Archive for the ‘benchmarking’ Category

Guest Blog: What I Learned About Business Leadership from John Wooden

Monday, October 3rd, 2011

I have been a leadership coach for the past two decades for Fortune 500 CEOs and other senior leaders.  Much of my success, or more accurately the success of my clients, is due to the wisdom of John Wooden, the great former UCLA basketball coach, who passed away at age 99 on June 4th, 2010.  Mr. Wooden won 10 national championships, a record unlikely to ever be equaled.  Many have called him a national treasure. I concur, and would add that he was a treasure chest of great wisdom in many domains of life beyond basketball, including business.

Twenty-one years ago (1989), just before I became an executive coach, I had the good fortune to spend a few hours with Mr. Wooden during one of his Chicago visits.  He was willing to see me because of his relationship with two of my former coaches.  After the normal pleasantries, I asked Mr. Wooden this question: “What is the one thing you did that made you such a masterful leader and coach?”

His answer changed my life, and shortly thereafter began to change the lives of my clients.  His answer: “Most coaches have one commitment, and that is to winning.  I had a dual commitment-to winning, and also to relationships-and I was equally committed to both.”

I was astounded by his answer because as a corporate business leader earlier in my career, I had certainly fulfilled on his first commitment, but had not even given much thought to the second.  Mr. Wooden then elaborated on how he fulfilled on those two commitments, never compromising one for the other.  That definition of leadership, and other leadership principles I learned that day, have played a major role in my business coaching practice the last 20 years.  Here are some of the most important principles Mr. Wooden spoke about and how they apply to business leadership.

1.   Live the Dual Commitment-to Both Results and Relationships.

As Mr. Wooden said years ago, “The drive to win is a good thing, but when that drive becomes single-minded, it often leads to insensitivity to people.  The coach, by relentlessly focusing on winning, can, over time, damage the team’s performance.”

Most of my corporate clients, when they begin working with me, mirror the way I used to be in my corporate career-a strong commitment to Results and a relatively weak commitment to Relationships.  However, when those same business leaders learn how to fulfill on both commitments, key performance measures including sales and earnings typically reach unprecedented, sustainable levels.  I have seen that happen with thousands of my business clients the last twenty years.

2.   Implement the Discipline of Execution.

Mr. Wooden insisted his players and coaches, including himself, be on time, and keep their word about everything, big and small.   He expressed this axiom: “Powerful results require disciplined actions, where everyone can be counted on.”

To generate the results they want, business leaders need to cause powerful actions to be implemented in a coordinated, clear manner, where each person’s word is their bond.

3.   Be Transparent.

This means admitting you’re not perfect, that as a leader you can learn from anyone.  One of Mr. Wooden’s favorite expressions was “It’s what you learn after you think you know it all that really counts.”

In business, the most effective leaders realize the first person to lead is themselves.  In other words, they have self-awareness.  This requires the counter-intuitive practice of leaders asking for feedback from the people around them on what’s working and not working.  That kind of vulnerability is actually a sign of strength, not weakness, and creates great value for the business and the people in it.

4.   Slow Down in Order to Speed Up.

One of John Wooden’s favorite phrases was “Be quick, but never be in a hurry,” meaning be alert, be diligent, think, but don’t be in a rush, don’t be careless, don’t take things for granted.

Of course, this principle relates to business in a big way, if one looks no further than the oil crisis in the Gulf.   Effective leaders must overcome the many characteristics of our times that push leaders to react, rather than reflect and think.

MR. WOODEN, ON BEHALF OF BUSINESS LEADERS EVERYWHERE, THANK YOU!

Al Ritter, President, Ritter Consulting Group, ahritter@ritterconsultinggroup.com

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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Twelve Reasons I Benchmark

Monday, March 14th, 2011

Benchmarking is one of the most significant things a general manager can do to improve the performance of a club.  By understanding the underlying “drivers” of the operation, he or she can take action to enhance results.  As Lord Kelvin said, “If you cannot measure it, you cannot improve it.”

