and casualty insurance…if you can obtain it. With rates increasing as a reflection of the overwhelming risks insurers are experiencing – whether wildfires, hurricanes, and tornadoes – in addition to the usual slip/fall risks, club leaders should evaluate risks with the understanding that most insurance premiums are a factor of annual club revenues adjusted (multiplied) by a risk factor that is established across business segments. Ask your insurance representative to conduct a risk assessment that may result in savings for the club – unless your club is not in safe operating condition.

3. Meet with the club’s auditor 90 days before the scheduled annual audit.
Many club leaders dread the annual audit. Embrace this independent, third-party review of the club’s books as an opportunity to improve operational results, which may reduce financial risks throughout the club. Your auditor sees many clubs and can provide financial benchmarks in addition to sound business advice.

4. Execute an annual evaluation of your club’s cyber security.
“The cyber battlefield never sleeps,” says Joseph Saracino, CEO of Cino Limited, which specializes in cyber security for private clubs. “In today’s world, many of us are sitting ducks, waiting to become the next cybercrime victims to be publicized by the media.” If an ounce of prevention is worth a pound of cure, take aggressive steps to ensure that the club’s members can rely upon a safe haven for themselves and their families.

Planning and acting ahead of the problem are a sure sign of effective servant leadership. Will you wait for the problem to put your club in the ditch or prevent the problem? Pretty easy choice when you think about it.

GGA Partner Henry DeLozier penned this article for BoardRoom Briefs. It appeared in the May 18, 2024 edition.

3 Keys to Consensus Based Strategy Planning

Private clubs operate within a unique ecosystem where member satisfaction, financial sustainability, and strategic foresight intersect. To navigate this complex landscape successfully, effective planning requires a consensus-based approach to strategy development.

Consensus-based strategic planning in private clubs requires club leaders to develop strategic plans that align the goals of multiple stakeholders, including members, employees, management, boards and committees. It emphasizes collaboration, communication, and shared decision-making processes to ensure that the strategic direction of the club reflects the collective interests and priorities of all involved parties. This approach fosters a sense of ownership, engagement, and commitment among stakeholders, leading to more effective implementation and sustainable success for the club.

The development process involves synthesizing member feedback, conducting comprehensive research, collaborating with experts, and ensuring financial viability. Here’s how these elements come together to form a robust strategic framework.

Informed Member Feedback: At the heart of every successful club strategy lies the voice of its members. However, gathering member feedback is not merely about soliciting opinions but rather about structuring the feedback process strategically and with a sound research methodology. Members who are in essence the customers of private clubs, are unique in two distinct ways: First, many are also owners, with a vested interest in the club’s success beyond the member experience. Second, they often don’t want the club to operate strictly like a business in certain aspects, as members typically prioritize experiences over financial performance. Considering these factors, it is essential to design surveys and engagement platforms that prompt members to prioritize their preferences and consider trade-offs. While member input is vital, it is just one data point to be considered alongside research and industry expertise.

Comprehensive Research: Comprehensive research is essential for private clubs to develop a robust strategic plan. This involves analyzing internal dynamics like membership demographics, financial performance, and member satisfaction, alongside benchmarking against peers and industry standards. Understanding market trends and using dynamic financial models for scenario analysis adds depth, helping clubs anticipate shifts and make informed decisions. This research-driven approach not only optimizes resources and enhances member experiences but also forms the foundation for consensus-based strategy, aligning stakeholders and ensuring strategic alignment.

Expert Collaboration and Maintaining Impartiality: Developing a consensus-based strategy requires collaboration among experts with diverse skill sets. This includes individuals proficient in business, finance, law, hospitality and strategic planning. However, it’s essential to recognize the nuances of the private club industry and leverage management and external industry experts to bridge knowledge gaps effectively. Maintaining impartiality throughout the strategy development process is critical. Balancing diverse interests and opinions within the club requires a data-driven approach that prioritizes objective analysis over personal preferences. By leveraging data and insights, clubs can make informed decisions that benefit the collective interests of their members while ensuring organizational resilience and growth.

Private clubs are unique and operate in a complex landscape. Employing a consensus-based approach to strategic planning is an important process to ensure your club is positioned to thrive now and in the future.

Matt Clarfield is a Manager at GGA Partners specializing in helping clients develop comprehensive strategic plans. To reach him, email matthew.clarfield@ggapartners.com.

Addressing Board Transparency

ADDRESSING TRANSPARENCY
THREE FACTORS CRITICAL TO HIGHLY EFFECTIVE PRIVATE CLUB BOARDS

As society becomes more open and increasingly skeptical, club members demand greater transparency from their boards. Whether in member focus groups, general meetings of members or the club dining room, members seek greater transparency.

