Leading the Strategic Planning Process - Club Managers ...

4Leading the StrategicPlanning ProcessThis chapter was written and contributed by Edward A. Merritt,Ph.D., Associate Professor, California State Polytechnic University,Pomona, CaliforniaTHIS CHAPTER provides an overall guide to the strategic planning process. Specifically,it produces a user-friendly explanation of the planning process as it relates toprivate clubs—including step-by-step guidelines, background information, helpfulhints, and real-life examples.This chapter will help club managers create an integrated strategic plan thatwill serve both club members and paid staff. Members include any volunteerinvolvement and governance—including the overlapping constituencies of officers,board members, and committees—and the various classifications of membersacross their areas of interest. Paid staff includes managers and other club employees—regardlessof rank—and includes the overlapping constituencies of managers,assistant managers, department heads, sports professionals, supervisors, shiftleaders, and hourly employees—essentially anyone who is paid by the club.Simply stated, the overarching goal of club strategic planning is to helpensure that the executive management team has established a vision and missionfor the club and that the paid staff is achieving that vision and mission throughthe process of achieving the strategic plan’s goals and objectives. A strategic planis broad-based and conceptual in nature, and requires long-range, big-picture,visionary thinking. Once created, a successful strategic plan leads to operationsplanning, which is more short-term and practical in nature (goals and objectives)and involves the club’s general manager/chief operating officer (GM/COO) andthe management team, supervisors, and appropriate line staff. General managers,as the chief operating officers of their clubs, typically lead the strategic planningprocess from an administrative perspective on behalf of the members and the paidstaff.Strategic planning in clubs offers several benefits for a private club:1. Strategic planning offers the club a way to examine where it is presently (if itis an existing club) or where it should be when it opens (if it is a new club).By understanding where the club is presently in terms of operations and performance(the actual) and comparing it to where the club would like to be(the benchmark), a manager and board have created an opportunity for a gap113

Exhibit 1 The Club Strategic Planning PyramidLeading the Strategic Planning Process 115Club Strategic PlanningResponsibility of board of governorsand GM/COOFunctional Strategic PlanningResponsibility of functionaldepartment heads (i.e., marketing,finance, IT, HR)Operations Strategic PlanningResponsibility of operationsdepartment heads (i.e., F&B,sports professionals)as marketing, finance, information technology, and human resources—usuallytake the lead in creating functional strategic plans (in conjunction withthe GM/COO). The primary planning issues include creating departmentalstrategies and initiatives to support the club’s overall strategic plan and to createand achieve departmental performance goals and objectives.• Operations strategic planning: The operations department heads—typicallyrepresented by the food and beverage director and the heads of the varioussports areas at the club (golf, tennis, swim, fitness, equestrian, etc.)—usuallytake the lead in operational strategic planning (again, in conjunctionwith the GM/COO). Primary planning issues include creating departmentspecificstrategies aimed at supporting the club’s strategic plan and creatingand achieving departmental performance goals and objectives.This chapter has been written under the assumption that no formal strategicinitiative exists at a particular club. Thus, the chapter is organized chronologically:GM/COOs and students can follow along, step-by-step, to see how anorganized and integrated strategic plan for clubs is put together. Realistically,however, the overwhelming majority of clubs will have at least some elements ofa strategic plan in place. In these cases, GM/COOs can look at the chapter moregenerally, to see the relationships among and general order of the strategic planningelements. While the individual elements work best in the order and mannerspecified, they can also serve supplemental functions alongside a given club’scurrent practices. In short, this chapter works as well for existing clubs seeking

116 Chapter 4to improve or adapt a strategic plan as it does for new clubs attempting to createan entirely new plan.Organizational Strategic Planning:A Step-by-Step ProcessStrategic planning helps you lead your club from a long-term perspective. For aclub, strategic planning always relates to the club’s self-definition of what it wantsto become. Thus, strategic planning affects operational decisions and determineshow the club will practically achieve what it ideally wants to be.Undertaking the process of strategic planning can be a daunting task. Thereare a number of elements inherent in the creation of an integrated strategic planthat may, at first glance, confuse even the most experienced club manager. However,when considered in a progressive order of importance, these elements workclearly and crucially with each other. They are:1. Vision2. Mission3. Goals4. Objectives5. Organizational situation analysis (SWOT)6. Strategy statement7. Budgets8. Action plan9. Assessing progressIf any step is not already in place at the club, the manager responsible for thestrategic planning process should ensure that the missing step is completed beforeproceeding to the next stage of the process.From the outset of the planning process, be sure to create an atmospherein which contributions are welcomed. Essentially, you want to help ensure thatall participants can safely share ideas, without the ideas being shouted down orignored as being insignificant or otherwise unimportant.To help you set the appropriate tone:1. Encourage active involvement. All participants (in any meeting or planningsession) should be actively involved in the process. Stating participationexpectations up front can help keep impatient or more vocal participantsfrom controlling the process and potentially shutting down creative viewpointsand ideas.2. Solicit different points of view. The idea during these strategic planning sessions—especiallyin the early stages—is to get broadness of ideas. You mayfind it helpful to announce that the purpose is to generate a lot of ideas

118 Chapter 4clubs regularly. A group that is unified, vocal, and passionate—no matter howsmall—can be very influential.4. Unanimity. The perceived strength of a unanimous decision lies in the factthat all eligible voters voted on a decision—whether for or against—with noabstentions. Unanimity is a form of decision by majority, unique because the“100-percent” vote often further legitimizes the decision.5. Consensus. Decision by consensus is, by far, the “bread-and-butter” decision-makingmodel most used in the private club environment. Consensus,like majority, is technically decision by authority; in consensus, though, theauthoritarian allows participants to arrive at a decision informally and usuallywithout a vote. The leader compromises throughout the discussion tohelp ensure inclusion before asking for consensus among members—typicallyindicated by a simple nod of agreement or non-response. The decision isthen adopted.Once your strategic planning meetings are appropriately focused—that is, amediator has been identified, participants are enthusiastic about the process, andeveryone understands how decisions will be made at the meetings—the strategicplanning process can begin by outlining your club’s vision.VisionVision is perhaps the most fundamental of the strategic planning elements.Vision is future-oriented and identifies what the club is all about—its purposefor being—as well as where the club is heading. Infusing the club with a definitesense of purpose, a club’s vision states a direction for the club and describes thedestination.At the outset of “visioneering,” which usually begins at the board level, itis important to assess others’ concept of vision. However, it is often difficult forboard members to find a common language to describe their respective visions ofthe club. One effective way to bring about an understanding of vision is to make acomparison between the club and an idea or object unrelated to the club. In makingsuch a comparison—constructing a metaphor to describe the club—it is helpfulto select a product—automobiles, for example—with widespread familiarityand a high degree of stratification.It may sound silly at first, but getting fundamental agreement on what a clubis presently and what the club should be creates the opportunity for a “gap analysis”—forwhich an automobile-related metaphor is an effective tool. For example,as you begin the strategic planning process with your board, you might ask thisquestion during the meeting: “If this club were a car, what kind of car should itbe?” This question works equally well for existing clubs (those that have somestrategic planning elements in place) or new clubs that are seeking to define themselves.The question is straightforward, understandable, and—perhaps mostimportantly—prompts the “visioneering” process.

