Posts Tagged ‘Operations Plan’

Attending to the Basics in an Organized and Disciplined Way

Sunday, July 8th, 2018

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 Real Time Accounting 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.

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 managers throughout the country and around the world.

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!