PLANNING IN TIMES OF UNCERTAINTY – Club Leadership in a Covid-19 World
No one likes uncertainty. A core quest among humanity is to know exactly where we stand. From our health, to our relationships, to our work, we like to know how things are going and how they might turn out. So, Covid-19 and the ensuing Great Cessation of the economy has really thrown us for a loop. We know the pandemic will end, but when? It is also likely that many things that have changed will quickly return to normal while some things may never go back to the way they were. But when and which ones are unknowable right now. That makes us uneasy.
In truth, things are always much less certain than we allow ourselves to believe. We confidently make personal and business decisions with a high degree of certitude only to run smackdab into macro events like 9/11 or the Great Recession, or now the pandemic. We can’t allow these Black Swan events to prevent us from planning, however. As Dwight D. Eisenhower said, “In preparing for battle I have always found that plans are useless, but planning is indispensable.” Just as procrastination is ultimately a choice, a failure to plan is a willingness to accept an accidental outcome instead of an intentional one. And in this sort of environment, you want to be intentional.
The pandemic is sure to change a lot of things about the service industry, and clubs will not be exempt. Being a social organization in a time of social distancing is challenging. Yet, our time is coming. While our clubs have been largely unable to welcome and comfort our members in recent weeks, the shelter-in-place restrictions will be lifting soon. First regionally and then nationally. And our clubs stand to be one of the first beneficiaries of the gradual awakening of economic activity.
Talk to any club member today and they’ll tell you about the number of trips they’ve cancelled for the balance of this year. Trips to Europe – and perhaps anything outside of driving distance – are clearly out for the remainder of 2020. It is also doubtful members will be going to major sporting events or hitting the busiest bars or restaurants in town. The “staycation” will be back in vogue. Clubs should broadcast and celebrate their advantages as the safe and trusted “third place” in members’ lives. It should be your mission right now to plan how you are going to make your members feel as comfortable in the club as they are at home. A private member enclave with a knowledgeable caring staff will be just the tonic needed to soothe a soul short on community and socialization.
It’s likely we’ll see significant and long lasting changes in consumer behavior when this ends. People are enjoying a slower pace of life right now, and many will opt to continue that approach. They are using the new-found time available to them to focus on personal and family wellbeing. Social circles have gotten smaller, while on-line connections have exploded. Remote work has become the norm and many companies and individuals will choose to maintain this approach going forward. Restaurant closures have rekindled the joy of the home cooked meal and when they ultimately choose to go out, there will be a decided preference for places with intense focus on food safety and hygiene. Effective leaders must understand and innovate their way around and through these changes to win back their members and succeed in the new normal.
While many aspects of daily life will change, McMahon Group’s research shows that the macro trends affecting clubs will remain solidly in place. An underreported cause of the decline in club membership over the past decade has been the decline in the number of people in the prime joining years, which for most clubs with golf is 36 to 45. The Baby Boomers passed this point about ten years ago, leaving the GenXers in their place, a group about half their size. Thankfully, the oldest segment of the Millennial Generation turns 39 this year. This is the vanguard of an 80 million strong cohort, which will increase the number of people in the prime joining years each year over the next decade. All the discussion of variance in lifestyles and finances aside, we like the supply-side aspects of this demographic change.
The other big-picture opportunity for clubs is the continued blurring of the Home-Work-Play segmentation of prior generations. Technology and economics paved the way for a work-anytime-from-anywhere life and Covid-19 will push companies and people further down the path to a truly flexible lifestyle. This has the potential to allow them to spend more time at the club, especially if clubs respond in kind with workspaces, a great cup of coffee and high speed internet. These two factors – an increase in the number of middle agers and a 5G world – spell big opportunities for clubs. Those clubs focused on building community and serving families in a fun, fitness-forward environment will be clear winners.
The confluence of near-term Covid-induced impacts and longer term demographic and lifestyle forces make this an opportune time for clubs to Refresh and Reset their strategy. Many clubs made significant errors in judgement during the 2007-09 financial meltdown that must be avoided this time around. Knee-jerk cuts in initiation fees, dues or services/programs led to poor outcomes for many of them. While clearly important to have control of the business model during a recession, going into a defensive shell does more to drive away members who can and will support the club than it does to attract marginal players.
The key to knowing the difference between responsible belt-tightening and cuts that undermine value is to have a clear understanding of the broad national trends in society, accurate information on the state of your marketplace and data and insight on the needs and desires of your members. Leaders must understand the real drivers of their club’s member experience and the facilities, programs and services driving this experience must always pass the test for any successful club. Do they possess inherent quality? Are they consistently presented and delivered? Do they represent a good value?
What McMahon Thinks
We are busy conducting research among members and club leaders to identify both the short and longer term changes in member behavior and joining decisions and how they will impact clubs. There is clearly more to come as we emerge from the Great Cessation. In the meantime, we strongly encourage club leaders not to make short term changes that conflict with their club’s core values and longer-term aspirations. These watershed events tend to create a world of winners and losers. If we can help you gain clarity on the difference, please give us a call.
About Frank Vain
Mr. Vain provides consulting and planning services to private clubs throughout North America and Asia. Through use of specialized services including membership surveys, strategic planning, operational analysis and facility long range planning, Frank assists clubs in developing individualized strategies for their unique situations.
Mr. Vain joined McMahon Group in 1988 and has more than forty years of experience in the management and development of hospitality properties including private clubs, athletic clubs, resorts and restaurants. Frank is a Past President of The Country Club of St. Albans, an 800-member, 36-hole country club located in Missouri and he is the former owner of Concord Sports Club, a 1,700-member family athletic club in St. Louis. Frank was elected to the Board of the National Club Association in 2011 and served as Chairman in 2018-19.
Mr. Vain is a native of Philadelphia and a graduate of Franklin & Marshall College, Lancaster, Pennsylvania. He is a featured speaker at the annual Club Managers Association of America World Conference, National Club Association National and Regional Conferences, Major Golf Associations and at regional chapter meetings of club managers and leaders.
He has written numerous articles that have been published in Club Management, Club Director andBoardRoom magazines. Frank was named the Gary Player Club Educator of the Year for 2012 and 2015 by BoardRoom magazine. He is the co-author of McMahon’s Club Trends®, a recognized industry benchmark on the trends and issues affecting private clubs.