Leading the Strategic Planning Process 119This discussion often will go on for some time, as participants share theirdefinition or view of the club in ideal terms. Be careful not to rush this discussion. Itis the most foundational discussion in the entire process, because it sets the club’sdirection. And expect to get a variety of answers—though there may be less variationamong answers if the meeting is attended by board members alone. Typically,“Mercedes-Benz,” “BMW,” and “Jaguar” top the list of responses.A logical follow-up question establishes the current state of the club and highlightsthe disparity of members’ views and responses: “Continuing with our caranalogy, what kind of car is the club presently?” This question is similar to the first,but forces the participants to assess the club’s actual and current status—what theclub is—rather than an intended ideal. Again, plan for an extended discussion asparticipants voice their opinions about how the club meets expectations and whereit may fall short—all in the context of the club as an automobile. And, as before,expect to get a variety of answers. In addition to the answers listed above, answerssuch as “Volkswagen,” “Bentley,” “Chevrolet,” “Ferrari,” and even “Edsel” are notuncommon.While it may seem that you have opened the proverbial “can of worms” withthis question, the answers are important clues to what the club’s members trulythink about the club in its present condition. Celebrate the fact that you now haveactual data to work with! To turn this data into useful, practical information, youmust compare the ideal and actual descriptions of the club. This is an effective “gapanalysis” of where you are presently as a club and where you want to be ideally asa club.After comparing answers and identifying the gap, you and your plannersshould analyze the answers in terms of the participants’ demographics and membershipcharacteristics (as much as club tradition and member preferences allow).For example, if most of your tennis-member respondents described the currentstate of the club in terms of economy or low-end cars, then you might considerexamining the tennis department and operation—its facilities, staff, and programs—tosee why it is falling short in the opinion of these members.Sometimes it is necessary to probe for more details, in order to elicit richerinformation for use in decision-making. Asking the question “What kind of car isthe club presently?” to assess members’ actual perception of the club is good as faras it goes, but if the discussion stalls, you can also ask more specific and probingquestions, such as:• What model is the car?• What is its condition?• What is the quality of its stereo? its tires?• What options does this car have?Depending on the willingness and enthusiasm of your group, you may needto keep probing to get people engaged and talking. (Once you get them talking,don't forget to make sure that all of their responses are recorded—this will getmore difficult as the pace of the discussion picks up.) For example, if members

120 Chapter 4answer initial questions vaguely, probe for meaning: Mr. Gordon, you stated thatthe present club would be a Mercedes-Benz S-Class, with a faded paint job and brokendashboard controls. Will you please elaborate a bit, so I can get a clearer idea of what youare saying? Do the controls work occasionally? Are they missing entirely? Why is thepaint faded? How does this automobile resemble the club? Naturally, these additionalprompts will lead into more specific discussion about the club itself, as the frameworkof the car metaphor generates discussion about values and qualities thatapply to the club.Here is an example of the vision statement for a start-up club that used theautomobile-as-metaphor process:The Country Club of Tarantula Canyon will create an exciting, innovative, differentiated,private club experience that will redefine quality in Southern California.By creating a country club experience that is second to none, continuouslyinnovating while recognizing tradition and broadening our appeal to themembers and prospective members, we will be successful in our quest for excellence.Our success in these endeavors will create greater value for our membersand greater desirability for prospective members.This is an example of a successful club that envisions itself as a Rolls-Royce–level club. By aligning its infrastructure, service, and facilities toward the “highend,”the club has initiation fees at the upper end, expensive (and inclusive) dues,and impeccable service. Members expect to pay a lot; however, they expect exceptionalvalue as well.Think for a moment about this successful club. It knows what it is and whoits members are. The message—We are a Rolls-Royce–level club—is clearly communicatedin everything that the club staff and management think, say, and do. Theclub does not appeal to Chevrolet-level members and does not try to do so. Instead,it focuses its marketing toward skimming the “cream” from the highest incomeearners in Southern California—those who routinely shop on Rodeo Drive.But do not misunderstand this concept. There is nothing wrong with a beinga Chevrolet-type club, and there are a number of extremely successful Chevroletlevelclubs. But those clubs are successful because they understand clearly thatthey are Chevrolet-level clubs—that is what they are, that is how they marketthemselves, and that is how they want to be defined. These clubs typically haveaverage initiation fees and dues structures and have a full array of reasonablymaintained (but not lavishly maintained) facilities. They are dependable, but notflashy or extravagant. Their strength lies in their ability to know clearly what theyare as clubs.Problems often develop when some among a given club’s population—whether club managers, staff members, club members, or others—do not sharethis clear understanding of their club’s vision. Think for a moment about themember who visits another club and notices a number of the special offeringsand amenities that the host club offers, only to return to his or her home cluband suggest that you, the GM/COO, immediately adopt similar offerings. Therequests may be simple and easily achieved. But it may then lead to larger andmore elaborate requests. Where does it stop? This sort of “Pandora’s box” effect

122 Chapter 4and do for the next 25 years—to become a powerhouse swimming club with oneof the top Amateur Athletic Union (AAU) programs in the nation. In hindsight, it isclear that a specific vision nurtured a strong commitment. With that strong commitment,potential members flocked to the club so their kids could be a part of thisnew, unprecedented swimming program. Over the years, the club produced scoresof world-class swimmers, including several Olympic medalists. At the club’s peak,there was a three-year waiting list of people wanting to join.Realize that Consultants Are Not MagiciansNobody understands your club better than your managers, staff, and membersunderstand it. Given this reality, why do scores of clubs each year pay thousandsof dollars for consultants to come in and tell them what to do in terms of strategicplanning? While consultants can be very helpful, they are not magicians. Consultantscan lay out the elements of the strategic planning process, and they have theadditional experience of having seen and analyzed a wide variety of solutions tofairly common club issues. Their external expertise, however, cannot substitute forthe club’s internal knowledge of its own personality. In the end, what works for anyparticular club is based on that particular club’s personality or culture.may be over-generalizing the situation. Still, without a clear understanding ofwhat a club is about—its vision—club members often tend to push for theirChevrolet clubs to slowly morph into Cadillac clubs. A clear understanding ofwhat kind of club yours is helps prevent this from occurring—or at least fromoccurring without careful examination.For example, one club located in North Carolina gave the impression of beinga Chevrolet-level club. Modest by most standards, the club had, however, a fewareas of discontinuity in operations. These inconsistencies helped explain theclub’s dire financial straits. All cars were parked by valets, which added to laborcosts. The house scotch was Chivas Regal, an expensive scotch priced at a mere $2for a two-ounce pour (including tax and gratuity)—a cost dictated by a past clubpresident who preferred the expensive brand to the former house scotch. Tableclothswere of an average quality, a standard polyester blend, but the china wasVilleroy & Boch (very high quality) and the flatware was Reed & Barton (very highquality). Luncheon steaks were Angus beef and the sandwich bread was custombakedat a local bakery. An interview with the general manager revealed that hehad been “helpfully advised” by some of the club members over the years; that is,he had been pressured by governors, influential committee chairs, and powerfulmembers to make these and other changes based on their personal whims.Frankly, this club would have been more accurately described as a Frankensteinclub instead of a Chevrolet club. Certain elements of the club were so outof line with its basic identity that the club had morphed into a monster—a bit ofthis, a bit of that. But, after beginning the strategic planning process, includingidentifying a clear vision, the club has re-created itself. A visionary president andGM/COO took charge of the arduous re-creation process in order to make the club