Three factors are proving critical to highly effective private club boards: (a) communication methods, (b) communication cadence, and (c) nondisclosure rules.
Boards are encouraged to heed three primary factors:

Establish and normalize the board’s communication methods. Develop a comprehensive communication plan for the club and make board communications an important and consistent part of the club’s communications. In so doing consider:

1. Topics of interest – Most club members seek a sense of “belonging.” See that they are invited to suggest topics of interest to them. In most clubs, that roster of needs includes activities and events, human interest stories about fellow members and staff, and the latest programs for each member segment. To ensure a sense of inclusion, see that members are aware of important activities well in advance of the sign-up or registration periods.

2. Multiple media options – Rely upon a wide array of media tools ranging from social media, email, postcards, and posters within club buildings. Most clubs serve multiple generations with preferred and most commonly used media options. Recognize that different subsets of the club’s members – separated by gender interests and generational media usage – require recognition and programming.

Maintain a reliable cadence of communications. Establish, announce and honor a realistic cadence of communications by topic and by membership category to help your members know what to expect and when. There are several keys to an effective communications cadence:

1. Communications profile – Develop an understanding of communications preferences for each member. Understand when – by day of the week and time of day – each member wants communications from the club. Understand what media options each member prefers. Use it.

2. Communications calendar – Publish the communications calendar to enable all members to watch for the topics of greatest interest to them. Keep it. Ensure that members and staff are well aware of the schedule and have ready access to each communication.

3. “Big events” communications – For the most popular club-wide events, such as the member-guest, holidays with Santa, parent-child dance, interrupt the normal cadence to draw attention to these special occasions.

Be transparent about the topics which will not be disclosed. Some topics – such as matters of club member discipline, employee compensation and benefits, and contract negotiations while in process – are confidential and should not be disclosed. Make it clear to members that topics require confidentiality of board members … and honor that confidentiality requirement. Be understanding and consistent to demonstrate that the board seeks the openness many members desire except on these important points.

Be transparent about what topics the board will not divulge for reasons of confidentiality and employee/member privacy. Some members want to see board meeting minutes and the club’s financial information, such as the balance sheet and income statement. The board should develop and broadly communicate what information it will share with members and in what format. The board is well advised to remember that these reports should be considered confidential and, therefore, not readily distributed outside of the club membership.

Beyond members’ demands for greater transparency, effective boards want club members to be well-informed and engaged with their clubs. Private club boards must maintain highly effective, truthful and consistent communications with club members. The rewards are greater member satisfaction, member engagement and a restful night’s sleep for board members.

This article was written by GGA’s Henry DeLozier for The Boardroom Magazine. It appeared in the March/April 2024 issue.

CMAC Partnership Continues

The Club Management Association of Canada and GGA Partners Renew Partnership Agreement for Three Years

The Club Management Association of Canada (CMAC) and GGA Partners are pleased to announce a partnership renewal agreement for a three-year period. The CMAC Corporate Partner Program recognizes industry partners that share the values of CMAC and offer members support as leaders in the club management profession in Canada.

The renewal as a Platinum Corporate Partner will continue to showcase GGA Partners long-standing commitment to the professional club industry and CMAC in the categories of strategic planning, business intelligence, and people services. GGA will continue to support CMAC members by facilitating an Annual Club Industry Survey focused on trends and relevant club industry insights. Beginning in 2024, GGA will work with CMAC to conduct and deliver the Annual General Manager and Food and Beverage Compensation Reports of CMAC members.

CMAC’s vision is to create great leaders through excellence in professional club management and its mission is to promote and develop the profession of club management. The Association offers a variety of programs and services in response to member needs and expectations including the certification program leading to the Certified Club Manager (CCM) and Certified Chief Executive (CCE) designations. Access to career opportunities, and a forum for networking for COOs, GMs, clubhouse managers, food and beverage supervisors, golf superintendents, chefs, and other professionals involved in club management are also important offerings of CMAC.

“We are excited to extend our relationship with CMAC and its members as a platinum corporate partner,” commented Michael Gregory, a Partner and Managing Director of the firm. “As a trusted advisor to many of the top clubs nationwide, we have the ability to seamlessly integrate our brand with CMAC and provide value to its members through our research and people services contributions.”

“GGA Partners continue to illustrate their dedication to the professional club industry and we’re thrilled to continue working with their group as a platinum corporate partner for the next three years,” indicated Suzanne Godbehere, chief executive officer at CMAC. “As a long-standing corporate partner, the firm has provided guidance and valuable industry insights to our members and we look forward to working closely with Michael and his team.”

