Archive for the ‘benchmarking’ Category

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!

Add to Technorati Favorites

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.

champagne-22Most 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.

fancy-table-setting-2Given 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.

wine-glass-on-table-21Each 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!

Add to Technorati Favorites

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:

mgmt-team-21GUIDING 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.emplprofessional-21
  • 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!

Add to Technorati Favorites

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.

baseball-2These 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.

budget-2The 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!

Add to Technorati Favorites