Archive for January, 2015

How Much Time Does Your Club Waste Reinventing the Wheel?

Monday, January 26th, 2015

Jim Muehlhausen has written an essential book for every small business entitled The 51 Fatal Business Errors and How to Avoid Them*.  It’s a book that every club manager should read and act on in his or her own operation.  In it he lists Fatal Error #43 as Reinventing the Wheel Daily.  To quote from the book,

“Every day a CEO with no written operation plan walks through the door, she says to herself, ‘Hey, I wonder how we should run the business today?’  This process of reinventing the wheel will end up consuming all the valuable time of the organization and the CEO.  In the name of flexibility and custom one-off solutions to problems, the CEO has doomed herself to a firefighting existence.”

The solution to the problem according to Muehlhausen is to have a written operations plan.  While most clubs executives have heard of an operations plan, few clubs have them.  As Muehlhausen says,

“If writing an operations plan is so powerful, why don’t 100% of businesses have one?  Well, writing an operations plan is a REAL pain.  It requires hard work, sacrifice, and a deep understanding of your business.”

And it’s coming to grips with a lack of understanding of your business and how it works in all its details that is the real value of writing an operations plan.  This is especially true in clubs which operate a variety of specialized businesses requiring specific knowledge and expertise.  Further, the intensive detail involved in delivering a quality service experience to members requires that the methods and processes of service and service delivery be spelled out in great detail.  W. Edwards Deming, the 20th Century’s renowned advocate for quality, recognized the importance of process when he said, “If you can’t describe what you are doing as a process, you don’t know what you are doing.”

Other authors have touched on the importance of the operations plan.  As we described in The Quest for Remarkable Service:

“Michael E. Gerber in his best-selling book The E-Myth Revisited [E for entrepreneur], describes the strength of franchised operations based to a great degree on the depth and quality of their written operations plans and says,

‘To the franchisor, the entire process by which the business does business is a marketing tool, a mechanism for finding and keeping customers.  Each and every component of the business system is a means through which the franchisor can differentiate his business from all other businesses in the mind of his consumer.  Where the business is the product, how the business interacts with the consumer is more important than what it sells.’

And ensuring that every employee knows how to interact with customers in every situation is what ensures the success of the franchise.  Gerber goes on to say,

‘. . . without a franchise no business can hope to succeed.  If, by a franchise, you under-stand that I’m talking about a proprietary way of doing business that differentiates your business from everyone else’s.  In short, the definition of a franchise is simply your unique way of doing business.’

When you truly understand this, you recognize that to be successful in the challenging world of club management, you must define your standards, policies, procedures, and work processes and organize your club as if it were a franchise – one where how it interacts with its members and how service is delivered sets it apart from all others.”

So what exactly is an operations plan and how can you go about preparing one for your club?

While this author found a number of definitions in searching the Internet, they all revolved around the concept of documenting the way an enterprise conducts its business.  In an effort to produce a more club-specific definition, I offer the following:

A club operations plan is the fully-integrated and detailed description of the organizational structure, systems, and processes that enable the multiple operating departments of the club to deliver a seamless, consistent, and high quality private club experience to its members.

The key words and phrases in this definition are:

  • Fully-integrated meaning consistent across all operating departments.
  • Detailed description of all the club’s individual standards, policies, and procedures.
  • Organizational structure describing the interrelationship among all functional areas of the operation.
  • Systems meaning the integrated body of standards, policies, and procedures supporting each functional area or department.
  • Processes are the individual standards, policies, and procedures to consistently accomplish required actions.

While I think Mr. Muehlhausen is spot on with his advocacy of the importance of an operations plan, I disagree with him (at least when it comes to club operations) when he says, “There are no template programs to create an operations plan.  The plan is custom to your business, so you cannot ‘borrow’ someone else’s and modify it.  You have start from scratch.”

I say this because Hospitality Resources International has created a large amount of standards, policies, and procedures that can act as a template and be customized for individual operations.  After all, what we as club managers do is similar from club to club and industry best practices are well-known and widely used.

