Even if implementation of the new GM/CEO governance model may not be possible, all clubs can learn from its guiding principles.
My advisory board meeting had just ended, so it was not completely alarming when the larger group broke into smaller ones and continued with side conversations. After some time had elapsed, the non-verbal language of one group became concerning. In a case like that, you do the most logical thing possible—walk right up to them.
Instantly the hushed tones fell silent. “What are you guys chatting about?” I asked. We can tell you, they responded, but you must promise not to say anything. “Of course,” I said. (Because this occurred over ten years ago and the club shall remain nameless, the statute of limitations on this promise has expired.)
We are discussing The Tabernacle, they said.
“Forgive me for asking a potentially silly question,” I replied. “But what is The Tabernacle?”
The Tabernacle, they tell me, is our plan to create a set of by-laws that are so ironclad, so set-in-stone, they will be impossible for future Boards to change. In doing this, we will ensure that our beliefs, and our standards for the club, live in eternity.
This strategy and story, ambitious by any Board’s standards (not to mention an advisory board), was buried deep in the recesses of my brain. It popped back to life with the recent spate of governance models being discussed in our industry, and more specifically, member-owned clubs.
Twenty years ago, the GM/COO idea was the “new” governance model for clubs. The strong business logic of centralizing operations being too difficult to ignore, this concept swept through the industry like a hot knife through butter.
Today, the “new new” model is the GM/CEO as the leader of not only operations, but also the Board and committees. It too is fundamentally based on the structure of almost every other business in America. But despite strong wishes for this model to sweep the nation like the COO model, its adoption to date has been limited to high-end, multi-course clubs and a few others (which we will get to in a moment).
Why has it not gained more traction? Jim Collins would tell you it is because, “Good is the enemy of great…We don’t have great schools, principally because we have good schools. We don’t have great government, principally because we have good government. Few people attain great lives, in large part because it is just so easy to settle for a good life. The vast majority of companies never become great, precisely because the vast majority become quite good—and that is their main problem.”
While this CEO ideal may never gain universal support in our industry, we can learn a lot from where it has been adopted successfully. Because clubs with $20+ million in revenue would be a difficult model to replicate, we turn to those with stronger parallels to our situations. The most aggressive changes in governance, and the ones that have successfully transitioned to a CEO model, have occurred at clubs fighting for their lives.
These clubs are typically in heavily competitive markets, and often carry a high debt load inherited from the developer. Clearly not the classic definition of “good.” Their “bad” status forced them to take striking action, in a traditional fight-or-flight scenario. And in many of these cases, their swift and dramatic moves have not only averted bankruptcy or worse, but have potentially positioned them ahead of the competition moving forward.
So if your club is not ready to make the leap to a CEO model, how can you plug into the same foundational logic that brought the COO model into existence, and now apply it to the best parts of the CEO model?
You must start at the top. There are great democratic countries, but you cannot name one great democratic company or organization. You must have a strong President who is willing to create an effective, clear and uncomplicated strategic vision for your club. This sounds too simple, but healthy clubs do the simple things well. And anything that is healthy—automatically grows!
Once this vision is created, you must over-communicate it within the club. This starts with sequential communication: the President telling the Board, the Board telling the committee chairs, the committee chairs telling the committee members, and the committee members telling their friends. (And then repeat numerous times.)
The key to success for this strategy is strong alignment of messaging. If any one of these groups does not buy in and goes their own direction, no amount of communication to the rest of the membership will be sufficient. With strong alignment of the leadership, even average communication to the rest of the membership is usually sufficient.
Furthermore, when you don’t have a single vision, or the vision has too many moving parts, silos are created within the club. Current ineffective models lead to these silos, as each committee feels they need to fight for their “piece of the pie.”
But under this new system, the chairs realize they are not serving just their committee, but the entire membership. This system allows for greater focus, which by its very nature will drive out ancillary or unimportant topics and personal agendas. When there is not alignment of focus, getting input from your members will inevitably lead to their frustration, as you are unable to deliver on their divergent requests.
For most of our clubs, the committee system makes up 90% of our governance success. If we can leverage the business and intellectual acumen present within our own leaders and Boards to help them better control their climate, we can have everyone singing the same hymn. And that would be the ultimate tabernacle.
Thanks for reading.
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