124 Chapter 4members have access to great tennis services and facilities, but little else—butthey offer a great value to tennis enthusiasts.• Focused differentiation: Focused differentiation emphasizes uniqueness andprice, but for a narrow market. For example, some high-end, independent,member-owned clubs offer a single membership plan at a high price, marketingthemselves as “elite”—and thereby appealing to a narrow, affluent audience.Their intangible array of desirable relationships and excellent facilitieshelps them capture a low number of total sales, but at high price. Rolls-Royceand Ferrari market in this manner.While the focused differentiation strategy is often stereotypically assumed tobe the business model of all private clubs, any of these generic strategies can workquite well. Remember, though, that the desirability of each strategy depends onthe goals of each particular club.During the vision stage of strategic planning, it is essential to clarify the club’sgeneric strategy. Are we going to be a low-cost club (relatively speaking, in relationto other clubs), a differentiation club, a focused low-cost club, or a focused differentiationclub? The important thing is to not allow your club to get stuck betweenthese positions somewhere. When a club is neither fish nor fowl, it gets into trouble.Often, competing forces within a club’s membership demand both high quality andlow price, which can lead a club to an untenable middle ground if it tries to satisfyboth demands. The conversation may proceed something like this:Look, I know that the regular price for a banquet is $39 per person. However, this is animportant function for a great cause. We need for you to do it for $30, including tax andgratuity, and it has to be the best event of the year because the senator will be attending.Or:Okay, here’s the plan, we really need to get a ton of new members in here. So, for the next50 members who join at the regular $100,000 initiation fee, let’s give them free dues forten years.To begin such a fire sale on a “Rolls-Royce” club should be unthinkable,because it would betray the club’s vision, cheapen the product, and upset currentmembers. Clubs that consistently stick to their chosen strategy in every decisionthey make, whether it be about pricing for a banquet or ways to recruit new members,are the most successful in the long run.Connect the Vision with Operations. For a club’s vision to become reality, thereshould be a strong connection between the vision and the operation of the club.MBA students often speak of operations as “the burning platform.” Envisionan ongoing business operation as an offshore oil rig that has caught fire. The oilrig’s engineers and laborers are trained to expect a fire as part of daily operations,and are so well-trained that the operation continues even in the midst of such acatastrophe. The idea behind this illustration is simple: a club’s vision should beso well-integrated into operations that, even under stressful conditions, everyoneexecutes his or her duties in a manner consistent with that vision.

Leading the Strategic Planning Process 125To connect the vision with operations, make sure that your discussions aboutthe club’s vision address these issues:1. Define the club. This may seem an obvious task, but it should not be underestimated.Such discussion is essential, especially if the club has never establisheda definite purpose and reason for being. Comparing the club to cars, assuggested previously, is one way to help you define the club. A private clubcan also be defined by answering three questions:• Who are the club’s members?• What are the members’ wants and needs?• How will the club satisfy the members’ wants and needs?2. Decide the long-term strategy. The long-term strategy should consider a timeframereaching five to ten years or more into the future. Generally, the moreestablished the club, the further out into the future the timeframe.3. Communicate the vision. The vision should be stated clearly and in a way thatinspires staff and members alike. Communicating the vision in everythingthat a club thinks, says, or does is as important as the creation of the visionitself. Share the vision! Construct a concise, well-worded vision statement toempower employees with a higher sense of purpose. For example, a painterin the engineering department who is in tune with the club’s vision mightconsider it his job to “maintain a treasured showplace,” not simply to “paintthe white trim.”MissionMission includes the broadest and highest level of club goals and objectives. Awritten mission statement includes not only the club’s vision and purpose, but alsothe basic services the club provides. Generally, the mission statement is one that, ifrealized, ensures the club’s success.To make the distinction between vision and mission, vision is a broaderapproach, while mission includes the vision and then adds the basic services providedat the club.More than any other element of the strategic planning process, the missionstatement spells out the first-order reasons for the club’s existence. The missionstatement flows directly from the club’s vision and helps crystallize it.The mission statement should be used everywhere to communicate and reinforcethe vision, and to remind the club community—members, staff, guests, vendors,and others—of why the club exists and what basic services it provides.To achieve this end, the mission statement should be reproduced and printedin all club publications—in the monthly newsletter, on club stationery and letterhead,in advertisements, in public relations articles, club employee handbooks,board orientation manuals, new-member materials, and even on the membershipapplication. In short, any time you are putting together a communications piece,

126 Chapter 4consider including the club’s mission statement as a companion element. Someclubs even print the mission statement on laminated business cards that paid staffmembers carry when on duty as a reminder of the club’s basic tenets.A sample mission statement for a start-up club might read as follows:The Country Club of Tarantula Canyon was created as a haven for its members.We are second to none in our purpose to offer an extraordinary array of clubexperiences, in our commitment to the highest level of member service, and inour willingness to recognize our employees as the most valuable asset within theclub. Our allegiance to these basic elements will ensure long-term success for ourmembers and staff.When creating a mission statement, carefully consider the following three elementsas a guideline:1. Common features: What are the club’s products and services? What marketsor potential members does the club pursue? What are the club’s core values?What are some of the club’s broadest goals? What is the club’s competitiveposition? What is the image that the club wants to portray to those outside theclub?2. Internal scans: What are the unique strengths that the club should be knownfor and build upon? What weaknesses should the club improve upon internally?3. External scans: What demographic shifts should the club anticipate? Whatchanges in products and services may come about over the next five years?What is the club’s source of labor? What laws and regulations could changethe ways that the club does business? What are the strengths and weaknessesof the competition?GoalsGoals focus on future states of existence that a club strives to achieve. Goals ensurefulfillment of the mission—how well a club aims toward those goals dictates itseffectiveness.The strategic vision transitions to performance targets through goal-creation.Goals are evidence of the commitment by club managers to achieve specific outcomesin keeping with the club’s vision. Managers who insist on achieving mutuallyagreed-upon and focused goals are far more effective in reaching those goalsthan are managers who have only a vague idea of what they should be doing.Goals are the “meat and potatoes” of strategic planning.Goals will differ in terms of their timelines:1. Short-term operational goal: In general terms, an operational goal that can beaccomplished within approximately three months is a short-term goal. Justbecause a goal is short term does not mean it is not vital to the club’s success.For example, a club membership department may decide in January toeliminate errors in the membership roster before the end of February—a veryimportant goal.

