Skip links

Taking the Other Road: The Path to Management Companies

The decision on the best management for a club rests squarely on the shoulders of the members and the board. A membership that is closely aligned with the club’s mission and is truly dedicated to it, will have many members willing to serve. They will serve on committees and the board, will fund needed capital projects, and will stay involved to improve their club when they are called upon. Such clubs, according to McMahon Group research, often have twice as many members who are “very satisfied” with their overall club experience than an average club found in today’s private club world.

Clubs with no clear strategic plan for their mission are at greater risk of having weak member loyalty and dysfunctional boards, and may be on the road to failure. They provide low member satisfaction, resulting in members with little desire to help. In this scenario, few members will volunteer to serve on committees or will want to take on board service, making them prime candidates for using management companies to manage and direct club business, because the members themselves have failed.

With time-constrained club members today, it is easy to see why members don’t have the commitment to serve their clubs that they once had. Members joined clubs to enjoy other members, not to undertake the challenge of saving a declining organization. But if a club’s membership does not value its club enough to work for it, it will get a club experience that is primarily commercial in nature.

For such clubs, membership becomes a customer relationship that a management company is well-suited to operate. They cannot charge much of an initiation fee, must have very competitive dues, and must have a large-quantity-membership business approach as opposed to a high-quality-strategic membership approach. For clubs with low membership loyalty, the management company operation approach works well.

Great clubs only happen if members care and are willing to make a commitment to their clubs. This equates to having capable members serving on committees and boards because they want a certain club experience for themselves and their families. A dedicated board listens to its membership, surveys them and then sets club policies for management to execute. Such clubs always have good management: A strong general manager directing club operations. Not only does the GM have to have all the skills to build a strong management team, but he/she must be equally adept in club politics and in tune with societal trends so the club is continually changing with the times. A management team must know how to keep most of the members “very satisfied” and yet make the hard decisions.

There are numerous examples of good clubs achieving high success with more than 50 percent of all members being “very satisfied” with their overall club experience. Almost all have a strategic plan that the board and management follow. Clubs such as Baltusrol Golf Club in N.J., Wellesley Country Club in Boston, The Union League of Philadelphia, The Briar Club in Houston, Multnomah Athletic Club in Ore., all have great managers, strong board leadership and commitment, and strategic plans setting membership-directed policies and operations.

The Case for Management Companies

For clubs where the members don’t have the time, commitment and/or ability to govern, bringing in a capable management company may be the best answer. Because without a hard-nose business approach to operations or a functional club board, bringing in a management company is the next best solution for saving a club from itself.

From a historical perspective, when club management companies do their jobs well, their clubs begin to prosper. And in this improved situation, many of these clubs begin wanting improved services and facilities that may only come from more involved members and a good general manager resuming control. The rise of management companies started about twenty years ago in the Carolina club marketplace when management companies were hired to run club operations. Eventually, the club members yearned for higher quality in the clubs, resulting in member-owned and governed clubs once again. We are again in such a club management cycle.

Which Management Path is Best for Your Club?

It’s all about a club’s mission. If a club’s members are striving for high-quality and premier position in a marketplace, the members have to stay involved, serving on committees and having their most capable members committed to serving on the board. They must search for and select the best club management skills they can afford. They must stay in touch with their members to monitor changing conditions. They must also have and follow a strategic plan.

If, however, a club cannot get this level of member commitment/dedication, then bringing in a highly qualified management company is the best way to survive and maintain a financially viable club operation. But even with management company operations, it is critical for such clubs to stay in touch with the members and to have a strategic plan guiding the club’s future.

Club Trends Fall 2017