Anatomy of a Private Club Turnaround

At the first CMAA World Conference I attended, I bumped into a nice guy. He was exuberant. In fact, he may have been the most interesting character I met at that conference in 2015. He was certainly the friendliest. Later I came to find out he was not only nice, but certifiably so. You see, the letters after Michael’s name, CNG, stand for “Certified Nice Guy.” He’s self certified by the way. It’s a classic example of who Michael is – a maverick. I mean that in a good way, because I proudly consider myself to be one as well. It’s the mavericks in any industry who drive real change.

Michael has consistently driven change in the positions he’s held. After managing two Platinum Clubs of America®, Exmoor Country Club and Thunderbird Country Club, he began a successful interim management business serving clubs such as Hallbrook Country Club, Mission Hills Country Club, Oakbourne Country Club and Saddle & Cycle Club. In many cases, Michael conducts a nationwide executive search for a permanent GM/COO after doing the heavy lifting to set up the entire team for success.

Since meeting Michael, I have had the pleasure of having him on Private Club Radio on a number of occasions. His episodes are consistently the most downloaded in our catalog – and for good reason. He’s insightful and approaches problems from a unique perspective. Recently I had the opportunity to interview Michael about what it takes to turn a club around. Below is the transcript of that conversation. Buckle up and enjoy!

Michael, you’re an expert at turning clubs around. What are some common problems you see clubs facing these days?

Many clubs have somewhat unknowingly strayed from their own Mission Statements. Or, conversely, held too closely to them. There has to be a conscious commitment to balance between these two extremes. Here are a few thoughts that come to mind.

1) Club traditions and unique culture is very important. But — keep in mind: the past is valuable as a guide post — but, very dangerous if used as a hitching post. Staying in, or longing for, the past does not necessarily help run the business of the club today or to attract tomorrow’s potential members.

2) Over the past decade the definition of remaining relevant to the lifestyle to a new generation of potential members has evolved and changed dramatically.

3) Approaches to club governance (Board) or operations (Management) that exist solely for historical reasons, which are no longer relevant in today’s world and lifestyles — keep you locked in an orbit around a world that no longer exists.

Understand that the future of a club is based upon consistent member experiences that satisfy the quality and service expectations of an ever changing marketplace to the point that they will excitedly recommend their club to their business associates, family and friends.

Those who ask if the private club industry is changing are way behind the curve. Why? Because it already has changed. And, it will never return to what it was in the days where all the Board had to do was make simplistic popular policy adjustments every so often and all Management had to do was to occasionally make “low hanging operational fruit” decisions. Those days are gone.

BUT —for those clubs resourceful enough to make the strategic policies (Board) and operational (Management) decisions necessary to reflect the times — there can be plenty of good days ahead.

I have to imagine that very often the problem a club THINKS they have is not exactly the problem the DO have. When you walk into a club that needs help, how do you go about finding where the problems and inefficiencies lay?

Answers are found by listening. I do lots of that. I’ve never learned one single thing while I am talking. Therefore, I first listen to what people have to say. What is on their mind? Where is their heart at? What concerns to they have?

ALL problems in any business model, ultimately have a direct link to “people problems.” Also, keep in mind that virtually every member-owned private club (when it comes to Net departmental operations) does not have a viable business model. (To prove it – that’s why members have to pay dues!)

Nonetheless, prior to my arrival on site, before having the opportunity to personally interact with all the key people (staff / management / board / committees) — I thoroughly review current and historical financial data — digest the minutes for the past year of all board / committee meetings and become familiar with their bylaws and club rules. I digest the past year of club newsletters and review their web site content and appearance.

This enables me to “hit the ground running” — in preparation before getting down to what truly matters. What matters, is listening and then earning the confidence of all the people involved.

Financial data, minutes from meetings, and club newsletters don’t change things. PEOPLE change things.

Soooo — to answer your direct question as to how I go about finding where any problems and inefficiencies are — while I do my homework ahead of time — my focus is on the people at the club. All of them!

Why? Just ask yourself this question: “If ─ by magic ─ I had all the right people in all the right places, who were all really focused and all excited about what they do ─ what then would happen to all those “problems” of ours?”

The short answer is that they would ALL go away.

Can you share any warning signs that boards should look for?

