The Impact of General Manager Turnover in Private Clubs
There are often valid reasons behind a Private Club Board’s deciding to make changes in top management (particularly their General or Club Managers, referred to here as General Manager). However, Boards should also carefully look at the potential impact of a change at the General Manager position and whether such an action really addresses the underlying reasons for making such a move.
Impact of General Manager Turnover
The potential impact of turnover in the General Manager position include:
- Finding a replacement is not easy. General Manager’s (and other top management positions in Private Clubs) are not commodities that are easily interchangeable. Factors that need to be considered when hiring a General Manager include the culture of the Club and the fit of a candidate. With many GM’s satisfied in their current positions the number of highly qualified candidates for your Club may be less than you think.
- The cost and time involved in a search can be substantial. There will be decreased productivity resulting from an open position.
- General Manager turnover can create uncertainty with other managers and the staff which could result in further turnover.
- Potential for membership dissatisfaction resulting from potential disruptions in service and changes in familiar faces. How popular was the General Manager with the general membership?
- The rapid turnover of Boards puts the implementation of strategic and long-term capital plans, critical to a Private Club’s financial sustainability, at risk. Turnover at the General Manager position can magnify that risk.
- Clubs are often uniquely complicated and learning curves can be long. There are many relationships to manage with Boards, committees, staff, vendors, government officials and hundreds of members.
Underlying Reasons For Changing The General Manager
Private Club Boards should completely evaluate the reasons for making changes in the GM position or when a qualified General Manager departs:
- Does the Board have an actionable strategic plan that addresses the Club’s future financial sustainability? If so, is the General Manager fully informed and given the freedom and resources to execute the plan?
- Does the Club have a funded Long-Term Capital Plan? Is the Club funding its depreciation and keeping up with the preservation of its facilities?
- Does the Board, in concert with the General Manager, approve an annual budget consistent with a long-term, fully-funded financial plan and then allow the General Manager and his/her team to execute without interference?
- Does the Board benchmark compensation programs and financial results with those of an appropriate set of peer clubs?
- During performance reviews, does the Board focus on key goals such as financial performance, execution of the strategic plan, membership satisfaction, member retention and completion of capital projects or does it get too far into the weeds?
Private Club Boards generally do not have the depth of knowledge of the Club Industry. A good GM, particularly with a Certified Club Manager designation from the Club Managers Association of America, does. We recommend that Boards hire carefully and use the transition process to reestablish the appropriate roles of the Board and General Manager.
Club Board Professionals, LLC is a strategic financial consulting and training firm. The Principals, Dave Duval and Joe Abely, assist their clients achieve excellence in three areas: membership satisfaction, financial sustainability, and exemplary governance. Contact us for a complimentary initial assessment of your club.
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