In the private club industry, there are generally two distinct views on senior management succession planning: management’s view and the board’s view. They are frequently divergent in ways neither party is eager to talk about; though, also are direct, strategic, caring and in the spirit of the greater good of the organization.
In any business, when there is a change in senior leadership, it is a point of inflection and reflection. Certain stakeholders view it as a moment when change will occur while others are deeply concerned about culture change, business direction, reporting relationships and at the most base level—how will it affect him or her personally.
Succession planning in small clubs is especially difficult for several reasons. Clubs are generally poor at investing in human capital so there is no deep bench within the organization that has been cross-trained and nurtured. The costs associated with carrying that level of talent requires t
raining and time and can be viewed as too expensive.
Also, very private, insular, deep culture clubs are generally concerned about injecting “outsiders” into their leadership teams. They are concerned about directional change and “culture shift” that may occur through leaders who may not understand the subtleties that make their club special in members’ eyes. In these environments, culture trumps business needs.
After weighing all the factors, a succession plan will look like this:
Build a Solid Game Plan that is as Explicit as Possible.
The key to a successful transition is to start building an explicit plan from the start. Consult with your Search and Selection Committees. Don’t make the mistake of designing a succession plan around one individual. As boards and people change, so does the club’s direction. When heading down this path, work towards implementing clear plans that all stakeholders truly buy into—the board, members, management and, most importantly, the heirs apparent. The objective is to be “business as usual” up to the point of transition. While it might seem obvious to build the plan around one person, in small businesses it is a best practice to build a bullpen of talent where the successor can emerge based upon talent, success trajectory and business needs. This is an especially difficult challenge for clubs.
Create a Timeline with Clear Target Dates.
Before you identify or confirm a succession candidate, commit to a target date. This is only fair, after all—it’s hard to keep potential candidates waiting indefinitely. Setting clear goals and milestones, and working backwards from there allows you to break things up into manageable steps, and enables you to have a more effective (and actionable) plan. Don’t underestimate the value of targeted communication to each stakeholder group. The plan is destined for failure without a certain level of buy-in from each group. Be prepared that some talent will leave of their own accord during this process while others may have their stock value diminished based upon performance or perceived future performance.
Understand the Organization Today and How it May Look in the Future.
Identify crucial roles in the club that will need to be filled and understand the political landscape. Invariably when there is a transition in senior leadership, the landscape and players may change. Depending on how the incumbent leader has scaled the org chart, different “offsetting” skills may be required of the current and future management team. Consider the many different roles that exist, how to leverage existing talent, and where to add and align supporting talent based upon new goals. How do you fill the position vacated by the new leader? What is the cost impact? Are the right people in the right seats on the right bus?
Define the Competencies Required for These Roles.
Decide what skills are required to fill the roles that you’ve identified. An absolute best practice in every executive search is the creation of a detailed candidate specifications list, a job description, and most importantly, a list of critical success factors. Once you’ve established these, you can assess talent against these criteria. Some of the best talent is found internally but is untested. There are several excellent online testing programs that can identify skills in internal talent provide skill training and assess executive-level thinking.
Prepare All Stakeholders.
It is critical that the three major constituencies—membership, staff and management, and the board and committees—align as much as possible. This is the “holy grail” of a successful transition. Over-communicating during this period is critical to success.
Train and Empower Potential Successors.
While many lament that the club may not have a candidate who’s ready to jump into the senior role, the fact is that there’s no such thing as a “plug and play” successor. Even the best candidates require some technical and cultural training to fully prepare them for their new role. The true litmus test is empowerment. Ultimately, the successful candidate can’t be given only a portion of the role—he or she needs to dive in head first.
Implement “Measurable” Goals and Expectations.
Use a scorecard and dashboard systems that apply metrics to track the health of the club and the performance of the new senior executive. They need to be specific to the new executive and specific to the club in the moment and short term. These metrics include month-over-month growth, member satisfaction ratings, “units” under management per employee, and new initiatives and impact points that support the club’s mission and vision.
Having data such as this holds people accountable, measures success, and gives peace of mind when the board and others review the numbers. Quantifying performance also helps to reduce the emotion around performance assessment.
It’s less about the plan itself, and more about the result. Every succession plan will be different, and should be designed around the needs of your club. The best plans should be able to flex and change along with your club’s needs, remaining vigilant to culture and tradition. n
Dan Denehy is president of DENEHY Club Thinking Partners, an executive search and management-consulting firm that has positively influenced the member/guest experience at more than 200 clubs and resorts on more than 400 projects. He can be reached at [email protected]. Learn more at www.denehyctp.com.