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Exploring Cornerstones of Private Club Management:

Does Your Club Have Sound ‘Principles’?

Welcome back to all our Club-Pros and Aficionados! Are you ready for another discussion of the key underpinnings of successful club management?

Last time, we delved into the concept of ‘Fundamentals’ – the bedrock nuts and bolts which ultimately guide the intricate workings of a private club. We uncovered the power of peeling back the layers of almost any problem to reveal the core mechanics which allowed it to surface in the first place.

By encouraging your entire team to engage in this strategic type of thinking, your Club’s march to success can be truly remarkable.

Everyone Talks About “Fundamentals” – But What Does That Really Mean to a Private Club?

Now let’s continue on this journey by pivoting to another pillar of management excellence – your Club Principles. After all, at the heart of a private Club lies a delicate equilibrium of managing the immediate demands of the Board, Members, Staff, and non-members while upholding the legal, ethical, and cultural expectations of your community.

Why Deal with Principles?

Many times, this aspect of your operation can pose more risk and consequences to your Club than any other. Why? Dealing with Club Principles is often subjective. Further, this type of issue may hit close to the emotional heart of anyone affected and lead to unpredictable outcomes.

Responsibility for setting the tone (or ethos) of the organization usually defaults to the General Manager. This is the person perceived to have the ultimate authority in driving the Club’s agenda: it’s where the rubber truly hits the pavement. Questions and controversies naturally reverberate back to the GM’s desk.

How the Club collectively supports the GM in these episodes counts most. The strength of an organization’s shared-values is revealed when unexpected things happen and there are demands for answers. Would your entire team stick together?

Picture your Club as a tapestry woven with the threads of your club’s values, your members’ desires, the expectations of employees, and even the perceptions of non-members — all mixed into an ever changing business environment. On top, your Board must monitor and evaluate your team’s alignment to ensure community goodwill and the Club’s long-term prosperity.

Club Principles encapsulate the guiding force which not only shapes decisions but also establishes the very essence of your club’s identity. Does your management team share an unwavering understanding of these foundational principles? Do the Board’s own actions support and nurture a healthy “Principled” environment?

As we know, the weight of these responsibilities largely falls on the GM, the figure who embodies Club values and acts as the prominent voice and everyday decision maker. No wonder this area of management poses one of the most potent lightning-rods for controversy and potential liability. So, let’s probe deeper into the essence of Club Principles in your operation.

Shared Values: The Critical Link Between Board/Management

As with your Club’s “Fundamentals”, the concept of “Principles” must also be defined, guided, enhanced, and enforced on a universal basis. Getting everyone on the same team is an ongoing effort due to constant turnover and change at every level. Having the Board and Management teams in lockstep is the first building-block of Club Principles.

Harking back to the Club’s Mission Statement, the development of Principles is shaped and formed over time through daily decision-making by the organization.

  1. How does the Club wish to be perceived in terms of fairness, equity, kindness, empathy, and social standing?

  2. Is your Club a measured, fair, thoughtful, respectful, and valued part of the community?

And, unlike more concrete operating-Fundamentals, Principles are not as easily definable and transmittable. There is no handbook that shows exactly what they are or how they are to be applied. But understanding the power of Principles is the secret-sauce which successful GM’s and Club Presidents rely upon most.

It is what you do at the most critical times which define your Club’s soul and character – even when nobody is looking. The intrinsic value of running a Principled-operation pays long-term dividends. Sound Principles are difficult to establish and very easy to lose.

For Clubs, the most important linkage in this effort is between the GM and the President. A discrepancy between the parties on the definition, understanding, and application of Club Principles will eventually reveal itself and end poorly. Both the GM and President must also steadfastly represent and communicate those same ideals to their respective staff and board/committees.

The concept of shared values and Principles is so important that management turnover at some Clubs can probably be traced to repetitive misunderstandings in this exact area. That is why a competent Executive Recruiter will spend much time on this factor in their search.

Case Studies: How Would You Respond?

