By Jim Butler, CEO - Club Benchmarking

Originally published by the National Club Association in Club Director Magazine, Fall 2019

Jim Butler CEO Club Benchmarking“Those who cannot remember the past are doomed to repeat it.” Those words from philosopher and poet George Santayana have been on our minds lately as we work with boards across the country, helping them prepare their clubs to withstand future economic uncertainties. While the U.S. is currently on a record-breaking streak of economic expansion, history tells us that the next recession is inevitable.

Recently, we came across a 2014 article in the McKinsey Quarterly that captured our attention with its relevance. “Building a Forward-Looking Board” was written in the wake of the 2008-2012 economic downturn. Reflecting on the demise of companies that succumbed during that period, authors Christian Casal and Christian Caspar cited “negligent, overoptimistic, or ill-informed boards” as a major contributing factor. They observed that governance suffers most when “boards spend too much time looking in the rear-view mirror and not enough scanning the road ahead.” That condition, in our experience, is endemic in the club industry.

Changing Club Dynamics
The club industry has undergone fundamental changes as a result of both the economic downturn and the market’s transition from Baby Boomers to less golf-centric Generation Xers. Member counts dropped due to decreased discretionary spending and a shift in the interests of prospective members. Clubs once focused solely on golf were forced to reevaluate their culture, traditions, programming and infrastructure in order to remain competitive.

Club leaders who recognized the impact of those societal changes were compelled to break their focus on “the rear-view mirror” in order to develop more forward-looking strategies. Some have been successful, but for many clubs the evolution has been difficult and slow. The upshot of the article by Casal and Caspar is this: Building a forward-looking board requires a clear roadmap if current and future leaders are to function as a truly strategic governing body. In the club industry, boards ready to lay a solid foundation for the future should consider the following steps:

  • Evaluate and Re-Center the Board Agenda: If agendas focus on operations and the income statement’s budget vs. actual (rear-view mirror) rather than strategic (scanning the road ahead) it’s time to make a change. Make time in every meeting to review the strategic plan, evaluate risks and opportunities in the local market and assess the effectiveness of your governance model.
  • Connect Strategic Plans to Operating Business Plans: A strategic plan not directly tied to the club’s operating business plan will wind up gathering dust on a shelf. The most effective plans identify where you want to go AND how you’re going to get there.
  • Ingrain Balance Sheet Focus in the Boardroom: Board turnover necessitates repetition. Every board and committee orientation should include an introduction to the club’s balance sheet and those metrics should be revisited on a regular basis throughout the year.
  • Develop a Forward-Looking Capital Plan: Sustainable financial success is rooted in the capital ledger and manifests on the balance sheet as property, plant & equipment. Clubs must have a comprehensive (including an up-to-date Capital Reserve Study) and accurate capital plan that assures future capital resources meet future capital needs. Seventy-five percent (75%) of clubs in the industry are not generating the capital necessary to properly maintain and re-invest. The shortfall of capital must be addressed prior to the next recession.
  • Monitor the Competitive Landscape: Scanning the road ahead requires a clear understanding of your local market and the external factors impacting your members’ connection to the club. Introduce reliable business intelligence into the planning process to promote informed decision-making and stimulate strategic discussions.
  • Partner with Industry Allies: The business of running a club has grown increasingly complex and boards are often faced with issues outside the skillset of volunteer leaders. Invest in partnerships with service providers and associations like NCA that offer the club-specific resources, expertise and experience to support you on your path to strategic leadership.

Jim Butler is a recognized leader in data science and academic research. Serving more than three decades as a professional club manager, he has a wealth of operational experience and a proven track record in real estate sales and capital improvement and renovation in gated communities. Jim welcomes your questions or comments and he can be reached at jbutler@clubbenchmarking.com 

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by Steve Mona

Over the course of my 39-year career in the golf industry, I’ve earned a reputation as a guy who likes to stay busy. At the end of 2018, when I stepped back from my role as CEO of the World Golf Foundation, I accepted a new position as Executive Director of We Are Golf and senior advisor to new WGF CEO Greg McLaughlin. This summer, I gained yet another opportunity to serve the industry I love when I joined the team at Club Benchmarking.

Steve TagI’ll be wearing two hats, as a member of the Club Benchmarking Board of Directors and as their newly minted Director of Governance & Leadership. Since the Club Benchmarking announcement came out, I have received a flood of calls and emails. There have been plenty of congratulations, and more than a few people expressed curiosity about what I had planned for this next chapter in my career. Could the serial CEO they knew really be a data geek in disguise? As it turns out, the answer is yes – I don’t think I saw it coming myself, but it’s a great fit and I couldn’t be more excited about it.

The genesis for my involvement with Club Benchmarking was meeting Jim Butler at Florida Golf Day several years ago. Jim, who was General Manager of Grey Oaks Country Club in Naples at the time, represented the Florida Chapter of the Club Managers Association of America, and I was CEO of the World Golf Foundation, the group that led the organization and execution of Florida Golf Day. Jim and I worked together closely for several years on both Florida Golf Day and the establishment of the Florida Golf Alliance

Around that same time, I was introduced to Club Benchmarking Founder Ray Cronin at the National Golf Foundation’s Golf Business Symposium in Chicago. Ray was rapidly expanding the impact of Club Benchmarking at that time and I was impressed with his grasp of the essence of what made private clubs successful. In January of this year I ran into Jim again at the PGA Merchandise Show in Orlando. He had transitioned to the CEO role at Club Benchmarking in late 2017 and as we discussed my own transition from the WGF, he wondered if I might have interest in potentially joining the Club Benchmarking team.

Months later, I met Ray and Jim for dinner at TPC Sawgrass in my hometown of Ponte Vedra Beach, FL. The conversation covered a range of issues, pertaining to the golf industry generally, and to governance challenges faced by volunteer leaders in a not-for-profit business specifically. That evening, a lightbulb went on for me. Joining Club Benchmarking would allow me to apply my years of studying governance and leadership in the nonprofit sector to the advancement of strategic governance in clubs through adoption of data-driven leadership. Over the course of the next few months, we read, studied and worked together to create a forward-looking plan for addressing and advancing the practice of governance in clubs.

One of my first assignments with Club Benchmarking was to author an article for the Fall 2019 issue of Club Business Magazine, a collaboration between Club Benchmarking and the National Club Association that carries the tagline “Insight for Strategic Club Governance.” In that article, I outline a seven-step process of governance that will help private clubs create an optimum governance structure for the Board of Directors and chief staff executive. I will share each of the seven areas, along with practical examples of how they may be successfully implemented, in upcoming posts in this space.

I also will show how the most important issues facing the golf industry can be understood and applied for the benefit of private clubs, using data as the foundation for my conclusions. The work in which I have been deeply involved over the past decade in the area of diversity and inclusion will form the basis of much of my commentary. I look forward to taking this journey with others who are vested in the success of private clubs. Our need to connect with like-minded people has never been greater. Few institutions provide that opportunity better than private clubs.

Steve Mona 400Steve Mona's career includes leadership roles with the Northern California Golf Association, United States Golf Association, Georgia State Golf Association, World Golf Foundation and Golf Course Superintendents Association of America. Both Golf Digest and Golf Inc. magazine have recognized him as one of the "Most Powerful People in Golf." A native of New York, Mona earned a bachelor’s degree in journalism from San Jose State University (CA). Steve invites (and appreciates) all comments, even those that challenge or disagree with his thinking. He can be reached via email at smona@clubbenchmarking.com 

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