Leading the Strategic Planning Process 1272. Mid-term operational goal: An operational goal that can be accomplished withinsix to 12 months is a mid-term goal. For example, a club’s golf course maintenancedepartment might decide in January to rebuild the bunker drainagesystem before the end of June.3. Long-term operational goal: A goal that requires 12 months or more to be accomplishedis a long-term goal. The aquatic department may be rebuilding theclub’s swim team and, in late July, might set a goal of winning the club noviceleague championships held in August of the following summer.Unlike operational goals, strategic goals are usually bigger in scope and typicallyhave more uncertain or open-ended timeframes:1. Short-term strategic goal: In January a club sets a goal to admit a net total of tennew members before the end of December.2. Mid-term strategic goal: A club decides in January of 20X1 that it wants to admita net total of 30 new members before the end of December 20X4.3. Long-term strategic goal: A club decides that in the next five years it would liketo admit a net total of 50 new members. Whenever the club achieves this goal,it will become a replacement club instead of a growth club.ObjectivesObjectives are often described as the specific “whats” of a club. Objectives includeshort-term, departmental aspirations and aims. Objectives should be quantifiable—measurableby counting and timing—and should serve as steps towardgoal-achievement.As with operational and strategic goals, the distinction between operationaland strategic objectives is sometimes a fine one. For example, one could argue thatthe short- and mid-term strategic goals used in the examples above are actuallyinterim objectives of the long-term goal to increase the club’s net total membershipby 50 members within five years.As you proceed through these initial stages of strategic planning, do not beoverly concerned about distinguishing an objective from a goal. Instead, concernyourself with aligning everything that the club thinks, says, does, and plans withthe club’s vision and its highest, broadest goals. Spinning your wheels arguingabout whether a given proposal is a “goal” or an “objective” wastes your time onunproductive word games.Organizational Situation Analysis (SWOT)Situation analysis is a concept that has existed for many years. Situation analysishelps a club establish a sense of identity and direction—where it is currently andwhere it might go in the future. Such analysis helps evaluate a club’s strengths,weaknesses, opportunities, and threats (SWOT). SWOT analysis is a valuable toolfor planning the strategic direction of a club.

128 Chapter 4The SWOT analysis is both an internal and external appraisal. The internalappraisal identifies the club’s strengths and weaknesses. These strengths and weaknesseshelp managers establish a set of key factors for the club’s success. The externalappraisal identifies the threats and opportunities that exist in the outside environment.This, too, helps managers establish a set of key factors for the club’s success.Strengths and Weaknesses. Strengths and weaknesses are internal to the club.A strength is something very positive about the club or what your club is goodat doing. Conversely, a weakness is where the club falls short or has a limitation.Curiously, in conducting a SWOT analysis, an identified strength may also helpmanagers identify a corresponding weakness, and vice versa. For example, thata certain club facility is a grand-style, 150-year-old architectural treasure may bea strength, in that the club’s age adds value to the members’ perception of theirclub experience. On the other hand, the facility’s age would undoubtedly be a factorin several internal problems—high maintenance costs, faulty wiring, outdatedplumbing—all club weaknesses.Do not be overly concerned that a strength in one sense could also be considereda weakness in another. Just use good judgment to determine whether thestrengths of a particular club attribute outweigh its weaknesses, so that the attributeshould be placed in the strength column rather than the weakness column(or vice versa). Many club managers have heard the cautionary tale of a club GM/COO and president who convinced the board and membership that the operationaldifficulties associated with maintaining an antebellum mansion as a clubfacility were insurmountable. The building was razed and a modern and efficientfacility was constructed in its place, but the new building’s sterile atmospherelacked character. The new club was little more than a modern banquet hall, andthe club suffered greatly from this misjudgment.Lists of strengths and weakness are developed during brainstorming sessions,formal club surveys, or informal conversations with and interviews of members,staff members, and suppliers. Following this collection of data, a session—or severalsessions—should be held to help ensure agreement and consensus. Duringthis process of “consideration and assessment,” perceived strengths and weaknessesshould be considered individually in terms of relativity and duplicity.For example, some members might report that the club is too expensive. Clubmanagers and the board must use honesty and sound judgment to determinewhether this is a valid statement of weakness or simply a relative weakness—thatis, a general statement that could be attributed to all private clubs.Eliminating duplicity (listing a club element as both a strength and a weakness)requires judgment in sorting through strengths and weaknesses. For example,suppose that a country club’s golf course has the highest USGA slope rating ofany area course. A club could perceive this as a strength—it may be a prestigiousaward that earns bragging rights; or, the difficulty lures the finest golfers to theclub; or, the undulating terrain is spectacular in its beauty and elevation change.But the fact that the club’s golf course has the highest USGA slope rating mayalso be a weakness, if the course’s difficulty frustrates golfers with average to high

Leading the Strategic Planning Process 129handicaps, thereby severely limiting the market for the club’s course as an “everydayhome course,” or if the difficulty creates an average round time of five hours,which is a full hour longer than the typical average round target of four hours. Inthis case, club managers, the board, and others must determine whether overallthe club’s golf course as a club strength or a weakness. Alternately, the listing couldappear in both places (as both a strength and a weakness), as long as the particularcontext was explained.Once complete, the internal assessment of strengths and weaknesses helpsestablish a bundle of distinctive competencies and qualities that the club is adeptat either doing or being, along with a set of issues that the club is not good at eitherdoing or being.In conducting this analysis, remember that strengths and weaknesses areinternal to the club.Opportunities and Threats. Opportunities and threats are external to the club. Anopportunity is something that the club could explore capitalizing on. A threat cancome from a competitor, or from government regulations, or from any other externalsituation that presents a challenge for the club.As with the determination of strengths and weaknesses, success in determiningopportunities and threats lies in careful analysis and judgment. Often, clubs arequick to dismiss a finding as insignificant, but few findings are insignificant. In fact,those clubs that are particularly successful in identifying opportunities and threatsare those that can identify emerging trends that go unnoticed by other clubs.A growing trend among seasoned strategy experts is to work through opportunitiesand threats before identifying strengths and weaknesses. These expertsbelieve that opportunities and threats from the outside drive the club’s internalstrengths and weaknesses, rather than the other way around.An opportunity based on competition may be that a neighboring club burnedto the ground, and present zoning only allows it to build back 50 percent of itspre-fire square footage. This creates an opportunity for a neighboring growthclub, because the rebuilt club may no longer have the capacity to handle its formermembership.A situational opportunity for a remote club may be that the state transportationdepartment has approved the construction of a new bridge, which will put theclub within 20 miles of the major population center of the area, as opposed to the40-mile journey that people in the populated area must currently take to reach theclub. Because of the new bridge, the club will become more geographically accessibleand thus potentially more desirable to a larger number of people—a clearopportunity for growth.Threats can be classified similarly. A threat from the competition may includeplans for a major new country club to be built within three miles of the club. Agovernmental threat may be a lowered blood-alcohol level requirement for DUIor DWI offenses. Such a mandate might then threaten the club’s beverage sales,and might also put the club at greater risk for alcohol liability and liquor-relatedlawsuits.