Here are the reasons I benchmark in detail:

1. To establish the baseline or “benchmark” of existing operational performance.

Businesses generate many variable measurements of performance.  Existing data determines the baseline performance against which all future operations will be compared.  If data has not been tracked in the past, begin by measuring existing performance and make that the benchmark.  Often past data is available, it’s just that no one has made the effort to collect, organize, and summarize it.  With a little effort baseline measures can be reconstructed from past periods.  If this is too much trouble, begin by collecting today’s data.  In a short time valid benchmarks will emerge, though usually a full year’s worth of data must be collected to account for seasonal variations in business.  In the absence of significant changes, the longer the data is tracked, the more valid it becomes as the standard for the operation and as a predictor of future activity.  But, a corollary to this is that the older the data, the less relevant it is to current operations.

2.   The benchmark performance can be considered the operating standard and all future performance can be compared to it.

Once the operating standard has been established, all future performance is compared to it.  “Out of line” benchmarks become warning indicators that something demands closer scrutiny.  Often there are valid reasons for out of line numbers, perhaps the benchmark is a true anomaly that will correct itself in future periods, or it may be the start of a trend that bears management consideration and decision.  In any case, by monitoring the benchmarks, managers are aware of changes in their business and will be prepared to take action as warranted.

3. After tracking operating statistics for a sufficient period of time to ensure a statistically sound sample, benchmarks can be used to establish performance goals for future operating periods.

When establishing budgets, management can use historical benchmarks to establish realistic and accurate goals for coming operating periods.  Once goals are established they can be used to compare to actual performance day by day, week by week, and month by month to measure progress toward overall objectives.  Should actual performance fall short of expectations, management can make timely interventions to get the operation back on track.

4. It is useful to compare an operation’s performance measures for a given period to other past periods, to other similar operations, or to the industry as a whole.

For example, comparing September of this year to September of last year or this year’s Mother’s Day brunch to all previous years’.  In large, multi-unit, restaurant companies, one restaurant is compared to all others of a similar kind by use of benchmarks.  There are also national trade associations and certain accounting firms that publish annual performance comparisons of various types of restaurants on a nationwide or regional basis.  It’s a good exercise to compare an operation’s performance with the national average for similar types of facilities.

5. Identifying under-performance or best practices.

Hopefully, comparisons with previous periods or other similar operations will be for the better, but if not, it will alert management to problems and possible solutions.  By monitoring the operation’s continuing performance measures and closely analyzing the circumstances that lead to extraordinary performance, a department head can identify best practices – those actions, conditions and practices that optimize efficiency and profitability.  In the case of downward trends, it can alert management to necessary interventions.

6. Benchmarks from past periods can make budgeting for future periods easier and far more accurate.

Absent major change, the best predictor of the future is the record of the past.

7. Revenue benchmarks from previous periods aid in forecasting business levels in future periods.

Accurate forecasting of future business allows managers to properly staff their operations and schedule appropriately for expected levels of business.  This, in turn, helps control payroll cost while ensuring service to members.

8. Tracking revenues and comparing them to historical benchmarks allows management to measure member response to products/services and new initiatives.

The most accurate indicator of member response to new initiatives such as new menus, new hours of operation, improved service training, hiring a new chef, etc., is the response seen in member patronage and buying habits.  If members traditionally spend an average of $132 per month on food, but since the new chef came on board that average has climbed to over $200 per month, management could feel comfortable that their decision to hire a new highly-paid chef was the right one.  Without the benchmark of previous operations, how would they know, except by anecdote and gut-feel?

9. While most managers have a general sense of the many variables influencing their operation, having the hard numbers and statistics supports the validity of decisions, proposed changes in the operation, and requests for additional resources.

Careful tracking and analysis of performance measures is the basis for sound decision-making and is extremely useful in proposing changes in the operation.  Proposals for capital purchases have a better chance for success when supported by details and analysis.  Further, there is no better way to manage the boss than with timely reports about the challenges and progress of the operation.

10. Benchmarks can be used to establish performance parameters for bonus and other incentive programs.

When goals are established based upon historical benchmarks, the ongoing performance measures can be used to determine eligibility and extent of bonus payments and other forms of incentive programs.

11.   The few minutes spent each day in recording and reviewing key operating statistics make a manager intimately familiar with the rhythms and flow of his operation.

