Data is critical to effective club governance. It can provide key information to help clubs determine the best course of action and avoid conjecture that can produce negative results. Over the last handful of years, my focus has been on understanding the club as a business system. Like any business, clubs have business models that should be understood by their leaders.
Case Study
At Interlachen Country Club in Edina, Minn., a member commented that they couldn’t book a tee time because there were too many members at the club. Fortunately, Interlachen has systems in place to verify this claim and to understand the capacity and utilization of the tee sheet. The Golf Committee discussed the issue, and along with the pro shop and golf staff, analyzed five years of tee sheet data and realized that the issue was not the number of club members, but the capacity, utilization and how club policies restricted use of the tee sheet.
The research revealed two problems: Guests were not allowed to play at certain times and the club held more league tee times than it needed, which meant they were not being used.
This information allowed the club to make several changes: League tee times were optimized based on actual utilization rates, guest policies were amended and some tee times were changed to start earlier. The club also examined peak times and adjusted guest fee pricing to make the tee sheet more efficient. The resulting analysis proved successful and resulted in fewer complaints.
This process also opened the door to discuss adding new members to the club—a proposition that was previously considered unpopular.
Club-Wide Decisions
A data driven approach applies to all aspects of the club. Data informs the context by which a club evaluates its decisions, from food and beverage to capital financing. For instance, businesses like manufacturers may justify a project to build a new factory by using data such as the capacity at their current factories, opportunities at a new location and the return on investment. If a club wants to build a new member activity center, decisions need to be similarly justified and rely on data such as quantitative membership surveys, costs and returns on investment. This keeps the project goal oriented, reduces bias and identifies objective factors for the board and management to consider.
In particular, membership surveys have helped Interlachen put the members’ desires before the board’s, collecting data across all membership categories and demographics to allow the board to make fact-based decisions.
It is also important for management and boards to understand your club’s performance relative to local and national competition as well as where the industry is heading. Without this benchmarking data, it is difficult to objectively gauge your club’s performance and the effectiveness of decisions being made.
Benchmarking data can shed light on your club’s business model and help set expectations. For example, in F&B, this information can provide insight on the role of à la carte services versus banquets. Specifically, it can help identify the financial impact of banquets to determine where it fits in the club’s model.
Culture
Clubs should institute a culture that promotes a data driven approach to governance, fosters a mathematical curiosity to problem solving, and helps develop understanding of key business factors. Effectively implemented, this club culture instills discipline that asks if a claim is true or not. That claim should be investigated through structured problem solving—testing a hypothesis. In Interlachen’s case, we saw that the original claim that the club had too many members was in fact not true and needed further investigation to find the correct solution.
It is important for the board and management to communicate this strategy throughout the club and to its members. This approach has allowed Interlachen to be more transparent with members about the club’s data and encourage healthy discussion.
As competition for members has increased within the industry, it has become more important to become skilled in this strategy and leverage the changing landscape.
Lou DiLorenzo is chief operating officer of Bright Health, a new technology-enabled health insurance company. He serves on Interlachen Country Club’s board of governors and serves as club vice president, chairman of the Tournament Committee, member of the Executive Committee and board liaison to the Golf and Membership Committees. DiLorenzo is a director of NCA and serves on the Communications Committee. He can be reached at [email protected].