Robert Dedman, Sr., founder of ClubCorp (now Invited) was once quoted as saying: “Clubs are run like nobody’s business because they are nobody’s business.” That philosophy was the foundation of what is now a much more professionalized club management industry, and one that has seen many clubs evolve from member-owned, not for profit enterprises into investor-owned, for profit businesses. Despite this evolution, there are still many member-owned clubs that are run “like nobody’s business."
The typical member-owned private golf/country club has from 300 to 600 members (per 18 holes) and is normally run by a member board, developing policies for a General Manager who administers the day to day operations of the club to implement. Since most members are usually successful business people (outside the club industry) and the General Manager and key staff are club industry professionals, one would think that they would play a significant role, not only in operations but also in establishing policies. Unfortunately, that’s not always the case, as club leadership, which should (but doesn’t always) turn over periodically sometimes micro-manages and fails to take advantage of the professional expertise they’ve hired.
When new leadership assumes their place, it’s not uncommon to see changes in key management positions and consistency is compromised. If, as in some cases, leadership positions are occupied by “the same old crowd” for extended periods, those to whom the club has an outsized role in their life sometimes pursue personal agendas, transparency can be compromised and most importantly the culture of the club membership becomes infected with doubt, mistrust and sometimes, even worse, financial irregularities.
There has been much written on the issue of club governance. There are consultants who advise clubs on their governance structure. Unfortunately, in many cases either the club rejects the advice they’ve paid for or they hire a consultant who tells the club leadership what they want to hear. I know of instances where clubs have retained multiple consultants in succession until they get the answer they want. Is that any way to run a business?
While I acknowledge that private, member-owned clubs are not motivated by profit, most are multi-million dollar enterprises that require numerous business functions, such as budgeting, human resources, property management, food & beverage, retail, agronomy and more. Accordingly, they need to be run effectively with a focus on the club’s mission and culture. It’s a fine-line balancing act in many cases between providing a specific service or product and the associated cost and willingness of the membership to pay for it.
A main difference between clubs and businesses is that businesses typically have long term leadership stability, who’ve assumed the financial risk of the business. Small businesses in particular, similar in annual revenues to many clubs, are owned by the same individual, group or family for long periods of time, often multiple generations. Clubs, even those with “benevolent dictator” leadership change periodically. Sometimes, there are term limits. While this periodic change in leadership varies from the consistency found in most small businesses, it is essential because of the fact that these leaders don’t own the club and assume none of the financial risk. Decisions can be impacted accordingly, and can take on a personal interest rather than the best interests of the club. Where the required consistency can be accomplished is in the management area, by having a COO/CEO/General Manager in place for longer periods. This is where “the buck stops” and having autonomy from overzealous board members who sometimes seek to impart their legacy to the club is essential. Just like an airplane needs a pilot, a football team needs a head coach and a company needs a leader, this should be an individual capable of speaking truth to power.
Like Mr. Dedman said, clubs are nobody’s business. Thus, it’s a fine line balancing the consistency needed and finding leaders to serve and willing to give up their enjoyment of the club they presumably joined for recreation. The key is term limits that are strictly obeyed and finding the right key management people for stability that can speak truth to power when necessary. When club leaders become long-term fixtures, a situation of “absolute power” results that can destroy the atmosphere of the club or, worse yet result in corruption, just like in government.