Over time this develops into what can readily be called an intuitive understanding of the essential aspects of the business.  As a result a department head is able to foresee and prepare for expected variations in the business, such as traditionally slow and busy periods; doing this will ensure keeping costs in check while maintaining high levels of service.

12.   A significant reason for benchmarking is that it establishes the condition of the operation upon a new manager’s arrival and gives him a graphic demonstration of the many operational improvements under his leadership.

This is most helpful in gaining the trust and confidence of bosses, peers, and employees alike.  Coincidentally, it also makes it easier to justify increased compensation for job performance.

Note:  Club Resources International has developed benchmarking spreadsheets for all areas of club operations.  The Excel files can be downloaded and customized for your operations.  You can find them here.

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 Hospitality Challenge

Monday, September 6th, 2010

I’ve learned a lot about the hospitality business since my first position as General Manager of an historic hotel in the late 70s.  In a variety of positions in hotels, resorts, and private clubs – in startups, turnarounds, and repositionings, I’ve learned a number of key lessons from my efforts to deliver high levels of service.  Here they are:

The customer is King.  The only perception of quality, service, and value is the customer’s.  Hospitality managers must learn as much as possible about their customers in order to meet their needs and wants – where they come from, why they come to your establishment, what are their expectations, what do they like or dislike about your property, what are their complaints, what would they like improved?

The hospitality business is detail and people-intensive.  It takes a lot of people doing all the right things everyday to deliver consistent, quality service.  Therefore:

  • Written standards, policies, and procedures ensure every employee knows what to do and how to do it; help develop specific training materials; and ensure consistency and continuity in the operation.
  • Formal training is a necessity.  Operational processes cannot be left to oral history or chance.
  • Continuous process improvement is a must.  We can never rest on yesterday’s accomplishments.
  • Thorough benchmarking of all areas of the operation ensures that we know what is going on and what our customers are telling us by their spending habits.

“The soft stuff is always harder than the hard stuff.”

  • Consistent, property-wide leadership is a must.  Disparate and competing leadership styles confound the staff and sow divisions in the team.
  • Values and behaviors must be spelled out in detail and reinforced continually.
  • Excessive employee turnover is damaging to an organization in continuity, lost time, and cost.  Except in extreme cases our first impulse (especially in difficult labor markets) is not to fire, but to examine causes; improve processes, organization, disciplines, and training; and instruct, counsel, and coach employees.
  • Employees must be empowered to think and act in alignment with organization values, the property’s mission and vision, and carefully defined management guidelines.  “Without empowerment an organization will never be a service leader.”  Why?  Because there is far more to do and monitor on a daily basis than any management team can possible handle.  Authority for service and service delivery must be pushed down to the lowest levels of the organization – where it takes place.

Work planning and ongoing performance review are essential to holding managers accountable for their performance and the performance of their departments or work teams.  Without accountability only the General Manager is accountable and he or she will fail or burnout trying to succeed.

Leadership is key at all levels of the organization:

  • To set an unimpeachable example for employees.
  • To uncover, analyze, and solve problems.
  • To thoroughly communicate standards, policies, procedures, information, and training.
  • To engage customers and staff continuously.

All of the foregoing requirements must be institutionalized so that the operation continues undisturbed in the face of any turnover and 80% of the operation functions routinely – allowing management to focus on strategic issues, planning, execution, problem-solving, and customer interface.

These lessons learned have led me to formulate a plan to create and deliver high levels of service.  This plan can be found in a white paper I’ve written entitled The Quest for Remarkable Service.

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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Assert Your Competence and Authority with Benchmarks

Thursday, April 1st, 2010

(I apologize to those who follow my regular weekly blog.  A lightning strike Sunday night fried my motherboard and modem.  I’m just getting back up and running this morning.  Here’s the blog that should have been posted Monday morning:)

At one time or another every club manager’s abilities are challenged by a pointed question from a committee or board member.  For example:

Mrs. Johnson, a member of the clubhouse committee, asks in a sharp tone, “Mr. Smith, why don’t you do a better job of training your waiters in the dining room?”