130 Chapter 4SWOT Analysis Examples. If the external analysis uncovers an opportunity forthe club and the internal analysis reveals corresponding internal strengths, thenthe club has a tremendous chance to capitalize on the opportunity.Continuing with one of the previous examples, if the club that has the newbridge being built nearby, thereby bringing the club closer to the population center(external opportunity) is a “growth club” with a number of memberships availablefor sale (an internal strength due to availability), then the club has a tremendousopportunity to sell new memberships.The following chart illustrates this example:Internal StrengthsGrowth clubExternal OpportunitiesNew bridgeInternal WeaknessesExternal ThreatsIf a club’s external analysis identifies an opportunity but its internal analysisreveals weaknesses that makes it difficult or impossible to take advantage of theopportunity, the club has a limited ability to capitalize. For example, if the “newbridge” club is a replacement club with few memberships available, it has a relativeweakness due to availability, and thus has only a limited opportunity to capitalizeon selling memberships. This situation can be represented as follows:Internal StrengthsExternal OpportunitiesNew bridgeInternal WeaknessesReplacement clubExternal ThreatsIf a club’s external analysis reveals a threat, but its internal analysis reveals astrength that can help the club offset or cope with the threat, then the club has theability to respond to the threat successfully. For example, if the state lowers theBAC requirement for DUIs, but the club has an outstanding alcohol awarenessprogram in place, the club has the ability to minimize the impact of this threat.This example could be illustrated as follows:Internal StrengthsAlcohol awareness programExternal OpportunitiesInternal WeaknessesExternal ThreatsLowered tolerance for DUI

Leading the Strategic Planning Process 131If a club’s external analysis determines a high degree of threat and its internalanalysis reveals weaknesses in its ability to respond to the threat, the club faces itsworst operating position. For example, if a new, developer-owned club will opennext year within two miles of a club that has not provided acceptable service toits members, the poor-service club faces a severe threat to which it likely cannotrespond effectively:Internal StrengthsExternal OpportunitiesInternal WeaknessesPoor member serviceExternal ThreatsNew developer-owned clubIn any SWOT analysis—whether club-wide or by department—a key toextracting meaningful information is to chart and compare the club’s strengthsand weaknesses. One way to do that is to prepare grids similar to the ones presentedin this section.Strategy StatementThe object of effective strategy is to capitalize on a club’s strengths in a way thathelps it develop sustainable advantages in its marketplace. After all, all GM/COOs—and boards, committees, members, and paid staff—want their particularclub to be the club of choice. To develop and highlight their strengths, clubs canchoose one or more of the strategic methods listed in the following paragraphs.Enhancing Differentiation. With the “enhancing differentiation” strategy, theclub concentrates on becoming more appealing in one particular area. The internalSWOT analysis identifies the club’s internal strengths (and weaknesses). Toenhance its differentiation from other clubs, the club simply focuses on improvinga strength.For example, one club located in a competitive area with high demand forgolf times might add lights, thereby allowing play long past sundown. In fact, oneclub in Arizona worked through this exercise and added lights to its five finishingholes, effectively accommodating an increase of almost 50 members per day. Sucha situation could be illustrated in this manner:Internal StrengthsWillingness to innovateDollars available for capitalimprovementsExternal OpportunitiesHigh demand for golfInternal WeaknessesLow availability for increasedrounds of golf on present courseExternal Threats

132 Chapter 4For another example of a club improving on a strength, a club with a GolfDigest–rated top-100 golf course spent an extra $200,000 on grooming and conditioningits course, thus spending capital dollars to enhance an already superioraspect of the club in order to attract new members, further satisfy current members,and perhaps move up in the Golf Digest ratings.Enhancing Superiority. A club using the “enhancing superiority” strategy endeavorsto exploit a competitor club’s weaknesses or to emphasize its own noncompetitivestrength.Exploiting weakness: To exploit another club’s weakness, a Nevada club rebuiltall of its greens with pure, bentgrass greens, thus highlighting the course conditionof a competitor, which had bumpy, 25-year-old annual bluegrass–infestedgreens—not an ideal course, by comparison. The following chart illustrates thisexploiting weaknesses strategy:Internal StrengthsWillingness to innovateDollars available for capitalimprovementExternal OpportunitiesCompetitor hasAnnual bluegrass–infested greensInternal WeaknessesExternal ThreatsEnhancing noncompetitive strength: A West Virginia club emphasized its noncompetingstrengths by publicizing the club-owned bowling center, equestriancenter, “dive-in” movies in the pool during summer, and indoor shooting range.Exploiting noncompetitive strengths—especially when perceived as having realdesirability—can add tremendously to the club’s value equation in terms of attractingpotential members or retaining and satisfying existing members. This exampleof enhancing a noncompetitive strength might look like this:Internal StrengthsBowling centerEquestrian centerPool “dive-in” moviesIndoor shooting rangeExternal OpportunitiesCompetitor clubs offer only golfInternal WeaknessesExternal ThreatsInnovating. Clubs interesting in innovating would develop new products orservices that do not presently exist at the club or at competing clubs. The list of

Leading the Strategic Planning Process 133potential new products and services is endless. The key is to innovate into areasthat will be appreciated and used by the club’s members—or at least be perceivedas providing new, different, and desirable products and services. One exampleof innovating would include a well-known club in Texas that, over time, addeda club dry-cleaners, a tailor shop, a stylist, casual-use office space, a retail-typeconvenience store, a business center, and a club-sponsored American Expresscard. This example of innovating is illustrated below:Internal StrengthsWillingness to add new productsor servicesExcess space availablein clubhouseDollars available for capitalimprovementsExternal OpportunitiesCompetitor clubs unwilling orunable to add new productsor servicesInternal WeaknessesExternal ThreatsRevolution. Revolution can be an effective strategy, especially when drastic measuresare required to improve the club or its performance. A “revolution” strategychanges the fundamental and accepted way the club conducts business. For example,a growth club located in Louisiana adopted a policy of nondiscriminatory teetimes among male and female members. This was seen as a very revolutionaryinitiative by the surrounding communities. Revolution is an extremely effectivestrategic initiative for a club hoping to gain new members and distinguish itself ina market dominated by old-line, established, traditional competitors. The revolutionstrategy could be illustrated in this manner:Internal StrengthsNew clubNo existing tradition or policiesWillingness to use revolutionExternal OpportunitiesCompetitor clubs are old-line,traditional, unwilling to changeDemand from female golfingcommunityInternal WeaknessesExternal ThreatsOnce a club has identified and chosen a strategy, the strategy is then writtenas a statement. The strategy statement explains how external opportunities will be

134 Chapter 4exploited by the club’s internal strengths. Threats and weaknesses, in the strategystatement, are either avoided or mitigated with suggested counter-measures.BudgetsThere are three types of budgets that clubs must create and manage: normal capitalbudgeting, project capital budgeting, and operations budgeting.Normal Capital Budgeting. The majority of clubs do not have unlimited capitalreserves. In fact, most clubs do not fund depreciation. Instead of funding depreciation,they traditionally spend about two to three percent of gross revenues onnormal capital items such as furniture, fixtures, and equipment (often referred toas “FF&E”). In recent years, and in view of the proliferation of developer-ownedclubs coming into the market, many clubs are finding it necessary to spend sevento eight percent of gross revenues annually on normal FF&E in order to maintaintheir elite-class standards. A club’s strategic plan should help prioritize capitalbudgeting.Project Capital Budgeting. Often clubs refer to major rebuilding, remodeling, and“adding-on” as “project capital.” Funding for project capital may come from capitalreserves (unspent capital), a supplemental monetary commitment from normalcapital over time, assumption of debt, or an assessment of the members. A memberassessment may come in the form of a cash requirement, either as a lump sum oras payments over time, to fund the project. The strategic plan should also prioritizeproject capital budgeting.Operations Budgeting. The process of operations budgeting by department isa tremendously time-consuming part of effective club management. Operationsbudgets consider how and when revenue will flow into the club and how andwhen expenses will flow out of the club. Operations budgets should be created inpainstaking detail and should be broken down into expected increments. Whencompleted, operations budgets should answer the questions, “What?” “Why?”“When?” and “How many?” or “How much?” (as the case may be).For example, if the membership department was budgeting revenue, budgetaryassumptions would be supported by answers to these questions:What? “The goal is 20 net new members for the year.” (Also answers“How many?”)Why? “The club is a growth club and, consistent with the strategic plan,the club will allow a growth of 20 net new members per year.”When? This would be a statement that projects when during the year thenew members will join the club. For example, club managers might projectthe following:“Consistent with the club’s resignation and join pattern over the past fiveyears, we forecast this seasonality during the following months”:

Leading the Strategic Planning Process 135MonthNumber ofmembers atbeginning ofmonthResignationsduring monthNew memberjoinsJanuary 360 0 0February 360 0 2March 362 1 3April 364 0 2May 366 2 6June 370 0 3July 373 0 2August 375 0 2September 377 1 3October 379 0 1November 380 0 0December 380 0 0Total 380 4 24These written assumptions will help explain any subsequent variance. Theywill help managers determine whether budget variances are valid or simply theresults of timing issues. The chart also provides a basis for forecasting membershiprevenue by month.Operations budgets should flow from the club-wide grand strategy and thesupporting departmental strategies.Action PlanThe action plan comes together after planning and budgeting are completed. Oftenreferred to as “operations” or “implementation,” the action plan is the realizationor practical application of the strategic planning effort. Strategy and operationsmeet during action planning. The strategy is what the club will do. Operations—the action plan—is how the club will do it (see Exhibit 3).There are four scenarios in which strategy meets operations. Knowing these scenariosprovides an understanding as to how the implementation is likely to occur. Inthe best case, the club has clear strategy and effective operations; the likely result isthat the club has enjoyed success in the past and will also do so in the future. If the

136 Chapter 4Exhibit 3 Implementing Action PlansOperations(How)Effective Operations(+)Ineffective Operations(-)Strategy (What)Clear Strategy Unclear Strategy(+)(-)Success in past andfuture.(+/+)Some success in past;doubtful future.(-/+)Success in past;doubtful future.(+/-)Failure in past andfuture.(-/-)club has a clear strategy but ineffective operations, the club has likely enjoyed somesuccess in the past; however, future success is in doubt. Similarly, if the club has anunclear strategy but effective operations, the club has probably enjoyed success inthe past, yet future success is doubtful. In the worst scenario, the club has an unclearstrategy and ineffective operations. Most likely, the club has failed in the past andwill likely fail in the future unless major changes are implemented.Assessing ProgressWhatever form the action plan takes, being able to measure whether the clubis accomplishing its goals, objectives, and strategic initiatives is vital. The foundationalelement for controlling and monitoring progress is a connection to the“counts” and “times”—the objective measures—created in the budgeting process.For example, a renovation of the mixed grill, which was approved in the capitalbudget, would have developed from a strategic initiative and would includeassumptions of what, why, when, and how much. The objective measures for evaluatingits success—timing and dollars spent—are the answers to “when,” and “howmuch.” Monitoring and assessing progress should be continuous, occurring duringthe renovation as well as after completion of the project. Monitoring servestwo purposes: (1) it keeps all departments and functional areas on track, and (2)it ensures that accomplishments move the club toward long-range goals (thoseoutlined in the strategic plan).Strategic Implementation AnalysisStrategic implementation analysis is the process of examining a club’s efforts toensure that operations efforts are driven by strategic initiatives. Often, clubs spendtremendous effort, time, and money to create a strategic plan, then fail to integrateit into operations. The flurry of day-to-day operations creates a disconnectbetween what the club would like to become (its ideal, as defined by its strategicplan) and what it is (its current state, as defined by operations and implementation).The strategic implementation analysis form (see Exhibit 4) allows a manager

Exhibit 4Leading the Strategic Planning Process 137Strategic Implemention Analysis FormStrategic Implementation Analysis Form(Fill in the name of your club here)Complete the form based on your observations in order to calculate an objective score.Rating Scale:2 = Standard is consistently demonstrated.1 = Standard is inconsistently demonstrated.0 = Standard is not demonstrated.Please use the rating scale above to fill in the blanks below:___ 1. The board of governors has determined what it wants the club to beover the next several years—it has formed a grand strategic plan.___ 2. The grand strategic plan of the club is a comprehensive, written documentthat the club uses as a reference for everything that it thinks, says,and does.___ 3. The grand strategic plan has been agreed upon by the board members,officers, and senior staff of the club.___ 4. Management has been included in the grand strategic planning processor in the outcome of what was decided and thus created.___ 5. The GM/COO and other club managers share, refer to, and reinforcethe importance of the grand strategic plan with their direct reports andall other club employees.___ 6. The grand strategic plan can be stated simply and clearly—within 30seconds—by any board member or manager of the club.___ 7. The strategic plan is used as a guide to create new services, products,and markets.___ 8. Strategic considerations and discussion converge in joint meetingstogether with long-range planning efforts.___ 9. All planning and operational efforts have been funneled through thestrategic planning committee.___ 10. An analysis of internal strengths and weaknesses has been performedon the club as a whole within the past 12 months.___ 11. An analysis of internal strengths and weaknesses has been performedat all departmental levels within the past 12 months.___ 12. An analysis of external opportunities and threats has been performedon the club as a whole within the past 12 months.___ 13. An analysis of external opportunities and threats has been performed atall departmental levels within the past 12 months.(continued)

138 Chapter 4Exhibit 4 (continued)___ 14. The strategic plan plays a major part in prioritizing and allocating capitalduring normal capital budgeting (for furniture, fixtures, and equipment).___ 15. The strategic plan plays a major part in prioritizing and allocating capitalduring project capital budgeting (for major renovations).___ 16. Any goals that are created relate to the strategic plan.___ 17. All goals are SMART—specific, measurable, acceptable, realistic, andtime-bound—and thus, complete.___ 18. Goals are all written in specific terms by including answers to the followingquestions: Who? What? Where? When? Why? How? Who cares?___ 19. Reporting includes brief descriptions to help set the tone of the report—whether positive or negative—and quantifies those descriptions withobjective measurements.___ 20. Objective, informal evaluation of employees is conducted in the employees’workspaces throughout the club at least monthly and includesinformal, objective updates on accomplishment of strategic initiatives.___ 21. Formal evaluation of employees is conducted in private with all employeesindividually throughout the club at least semi-annually and includesformal, objective measures.___ 22. Accomplishment of strategic initiatives is described during the formalevaluation process and includes quantifiable, objective measurement.___ 23. Quantifiable variance analysis meetings with department heads arefacilitated by the GM/COO on a monthly (or periodic), quarterly, semiannual,and annual basis.___ 24. All managerial employees participate in an objective incentive bonusprogram based on financial management, service management, andachievement of strategic initiatives that can be explained clearly byeach participant within 30 seconds.___ 25. All club employees participate in an objective incentive bonus programbased on financial management, service management, and achievementof strategic initiatives that can be explained clearly by each participantwithin 30 seconds.___Total ScoreTo obtain the total score, add your ratings for questions 1–25.

