Archive for June, 2010

Our Need to Serve

Monday, June 28th, 2010

Jim Collins says that people “want to be involved in something that just flat-out works,” but I believe it is something more.  I believe that people have a great need to connect with or serve something larger than themselves.  Whether it’s building a skyscraper, embarking on a campaign to eradicate hunger, working on the design of an award-winning advertising campaign, or even dressing in favorite NFL team colors and attending all the home games – people need to connect to a larger purpose or endeavor.

Great leaders understand this basic human need and have the ability to create that connection for their followers; unfortunately, not always to good purpose-witness Hitler’s rise to power and spell-binding hold on the German people or, in recent times, the illusion of success created by the leaders of ENRON before its financial collapse.

But the connection I am talking about need not be a life-altering cause or event.  Most of us live rather uneventful lives.  While our need is to earn a living and support our families, an astute leader recognizes the opportunity to create something out-of-the-ordinary – a special enterprise that performs better than others and is a source of purpose and pride for all.

In connecting people to the challenge of creating something special, the leader feeds the employees’ need to do something beyond self while advancing the purpose of the enterprise.  All that is necessary is for the leader to frame the challenge in terms of shared goals.  In the service industry this is a fairly simple task.  Our purpose is to serve.  The quality of our service encourages customers and repeat business, which in turn ensures the success of the enterprise for the owners, and, ultimately, the job security and advancement opportunities of everyone involved.

Throughout my career, I have met many eager, enthusiastic young people, some just starting out their adult lives and relishing the opportunity of their first jobs.  Unfortunately for most, their youthful idealism is crushed pretty quickly by the realities of the workplace, particularly when they are not well-led, when they are not properly trained or supported, and when they are treated as if they didn’t matter.

At the same time, I’ve heard managers complain about the poor state of the labor pool and their inability to find decent employees who have commitment to their jobs.  Listening to such complaints I have to wonder what steps these individuals have taken to motivate their employees, to provide training and meaningful work experiences, to connect their workers’ labors to a larger effort.

To expect that the wide variety of applicants for positions will inherently know and understand a leader’s vision and the values that underlie the enterprise’s efforts is foolish.  All employees, whether first-time job seekers or those who have worked in a variety of jobs and settings, need the vision of connecting to a larger purpose, and they need a Service-Based Leader who can provide them the meaningful employment that serves their greater needs.

Excerpted from Leadership on the Line – The Workbook.

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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The 100/0 Principle

Monday, June 21st, 2010

Al Ritter has written a great little book, The 100/0 Principle, subtitled The Secret of Great Relationships.  While this may sound like any one of the score of self-help books published annually, one merely has to look at Mr. Ritter’s resume – MBA from Dartmouth, marketing and operations positions with Pepsico, CFO at Swift and Company, Senior VP for Citigroup, consulting for Accenture, and founding his own consulting company – to recognize that this short, simple, and easy-to-read book holds much promise for business leaders in any setting and level of organizational hierarchies.

I believe the simple concept at the heart of this book is arguably the single most important guarantor of success in any relationship, certainly in the personal arena, but beyond that in any organization or business enterprise.  Such well-known leadership authors as John C. Maxwell, Brian Tracy, and Warren Blank have all recognized the central role of relationships in any attempt to lead.  As Maxwell said, “People who are unable to build solid, lasting relationships will soon discover that they are unable to sustain long, effective leadership.”

What Mr. Ritter so strikingly advocates in his book is that if you want any relationship to be successful, you must take 100% responsibility for the outcome while expecting nothing in return.  While this statement may seem shocking to some, I believe it is counter-intuitive wisdom of the highest order.  To examine why, consider the following statements relating to leadership:

  • A leader is responsible for his own success.
  • A leader is responsible for everything her organization does or fails to do.
  • In a free society, all but the most socially or economically disadvantaged followers have choice and can go elsewhere.
  • Meaningful relationships are based on trust.
  • Followers don’t automatically extend their trust to a leader; it must be earned.
  • As the one with the power and authority, the leader must take responsibility for establishing trust.
  • If, for whatever reason, a relationship with followers is not going well, a leader cannot expect or wait for others to fix it.
  • Ergo: He or she must take full responsibility for the relationship.