 

About the Club Management Association of Canada
The Club Management Association of Canada is the national professional association for individuals involved in the club management profession in Canada. Since 1957, the association has been supporting members with education, certification, networking and member events to facilitate them being the best in the industry. Members include general managers, chief operating officers, assistant general managers, clubhouse managers, golf superintendents, chefs, controllers, food and beverage supervisors, golf professionals, as well as students interested in pursuing a career in club management. CMAC professionals work at private, semi-private and public golf clubs, country clubs, city clubs, faculty clubs and recreation and leisure clubs.

CMAC is headquartered in Toronto, Ontario with over 650 members and 11 branches across Canada.

Michael Leemhuis, CCM, CCE, Master PGA, CMAA Fellow, Joins as a Partner of the Firm

GGA Partners, a ClubWorks company, announced today that Michael Leemhuis, M.A. Ed, CCM, CCE, Master PGA, CMAA Fellow, has expanded his role within the ClubWorks network and joined GGA Partners support the growth of the Executive Search Practice.

As a Partner at GGA Partners, Leemhuis will be focused on growing the firm’s executive search and people services practice. In his role, Michael will leverage the firms leading recruiting practices, along with his vast network of contacts to find and place top-level talent.

“Michael’s experience in the golf and private club industry will be a tremendous asset to GGA,” commented Managing Director and Partner Michael Gregory.  “His experience managing elite private clubs, coupled with his experience recruiting candidates for top clubs over the past five years, will help GGA continue to deliver the highest quality executive search services to clients.”

Leemhuis will continue in his role at ClubWorks as Chairman & Chief Executive Officer as the organization continues adding to its growing platform of leading service providers to the private club, resort, and hospitality industries.

Michael will be based in the West Palm Beach office. He can be reached via email at michael.leemhuis@ggapartners.com.

Jeff Germond, CCM, to Join GGA Executive Search Team

Jeff Germond, CCM, will join the GGA Executive Search Team effective February 1, 2024 after completion of his tenure as COO of Mississaugua Golf & Country Club.

Jeff’s experience encompasses all aspects of club management, from food & beverage to operations, finances and human resources. His vast knowledge of the inner workings of high-end private clubs and all aspects of food & beverage operations will benefit all clients who need to fill culinary and all leadership positions.

Jeff began his career as an Executive Chef with an emphasis on building and fostering high-performance teams. Over the course of his career, he had the opportunity to work at several of Canada’s premier clubs, including the National Golf Club of Canada, Hamilton Golf & Country Club and St. Catharine’s Golf & Country Club, among others. He is currently completing his tenure as the COO at Mississaugua, after which he will bring his experience and knowledge to GGA.

Jeff will be based in GGA’s Toronto office. As of February 1, 2024, he can be reached via email at jeff.germond@ggapartners.com.

Colin Burns, CCM, Joins GGA Executive Search Team

Many of you know Colin from his three-decade career as the General Manager at Winged Foot Golf Club. During his tenure at this top-rated club he played an integral role in hosting multiple major golf championships, including the 2006 and 2020 US Opens, the 2004 US Amateur and the 2016 Four-Ball Championship. He also oversaw more than $100 million in capital projects, including the complete restoration of both golf courses.

We are delighted to announce that Colin has joined GGA Partners and will focus on next-level executive search services for clubs seeking high-quality, long-term candidates..

Colin spent 30 years “on the other side” as a client of search firms, the benefit of which is a clear understanding of what makes a good search.  He has spent countless hours in board meetings which has provided the ability to identify both club and board room culture. He has an incredible network of professional contacts from which to recruit the right individual who views your goals strategically and has the knowledge of how to get there. Each of these attributes and experiences will benefit you in your search for the right individual to help your club succeed.

Colin will be based in Connecticut and can be reached via email at colin.burns@ggapartners.com.

5 Tips for “Yes” in Your Capital Call Communications

People fear change when they don’t understand the reason for it. And when they don’t understand the reason, they resist it.

In our work related to capital investment communications, we find that the vast majority of private club members understand and accept that it is their duty to leave their club better than they found it, with the caveat that the investment they are being asked to make is reasonable and necessary.

While obtaining a positive vote for your upcoming assessment is not guaranteed, getting members to say yes to being assessed can be much more achievable by following these 5 guidelines:

1. Communicate the Need

One of the keys to achieving a positive assessment vote outcome is to clearly communicate the need for the proposed upgrades. Whether your irrigation system is past its useful life and now costs more to maintain than replace or your casual dining area cannot service the demand or still has 1980’s decor, it is important to educate members about the need for the upgrades as well as the benefits that members will receive from them.

