Archive for September, 2009

Fear-Based Management

Monday, September 28th, 2009

Leadership is situational.  Different situations and people require the application of different sets of skills and techniques.  What works for the General will not work for the Politician.  The art of leadership, then, is in the ability to size up a given situation and understand how best to address it.

While some leaders have an innate sense of what to do, most learn through experience.  Unfortunately for first-time supervisors, such experience is in short supply.  Some of you are lucky enough to have been mentored by a respected senior leader or you have worked for someone who taught leadership by example.  But whatever your examples, much of your success or failure will come from your attitudes about the job and the people you lead.

In extreme cases, new supervisors believe that it is only through their efforts that progress is made, that employees can’t be trusted, that goals can only be achieved by driving employees hard, and that discipline is the only way to keep staff in line.  Quite naturally, these attitudes create an environment where employees are fearful.  Such fear-based management is damaging to your service team and, ultimately, to the company.  Consider the case of Michael, an eager first-time supervisor.

Michael was bright, young, ambitious, and a recent graduate of a respected university.  He was hired based upon his enthusiasm, energy, and obvious intelligence.  The company expected great things of him.

Sure enough, there were immediate results.  He analyzed his department’s operation and identified areas for improvement.  He presented his superiors with a detailed action plan and a timeline for accomplishment.  As the months passed, he met each deadline and his department’s numbers were showing a definite positive trend.  Senior management could not have been more pleased.  Michael was quickly establishing himself as a rising star of the company.

However, seven months after Michael started, his assistant manager, Willard, a longstanding and trusted employee, abruptly resigned.  In his exit interview with Human Resources, Willard was bitter in his denunciation of Michael and of the company for hiring him and failing to properly supervise him.

It seems that Michael’s meteoric success had been built upon a hard-nosed, bullying management style.  He frequently flew into tirades if his employees did not perform to his expectations, yet he was a poor communicator, rarely meeting with his staff to explain his goals or desires.  Further, Willard said he often berated his employees in front of others.

According to Willard, departmental morale had never been lower.  When Willard tried to talk to Michael about mounting staff resentment, Michael threatened him, saying that Willard was conspiring to undermine his authority.  The last straw occurred when Michael complained to line employees about his assistant’s performance.

Unfortunately, Willard could not be dissuaded from retiring, but in the ensuing investigation his allegations were borne out.  In reviewing departmental records, investigators found a higher incidence of absenteeism, much departmental rework masked by unauthorized overtime, and a deep and pervasive anger on the part of the staff.

As a result of the investigation, Michael was reassigned to another division.  His boss was disciplined for lax supervision, and the company worked hard to regain the trust of its employees.  While the situation eventually returned to normal, the affair disrupted the smooth operation of the company for over two years.

Fear-based management is rooted in the insecurities of the supervisor.  While everyone has insecurities, in this instance, the immature, inexperienced, and untrusting attitude of the supervisor dominates the workplace.  Some symptoms of fear-based management are:

  • Employees covering their backsides.
  • Unwillingness to take a risk.
  • Lack of initiative and acceptance of the status quo.
  • Employees afraid to express opinions or answer questions.
  • Lack of trust.
  • Defensiveness and blame placing.
  • Lack of communication or only top-down communication.
  • Poor motivation and morale.
  • Lack of cheerfulness, friendliness, and smiles.

Fear-based management impedes organizational teamwork and effectiveness but can be overcome by a leader with an open, trusting attitude and a willingness to grow as a person and a leader.  Because of its detrimental impact on employees, customers, and the bottom line, fear-based management should not be tolerated in any company.

Excerpted from Leadership on the Line:  A Guide for Front Line Supervisors, Business Owners, and Emerging Leaders.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the club industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking club managers throughout the country and around the world.

Club Resources International – Management Resources for Clubs!

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Benchmarking

Monday, September 21st, 2009

Imagine two professional baseball teams.  One team measures every aspect of every player’s performance—the number of at bats; number of hits, walks, and strikeouts; batting averages against right- and left-handed pitchers; slugging averages; and fielding percentages.  They also measure each pitcher’s earned run average, number of base on balls, strikeouts, wild pitches; and so on.  The other team decides it’s too much trouble and keeps no statistics whatsoever.

These two teams will meet each other eighteen times a season.  While well matched in player talent, hustle, and desire, and though each team possesses competent management and coaching, one team dominates the other season after season.  Would anyone be surprised to discover which is the dominant team?

As everyone knows, this example is ludicrous because every baseball team measures players’ performance and uses this information to make crucial game decisions.  What is it that baseball managers understand that some club managers don’t seem to grasp?  The fact that everything in life follows patterns. When patterns are tracked and analyzed, they can be used to predict future performance and set goals.