Mr. Ritter states and I believe that taking complete responsibility for your relationships and expecting nothing in return will yield vastly improved results in every arena of life.  His book offers concrete advice and steps, such as creative listening, suspending judgment, and unconditional acceptance, for readers to adjust their thinking and change their responses to difficult people, challenging situations, even “toxic” bosses.  While his experience with The 100/0 Principle has been mostly successful, he outlines a few situations where it doesn’t apply.  He also candidly admits that there are no guarantees that it will always work, but that in the majority of situations, dramatic results are achieved.

Roger Enrico, former Chairman and CEO of Pepsico said, “The soft stuff is always harder than the hard stuff.” I can’t imagine that anyone who has attempted to lead would dispute this basic observation.  Read Al Ritter’s book – it offers a simple and straightforward approach to getting the soft stuff right!

The Book is: The 100/0 Principle:  The Secret of Great Relationships, Al Ritter, Simple Truths, LLC, Napierville, IL, 2010

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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Guest Blog: Cost Reduction Opportunities for Private Clubs

Monday, June 14th, 2010

It goes without saying that the last couple of years have been economically challenging for both commercial and non-profit organizations in the U.S., and certainly this dilemma would extend to private clubs.  Traditionally, the first impulse among owners and managers facing eroding profitability is to cut services or staff, a somewhat dubious calculation when considering the long term consequences of these actions.

Without getting into the debate surrounding the viability of business models used by clubs given today’s distressed financial and demographic environments, there are realistic, yet generally overlooked, measures that are available to mitigate revenue shortfalls.

Organizations, irrespective of their type, essentially have two broad means that can be taken to improve profitability:   1) increase revenues, or 2) reduce costs.  Increasing revenues is often a difficult proposition, at best, although it may be argued that creative marketing can offer great potential to those willing to utilize it.  Still, if the overall [economic] pie is not growing, aggressive marketing will serve only to benefit the more creative at the expense of the less creative.

The alternative to raising revenues is to reduce costs.  Surprisingly in this country, only a small number (below 10%) of organizations have ever undergone an independent, comprehensive analysis of their expenses, despite the fact that cost reduction usually is so impactful.  Furthermore, and depending on the profit margin of a given organization, it would require at least five times the amount of revenue to produce the equivalent amount of bottom line benefit that cost reduction can generate – without a penny invested in marketing.

Although most organizations employ accountants, treasurers and/or CFOs, their typical policy in this regard is to look only at trends or exceptional, possibly one-time only, expenditures and to assume that the status quo should not be disturbed.

It is not meant as a criticism to suggest that these folks are usually missing the forest for the trees (or, perhaps better stated, the trees for the forest).  The fact of the matter is that they simply cannot be expert in all of the categories of expenses found on any P&L statement.  Let’s look, for sake of discussion, at some of the line items that would be found on a club’s books:  electric utility costs (including lighting), internal-equipment maintenance (including that for heating and A/C, restaurant, water supply, and waste removal or mitigation), vehicle maintenance, facility maintenance, IT, telecom and security systems and service contracts,  advertising, office supplies, uniforms, bank fees, insurance (of all types), human resources, travel, and the ever-popular financing expenses.  Consider the staff size that it would take to establish not only the appropriate “baseline” numbers for these items, but then to have the sophistication and capability to access alternative vendors for them or to re-negotiate existing contracts, if necessary.  Fortune 500 companies have entire departments devoted just to this arena; smaller organizations can’t afford them.

It must be emphasized here that we are not speaking of small potatoes in the aggregate when assessing the excess spending in these categories.  It would be hard to envision that most clubs of any size would not have adjustable expenses – i.e., excluding salaries and commodity related supplies – in the million dollar-plus range.  It is no exaggeration to state that an expense audit would be expected to uncover potential savings, on average, of $200,000 to $300,000 at this level of expenditures and that, the greater the gross expenditures, the greater the cumulative savings benefit.  Additionally, not only can the savings occur in the first year, they recur in the years to follow.

So why is it that more organizations don’t employ an outside consultant to evaluate their spending patterns?  In part, it’s because owners don’t realize such services exist, in part because they first need a nudge from a trusted source before they’ll try something “new,” and in part it’s because they’re convinced their staffs can handle it.  Although expense reduction is not the only answer, it is one of the answers, and one which can be accomplished with no financial risk or out of pocket cost to the organization as fees are usually based on a split of realized savings, and then only for a limited period.

