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A Club Leadership Lesson From Andrew Carnegie

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.

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A Club Leadership Lesson From Andrew CarnegieRoxanne2025-02-14T20:32:57+00:00

Eureka! I Found It!

After working with hundreds of private clubs and thousands of club board members over the past 50 years, I am confident I have discovered the secret to being a great board member.

Club members who agree to dedicate hours of their time to private club board duty come in all shapes and sizes. They have all types of career experiences and range in age from the X, Y or Z generations, to the Baby Boomers, to the maturing retirees. Their political and religious beliefs can differ as much as their personal and family use of the private club experience.

Board members will display varying degrees of dedication, passion and commitment as they tackle their roles. Some will lead their assigned committees effectively and others will assume more passive roles.

One trait will set great private club board members apart from “those who also served.” It may not be evident at first and may take careful observation, but if you look closely, you will find a few of these superstars in every private club boardroom.

What is the distinguishing characteristic that sets these club leaders apart? Which trait do the most successful board members possess? Why have these superstars gained the respect of the rest of the board and most members?

The secret that great board members have discovered is the ability to ask the right questions. Not the most questions but the right questions. They have learned to communicate effectively not by dominating the conversation but by asking key questions.

One of those questions might be: “What kind of orientation process will the general manager provide as I begin my duties as a new board member?” The most effective board members have experienced a thorough orientation that gives them the framework to make informed, rational decisions. This orientation includes a complete physical review of club assets and an introduction to department managers.

Another question: “Are the roles and responsibilities of the board members, the general manager and the department managers defined in writing?” Model clubs have clearly outlined the role of board members in club governance and the role of the general manager and department managers in the day-to-day management of the club. This practice discourages “coloring outside of the lines,” which can happen without written guidelines.

A frequently asked question: “Has the club engaged in a strategic planning process, and do we have a written report that is updated on a yearly basis?” The most progressive and successful private clubs have developed a strategic plan that provides a template for ongoing success. Clubs that are not engaged in this process may find that they will be transitioning in the future to semi-private status or become good candidates for takeover by a management company.

An important question often asked: “How can we as board members effectively support the general manager/chief operating officer model of club management?” The best-managed and best-governed clubs have embraced this management concept because many club board members can relate to how effective this model is or how effective it has been during their business careers.

Another frequently asked question: “How can we as board members demonstrate a ‘unity of purpose’ once we have made a decision?” It doesn’t matter whether an issue has been decided unanimously or by a close vote. What matters is that once board members leave the boardroom, they support the decision and leave the details of their discussions in the boardroom.

Outstanding board members will ask many other questions during their tenure, but those five are certainly common in club boardrooms.

The secret to being a great board member is not how much you have to say but how good your questions are.

This much I know for sure.

THE BOARDROOM MAGAZINE – November/December 2024

“This Much I Know for Sure” is a regular feature in BoardRoom magazine beginning Fall 2022. Dick will share some of his reflections based on his 50-plus years of working in the private club business.

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Eureka! I Found It!Roxanne2025-01-22T21:48:38+00:00

Mentorize Your Club Board

I have observed that truly successful private club general managers/chief operating officers have developed the skill of tapping into the rich resource they have sitting at their board tables: each board member’s expertise.

Too often club general managers overlook this resource, yet their board members are some of the most successful businesspeople in their community and maybe even the country. Why not tap into this rich reservoir of business expertise and talent?

Private club board members have volunteered their time and most of them would be honored if asked to contribute their knowledge-based experience for a better-governed club. Here are three strategies you can use at your club to benefit from this incredible resource.

First, your preparation for the new board member orientation is the perfect time to gather the information you will need regarding the talent each new board member possesses. I suggest a biographical data sheet similar to what was probably presented to the club shareholders when they elected the board members. You will want to expand this format, however, to include specific information outlining the accomplishments and expertise of each new board member.

Ask them to share some of their career highlights and most noted achievements. Make sure you have received approval of the draft version from your respective board members before publishing any of their biographical data. Explain to them that you will probably be calling on them to share some of their business knowledge as you manage the club, and it would help you to know as much about their careers as they are willing to discuss.

I am always pleasantly surprised at the eagerness of successful people to open up and share their stories. This information can be instructive for the general manager/chief operating officer, and many fundamental business success stories can be replicated and adapted to the private club environment. Some of the “best practices” I have seen model club general managers engage in often result from tapping into the business experiences of their board members.

The second strategy is to use the annual board retreat to develop the “experience model.” Have the retreat facilitator go around the table and ask each board member how many years of experience they have in their respective careers. With a typical nine-person board, this number can range from 250 to 350 years and higher. The facilitator will write that number on the flip chart and discuss the significance of the cumulative total.

Frequently, board members are surprised at the years of experience and the “collective wisdom” that sits around the board table every month. Once this resource is acknowledged, club issues and problems often don’t loom as large or seem daunting. There is a sense of confidence that no matter what issues might arise in a typical club environment, this governing body has hundreds of years of experience resolving problems.