Benchmarking, the act of measuring and analyzing operating performance, seeks to understand the patterns underlying a club’s operation.  Reasons to benchmark include:

  • Benchmarks can be used to establish performance goals for future operating periods.
  • Benchmarks help identify under-performance and best practices.
  • Benchmarks from past periods can make budgeting for future periods easier and far more accurate.
  • Tracking revenues and comparing them to historical benchmarks allows management to measure member response to products/services and new initiatives.
  • Benchmarks create the measurable accountabilities for each manager’s work plan.

The club’s monthly operating statements provide good basic information, but these summary numbers can mask troubling trends within the operation.  For instance, higher food revenues can be a result of less patronage, but each member spending more because of higher menu prices.  The manager is happy with the higher revenues, but is blissfully ignorant of declining clientele.

Benchmarking is best accomplished by department heads who have bottom line responsibility.  Most performance measures will fall into the following broad categories.

  • Revenues and expenses, both aggregate and by type
  • Inventories
  • Retail sales mix to determine buying patterns of members

Most of the raw data necessary to benchmark comes from point-of-sale (POS) reports.  Much of this lode of daily information gets looked at briefly by department heads or the accounting office and is then filed away, rarely to be seen again.  The real value of this information comes from tracking it over time to determine trends by day of week, week to week, month to month, and year to year.  This makes it necessary for managers to pull the information from POS reports and enter it into spreadsheet software.

A few caveats:

  • There are as many aspects of an operation to measure as time, resources, and ingenuity will allow.  Focus on those most critical to one’s operation.
  • Data used in benchmarking must be defined and collected in a consistent manner.
  • When comparing data, always compare like to like.
  • Ensure benchmarks measure events with only one underlying variable.
  • Do not draw conclusions from too small a sample.  The larger the sample, the more accurate the conclusion.
  • When two pieces of data are compared to generate a benchmark, both a small sample size or extreme volatility in one or the other, can skew the resultant benchmark.

Benchmarking is not complicated, but it does require discipline and persistence.  It is best accomplished by setting up routine systems to collect, compile, report, and analyze the information collected.  Like a baseball team, the knowledge gained by benchmarking will bring a club to the top of its game.

 

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the club industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking club managers throughout the country and around the world.

Club Resources International – Management Resources for Clubs!

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Romancing Your Members – Member Relationship Management

Monday, September 14th, 2009

I recently read a book called Romancing the Customer, Maximizing Brand Value through Powerful Relationship Management written by two British authors, Paul Temporal and Martin Trott.  While its message was targeted to large businesses, often in the retail and service sectors, it contained the seeds of important ideas for private club management.

First, the book makes the point that “Brands are Relationships.  People don’t buy products; they buy brands.”  They go on to say that:

“Brands are:

  • Experiences. A good experience with anything fuels the desire for more, while a poor experience kills the appetite.
  • Very personal. They give exclusivity of feeling and association. (the way private clubs are supposed to do)
  • Evoke emotions. Emotion is at the very heart of power brand strategies, aiming to capture both the rational and emotional aspects of the target customer.
  • Live and evolve. Brands are very much like people. Many have their own distinctive personalities, and these personalities evolve over time, just as ours do.
  • Communicate. Like people, brands listen, receive feedback, and send messages. They talk to different people in different ways, just as we do. Brands that are successful tend to be those that create a dialogue with consumers.
  • Create equity and loyalty. It is the way in which brands interact, and the friendship they give that engenders loyalty and a long-lasting relationship.
  • Above all, add friendship and romance. The greater the emotional involvement on the part of the consumer, the greater the friendship and loyalty that results.

Next the authors state categorically that Customer Relationship Management (CRM) is the quickest way to establish a brand.

quote-call-outs1-2“What is CRM?  It’s all about collaborating with each customer, adding value to each customer’s life.  In return, you get their loyalty.  Further, it’s about dealing with each customer individually, because all customers are not equal and should not be treated equally.  A small percentage of your customers contribute far more to your revenues and to your profit.  But as compelling as the economics of focusing on your best customers, a good CRM program should not ignore the others.  In fact, good CRM programs encourage less profitable customers to become better customers.  There is no doubt that by turning your organization into one that is centered around the customer, every single customer will ultimately benefit.

“But the focus must be on capturing ‘share of heart,’ not ‘share of wallet.’  While money-grubbing will certainly build short-term sales, it will not ensure that you build an enduring relationship.”

Traditional marketing theory says that it’s all a numbers game.  The more you market, the more people you contact, they greater your sales.  The authors point out that what makes marketing a numbers game “is the lack of specific information about individual customers.”  Today, though, with the rapid growth in computing power and data capture, it is possible to know each of your customers far better.  And that information provides the power to romance your customers.  “Instead of focusing your efforts on your product, focus on your customers.  By building up that body of information on each customer over time, you can increase the degree of tailoring of your product or service and, in the process, strengthen the emotional bond between the customer, your brand, and your company.”