While there are certainly many possible responses to this complaint disguised as a question, consider the benefits of a reply like this:

“Well, Mrs. Johnson, last year each of our servers had 20 hours of formal training, plus we conduct brief on-the-go training sessions as part of every pre-shift meeting.  On average each server who has been with us for six months or more has had over 40 hours of job specific training.  Last year, club-wide we averaged just over 92 hours per employee of formal training on a wide range of topics, including organizational values, legal and liability abatement, work rules and club policies, and safety, as well as job-specific skills.  This was a 7% increase over the previous year.  We’re currently working on a program to expand server training with a series of videos on tableside etiquette and serving techniques, which we’ll roll out next month.  We’re always working on ways to improve the efficiency of our training delivery system, but keep in mind that every hour of training costs the club $10.47.  I’d be happy to share our methods, resources, and job specific curriculum with you, as we could always use another set of eyes on what we’re doing.”

Mrs. Johnson nods her head knowingly and replies in a much softer tone, “Uh . . . no thanks, Mr. Smith.  I was just wondering how we go about training our staff.”

As this example suggests, there is no better way to assert your competence and authority than to be conversant with a wide range of operational data.  Such information is as useful to the head golf professional, golf course superintendent, clubhouse manager, dining room supervisor, chef, and controller, as it is for the club’s General Manager.

But to have such information at your fingertips, ready for any and all challenges, requires that every club department benchmark their operations in detail.  While these details are absolutely essential to the department head, important summary benchmarks must be forwarded monthly to the controller for inclusion in the Executive Metrics Report.  This report is then attached to the monthly financial statement and forwarded to various board and committee members.  Ultimately this information, tracked over time, educates board members and helps the General Manager establish his authority while advancing his vision and agenda for the club.

Knowledge is Power!  And the more knowledge you have about your operations, the more power and control you will have over the club’s direction and your own destiny.  So avail yourself of the great variety of benchmarking resources available on the Club Resources International website and start benchmarking your operation today!

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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Creating Measurable Accountabilities

Monday, February 15th, 2010

I have spent a good deal of time over the course of a career trying to establish a basis for meaningful work plans with measurable accountabilities for club department heads.  Looking back on a long career, I would reluctantly admit that I spent too much time doing and not enough time planning and appropriately delegating.

Sure, work planning takes time, particularly if you put enough effort into it to be of value . . . and finding measurable accountabilities for department head performance seems an elusive goal.  Now, though, on the tail end of my career, I have finally found the time to give the whole matter some serious thought.

As far as work planning goes, what I expect from subordinate managers is to meet goals and budgets and to help measure their progress toward specific objectives.  To do this I find it important to establish monthly reviews of financial performance, as well as timelines and milestones toward non-monetary goals, such as developing departmental operation plans and effective training programs.

On the other side of the coin, measurable accountabilities have continued to be a challenge.  Over the years I’ve developed and deployed several versions of managers’ performance evaluation criteria.  Each ultimately proved unsatisfactory though they included a number of meaningful and worthwhile objectives such as “builds teamwork and morale,” “directs work effectively,” and “follows through and implements well.”  As good as these criteria may look on paper; they turned out to be practically meaningless as I attempted to do reviews because I had no hard evidence or objective means of measuring them.  Once again my reviews degenerated to my “gut feel” or “overall sense of things.”  Clearly measurable accountabilities continued to prove elusive.

In recent months I’ve taken another stab at finding performance criteria for which I could establish specific measurable goals.  Here’s what I’ve come up with.

On the big picture scale, I’ve broken down performance expectations for department heads into 6 major categories — leadership, management, training, performance, compliance, and member satisfaction.  These can be weighted based upon changing emphases, but must equal 100%.  Within each major category are sub-categories that can in some way be measured.  These are also weighted, again totaling 100%.  The following chart lays out the major and sub- categories, as well as the means to evaluate and who is responsible for creating the measurements.

measurable-accountabilities-3

This whole process presupposes that the club has already instituted certain disciplines such as holding monthly reviews of financials and departmental plans with each department head; measurements such as departmental and personnel benchmarks; and both member and employee surveys.

I’m sure that there may be other worthwhile things to measure and for which subordinates should be responsible, and I’m equally sure that there will be some challenges in implementing such a system.  But ultimately I believe the benefits of holding subordinate managers strictly accountable for their performance outweighs any and all challenges encountered.