Consider some examples of how these concepts can be evaluated and applied in your own Club. We’ve compiled two hypothetical situations which illuminate the type of exposure that can be encountered in almost any Club operation.

  1. How would you (and your team) manage each predicament?

  2. Would your actions or decisions be supported by the Board?

  3. What other hidden complexities are presented which could affect the Club long term?

#1: The Case of Membership Privilege

Your Club has a Legacy membership program providing preferential admittance policies and financial incentives to the children of existing members. The Membership Chair approaches the President and explains they personally have no family members who could take advantage of the program. But, if they were permitted to extend the same offer to another person (extended non-blood relative) then what would be the harm? It just doesn’t seem fair to the Membership Chair that they can’t have the same benefit as another member. The financial upside to the prospective member is a net savings of over $50K. The President, a good friend of the Membership Chair, agrees with the plan despite a wait-list of other new member applications at full price. The new member is quietly shepherded through the application process while the Board remains uninformed of the conflict. By the time you recognize the scheme, the new member has already been admitted. What would you do?

#2: Pandora’s Box: The Problematic Employee

Years ago, prior to your arrival as GM, the Club suffered multiple lawsuits and settlements. It was even in the newspaper. For many years now, the Club established an impeccable record in Human Resource matters. Recently, a visible and well-liked employee faced multiple counseling and disciplinary proceedings. This person’s behavior, due to substance abuse, placed the operation at risk of a loss or legal claim. Things continued to deteriorate despite the pleadings and support shown to the employee. Due to the potential public fallout, the President was advised of the matter. After valiant attempts to assist this individual, the employee is given a final warning and eventually terminated. Subsequently, the employee contacts a friendly Executive Officer and other influential members. Controversy ensues. The Officer entertains the terminated employee’s calls/texts without professional advice, holds debates with other board members, and waffles with members in the face of criticism. As GM, you must endure extensive questioning while preserving employee confidentiality. Worse, two more marginal employees, emboldened by an apparent new avenue of appeal, also contact the Officer directly for intervention. This Board member is unqualified in the complexities of labor law, uninformed about the details of each case, and leaves the management control structure compromised. How do you respond?

With Ever Changing Players, No Club is Immune

There are endless examples of how Principles are constantly tested within a private Club. How they are handled over the course of time is one of the most important attributes of a successful operation. Unity in the understanding, compliance, and application of Principles represents an intrinsic value which, over time, translates into real dollars.

When controversy arises (and it will) does your Club appear disjointed with internal strife and ugly arguments? Or, are you united and articulate in your decisions? Do you appear silly or serious? Your constituents are watching closely and ultimately decide whether to continue business with you or to recommend you to their friends. Members wish to be proud of their Club; violation of community Principles diminishes your value.

  1. Do your decisions match your stated Mission?

  2. Have clear lines of authority been established between Management and Leadership?

  3. Are the management team and board required to formally acknowledge their ethical responsibilities?

  4. At the end of Board meetings, do members remain united as a team regardless of the outcome of any individual vote?

  5. Does the management team make a concerted joint-effort to properly measure, evaluate, and reach consensus on important issues which may affect the Club’s reputation?

How does your Club balance and protect its valuable Principles? Or is it just left to chance?

Share Your Stories!

As we can see, the establishment and nurturing of Principles is as important and valuable as your Fundamentals. Each is essential to a healthy operation. While Fundamentals can mostly be established and delegated to management, Principles require a direct-link and cooperation with the Board. This unique relationship requires a complete unification of standards and expectations.

Defining Principles is achieved over the course of time through a series of long-term decision making on the part of both the Board and Management. This body of shared values must be developed and guarded, especially in light of the ever-changing leadership and operating environments seen in most private Clubs.

Our two short examples barely touch the surface of how these issues play out in real life. We’d like to hear your feedback and comments. Have you faced and handled situations which would prove illuminating and helpful to your fellow readers? If you would like to anonymously share your story, just let us know!

Contact David Shaw at Club Consulting Associates for more answers. And remember to stay Club-Tastic!


Everyone Talks About “Fundamentals” – But What Does That Really Mean to a Private Club?

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