The book is:  The 51 Fatal Business Errors and How to Avoid Them, 2nd Ed., Jim Muehlhausen, Maximum Communications, Indianapolis, 2008.  It can be purchased here.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality 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 hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

Eight Steps to Performance Accountability

Monday, January 19th, 2015

The greatest failure in performance management in any enterprise is the failure to hold managers accountable for their performance.  Many hospitality operations do a poor job in the area of accountability.  This failure is crippling to the long term health and viability of the enterprise.  Here are eight steps to help measure performance and hold managers accountable:

  1. Work Plans.  Have each manager prepare an annual work plan spelling out goals, proposed accomplishments, and timelines for completion of each item.  It’s always a good idea to involve managers in preparing their own work plans though these must be based upon broad guidelines from the owners and general manager.  While their buy-in is important to their commitment to their individual plans, ultimately plans must meet the needs and desires of the owner and general manager.
  2. Budgets.  In order for managers of profit or cost centers to be held accountable for meeting budgets, they must participate in developing their own budgets.  An unrealistic budget will defeat a manager from the get-go, but “softball” budgets cannot be accepted either.  One of the best ways to budget is to use volume and average sale/hourly wage benchmarks to build the revenue and payroll parts of the budget.  Not only do historical metrics make for more accurate budgets, but analyzing these benchmarks on an ongoing basis makes for a better understanding of shortfalls in revenue or overages in payroll costs.
  3. Benchmarks.  All departments must be benchmarked in detail – at a minimum revenues, cost of goods, payroll, and other operating expenses should be benchmarked monthly.  These and other benchmarks are the most objective measures for holding managers accountable.
  4. Tools to Beat Budget.  Use the Tools to Beat Budget program whereby all managers with bottom line responsibility track their revenues and/or expenses in real time, thereby exercising greater control over their budget and financial performance.  Properly maintaining the Tools to Beat Budget binder provides all the information necessary for in-depth monthly reviews of performance by the General Manager and other interested parties.
  5. Monthly Review Meetings.  Hold monthly meetings with department heads to review progress on annual plans, actual to budget performance, benchmarks, and efforts to correct operational and performance deficiencies.  These meetings permit ongoing review and course corrections or added emphasis as necessary.
  6. Routine Departmental Inspections.  Use routine inspections with a standardized checklist to inspect all operating areas on an ongoing basis.  Such inspections should monitor and note cleanliness, order, maintenance, safety, security, and other signs of organized and efficient operations.  These inspections when standardized, scored, and benchmarked provide an ongoing measure of these basics of an operation.
  7. Interdepartmental Support Evaluations.  Since all departments of a operation are interrelated and depend upon one another for peak performance, each department head should fill out standardized evaluations on interdepartmental support and cooperation.  As an example:  the accounting department will have a hard time meeting its requirements if operating departments do not submit coded invoices, payroll data, inventories, benchmarks, and other financial data in a timely fashion.  If department heads know that their performance in these areas is being monitored and rated, they will put greater emphasis in meeting these requirements.
  8. Performance Reviews.  Base periodic performance reviews for each manager on specific accomplishments and meeting well-defined performance measures.  Meaningful reviews are directly dependent upon the effort put into defining expectations, establishing specific work plans, and creating objective measures for accomplishment and performance.  While it takes some effort to set up a system of objective measures, the rewards for doing so are immense and well worth the effort.

Unless a General Manager does everything himself, he must rely on the efforts and performance of his subordinate managers.  But without measurable accountabilities he has no real means to drive his agenda, performance, and other initiatives to improve operations.  When department heads aren’t held accountable, only the General Manager will be.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality 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 hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

Consistency is Key to Quality and Service

Monday, January 12th, 2015

When it comes to quality and service some clubs are consistently awesome, a few are consistently awful, and most are consistently inconsistent. While there may be many factors that contribute to the comparative performance of clubs, a major underlying difference is consistency or lack thereof in the details of their operations.

As I progressed through my hospitality career, I often heard the time-worn remark that while fast food operations don’t necessarily provide their customers with the highest quality of product and service; they build their success on providing a consistent experience.

Private clubs aim higher for their customers – the elite and affluent members of a community who pay a significant amount to belong and enjoy the ambience and personalized service of a club.  Yet simply because a club offers more impressive surroundings, higher quality amenities, and a more upscale menu doesn’t mean that members don’t have a reasonable expectation of consistency whenever they come to their club.

But in contrasting clubs, which are often standalone operations with limited staffs and no economies of scale, with a McDonalds or a Subway with their significant corporate resources is an unfair comparison.  This doesn’t mean that clubs should not aspire to consistency of operations, but it does mean that clubs must make a concerted effort to institutionalize consistency in all areas, particularly in its relationship with members.