The third strategy is “the office visit.” During my early years as a club manager, I was having difficulty with a particular board member. No matter what I did he responded negatively or, even worse, indifferently. And then I called him and made an appointment to visit him at his office. The ruse I used was that I wanted to discuss a couple of issues regarding the committee he was chairing, but I preferred to meet with him away from the club.

I found him cordial, and we covered the club committee issues within minutes. However, sitting in his office, I noticed a Notre Dame diploma on his wall. My brother-in-law graduated from Notre Dame and this provided the perfect “ice-breaker” as we chatted about their storied football program.

He then gave me a tour of his manufacturing facility, introducing me to every employee we encountered, and then suggested we have lunch at a nearby restaurant. From that day on our relationship changed. The dynamic shifted in a very positive manner; I don’t know why, it just did.

The office visit can be one of the most powerful strategies for a general manager to develop trust with board members. The management/governance dynamic will change positively and the club will benefit.

Mentorize your board members by engaging the above three strategies and your role as general manager will take a dramatic turn for the better. By tapping into the best business practices of your current board members, you will be viewed as a wise and resourceful general manager/chief operating officer who successfully adopts the expertise readily available at the board table.

THE BOARDROOM MAGAZINE – September/October 2024

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Mentorize Your Club BoardRoxanne2024-11-05T16:20:37+00:00

How to Move Forward When the Board Retreats

Over the many years I have worked with private club boards, the annual board retreat is one common strategy that high-performing, successful clubs have in place.

Attendance is typically mandatory for board members who are serious about their leadership role as volunteers serving their fellow members.

The retreat’s purpose is for board members to take time away from their clubs to look at club issues strategically and with both future and historical perspectives.

It is difficult to objectively review many of the issues flowing from club committees and staff to the board without appropriate context. Especially if some of these decisions impact the long-term well-being of the club. Everyone’s best interest is served if the directors can gather once a year away from the club to discuss their leadership roles and the direction they see for the club operations.

The progress that can be made when club issues are viewed dispassionately and with some reflection is truly amazing. This methodical review cannot be achieved during normal monthly board meetings. Only an annual “brainstorming” session where board members can freely exchange comments and observations will produce results of substance and tenure.

You can select a variety of ways to conduct this retreat, but I have found the following process works effectively for many clubs. Select a half-day. Usually, a Friday or Saturday works best. Try to time this retreat when the activity at the club is slowest but also when board members are not away on vacation, sometimes a difficult balancing act.

Hold the retreat at a site away from the club. This is important. Very often another club in your area will be happy to provide you their boardroom in exchange for you extending the same courtesy in the future. You might also have access to a board member’s corporate meeting room or you can rent space at a nearby hotel or resort. A recent board retreat I helped facilitate was held in the tasting room of a neighboring vineyard. (A wonderful environment, a great feast for the senses and some wonderful wine at the end of the retreat.)

My preference is for a half-day meeting rather than a full day. If the agenda is thoughtfully developed, most board members participate with enthusiasm if they know there is a time limit to reviewing the issues. Board member attention will significantly wane after lunch no matter how enthused the facilitator or how important the topics are to the club.

I often suggest that the retreat start by 8 a.m. and finish with lunch at noon, where discussion can continue, often followed by a round of golf and dinner. A great way to cover important issues and build camaraderie among board members.

This annual opportunity to review issues dispassionately within a strategic framework will provide club leaders with a powerful and effective process for leading their club. It will also ensure that the general manager/COO (who should attend this retreat) will align with the board on many of the operational issues that are dealt with daily.

Club boards that have “retreated” annually have seen dramatic results in moving their clubs forward. In today’s high-tech environment taking a break from the daily routine of club management and governance is one of the most important strategies the board can adopt. The annual retreat allows directors to stay productive and engaged in their important roles while getting the perspective they need to make sound decisions. This much I know for sure.

THE BOARDROOM MAGAZINE – July/August 2024

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How to Move Forward When the Board RetreatsRoxanne2024-11-05T16:59:13+00:00

Focus on the Fundamentals to Improve Your Food & Beverage Operations

It is the most common complaint I hear working with private club board members. “We need to improve the food and beverage service at our club.”

Notice I did not say the “profitability,” although that benefit is sometimes inherent in well-managed club dining facilities.

How can you improve the food and beverage operations at your club? The answer is easier than you might think and begins with the fundamentals.

A few years ago, a national survey of restaurant patrons revealed the three primary reasons customers returned regularly to their favorite restaurant. The results will probably surprise you, but if you consider your dining out experiences, I think your habits will corroborate the data.

Private clubs can certainly find good applications from the survey results. These three fundamental findings should be the basis for every good private club’s food and beverage operations:

A warm greeting. The number one reason people cited for returning to a particular restaurant was a warm greeting upon arrival. This greeting is not the standard “canned approach” from a well-intentioned but robotic host or hostess but a sincere and warm greeting, usually by a senior manager or owner of the establishment.

