It's Not JUST About the Millennials

October 12, 2018

 

It seems the hot topic for the past few years is how to attract Millennials to the private club. I contend this is a smoke screen to a much deeper, more pressing issue that is threatening many member equity clubs – poorly run clubs due to member interference in the daily operations. There is no reason to attract Millennials to your club if it is run poorly. They have lofty expectations and if those are left undelivered, the Millennials will not stay at the club, leaving you where you were before – in need of new members to survive. Millennials are not the silver bullet many are seeking.

 

It is easier to blame the fact that the next generation is not joining your club than it is to be introspective to get to the root cause of the issue: when members insert themselves into the operations, the club suffers. If members continue to involve themselves in the operations in an attempt to make management decisions or provide direction to employees, the club will not be around long enough to cash the millennial’s first dues check. In numerous conversations with general managers; coupled with my experience and association with member-owned private clubs, many clubs continue to allow and operate within a fundamentally flawed operations model. Other than the club’s volunteer leadership of board members and advisory committees who are put in place to determine the club’s strategy and policy, the constant desire for members to manage the daily operation of the club has, and will continue, to drive many clubs out of existence….or into the hands of private ownership or professional management. 

 

 

This may be a good thing because of the over-saturation of clubs in the marketplace who are at a crossroads with their membership declining, deferred maintenance needing attention and aging facilities keeping the club from being competitive. The evolution of the private club experience will change drastically over the next few decades following the plight of the roadside motel. In the early part of the 20th Century, the hotel business landscape was populated with "Mom and Pop" roadside motels and hotels. Each one independently owned and operated. As the lodging industry changed and grew through the century, independent hotels or motels were replaced with professionally managed, consistent brands. Members will continue to "own" the club but will completely turn operations over to a professional team. Why won't this model work within the club industry ?

 

Some of the most successful companies in any industry, share a few characteristics: the first is usually a long-tenured CEO who has complete control of day to day operations. The second characteristic is a board of directors that is focused on strategic issues facing the organization two or more years into the future. The best companies are focused even further into the future, 5-10 years, and have a long-term financial plan in place to go with their strategy. Too many club boards are worried about the price of a glass of wine and how fast the greens are rolling. These trivial operating concerns become moot if you don’t have a plan for how you will keep the lights on two years from now or understand the needs of future members and identify what the club must do to remain competitive over the next 2 – 5 years.

 

 

If you own stock in Coca Cola, you are an owner of the company. It would be unheard of to go to the Annual Meeting in Atlanta and have a conversation with the Board or Management Team regarding the price of a 16oz Diet Coke at your local convenience store. Yet, daily, members feel it is their duty to discuss the price of a beer or cheeseburger with the board and management, because they are the "owner". Boards and members must understand how this interference damages their club in the long-run. Members simply have too much of a vested interest to make clear-minded best decisions for the benefit of the club’s long-term viability and all members’ enjoyment – now and in the future.

 

The future holds great change for member-owned private clubs; some will continue to close and be re-purposed (mainly housing), others will sell to large management companies. I believe the largest growth potential will be in management companies.  Members will continue to own their club, but they will sign a multi-year contract with a management company that provides superior hospitality to the members. Of course, the third option is available right now: provide the management team in place the chance to be successful by allowing them to do their job and provide professional management of the club without interference. Either way, there must be wholesale buy-in from ALL members that the hired management (third party management company or the club’s management) has complete control of operations.

 

If a club is run properly: from attracting new members to controlling expenses, and the members and management have a true and accurate understanding of the club’s strengths, weaknesses, opportunities and threats, the club will be successful. It’s not just about the Millennials.

Brian Armstrong is RCS's primary recruiter,  and a Certified Club Manager with over 17 years of management experience in all types of clubs. Brian's industry knowledge is vast and extends to every area of the club. This well-rounded expertise combined with a forward-thinking perspective enables Brian to effectively and strategically guide clubs and their Boards into the 21st century while still respecting the traditions of the past. He was elected President of the National Capital Club Manager's Association in 2012 and 2013, served over 5 years on the Board and countless others on various committees, and shares RCS's passion for giving back to the industry.

 

Contact him at Brian@consultingRCS.com or visit the RCS website at www.consultingRCS.com.

 

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Whitney Reid Pennell
 Founder & President

Whitney Reid Pennell is the founder and president of the award-winning RCS Hospitality Group (formerly Reid Consulting Services). She is a published author and widely praised seminar leader, with over 20 years of club operations management and consulting experience. 

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