Here are major areas of a club operation where consistency is critical:

Leadership.  How your management team interacts with employees is critical to their commitment, performance, and engagement with members.  Without a consistent conception and application of leadership at all levels of the operation, the quality and service you provide will be as inconsistent as the leadership styles of each manager and supervisor.  Leadership on the Line and Leadership on the Line – The Workbook spell out in detail the principles of Service-Based Leadership and are a great foundation for consistent quality and service.

An Overarching Game Plan.  Every endeavor demands a plan to be successful.  Without a written plan to guide various departments in the execution of their missions, inconsistencies will abound.  The Quest for Remarkable Service is a good starting point in developing your specific game plan.

Organizational Values and Culture of Service.  The values your club holds dear and the manner it interacts with members, employees, and the community at large is crucial to its success.  As with any nuanced interaction with others, these must be well-defined, taught, and modeled to ensure consistent understanding and application.  Organizational Values can help you define your own values and culture of service.

Organizational and Operational Standards, Policies, and Procedures.  How can you possibly determine what employees should be trained to know and do if you have not defined your Standards, Policies, and Procedures?  See Club Accounting Standards, Policies, and Procedures and Club Personnel Standards, Policies, and Procedures; there is no better starting point to prepare your club’s customized SPPs in these two critical areas.

Management Disciplines.  In his groundbreaking book, Good to Great: Why Some Companies Make the Leap . . . and Others Don’t, Jim Collins said, “Much of the answer to the question of ‘good to great’ lies in the discipline to do whatever it takes to become the best within carefully selected arenas and then seek continual improvement in these.  It’s really just that simple.”  Without disciplined managers at every level of the organization executing best practice management disciplines, a club will never achieve consistency of operations or greatness.

Member Relations.  A club’s membership is its lifeblood.  How the club interacts with its members in all its areas of engagement will determine the memberships’ commitment to and use of club facilities.  This is an area that cannot be left to serendipity.  To be consistent in how members are engaged and treated, the club must have a comprehensive Member Relationship Management Plan and all employees must be trained in its requirements.

Managerial and Employee Training.  If employees are to perform with consistency, all staff, including managers, must be trained in all aspects of their positions and responsibilities, most particularly in the details of service and service delivery.  Read Training Requirements in Hospitality Operations for a broad list of training necessities.

Employee Empowerment.  John Tschohl said, “Without empowerment, an organization will never be a service leader. Empowerment is the most critical skill an employee can master and a company can drive in order to lure and keep customers.”  Creating employee empowerment requires leadership, planning, and training.  Consistent empowerment training across all service delivery areas will transform both employee morale and member satisfaction.  Read The Power of Employee Empowerment for a greater understanding of this revolutionary means of service.

Planning, Execution, and Review.  The operational efforts of the club are encompassed in the ongoing process of planning, execution, and review.  When addressed and executed in a disciplined manner, this process can streamline your operation while infusing it with consistency.  Any club task that will be repeated (and this means 99.9% of everything you do) can be examined for ways to make it more efficient or replicated with greater ease.  This discipline leads naturally into the following one.

Continual Process Improvement.  Refer again to the quote from Jim Collins under Management Disciplines above, “. . . and then seek continual improvement in these.”  In the effort to continually improve, a major and continuing focus should be on improving the consistency of the club’s quality and service.

Accountability.  Everything we’ve talked about above to improve consistency of quality and service means nothing without accountability.  Without leadership, the “will to make it happen,” and strict accountability for results, running a high quality club is an exercise in futility.

Having discussed the major areas requiring consistency, you must understand that the way to build a high performing, consistent operation is not unknown, but at the same time, there is nothing easy about the effort that goes into it.  It requires the hard work, focus, and diligence that Jim Collins described as the Flywheel Effect in building a “good to great” company,

“Sustainable transformations follow a predictable pattern of buildup and breakthrough.  Like pushing on a giant, heavy flywheel, it takes a lot of effort to get the thing moving at all, but with persistent pushing in a consistent direction over a long period of time, the flywheel builds up momentum, eventually hitting a point of breakthrough.”

Fortunately, much of the initial groundwork and documentation has already been accomplished.  Given the fact that most clubs are similar in their aims and methods, there is no sense in reinventing the wheel.  Hospitality Resources International has a wide variety of basic resources available to purchase at reasonable cost.  This material can be used as is or can be customized for specific operations.

