Q: Why do private clubs need strategy?
A: Roughly half of America’s private clubs operate with a strategic plan, according to a 2014 National Golf Foundation study of private clubs. Among the 32 percent of clubs surveyed that defined themselves as “financially sound,” nearly three-in-four (73%) depend on a strategic plan. The top performers use strategy to guide the board.
Properly drawn strategy identifies and defines the club’s strategic goals and objectives. The first question most experienced club managers ask is “What do we want to achieve?” The answer is found in the board’s goals and objectives. When the club has no destination, one road is as good as another.
Three of the most significant responsibilities of a board of directors are to govern effectively, plan and focus strategically, and manage the balance sheet. These are strategic responsibilities. Immediately after the “big three” are fiduciary duties involving care and loyalty to the benefit of those served (club members). Good strategy ensures that the club’s leaders attend to these responsibilities faithfully and consistently as a matter of sound governance.
A reliable strategic plan consists of several key elements: mission, vision, core values, goals and objectives and business risk are always on the short-list. Market analysis, financial planning, organized management and governance planning are also essential to good strategy. So is a balanced and objective understanding of the competitive landscape, which is a part of a thorough market analysis.
Most club leaders get bogged down in formulating mission and vision statements. It is good to remember that the mission statement describes what the club is and does. A vision statement describes what the club stands for and represents. In developing strategy for private clubs, beginning with broadly shared goals and objectives helps initiate the strategic planning process.
Servant leaders—be they club managers or board members— are motivated to do things. Often, these directors begin discussing strategy and then stumble into problem solving, which is tactics. Therefore, best practices suggest that board members focus on governance, strategy and the balance sheet.
Solving operational problems and implementing tactical solutions is the general manager’s duty. He or she is obligated to identify, address and resolve operational matters in the course of business. Doing so helps the board maintain its focus on strategy. “We’re a private club, for goodness’ sake, this is not some corporation!”
Following are several strategic issues that should be in the crosshairs for most private club boards:
- How does the club sustain membership participation and engagement? These factors are measured in membership growth and retention.
- How are changing market conditions impacting or threatening the current and future economic security of the club?
- What economic needs must be addressed in order to sustain the club with current facilities, programs and business practices?
- How will the club fund its future capital replacement and improvement needs?
- What will the club be and do in five years?
Why does the club need a strategic plan? The club is a corporation and the people who serve on its board are obligated to see that it functions like a business—to the extent expected and required by the club’s members.
Henry DeLozier is a principal at Global Golf Advisors, a Legacy Alliance Partner of the National Club Association. GGA serves club management professionals from offices in Toronto, Phoenix and Dublin (IR). He can be reached at [email protected] or visit www.globalgolfadvisors.com.