Ultimately, “Customer Relationship Management builds strong brand by creating the right blend of organization, systems, and processes that allow your people to understand your customers as individuals, and potentially tailor every interaction with a customer to their specific needs.”

mrm-22What does this mean for us as private club managers?  Simply put, the more we know our members, the more we understand their needs, the better able we will be to provide the individualized service that people join clubs to receive.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the club industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking club managers throughout the country and around the world.

Club Resources International – Management Resources for Clubs!

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A Discipline of Planning

Monday, September 7th, 2009

Managing a club without a plan is like driving through a strange land without a road map.  Given the size, complexity, and money invested in making a club successful, why would anyone consider operating it by the seat of one’s pants?  Yet, this is exactly what managers do when they fail to establish a discipline of formal planning.  And make no mistake about it, it is a discipline – requiring managers and supervisors at all levels to conceive and document their plans for upcoming periods and specific events.  It also requires that the General Manager review all planning documents, as well as review progress toward completing those plans on an ongoing basis.

Every enterprise demands a plan.  Without a formal, written plan to focus attention and action upon the completion of specified goals within a specified time period, the club will lack clear direction and purpose.  By putting plans in writing, the responsible manager formally commits to its accomplishment.  Further, there is a common understanding on the part of both the subordinate manager and the General Manager of what will happen and when.  Often, the planning and execution of one department will impact other departments or the club as a whole.  Written plans ensure that all managers and department heads are fully informed about where the club is going and when things are supposed to happen.  Taking all this into account, planning is not a luxury, but a necessity for efficient operations.

Types of Plans.  Planning is necessary on many levels and in many settings.  Formally, the club should have the following:

  • A Club Annual Plan covering a period of 12 months, coinciding with the budgeting cycle.  This plan lays out the specific goals to be accomplished during the year as part of the club’s efforts toward continual improvement.
  • A General Manager’s Work Plan for the 12 months covered by the Club Annual Plan.  This plan lays out measurable accountabilities for the General Manager and is the basis the GM’s performance appraisal.
  • Departmental Plans for the 12 months covered by the Club Annual Plan.  These plans lay out the goals and objectives of each operating department.
  • A Work Plan for each Department Head for the same 12 months.  These plans do the same for the club’s department heads.
  • Plans for major project and events.  These are plans developed for specific major tasks or activities such as purchasing new golf carts, renovating a facility, or preparing for the Member-Guest Tournament.

Planning Tips.   Having gone through the planning process a number of times, I offer the following advice to all General Managers:

  • Start early.  Procrastination results in poor, disjointed planning.
  • Lay out the broad outlines of what the Board or GM wish to accomplish.  These outlines will impact the priorities and initiatives of the club’s operating departments.
  • Involve your staff.  The departmental plans must take into account the broader goals of the club, but will also include the plans and agendas of individual Department Heads.  Further, since no department works in isolation, one department’s plan may affect others – either materially or in the timing of events and accomplishments.
  • Challenge staff.  General Managers should explain the big picture of club direction and progress and then challenge Department Heads to work on specific initiatives within their departments, for example, implementing Benchmarking, setting up Tools to Beat Budget, reviewing departmental training material and plans, Continual Process Improvement.
  • Planning is a process.  No plan is completed after one pass.  Back and forth discussion between the General Manager and Department Heads and among the different departments will further refine plans insuring a well-integrated club plan.
  • Use planning as a team-building exercise.  Given the preceding tips, I encourage General Managers to use the annual planning process as a team-building process.  Call an early planning meeting with all Department Heads to lay out the purpose, process, and planning timeline.  Then establish a series of planning meetings at which each Department Head presents his or her plans to the rest of the management staff for input and feedback.  One Department Head’s ideas may spark others to similar accomplishment.  Encourage critical review of plans and challenge groups of Department Heads to work together to work on larger club or departmental initiatives.

When departmental plans are completed, General Managers must review them and incorporate the more significant items in the Annual Club Plan.  All this should be done in time to allow adequate review and feedback by the Board before the start of the budgeting process.

Lastly, plans must not be a one-time task not to be looked at again.  To be truly useful departmentals and the Club Annual Plan should be reviewed often.  I recommend a brief review of plans and accomplishments during the Monthly Review of Operating Statements.  This ongoing review and discussion of planning will ensure timely completion of tasks and keep the club on target to meet all of its Annual Goals.

Summary.  The importance of disciplined planning cannot be overstated.  Haphazard planning results in haphazard operations and equally haphazard performance.

 

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the club industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking club managers throughout the country and around the world.

Club Resources International – Management Resources for Clubs!

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