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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Attending to the Basics in an Organized and Disciplined Way

Monday, February 8th, 2010

I received a phone call a couple of weeks back from an industry colleague who belongs to a private club.  He said he was serving on a committee to look for ways to increase membership and revenues, while cutting costs.  While I mentioned a couple of ideas, I launched into my familiar pitch that almost any club could benefit from attending to the basics of the business in an organized and disciplined way.

Most of us recognize that our business is not rocket science.  The basics of what we do are well-known to any club professional.  What makes our jobs so challenging is the sheer volume of things that must be attended to daily in a detail and people-intensive business.  Unless a club operation is well-organized and its managers highly disciplined, it operates in a state of barely-controlled chaos interspersed with periods of downtime.  The challenge for all is to transition quickly from storm to calm back to storm while remaining focused on long term goals, ongoing projects, and continual process improvement.  The solution is to organize the club so that most things happen routinely and that managers at all levels be highly disciplined in approaching their duties and efforts to improve the operation.

The great majority of private clubs suffer from similar problems rooted in the same underlying causes:

  1. Standalone operations with limited resources and few economies of scale.
  2. Clubs operate multiple businesses — food and beverage, golf, tennis, aquatics, retail, recreation, and the major maintenance effort involved in golf course operations.  The knowledge and skill set to operate clubs efficiently is large and complex, and especially challenging for lean management teams working long hours and weeks.
  3. The club business is both labor and detail-intensive requiring significant ongoing training, yet without the necessary resources to adequately provide it.  As a result most clubs operate from oral tradition and service complaints are a continuing issue.
  4. Most clubs operate without a written operations plan made up of detailed standards, policies, and procedures which, as Jim Muehlhausen says in his book, The 51 Fatal Business Errors, requires managers to reinvent the wheel every day.
  5. The hospitality industry as a whole and clubs in particularly offer relatively low wage jobs, limited benefits, and challenging working conditions.  As a result high levels of staff turnover are common, particularly among line employees.
  6. Older clubs with aging memberships and outdated facilities find it challenging to find the right mix of facilities and activities to attract new members.
  7. In most markets, there is ample competition for the members’ discretionary spending — and often from operations that offer limited well-designed and executed products or services; whereas clubs must be all things to all members.
  8. In a sense, club members are a “captive” audience and can quickly grow bored or dissatisfied with the same old events and activities.  A club staff, without the ability or resources to provide frequently changing “wow” factor events, will often hear the comment, “What have you done for me lately?”
  9. In some clubs ever-changing boards offer little continuity of direction.

Given these and other specific challenges that vary from club to club, it is absolutely imperative that club managers organize their operations in detail.  My own list of requirements includes:

  1. Leadership and management training for all managers and supervisors with an aim of having consistent and disciplined, service-based leaders taking disciplined actions (the benefits of which are discussed by Jim Collins in Good to Great, Why Some Companies Make the Leap . . . and Others Don’t).
  2. Well-defined and consistently reinforced organizational values and culture of service.
  3. A written operations plan made up of standards, policies, and procedures — absolutely critical for human resources and accounting, and fostering organization and discipline in club departments.
  4. Communicate thoroughly with members through a variety of tools and techniques, including newsletter, members only website, management calling programs, and General Manager’s letters.  Understand members’ wants and preferences by taking the pulse of the membership with an annual online survey and monthly surveys of smaller subsets of members.  Analyze member spending habits and purchases to determine individual likes and dislikes, as well as popular and unpopular club initiatives and offerings.
  5. Provide ongoing, thorough training of managers and employees.  This coupled with service-based leadership and a constantly reinforced culture of service will foster employee empowerment — and as John Tschohl, President of the Service Quality Institute says, “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.”
  6. Use Tools to Beat Budget or some other means of real time tracking of revenues, payroll, and other expenses to quickly spot and intervene to correct operational under-performance.
  7. Benchmarking of all areas of the operation to establish the norms of the operation.  The value of benchmarks tracked over time is immense and includes establishing realistic goals for future periods, establishing measurable accountabilities for managers, and easing the preparation and improving the accuracy of future budgets.
  8. Detailed planning, both strategic and tactical, at all levels of the operation and a habit of Continual Process Improvement.
  9. Thorough work planning and performance reviews, coupled with a policy of strict accountability for performance.  This requires developing measurable performance criteria for all managerial positions.
  10. A membership marketing plan based upon the realities of the marketplace and requiring weekly call and action reports from the membership director.  Recognizing that satisfied members are the best recruiters of new members, involve hand-picked members in the membership sales effort.