Yes. Here is just a random sampling. To all board members out there — if you find your meetings:

Rehashing again and again the same old dead issues for hours upon hours … with seemingly nothing ever getting fully resolved.
Finding a need to spend time in “Executive Session” in order to delve deeper into “operations” while the GM/COO is out of the room. (Yikes!)
Committee chairs coming woefully unprepared to truly present actionable (fully vetted at the committee level) recommendations that the board can confidently act upon.
A GM/COO either not expected (of not qualified) to be near the top of every agenda who consistently provides proactive meaningful input that sets the tone for the rest of the meeting. (Including a succinct “Executive Summary” emailed prior to every meeting.)
Agendas that are, truly, redundant and all but meaningless.
Waaaaay too much time spent dissecting the past 30-day operating data (particularly F&B) rather than focusing on the long-range future of the club, the best polices to protect club traditions while still reflecting the times, and in supporting top management talent.

Now then – having pointed out just a few things above — all are directly related to having (or not) — the right people in the right places.

I oftentimes find clubs allowing onerous debt to be kicked down the road for far too long. This is particularly true when initiation fee income is no longer what it was years ago. Add this to repetitive annual Board decisions approving what amounts to “artificially” low dues levels and high levels of deferred maintenance. (A potential death spiral if not addressed.)

Quite often, potentially strong board and/or management performance is compromised because they “don’t know what they don’t know.”

By working together, light is shed on a viable plan moving forward. It is all about the people. (Not financial data. Charts. Reports. Graphs. Projections.) It is having people know their roles in getting results. Favorable data, etc. is a byproduct of knowing what you are doing and ensuring the right people are in the right places. I create an environment where this happens.

Once you’ve identified any problems, what comes next?

Let me first share “The CNG Universal Mission Statement” that I believe every club can use as an inspiration. Just seven words: “Our member’s very favorite place to be.”

Imagine if the entire leadership team buys into a Mission Statement like that and then retools itself where every policy and operating decision is put through the filter of enhancing the success of the mission or not! Every SOP, leadership and staff roles, rules, bylaws — EVERYTHING — needs to contribute to a master plan of being: “Our member’s very favorite place to be.”

That’s the plan moving forward. Now, here are the two specific areas where people bring it to life:

1) Staff / Management / Operations:

Positive leadership must consistently steer in the direction of:

Making sure we have the right people and putting them in the right places.Developing, motivating and mentoring them. Culling the herd when necessary.

Building and maintaining exemplarily management teams is accomplished by identifying talent, mentoring them, and monitoring accountability for terrific results with a style of leadership based upon positive support and empowerment, rather than fear or micro-management.

2) Board / Policy / Governance:

Here we get into:

Updating bylaws and club rules to reflect the times and being relevant.
Recasting lines of communication, authority and accountability.
Creating position descriptions for board officers and committee chairs.

Behind the scenes stuff that REALLY matters and oftentimes needs to be cleaned up in order for the leadership team (Board and Management) to truly deliver day-to-day member experiences that fuel retention and recruitment to solidify the future of the club.

Every decision and policy must ultimately support the mission at hand: “Our member’s very favorite place to be.

What’s the “secret sauce” of getting staff and members to buy into your plan as an interim GM?

It’s not my plan. It’s theirs! I just provide the professional expertise and personal care in helping them identify what their mission is and their plan to get there.

I simply do not believe in having a bad day and instead engage everyone on a personal level while consistently bringing sound business savvy & financial acumen to the table.

I revere the fact that the business world spins on an axis of accountability. Therefore I demand from myself the expertise necessary to create, present, gain ultimate approval — and then monitor unwavering adherence to both Operating and Capital budgets. It’s just the way I roll.

I quickly assess the level of talent available and then focus on creating an all but palpable positive energy that sets everyone up for success. Sure, I create reports, organization charts, flow charts and PowerPoint presentations. But, what I really do is spend time with people, build relationships and set up the team for success.

BTW – every situation is unique in what specific factors really would make the club their member’s very favorite place to be. One size does NOT fit all. However, once the board and executive level management agree on the mission at hand — we simply map out their plan, gain momentum and don’t look back.

Secret sauce? Here are the ingredients that, when mixed with expertise and care, creates the recipe for a successful mission:

Staff Management / Operations / Board / Policy / Governance.

Gabe, I’m flattered that you began by suggesting that I am an expert at turning clubs around. But, the truth is that I don’t turn any of them around. Instead, my expertise is more in listening, filling voids where “not knowing what they don’t know” is an obstacle, creating an environment conducive to success, and then getting out of the way. It is the rejuvenated board / management team that turns things around. Wooo-Hoooo!