2. Engage Members in the Process 

Gone are the days when new amenities being proposed were based on the desires of a board member or two. Today, board members and management teams have adopted a more strategic approach to determining investments needed to ensure their club’s continued success. Club leaders are apt to rely on member surveys and focus groups as the starting point to understanding the need and the desire for capital improvements. It is a good first step, but not the only one. The most effective club leaders prepare preliminary plans and drawings with the understanding that once members have a chance to review the information, there will likely be a need for changes. We encourage clubs to present the plans in multiple meetings with small groups of members. This allows the facilitator to engage each member to hear questions and comments. This method allows the facilitator to control the flow of the meeting and ensure that one or two members are not monopolizing the meeting. Once all meetings have been completed, a recap of the key takeaways should be shared with all members.

3. Don’t Rush the Process 

Typically, the reaction to the introduction of major capital improvements and the associated assessment will be quite mixed. At GGA, we typically find that 20% of members will fully embrace the upgrades and 20% will be adamantly opposed to the plan. The remaining 60% need time to process the information and become comfortable with the prospect of the changes to the club and their budgets. That’s why it is vital to allow time for members to process the information, become comfortable with the plan and consider how it will benefit them. If you rush to a vote, there is a good chance the level of support needed will not be achieved. But if you take the time to communicate how you are addressing member concerns, answer member questions, provide plan updates, then ask for support, you will have a much greater chance of getting to that “yes” vote.

4. Develop an Equitable Payment Plan

The most senior members at clubs are least receptive to paying a lump sum assessment, using the argument that they will be paying for something they will not be able to enjoy for long. To ensure the capital improvement payment plan is not the deterrent to support, many clubs have moved to a “pay as you go” program whereby a small portion of the total assessment is paid in a lump sum, but the remaining assessment amount is paid monthly or semi-annually over three to five years. Not only does this payment option make it more manageable for all members, it also shows that those who will be enjoying it for years to come will assume more of the burden of paying for the plan.  

5. Bring Members Along on the Journey

Just like you, members are overwhelmed by the sheer volume of information that bombards them every day, which means that your capital investment communications need to work harder than ever to break through the clutter. Efforts to keep members informed along the journey to improve their experience should carry a consistent theme, be repetitive and as short as possible.

A clear, consistent communications plan to educate and engage your members in the process of planning your capital improvements will ensure that fear is not the deciding factor of your club’s future.

Interested in learning about GGA’s Capital Call Communications services?

If you would like to learn more about how we can help your club execute a capital call, please contact us.

The Art of Influence – Executive Presence in the Boardroom

What do people think when you walk into a room, open your mouth to speak, or engage with others? Are they excited for what is about to happen? How do they see you, and how do they experience you? What happens as a result of your presence?

Senior leaders are increasingly discussing Executive Presence – what it is and how to have more of it. No matter how you define it, it has much to do with how we influence others.  To be clear, Executive Prescence is not about how many followers you have on your social profiles but rather, how you connect, communicate, care, and impact others.

In his recent book, “The Gift of Influence”, Tommy Spaulding reveals how we can be more mindful and effective in wielding influence throughout a lifetime of connecting with others. He outlines research that suggests the average person will influence up to 80,000 people in their lifetime – about the size of a football stadium. He suggests that “If you commit to living a life of positive influence, you will never look at your personal and professional relationships the same way again.” “Leadership is not about influence. It is influence.”

Influence has everything to do with leading in the boardroom, the staff room, and beyond. Here are some considerations on how to elevate your presence, your influence and your life.

Trust – The Strongest Foundation

All relationships start and end with trust. Think about the best board relationship of your career or greatest team you have ever been a part of. What was the level of trust?

If you want to build trust with others, make sure you are trustworthy yourself as well as trusting of others. This doesn’t mean establishing blind trust without questioning. It means that we always have the intention of trust.

Years ago, author Stephen Covey likened trust to an emotional bank account. As with a real bank account, we want the balance to be at its highest. And so, it is true with a trust account. When the balance is high, the relationship is easy, more productive, and positive influence occurs. On the other hand, a low trust account breeds an environment of fear, a lack of engagement, negative influence and limited results.

Ensure you are making more deposits than withdrawals into your trust account with others: Be upfront. Be clear with your intentions. Do what you say you will do. Find the answers. Show you care. Acknowledge others.

Communication – A Main Ingredient

Most great influencers are extraordinary communicators. They understand that the words they say are powerful, and the way they say them is even more.  They get to the point – and they have one! Brevity and clarity are their style. They say what they mean and mean what they say. They speak with good intentions. They have the good of the other person and the organization in mind, not themselves. A great communicator uses the language of vision and possibility.

