By Kurt Kuebler , CCM^*

"Crucial Confrontations----Is It Time for A Job Change....For Both the Club and the GM/COO?"

Have you ever wondered why a seemingly happy, long tenured manager who has established him/herself in the local community and within a successful club leaves for a new job? Clearly, there are nearly as many reasons for doing so as there are clubs and managers. The one reason, however, that is increasingly becoming the predominate answer to that question is ---- “The only way I can achieve the financial compensation levels of top managers these days is to leave for a club that recognizes today’s ‘going rate’!”

There is no doubt but that General Manager/COO salaries have escalated in many parts of the country in the past few years, well beyond normal inflation. Some managers would say, “It’s about time Boards recognized the complexity of this business model and provide us appropriate and commensurate executive compensation.” Others would suggest that like we read in the financial sections of our newspapers nearly every day, “Compensation for executives is out of control. Executives should be paid for results. If results aren’t there, very moderate or no increase in compensation should be provided or expected!”

So, where does the club world really fit in to this picture?

On the ‘reality’ side of what often occurs in private clubs, GMs are faced with several issues not normally part of ‘for-profit’ corporate cultures. Clearly, most corporate executives would cringe over an annual change of the Chairman of the Board (Club President) and the loss of continuity it creates. Additionally, in the for-profit world, who would ever create a budget that is projected to ‘break-even’ and then think that someone could easily assess their performance while at the same time trying to determine how many uncontrollable factors and decisions were included in that outcome (committee influences, unplanned board approved expenditures, weather, and so forth).

Therefore, one of the most significant negative influences on tenure is a lack of consistent, realistic and attainable goals that often set a GM up for failure from the start. Clearly, setting the standards and parameters of the ‘playing field’ (expectations and goals) is first and foremost in the process of success. Revisiting and redefining this ‘playing field’ on a regular basis is critical. The best clubs in the country typically do this without fail for itself, its committees and, most especially, for the GM. The GM does this with his or her team to ensure that from top to bottom, everyone knows, or has the opportunity to know, what their ‘playing field’ is and even more importantly, what the expectations are.

After the playing field and expectations have been established, both the Board and GM (and all others within their related constituencies --- committees, staff, vendors, etc.) have to be held accountable for their end of the commitment.

Assuming then that the GM is meeting or exceeding expectations, Boards need to recognize that he or she is often the single most influential ‘face’ of the operation and has significant impact on the continued success ‘culture’ that has been established. And, many Boards need to realize how valuable this influence is on the ‘brand’ the club has established in the community. In some cases, especially in residential club communities, the ‘branding’ provided by the club to the rest of the community is worth millions of dollars when considering the entire value of these communities can be from tens of millions to hundreds or even a billion dollars in assets. Conversely, a diminished club ‘branding’ of the community can significantly devalue these assets. Recognizing the GM’s role in this outcome is extremely important, and is often the overlooked factor in determining the long-term tenure ‘value’ of the role.

The bottom line of it all is that retaining an underperforming GM, and the inherent loss of value/reputation of the club/community is as short sighted as not ensuring that a well performing GM (and his or her team) is consistently compensated at a level that is competitive with the geographic community in which it sits.

Tenure shouldn’t be a factor in retaining and compensating an underperforming GM. Nor should a club essentially force a well-performing GM to have to look outside of his or her current club in order to be fairly compensated in the market. Most certainly, a club should not be expected to pay for results that don’t measure up! But, both the Board and the GM need to have candid, reasonable and realistic discussion about the results as they relate to overall expectations. And, in a perfect world, these conversations should be occurring at least quarterly so that there are absolutely no surprises for each party when the annual performance (and compensation) review occurs. If the GM feels that he/she is falling behind ‘market’ in compensation, he/she should be making the case to the Board with clear facts and results as to why a larger increase (or bonus) is prudent. If, however, the GM did not, or has consistently not met clearly defined goals and expectations, the Club should not be paying him/her simply because he/she remains with the Club and has good tenure.

Clearly, there has to be a consistent ‘meeting of the minds’ as to what is expected, and most certainly there must be regular and on-going candid conversations about these expectations and the ‘facts’ that led to the outcomes experienced during the period of time being discussed. While these are often not the easiest of conversations for either party, they are crucial to achieving the desired results, and most certainly the ability for everyone to understand the ‘whys and wherefores’ that got you there.

Too many failures, too many unnecessary personnel changes, and way too many frustrations result from NOT having these crucial and necessary confrontations or discussions. Don’t be caught in this trap and find that you feel that its time for a job change when it really isn’t necessary!!

Written by Kurt D. Kuebler, CCM

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Credits

Originally posted by KurtKuebler on 31 Mar 2010.
All contributors: KurtKuebler, MarleneStone,

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