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The Secret to Club Success: Trends in Club Governance and Management

As we look to the future of the private club industry, we see two interconnected issues having the most impact of club success:

            How clubs are governed?                               How clubs are managed?

Without effective leadership in both areas, clubs will languish and slowly decline. The days of member waiting lists to join golf and country clubs are over except for those few prosperous cities and world-class private clubs. So, what do we see happening across North America that shows how to achieve the necessary leadership at both the board and management levels?

Providing a high quality, successful private club today is no easy task. The club offering has to be in sync with a membership’s needs. The region has to be financially strong so enough members can afford to belong. The leadership must have a clear understanding of the club’s purpose if it is to achieve it. In simple terms, a club must have a strategic plan like every successful business has and then be committed to achieve it.

Effective governance is probably the biggest challenge for continuity in club success as constant turnover in club presidents and board members is a perfect recipe for ineffective governance. How can anything meaningful get accomplished in a continual game of musical chairs at the board and committee levels? This must be fixed.

Managing clubs is challenging in situations where clubs do not have clear strategic direction from their boards on what they want to achieve. Boards often report that club managers don’t have the right skills when the boards themselves have not provided a clear idea of what they want the clubs to be.

The boards of successful clubs of the future must have a close and respectful working partnership with their GM/COO. Boards need to set and approve the mission and vision for their club. The general manager is then responsible to implement and fulfill the promise. It is necessary for boards and clubs to have a strategic direction. It is equally necessary for managers to then think and manage strategically. They must employ a Strategic Management Process in managing their club’s day-to-day business and more importantly, to achieve their club’s overall strategic mission and vision goals.

The Strategic Management Process

Goal Setting:

The vision and goals of the organization must be clearly stated, understood and agreed upon by governance, membership and management. The processes to achieve the goals and objectives are the managers to implement.


Progress must be measurable, in order to be managed. Managers must establish systems to measure accomplishments that are easily reported and logged.  

 Strategy Formulation:

Once the analysis is done, the club then formulates their strategy of where the required financial resources will come from and that the appropriate and capable staff is in place to achieve the desired goals.

Strategy Implementation:

After formulation of the strategy, the management team executes the plan following the road map specified by the strategic plan and process. 

Strategy Evaluation:

We’ve now come full circle. The systems of measurement (Analysis) is now providing progress reports, allowing for goals, strategy formulation and implementation to be re-adjusted; all focused on the club’s targeted goals as they migrate and are re-evaluated year to year.

The challenges in club management are becoming severe for the mid- to low-level clubs that are struggling to exist in today’s challenging world. Their focus, unfortunately, is year to year, or worse, month to month, eliminating the luxury of the opportunity for strategic long range planning and a strategic management process.

Are Management Companies the Answer?

The 1,000 top-level clubs for the most part are doing fine with long histories of stability, strong financial operations, and having strategic plans, strong membership numbers and the financial resources to hire the best staff at all levels. These clubs in the top quarter of the private club world will continue to prosper. But what about the bottom quarter of clubs struggling to make ends meet and facing significant competition from each other and from for-profit recreation and dining offerings? These are the clubs that need help to survive and prosper. Their boards are handing operations over to management companies. The club manager becomes a secondary decision maker as the out-of-town management company makes the decisions on important operations issues. The club board becomes much less involved in operational issues (a good thing) but also loses control on quality issues.

As the outside management company gets more and more involved in the club, the members’ club becomes the management company’s club. Ultimately the club loses what made it special when the club prospered and becomes more of a commercial venture as the management company is rewarded for how much profit it can squeeze out of the club’s operations. However, this outside management trend in clubs is accelerating as club board members are giving-up on trying to both govern and work with their existing management teams.

For the bottom quarter of the club industry, something is not working correctly, and the private club industry must do something about it. Yes, the management company option can be a short-term fix for a troubled club. But from a quality delivery perspective, the incentives are wrong in trying to run a private club as a profit-making entity with someone other than the members benefiting from the profit. Fifteen to twenty years ago, a number of southern clubs were taken over by the management company trend until members complained and took their clubs back.

Governance Trends

What are the successful trends in governance and management? First, success starts with clubs having a viable and current strategic plan that is developed within a board and manager partnership. Every board member accepts the plan and agrees to follow it, and the manager knows he or she can use it when making decisions. It is interesting to note that while good clubs have and follow their strategic plans, they usually develop them for achieving major goals (like a major capital project). But once this project is achieved, few on the board pay much attention to the other strategic goals that assure a club’s success. This is where a club manager must continually pursue the strategic plan. Fortunately, more and more clubs today have and follow strategic plans. The most recent McMahon Pulse Survey found that 60 percent of clubs today have and actively follow a strategic plan (83 percent of this group update it annually). The larger the club and more successful it is, the more likely it has a current strategic plan.

Next is the selection process for nominating and electing board members and officers. Selecting the leadership is probably the most important task in the board governance. Clubs with good nominating procedures for the board can elect capable and dedicated club members who will commit to serving. The position of board president is by far the single most important characteristic of a successful club. A nominating committee selecting board members has to know that anyone placed on a club board could someday be the club’s president. The trend for the best board nominating practice is to select only one capable and dedicated member for each board position. The temptation to run multiple persons for each board opening may help lose a club’s strategic direction and discourage truly capable members from being willing to serve. Without attracting the most capable members in a membership, the club suffers in its leadership.

It is also important to be sure that serving on a club board is more than a worthwhile gesture of giving back. Board service should be enjoyable. Good friendships happen. A feeling of accomplishment is achieved. If board service is drudgery, no one will want to serve.

The Management Team

The other successful ingredient for club success is their management teams. Great clubs have independent club managers who lead and have the education, management skills and political savvy to work with ever rotating board members and presidents. They know how to follow a strategic blueprint for achieving club success. But a challenging issue for clubs today is finding the highly-qualified managers to run the complex private club models that are evolving. Without stability in the board itself and a strong president to guide it, managing a private club can be a very hazardous profession. This is where a manager’s political skills are important.

How are the best managers created? Almost always it is through a mentoring process of working for a top manager in one’s career who teaches the up and coming star things you can’t learn in a textbook or seminar. An example of how the best managers mentor future stars is seen in award-winning manager Ted Gillary, CCM, CCE, ECM from the Detroit Athletic Club, who has nominated three winning Rising Star managers at his club. For a club to be truly successful with the best possible management team, it always starts with having a well-trained, intelligent, enthusiastic and well-mentored independent manager who can think and manage strategically. All the best member-owned private clubs are managed this way. However, you seldom find a truly top level private club managed by a management company. A management company may well save a failing club from financial ruin, but its strategic vision may change, resulting in the loss of member control and possibly a different member experience.

Here are the trends for maximum club success focus on how to achieve true success:

·         Have and follow a current strategic plan.

·         Have effective governance that elects capable presidents and boards, and then knows how to let managers manage.

·         Assure that managers know what is expected of them and then let the management team do its job.

·         Find ways to enhance effective governance and management skills.

There is no substitute for a true partnership of board and capable management working together for achieving club success. But remember, it all starts with having a good strategic plan to follow.

Club Trends Winter 2017