When you recognize that consistency is a significant underlying element of both quality and service, it is obvious that it must be a focus of everything you do to organize the club and train staff.  So do yourself, your employees, and your members a favor and ensure a Consistency of Message for your club to consistently excel in everything you do.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality 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 hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

Motivation and Morale

Monday, January 5th, 2015

Employee turnover rates, employee attitudes, body language, and facial expressions speak volumes about a company.  The signs are easy to see – grumbling, fearfulness, under-breath comments, lack of humor or gallows humor, cynical signs on desks or screen savers, and sour, negative attitudes.

Poor morale comes from poor leaders.  Employees are not to blame.  They are simply responding to a lack of leadership.  Poor morale is solved by a genuine interest in the welfare of employees, trust, constant feedback, good two-way communications, clear goals, and positive motivation.

Leaders must motivate their employees to do what needs to be done, not just to get by, but to excel.  Leaders are vitally concerned about their employees’ morale.  Poor morale can cripple the effectiveness of any group of people.

You must set the example and be positive and upbeat.  Bad moods can destroy an organization, especially if it is yours.  It is your responsibility to keep your employees up.  Don’t tolerate sour, negative attitudes.  Unless you put a stop to them, they will grow like a cancer and be just as destructive.

A vivid memory of mine is of working at a historic hotel where the controller had been “in residence” for over twenty years.  Martha never smiled, and she seemingly despised hotel guests, vendors, and other employees.  Her isolation, constant grumbling, and obvious contempt for all around her poisoned the day-to-day atmosphere of the operation.

Staff social functions were occasions for Martha to complain about others who had not done their part or had performed poorly.  Staff meetings always included diatribes on how planned improvements were pointless because guests always complained and employees didn’t care.  Despite her critical and central role in the operation, other employees avoided her like the plague since she was so unpleasant.  Naturally this led to all sorts of problems, lack of cooperation, and miscommunication.

Finally, after much fruitless counseling and despite her longevity, we fired Martha.  The new controller we hired placed great emphasis on being part of the team, meeting with other department heads to explore their concerns and issues, and making a positive contribution to planning and change.

Morale improved immediately.  Line employees and managers seemed to have a new enthusiasm for the challenges we faced.  Cooperation and consideration became the order of the day.  As we gathered steam, improvements in the operation were readily apparent, and we all took pride in our efforts and accomplishments.  Even our regular guests noticed the new attitude and complimented us on our many initiatives.

I expected things to improve without Martha’s ill humor, yet I was stunned by the difference her departure made.  It seems her negativity impacted many on the staff.  The collective emotional energy invested in dealing with her was put to better use and everyone was better for it.

While you can’t control the mood swings of others, you can expect and require your employees to treat their fellow employees with courtesy and respect.  You can insist on a cheerful and positive attitude.  Any employee who refuses to make this basic commitment to the group welfare should seek other employment or, if suffering from a medical condition or emotional problem, seek professional help.

In dealing with many issues of motivation and morale, a little sincere human concern goes a long way.  The people who work for you are like you, basically good-at-heart, each with his or her own strengths and weaknesses.  Be gentle and nurturing and give them the benefit of the doubt.  Show understanding in helping and teaching them.  Yet be uncompromising and fanatical in your dedication to right attitude and quality of service.

Make employees part of the team, remembering that you are their coach.  Share ideas with them, brainstorm with them, and listen to their ideas.  A person with a stake in an organization has a greater sense of commitment.

A little praise and recognition goes a long way in building morale and esprit.  If employees bring you good ideas, make sure they get recognition for their contribution.  Never, ever take credit for an employee’s idea.  Your superiors will be far more impressed by your self-confidence and generosity of spirit in giving credit where it is truly due.  Conversely, nothing will destroy your standing with employees faster than claiming credit for their accomplishments and ideas.

Know and address your employees by name.  Meet with your employees frequently, both formally and informally.  Talk to them every day.  Ask for problems; hound them for problems.  If they honestly believe you will try to solve the problems they face, they will open up.

Excerpted from Leadership on the Line: A Guide for Front Line Supervisors, Business Owners, and Emerging Leaders, Ed Rehkopf, Clarity Publications, 2002

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality 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 hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!