Exhibit 4(continued)Leading the Strategic Planning Process 139Interpreting the ScorePlease refer to the ranges listed below to help explain the club’s current score.ScoreExplanation0–20 Grade: F to C- Ribbon: ParticipantSome focus on the strategic plan, but operations and short-term, nonintegratedthinking dominate. Few to no formal programs exist to helpfoster a commitment to the strategic plan as the foundational element ofthe club.Outlook: The board members and club managers have a tremendousopportunity to create a strategic infrastructure and culture.21–30 Grade: C to B Ribbon: GreenSome strategic focus, but few operations are tied to measurableoutcomes. Accomplishment of strategic initiatives is occasionallydiscussed. Few programs exist to help support a commitment to thestrategic plan.Outlook: The club’s board and management team have a uniqueopportunity to create an integrated, strategic infrastructure and culture.31–40 Grade: B+ to A- Ribbon: RedA strategic focus is expected and fostered. Operations are tied tomeasurable outcomes and accomplish strategic initiatives, but may fallshort at times. Many programs exist to help support a commitment tothe strategic plan.Outlook: The board and management team have a solid plan in placeand have a superb opportunity to further integrate a strategic infrastructureand culture.41–50 Grade: A to A+ Ribbon: BlueA strategic focus is expected, fostered, and tied to measurable resultsand the accomplishment of strategic initiatives. Occasional discontinuityis tested against the strategic plan. Fully integrated programs supportthe strategic plan.Outlook: The board and management team have an excellent plan inplace and have a unique opportunity to inch this club further toward aworld-class, strategy-based infrastructure and culture.

140 Chapter 4to rate how well the club aligns and coordinates its strategic plan with implementation,and helps the manager bring these two aspects more into alignment, ifnecessary. Ideally, club operations flow naturally from the overall strategic effortsof the club.The headings of the following sections provide a checklist of issues that clubmanagers should concern themselves with in managing the effective implementationof the club’s strategy.Creation of Grand StrategyHas the board of governors determined what it wants the overall club to be—inboth nature and direction—over the next several years? An overarching approachand agreement to club-wide direction from the board is referred to as grand strategy.This effort is perhaps the most fundamental of the strategic planning elements.Much like a road map for the club, the grand strategy provides a direction for theclub and should be the foundation and reference point for everything the clubthinks, says, and does. This grand strategy should be written down and referredto often.AgreementIs there agreement about the grand strategy? As the foundation for everything theclub thinks, says, and does, the grand strategy should be agreed to by all boardmembers, officers, and senior staff. Do not be surprised if agreement does notcome easily; agreement usually develops over time. However difficult a process,agreement about the club’s grand strategy is a valuable outcome. Efforts made tobring the board of governors, members, and staff into agreement and alignmentcreate a strong club identity.The GM/COO as an Integral Part of Grand StrategyThough unlikely, it is conceivable that the club does have an agreed-upon masterplan for the club—the grand strategy—but management has been left out of theloop. GMs/COOs should, to the extent possible, ensure that they are made an integralpart of the planning and development process in clubs where grand strategyis a new initiative. In clubs that already have a grand strategy, GMs/COOs shouldreinforce the importance of the agreed-upon outcomes as guiding principles forthe club. Successful GMs/COOs position themselves not only as chief operatingofficers, but also as chief administrative officers for board proceedings. As such,they become chief advocates for continuity of the grand strategy across all clubconstituencies. GMs/COOs are responsible for implementing the elements of thestrategic plan on the operational level. They can be much more effective if theytake an active role in the grand strategy and the specifics of the club’s strategy.Communicating the StrategyAssume that as the club’s GM/COO you are familiar with the club’s grand strategy.Are you sharing that plan with your direct reports as well as every other club

Leading the Strategic Planning Process 141employee? Are you reinforcing the importance of the plan and using it as a centraltheme in everything that you think, do, and say at the club—whether with subordinates,club committees, individual members, or suppliers? Do your key managersunderstand and share the same vision of the club’s grand strategy and use itas a guide for their departmental strategy? All of the club’s senior-level managerswho work directly with the board of governors should be sure to refer to and reinforcethe importance of the strategic plan when discussing any issues.Checking for Clarity and ConcisenessThere is an exercise referred to as the “Elevator Test” that works well in illustratingthe need for clarity and conciseness when expressing the club’s overall strategy.Imagine for a moment that you are riding down from the 20th floor to the 1st floorin an elevator at your club with a prospective member, and he or she asks you toexplain what your club is all about. Could you do it before the doors opened onthe 1st floor? Where would you begin? What would you say?The elevator test suggests that you as the GM/COO, as well as other clubmanagers and the club’s board members, should visualize the club’s strategicplan—including its vision, mission, and major goals and objectives—as a daisychain of connectedness. As such, you should be able to organize your thoughtsand answer the question simply, clearly, and in less than 30 seconds. Impossible? Ifyour answer is “yes,” then you need to better organize your thoughts and/or simplifyor clarify your club’s strategy. You should practice reciting the 30-second versionof your club’s strategic plan until the answer becomes second nature. If youcannot explain your club’s strategy clearly and concisely before the elevator doorsopen, you—or the club’s written documents—are stating the strategy in terms thatare disorganized or too complicated. Organize. Simplify. Clarify. Refine.Use Strategy to Create New Club ServicesA clear grand strategy allows your department heads to align their daily operationswith the strategy and guide the creation of new services, products, andmarkets. Additionally, a clear strategy suggests services, products, and marketsthat your club will not pursue. This “here-and-now” application of the strategicplanning process is an important key to the success of the club-wide effort—andhas a tremendously important focusing quality.Consider the scenario suggested earlier in the visioneering discussion: Membersvisit another club and return with suggestions that they want you to adopt.A clear strategy can be an effective filter for these sorts of suggestions. Do themembers’ suggestions fit in with the club’s strategy? If not, they shouldn’t beimplemented.A clear strategic plan, like the vision and mission that help define it, is a foundationalelement of the club. Refer to the strategy to ensure that your Chevroletclub, Mercedes club, or Ferrari club stays true to its roots, maintains its distinctiveidentity, and does not become a Frankenstein club, as we discussed earlier in thechapter.

142 Chapter 4Strategic and Long-Range Planning Should Complement Each OtherThe operational focus of strategic and long-range planning lies mainly in capitalimprovement projects, land utilization, and the development and maintenance ofan integrated, multiple-year plan consistent with the vision and mission of theclub. Ideally, this plan is continuously updated.Just as the strategic and long-range plans should complement each other, sotoo should the hierarchy charged with those planning efforts work fluidly andconsistently. There is much variation among clubs’ strategic and long-range planningefforts, but typically one of the following three scenarios occurs in clubs:1. No strategic or long-range planning. The least desirable scenario for a club isthat it has neither a strategic planning nor a long-range planning committee.Clubs without either committee are at a distinct operational disadvantage;their product offerings, markets, and services tend to develop as reactions tomember comments, without cohesion or structure. If the formation of strategicand long-range planning committees is currently impractical for yourclub, an ad hoc committee that occasionally reviews strategic and long-rangeplanning efforts is better than nothing at all.2. Merging strategic and long-range planning. The second configuration mergesstrategic planning with long-range planning into one standing committee.While this is often a very effective model, the demands on the committeemembers are numerous. The success of the single committee depends onthe organization of work: What are members of the committee charged withaccomplishing? If duties are not carefully decided, assigned, and prioritized,the committee members can become overwhelmed with work—especially inan existing club that establishes a combination long-range planning and strategycommittee for the first time.3. Separate strategic and long-range planning. The third governance model separateslong-range planning and strategic planning into two discrete standingcommittees. The functional advantage of having two committees is thepotential division of work among the volunteer, member-composed committees—thereis not an unreasonable time commitment required of either. Themain disadvantage is the separation of planning issues and coordination ofthe committees’ efforts. Simply stated, long-range planning efforts should notbe separated from strategic considerations.Given these three scenarios, the one most common—and perhaps most practicalfor the average club—is the single-committee model. Though the demands oncommittee members are larger, coordination of effort is streamlined, which is oftenthe most important consideration in planning efforts. Clubs without a strategicplanning committee should create one.The Strategic Plan as a Living ElementIs strategy treated as if it were the blood which courses throughout the body ofthe club? If not, it should be. A club’s strategic plan should be the “nourishment”