Each of these necessities, while challenging, will improve the organization and discipline of the club while fostering consistently higher levels of service.  The resulting efficiency and service of a well-run club will make it easier to attract members, which improves dues and revenues and ultimately better positions the club in the marketplace.

Many of the tools and resources to implement the initiatives mentioned here are available on the Club Resources International website — most at no charge.  Currently the website has 1,550 high quality, fully integrated resources available — and more being added all the time.  Come explore the site and see for yourself!

Next Week:  Creating Measurable Accountabilities

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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Guiding Principles and Operating Standards

Monday, November 2nd, 2009

Back in June I blogged about a Culture of Service and the need for constantly reinforced organizational values.  Among those values I suggested the need for principles and standards to guide the enterprise.  Here’s one attempt to define the underlying values of an organization:

GUIDING PRINCIPLES: Principles that guide the conduct of our business!

  • Proactive leadership with service-based philosophy. Our leadership is active and engaged, while strictly adhering to service-based leadership principles (per Leadership on the Line).
  • Forward-thinking, professional expertise. Our professional knowledge should not only be up-to-date, but should be constantly looking ahead for cutting edge concepts and practices.
  • Proven management and operating systems. We utilize proven management practices and operating systems to efficiently organize and operate our club.
  • Sound planning and effective implementation. All of our projects and tasks must be planned thoroughly and implemented completely.
  • Innovative programs, continually reviewed. We offer innovative programs and we continually review them to make improvements.
  • A commitment to staff development and empowerment through formal, ongoing training. We operate in a detail intensive business and can only achieve excellence by thorough training and retraining.  Employees must be empowered to succeed and to solve member/guest issues whenever encountered.

OPERATING STANDARDS: Standards that form the basis for our operations!

  • Our vision and goals are articulated.  Our Club Strategic Plan lays out the long term goals for the operation.  Club Annual Goals are prepared as guides and targets for accomplishment.  We put them in writing to formally commit ourselves to their accomplishment.
  • We are uncompromising in our commitment to excellence, quality, and service.  To serve the highest echelons of our community, we have to set and commit to the highest standards.
  • Authority and responsibility are assigned and accountability assured.  Managers are assigned both the authority and the responsibility to direct their areas of the operation according to our highest standards.  These individuals are held accountable for their results.
  • We embrace innovation, initiative, and change while rejecting the status quo.  We seek continual improvement in all aspects of our operations.
  • Standards are defined, operations are detailed in written policy and procedure, and we seek continual improvement of products, services, programs, and operating systems.  Written standards (or the expected outcome of our “moments of truth”) for our products and services are detailed in written policies and procedures.  We seek continual improvement in these.
  • Member/guest issues are resolved politely and promptly to their complete satisfaction by our empowered employees.  No explanation needed.
  • Constant communications and feedback enhances operations and service, while problems and complaints are viewed as opportunities to improve.  We can never communicate too much or too well.  Informed employees are better employees.  Problems brought to our attention allow us to focus on solutions.
  • We benchmark revenues and sales mixes to evaluate members’ response to products, services, and programs, and we benchmark expenses, inventories, and processes to ensure efficiency and cost effectiveness.  We must pay close attention to what our members are telling us by their spending habits.  Benchmarking and analyzing expenses, inventories, and processes help us be more efficient.
  • We ensure clean, safe, well-maintained facilities and equipment while safeguarding club assets.  A good bottom line is only one measure of our effectiveness; we must also take care of all club facilities and safeguard their assets.
  • We acknowledge each operation as a team of dedicated individuals working toward common goals and we recognize the ultimate value of people in everything we do.  While each employee has his or her own duties and responsibilities, every member of our staff is important and works toward the common goal of understanding and exceeding the expectations of our members and guests.  Ultimately our business is about people and they must be valued and respected wherever and whenever encountered.

By themselves such statements have little value.  But by the  consistent example of management and the constant reinforcement to all employees these values are elevated to an animating spirit that permeates the organization.

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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