In 2008, while serving on the board of my own club, I became aware of a disturbing information gap in the club industry that was affecting the way decisions were being made. The country was in the throes of an economic meltdown, yet the mindset in club boardrooms was reactive and historical, laser focused on internal operational data and last month’s results against the budget. Virtually every club in the country was feeling the strain to some extent, but boards and managers had no accurate way to know whether what was happening at their club was an anomaly or a reflection of what other clubs in their market were experiencing.
Operating in an information vacuum, clubs made decisions that have had a profound and lasting impact: Cutting or eliminating initiation fees, carving away at budget to the detriment of the member experience, reducing staff to an extent that severely undermined the culture of the club.
The demand for data in the boardroom has increased tremendously since 2008 which is a positive development, but the data presented should be appropriate for board focus. Tactical data such as cover counts, rounds of golf or cost of goods sold distracts the board from their role as a strategic body. Club leaders should instead be focused on more challenging questions:
- What is our club’s value proposition?
- How can we innovate and evolve that value proposition?
- Are we generating enough capital income to support innovation?
- How does our value proposition stand up against the competition? Not just competition from other clubs, but also from the growing array of alternative dining and entertainment experiences available to members.
Looking ahead to the next recession, which history tells us is inevitable, the time to prepare is now. After two years of development and testing, we recently released a Strategic Monthly Dashboard as a free service for the club industry. Four monthly reports (Membership, Cost of Belonging, Operating Finance and Capital Finance) are comprised of strategic KPIs to help boards measure and monitor their own club, their position relative to the market in which they compete and their position relative to the industry overall. For information about participating, visit clubbenchmarking.com/monthly