Steve Vest, Pearl Logic, Inc.

A graduate of Occidental College in Los Angeles, and with a post-graduate degree from Thunderbird Graduate School of Global Management in Glendale, Arizona, Mr. Vest’s career spans over thirty years in the investment and business brokerage industries, during which period he held positions as a Wall Street security analyst, institutional salesman, financial advisor, and business-transaction specialist, while earning the professional designations Chartered Financial Analyst (CFA) and Certified Financial Planner (CFP).  Most recently, he has become associated with a consulting company, Pearl Logic. Inc. (Tampa, FL) as a Senior Solutions Advisor in the area of cost reduction of operating expenses on behalf of mid-size companies and non-profit organizations.

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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The Proper Role of General Managers – A Second Opinion

Monday, June 7th, 2010

On April 26th I posted a blog on The Proper Role of General Managers in Private Clubs and asked for feedback from other club managers.  The following response came from Rob Duckett, General Manager of The Mountaintop Lake and Golf Club in Cashiers, NC.

“Below is a list for what I focus on and believe to be the most important roles of the General Manager:

  • The General Manager fosters the Culture and overall Vision of the Club.  Every effort and every decision that is made by the General Manager will aid in the execution of the Club’s Culture and Vision.
  • The General Manager is responsible for defining the Culture and Vision so that they can be easily communicated to others to ensure that they can foster them as well.  The General Manager is constantly looking for anything that might detract from the Club’s Culture and seize opportunities to add to the Culture so that the Vision can be realized.
  • From an organizational standpoint the General Manager should provide leadership by acting as a business partner for each department head, running each department as its own business within the whole of the club.
  • Together the General Manager and the Department Head will create a Vision for the department, establish goals, short term and long term, and create and regularly update Standards of Operation that act as an agreed upon system for successful operation of the department.  Once the General Manager and Department Head are in agreement on the Vision and Standards of Operation, the General Manager will assist the Department Head with Leadership, execution of the standards, staff training and accountability to a degree dependent upon the experience and level of expertise of the Department Head.  Acting as Mentor and Coach, the General Manager is responsible for maximizing the development and professional growth of the Club’s management staff.
  • The General Manager is also responsible for establishing systems of accountability for financial and service performance.  (These systems are most effective with the input of staff involved).   For Example: Department Heads use a checkbook system to assist in tracking expenditures for their department which is monitored by the General Manager to help them stay within budget.
  • Each time a problem arises, we evaluate the systems that support the operation to determine if a system needs to be altered or a new system needs to be created to eliminate the problem in the future.
  • The General Manager is a steward of the facilities, ensuring all is maintained up to standard and there is a continuous search to improve the facility to support operations.
  • A good General Manager is responsible for the Club’s public persona, how the club is viewed as an employer, community partner and goodwill ambassador.  It is important whenever someone ‘touches’ the club or its staff that the experience is a positive one.  This awareness will pay dividends in areas of member attraction, business relationships, employee recruitment etc.
  • The General Manager role is one of communicator.  As the Club’s #1 ambassador, the General Manager sells the Vision, Culture and Standards to all who will listen.  This especially includes members and staff, as well as business partners and folks in the community.   The General Manager is the one person who ties everything together and is the most knowledgeable in all things associated with the Club.  The better the communicator the General Manager happens to be, the more confidence the Board, members and staff will have in the General Manager as their leader.
  • As the Club’s business manager, the General Manager ensures the Club is in compliance with all regulatory agencies and holds the proper licenses to operate the business.

“There are many duties the General Manager must perform and you have outlined most of them.  I believe most General Managers do understand what their role should be, but I feel they have trouble overcoming all the issues that will allow them to be most effective.  Roadblocks in the form of uncooperative board members, ‘Sacred Cow’ employees and financial restraints keep them from being successful.  I see many managers who just don’t know how to overcome these challenges.  I personally feel these challenges are what make what we do fun and challenging.

“Many General Managers do focus on putting out the fires and from time to time we all do, but if the General Manager is focused on the principles you outline there will be less frequent fires to put out.”

Thanks, Rob, for your input and insights.  Anybody else have any thoughts on the matter?

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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