In the leadership development practice, we have a saying “Say Less. Ask More.” The best leaders exercise the skill of listening more and speaking less. They are curious. They don’t have all the answers and genuinely seek them out. They ask powerful questions that engage others, explore solutions, and bring about growth. The focus shifts to others, not themselves.

A positive influencer also knows how their body language and voice add to or detract from their impact. They are purposeful yet speak with integrity and authenticity. They read the room, they remain calm under pressure, and they connect and engage others. Their eye contact, facial expressions and gestures are appropriately warm and powerful at the same time. They influence.

Humility – If You Don’t Have It, Find It

No question, you need to be competent in your role, but do you need to be the smartest person in the room?

Positive influencers own their competence, yet never let their competence own them.

The most purposeful leaders have the gift of humility. They let the results speak. They always give credit where it is due. They show up as competent, kind, caring leaders, and they often get amazing results. Their reputation speaks for itself, without their own input. They are keenly self-aware and always learning and growing.

Are you aware of how you “land” with others? Do you speak the language of team or individual?   What message are you trying to send? Be acutely aware.

The great news about executive presence and influence is that they are learned skills. Start where you are. Dive in. Get feedback from those that you trust. Acquire some training or coaching. Change some habits and see how your positive influence soars – in the boardroom and beyond.

Interested in learning more about GGA’s Leadership Development and Coaching services? Contact our team.

Inflationary Impacts on Budgeting

Since 2012, the Federal Reserve has targeted a 2% inflation rate for the US economy; however, recent inflation rates are currently hovering closer to 6%, after averaging 8% in 2022.

These ever-fluctuating inflationary rates are felt deeply in clubs, who are heavily impacted by increases to personnel costs as well as food and beverage and other key supply purchases.  Club leaders are expecting continued high inflationary increases to key departmental expense budgets, including expected increases of 7.3% to payroll expenses and 6.2% to non-payroll expenses.  

Unlike more traditional industries, where pricing strategies can be more nimble to reflect volatility in costs, clubs are generally bound to operate within the confines of an annual budget cycle, establishing member dues rates once a year and leaving limited flexibility to adapt or react as economic circumstances change within a given period. Clubs get one chance to get it right for the year, and live with the consequences of the assumptions and decisions made during budget-time.

Clubs can be best-prepared to addressing these inflationary challenges by being proactive with their budgeting strategy to validate the inputs, and ensuring that they have a robust communication plan in place to support the outputs.

Understanding the specific factors that will impact budgetary line items is the first step towards creating an effective budget, and the key factor that will impact your ability to clearly communicate any resulting pricing changes. Breaking down the specific inputs which have the most significant impact on overall membership dues, whether that be payroll, cost of goods, or other operating items, and getting a clear line of sight to the factors impacting their increases will allow you to budget effectively and provide an opportunity to communicate those reasons clearly, increasing the likelihood of membership acceptance of the changes. For instance, rather than applying a consistent inflationary rate across all line items, consider the specific regional and cost-specific information that will impact individual line items.

In line with the budget for the year, be sure to prepare a robust communication strategy to prepare members for the upcoming changes. Leverage external data points wherever possible to support the assumptions you are making, and ensure you highlight the wins wherever you can. As the cost of labor goes up, the relative cost of technology to replace that labor goes down. Consider opportunities to leverage technology to supplement / support (not replace) human capital and share that with your membership.

Whether investing in technology to supplement your variable workforce, altering your menu design to improve margin yields, or ensuring that your labor costs are keeping up with regional trends to secure your workforce for the longer-term, the more you can communicate with your membership, the more confidence you can have when it comes time to implement the impact of these changes via dues increases.

Rather than reducing service or programming offerings, the vast majority of clubs have responded to increasing costs by passing along these inflationary increases to their members.  While inflationary pressures are certainly widespread, and members can be expected to be generally receptive to the idea of resulting cost increases, the more diligence that can be demonstrated by management throughout the budget process, the greater the membership buy-in is expected to be, and the less the membership resistance you can expect to hear.

Inflationary impacts are certainly being felt far and wide throughout the industry, and can make club budgeting challenging. Being proactive with your budgeting strategy, knowing how to respond to inflation,  and communicating clearly and effectively with members can help to mitigate effects that result from inflation.

How GGA Partners can help your club address inflation

  • Investigate ways to improve your cash flow.
  • Explore ways to reduce your debt payments.
  • Make suggestions to make your budget more inflation-proof.

Contact us today to discuss how we can help.

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