Legend has it that in the early 1900s, Andrew Carnegie, the founder of Carnegie Steel Corporation and arguably one of the first billionaires in the United States in today’s dollars, was interviewed by a newspaper reporter who said, “Mr. Carnegie, I understand you pay the president of your company a substantial amount of money.
Can you share with me how much compensation you give Mr. Schwab?” Charles Schwab became president of Carnegie Steel Corporation in 1897 at age 35.
Carnegie said, “Yes, I can share that with you. As a matter of fact, we are a publicly traded company so that knowledge is available to anyone. But to be specific, I pay Mr. Schwab an annual salary of one hundred thousand dollars.”
Now, $100,000 today is certainly a respectful level of compensation but in 1901 it was a significant amount of money. Carnegie continued, “In addition to his salary of one hundred thousand dollars, I also give him an annual bonus of one million dollars.”
The newspaper reporter was astonished and asked, “With all due respect, sir, why in the world would you give someone a bonus that is 10 times their annual salary?”
Mr. Carnegie responded, “Let me explain. You see I give Mr. Schwab a salary of one hundred thousand dollars for what he does…but I give him a million dollars every year for what he gets other people to do.”
What does that have to do with you as a leader in the private club business? It has everything to do with you! Because whether you realize it or not the value you bring to your club does not reside in your skill set. You may think it does, but it doesn’t. Your skill set probably got you the job but that’s not what determines your true worth to the organization. Your value is truly determined by how effective you can be “in getting things done with and through other people.”
I was fortunate as a young club general manager to accept a position at a club that was much larger and busier than the smaller club I was leaving. I was so overwhelmed that I almost quit because I was not experienced enough to deal with the challenges that the club presented. Thankfully, I had a club president who “talked me off the ledge” and directed me to a management consultant who took me and our club department managers through a two-day team workshop.
The most valuable takeaway from those two intense days was that I would only succeed by accomplishing our goals with and through the club department managers. There are no successful “lone rangers” in private club management; at least I haven’t met any. Our team had been waiting for me to ask them for their assistance, waiting for me to tap into their expertise, waiting for me to say, “How can we get this done together?”
My “flying solo” days were over, and I began to spend considerable time with each of our department managers understanding how I could support them rather than dictating policy to them. I truly believe the most important epiphany moment I have ever had in my club management career was the day I learned how to engage the talents of fellow employees so that they could showcase their contributions to the club.
I have been privileged, particularly during the last 30 years, to work with many outstanding general managers. The most successful of them clearly understand the valuable leadership lesson Carnegie outlined so many years ago. They know their value to the club lies in their ability “to get things done with and through other people.” This much I know for sure.
THE BOARDROOM MAGAZINE – January/February 2025
“This Much I Know for Sure” is a regular feature in BoardRoom magazine. Dick shares some of his reflections based on his 50-plus years of working in the private club business.