Additionally, the greeter usually knows the party’s name and will be perspicacious enough to recognize if the regular patron has guests accompanying them. Can we replicate this in the private club business? Absolutely. In spades.

Since most clubs request reservations, the greeter and seater should know not only the members’ names but also if they have guests. What an opportunity to make an impression upon the member with a very warm and engaging greeting which includes the use of the members name; and if done in front of guests…wow!

A fond farewell. The second reason people gave for supporting their favorite restaurant was knowing that their business was appreciated. This is accomplished while the patron is leaving the restaurant and the greeter, manager or owner thanks the customer for visiting the restaurant and expresses the desire to see them again.

This is not the usual “goodbye now” that most of us experience (if we are lucky and catch the hostess on a good day) in the chain restaurants as we fumble for a toothpick and mint. The best restaurateurs take a few minutes while their patrons are leaving to ensure that their experience was enjoyable and sincerely extend the invitation to visit again when their special table will be awaiting them.

Clean restrooms and good food. There was a tie for third in the survey. Customers were adamant about dining in “clean facilities,” and their primary way of evaluating the “housekeeping” in a restaurant is usually a result of a visit to the restroom.

My rule of thumb when frequenting fast-food restaurants during my travels is to walk into the men’s room before I order food. I know that the same person who cleans the restrooms also cleans the kitchen and, more importantly, the “cleanliness philosophy” of the manager who oversees that restaurant is evident in the restroom.

Good food tied for third with clean restrooms. Surprised? Not me. I like good food, and I tend to go to restaurants where I know the quality will be consistent. But I will avoid the establishments whose rankings in our local paper don’t earn an “A” ranking from the city health department.

In the private club environment, consistency and quality will provide a strong magnet to attract members to your club. If you combine consistently good food with the top three fundamentals of a warm welcome, a fond farewell and clean facilities, you can’t help but increase the use of your club dining rooms. This much I know for sure.

THE BOARDROOM MAGAZINE – May/June 2024

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Focus on the Fundamentals to Improve Your Food & Beverage OperationsRoxanne2024-06-04T20:39:43+00:00

Membership Privileges? WHAT THE #@*$%& ARE YOU THINKING???

In the course of working with club boards and search committees to identify and retain professional executive leadership (GM/CEs) for their clubs, our firm typically conducts a market compensation analysis and assists in the final agreement negotiations with the successful candidate.

I’m continually amazed at how many seemingly competent managers expect membership privileges for themselves and often their families as part of the “normal” benefits provided to them. Where does this entitlement expectation come from?

Some years ago at a club I was hired to manage, one of the first operational standards defined for management and the employee team stated in no uncertain terms that “no employee of the club, including management, will be allowed to consume alcohol on club property.”

Our golf professional staff had been in the habit of playing golf with the members and then having drinks and sometimes engaging in card games after they finished playing golf.

There could be no good end to this story, so I explained to the head pro and his assistants that they should continue their golf games with the members but there would no longer be any consumption of alcohol or participation at the gin table. This standard was endorsed by the club’s board, as board members had realized that some golf employees were acting more like members than employees.

A recently terminated general manager who contacted us had lost the board’s trust not because of his lack of ability but because of the activities of his wife and kids at the pool.

It seems that with his family’s daily use of the pool, his spouse had earned a reputation among employees as “the most difficult member.” Additionally, his two children were entered in all of the swim club events and expected to travel to events at other clubs as though they were children of club members. There could be no good end to that story and there wasn’t.

Sometimes a club president will suggest to the general manager that they should participate in the golf and social events at the club with their spouse. The subliminal message to the manager: “You are one of us.” Well, the reality is the manager/spouse is not “one of them.” Likewise, there can be no good end to this story.

In one instance, the club general manager and his wife won a couples golf event and then the problems really began.

A perspicacious general manager will politely decline invitations to participate regularly in club events and instead play golf on Monday or whatever day the club allows employees to play.

That doesn’t mean that, on occasion, the general manager should not participate if asked to play with a group of members or at the annual board tournament. However, there should never be a perception that “our manager is on the course again today” or, even worse, “they’re playing with their regular group of members on Saturday morning.”

There can be no possible good emanating from general managers and their families becoming active participants and users of club facilities. Not only do employee/member lines become blurred for the general managers but there can also be frustration at the staff level as employees struggle with the “are they employees or members” issue.

This entitlement thinking can undermine any of the positives that a quality general manager may be providing the club because of how emotionally charged this issue can become. It provides fodder for the “bridge ladies” and is the hot topic at the “round table” in the club grille.

Successful club general managers have set clear standards for themselves and their employees when it comes to socializing at the club. These standards recognize that while general managers may, on occasion, enjoy club privileges, they are not entitled to the same membership privileges purchased by their employers, the members.

If they don’t understand that distinction, there can be no good ending to this story.

This much I know for sure.

THE BOARDROOM MAGAZINE – March/April 2024

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Membership Privileges? WHAT THE #@*$%& ARE YOU THINKING???Hannah2024-11-18T14:43:30+00:00

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