Leading the Strategic Planning Process 143for everything that a club plans, projects, and budgets—it is the lifeblood of alldiscussion at the club.At times you may feel frustrated and confused as to why it seems as if allplanning and operations are funneled through the strategic planning committee.Take heart; that is the very purpose of the committee. When a strategic planningcommittee is established in an existing club, the committee should be thought ofas a “gatekeeper” or a filter for operations. This is an enormous responsibility fortwo reasons:1. The strategic plan flows from the club’s vision and mission, while operationsflow from the strategic plan. Because strategy flows from vision and mission,all ideas for new products or changes or improvements to the club must be“filtered” through the strategic planning committee to ensure that they areconsistent with the club’s vision and mission. With this system in place, ideallyall board members, all committees, and all staff members at all levels ofoperations will soon begin to ask themselves the question, whenever a newidea for the club comes up: “Is this consistent with the club’s strategy?” If so,the conversation should continue and perhaps the idea will move all the wayto implementation. If not, the idea should be either discarded or filed awayfor future discussion and possible implementation, should the club’s strategyever change.2. The strategic planning committee is also important because all current practicesshould be filtered through the strategic plan; the committee becomes anevaluation tool not only for new ideas, but also for what’s currently going onat the club. Sometimes old club products, services, or operational procedurespre-date the club’s current strategic plan. These “unfiltered” club elementsshould pass through the strategic planning committee to ensure that all clubelements are aligned with the club’s strategic plan. Otherwise, “filtered” orcommittee-approved operations are mixed in with unfiltered operations, tothe detriment of the club’s strategic vision. This type of club is a conglomerationof misaligned functions and is in danger of becoming a Frankensteinclub.Understanding the Internal and External EnvironmentStrategic planning includes an internal analysis of what a club is adept at doingand where it falls short, as well as an outward look at the external environmentand its challenges and opportunities.As discussed previously, the SWOT analysis—which identifies a club’sstrengths, weaknesses, opportunities, and threats—indicates a club’s current position.As such, a SWOT analysis is often referred to as a situation analysis. A SWOTanalysis may be used on a macro level to evaluate the club as an overall entity oron a micro level to get a “snapshot” of a particular aspect of the club, such as thegolf course, food and beverage department, membership department, or any otherdepartment or area of the club.

144 Chapter 4During a SWOT analysis, a club is its own critic. Besides providing perspectiveand understanding of the club’s position, a SWOT analysis supports and helpscreate a clear strategic plan—again, either for the club as an entity (grand strategy)or departmentally (which should align with the grand strategy).A SWOT analysis should be performed for the club as a whole and for eachdepartment within the club at least one time each year. It can be an extremely valuableexercise, if it is carried out in a frank and honest manner. On the other hand, if itis handled in a political manner, the exercise can become a useless waste of time.Using the Strategic Plan to Allocate CapitalThroughout the budgeting process, the strategic plan should play a major part asa reference tool for prioritizing needs and distributing capital. Capital requestsshould be made with the club’s strategic plan in mind.For example, suppose that the Golf Course Committee and Golf OperationsCommittee have supported a proposal by the GM/COO, the golf course superintendent,and the director of golf to begin hand-mowing greens instead of tri-plexinggreens, to begin tri-plexing fairways instead of gang mowing fairways, and tobegin gang mowing the rough instead of flail mowing the rough. In the proposal,the economic impact of the mowing changes has been stated in terms of operations(increased labor) and capital expenses (purchasing hand-mowers and gas cartswith trailer combinations for transport).Since this is an expensive proposition, it’s likely that this proposal would beturned down at many clubs—unless it dovetailed with the club’s strategic vision.In this case, the club had a strategic initiative to improve the condition of the club’sgolf course by 25 percent within two years. Therefore, the club’s board of governorsapproved the proposal as consistent with the club’s strategic plan. In thiscase, everyone involved—the GM/COO, the golf course superintendent, the directorof golf, the Golf Course Committee members, the Golf Operations Committeemembers, and the club’s board—kept the club’s strategic goal for the golf course inmind, and so time was not wasted on a proposal that had nothing to do with theclub’s strategic vision, and the proposal was approved with no difficulty. Clubsthat use the strategic plan to allocate capital do not waste money on projects thathave nothing to do with advancing the club’s strategic vision.Key Termsaction plan—the realization or practical application of the strategic planningeffort. It is how the club will enact its strategies.differentiation—a strategy which focuses on uniqueness and price.focused differentiation—a strategy that emphasizes uniqueness and price for anarrow market.focused low-cost leadership—a strategy that emphasizes high sales at low cost toa narrow target market.

Leading the Strategic Planning Process 145innovating strategy—a strategy in which a club develops new products or servicesthat are not present at the club or at competing clubs.low-cost leadership—a strategy which focuses on high sales at a low cost.mission—a statement of the club’s broadest and highest goals and objectives.revolution strategy—a strategy which changes the fundamental and acceptedway the club conducts business.strategic implementation analysis—process of examining a club’s efforts to ensurethat operations efforts are driven by strategic initiatives.superiority—a strategy that endeavors to exploit a competitor club’s weaknessesor to emphasize its own noncompetitive strength.SWOT analysis—a tool that evaluates a club’s strengths, weaknesses, opportunities,and threats.vision—the purpose of a club and the statement for its direction and what it wantsthe destination to be.Review Questions1. What are some of the benefits and challenges of strategic planning for clubs?2. What are typical elements of the strategic planning process?3. How is a club’s vision put together?4. How is a club’s mission statement created and used?5. Why should clubs create goals and objectives?6. What is a situation or SWOT analysis?7. What are some general strategic approaches that clubs can choose from?8. What are three basic types of budgets that clubs must create and follow?9. Why is an action plan important for a club?10. What are some issues that club managers should be aware of when implementingtheir club’s strategy?Internet SitesFor more information, visit the following Internet sites. Remember that Internetaddresses can change without notice. If the site is no longer there, use a browserto look for additional sites.Fast Track Strategic Planningwww.rsmmcgladrey.com/Industries/Private-Clubs/Strategic-Planning/McMahon Groupwww.mcmahongroup.comThe Hospitality Resource Group:Private Club Divisionwww.thehospitalityresourcegroup.com/club_strategy.htm