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Data-Driven Leadership: What is the Alternative?

The Jim Collins book “Good to Great,” widely reviewed as one of the best business books of all time, was published in October 2001. In my technology days, I had the fortune of working closely with a person, who while studying for his MBA at Stanford was one of the researchers on Collins’ team. Over the time we worked together, he told me many tales about the research and effort that culminated in that book. At that time, we were leading a technology startup and often discussed the “Good to Great” principles while attempting to apply the lessons to our own situation. In that renowned book, Collins and his team advanced the premise that a core concept in the companies that evolved from “good to great” was disciplined people who engaged in disciplined thought resulting in disciplined action. A key aspect of disciplined thought was the need to “confront the brutal facts.”

I am writing this article the day after returning from an eight-day road trip visiting a handful of clubs including facilitating board retreats at two different clubs and presenting to more than 150 members at another club. Additionally, earlier today before I started writing, I had a lengthy conversation with a general manager in a situation with two board members who eschew data. They say they reject the data because the data can’t be correct, and they cling to the belief that their club is so unique the data doesn’t apply anyway. Of course, they have no data to support either conclusion. They just know. In each retreat and at the member presentation, I encountered people who “just can’t believe the data,” or who pushed the premise that “our club is unique.”

Since 2009, I have presented to the boards and/or committees and membership of more than 600 clubs. The patterns that evolve have become very clear; some people (my estimate is about 20%) do not have the desire to engage in disciplined thought. Facts and logic be damned— they just know. One of the clubs I have visited regularly is The Landings. I have worked closely with Steven Freund and Jesse Ruben who have both contributed articles to this issue of Club Business. Anyone who knows Steven and Jesse knows they are both extremely disciplined people who not only engage in disciplined thought but, literally, embody the concept. The entire management team embraces the leadership traits that Jim Collins found drive organizations to be great and they consistently lead with data, facts and logic. They are all disciplined people who engaged in disciplined thought resulting in disciplined action.

The club industry is a fragmented, cottage industry. For many years the industry evolved without data and frankly, without understanding the key drivers of sustained success and the key performance indicators. As a result, several misconceptions arose—many clubs still live and die (mostly die) by these misconceptions.

In “Good to Great,” Collins refers to the hedgehog concept: “that the fox knows many things, but the hedgehog knows one big thing.” Relating the hedgehog concept to a data-driven view of the club industry has led Club Benchmarking to conclude that the key to success over time as a private club is related to the following two points. The two points can almost serve as a universal mission statement that must somehow come into play in every club:

• Every club must create, nurture and continuously evolve a membership experience that is so compelling that it attracts and retains enough members to properly fund the club (and the club charges those members the amount necessary to deliver that membership experience). Every club must also be able to retain and attract the professional staff to manage the delivery of the membership experience.

• Every club must consistently generate enough Obligatory Capital (Maintenance) to be able to re-invest in its assets so that they are always “fresh and up-to-date” and enough Aspirational Capital (Growth) to continuously add the new services and amenities necessary to keep pace with an ever-changing society and the needs and wants of the next generation of members (in standalone clubs a family with 42-year-old parents, in residential community clubs typically a 60-year-old couple).

Steven and Jesse and the volunteer leadership at The Landings Club are consistently using data to make decisions in accordance with the above two points. The results the club achieved during the pandemic shows, with data, that they are achieving their aims. They have engaged members. They have services and amenities that are attractive and compelling. They worked hard to evolve and invest in “modern” and relevant services and amenities and their members embraced those amenities during the pandemic. Jesse’s CFO Perspective article in this issue of Club Business shows the beauty of disciplined leadership—one could say data-driven leadership. The Landings Club was able to see in real time the results of their recent efforts and investments. They could see their member engagement was at the top of the industry and they could communicate that outcome to their members/owners as it was happening!

The club’s positive results did not happen by chance. It was the result of disciplined people who engaged in disciplined thought resulting in disciplined action that caused both the outcome and the ability to measure and benchmark that outcome.

Is it possible to have disciplined thought without embracing the brutal facts when necessary? My experience tells me it is not. It is the lack of data and disciplined thought that has historically led to the misconceptions cited above. It is the data and disciplined thinking that also led to the clear view of the keys to success, the hedgehog “one big thing,” that is also cited above.

The lack of data will, and does, lead club boards and committees down the long, dangerous dead-end path of pushing staff to “stop the loss in F&B” or doing endless “deep dives” on efficiency while the club’s assets wilt away due to lack of capital, or to focus on “keeping the dues low” to attract members who are, as the data shows, actually looking for a compelling experience, not a low price. Lack of humility and willingness to accept and embrace the “brutal facts” that are central to being great is something we see far too often. Leaders of The Landings Club’s are data-driven and well-versed in embracing data and accepting the facts. The Club’s performance and ability to communicate through transparent data and benchmarks is a direct result of disciplined people who engaged in disciplined thought resulting in disciplined action.

Not every person is a disciplined thinker, some are more emotional. That is fine—differences make the world “go round.” However, when it comes to managing or governing, it is a requirement to be a disciplined thinker who can embrace, not shun data.

Ray Cronin is Founder & Chief Innovator at Club Benchmarking.