Show notes
John Schultz, CEO of Club Leadership Alliance, has been around the block - a bunch of times! Prior to his current role, he was the GM for over 20 years at Carmel Country Club in Charlotte, North Carolina. Taking over a club with financial challenges, he put his flywheel in motion and turned the club around with more than 60 million dollars in capital improvements in 2 decades. Balancing the shifting demographics of new, younger members with longstanding members, facilitating town hall discussions, managing the conflict and debate that goes with member assessments and day to day communication challenges that are hand-in-hand with running a club, Schultz has done it all. John Schultz built his career at Carmel Country Club with more than 20 years of service AFTER doing 9 years of military service as a United States Marine. There were probably some days as a Staff Sergeant in the Marines that were easier than his days as a General Manager, but that's another story! Needless to say, when you stay in one place for over 20 years, you did a lot of things right and you also dealt with a lot of change. Today, John Schultz is the CEO of the Club Leadership Alliance which is a collaborative effort between The McMahon Group, Club Benchmarking and Kopplin, Kuelber and Wallace. Their mission is to aggregate the best practices they've seen from the hundreds of clubs that they work with and then help clubs take advantage of the knowledge they have gleaned. What better guest could we have for an episode on change management and managing shifting club demographics and dynamics? Episode Notes 4:29 - John talks about taking over a club that was experiencing financial distress early in his career. 9:03 - John talks about how he approached relationships with the board. 11:18 - John talks about how the "Flywheel Approach" started to help grow the club with the right members. 13:00 - John shares his most challenging initiative and how he handled it. 15:47 - Building trust again is difficulty. John talks about how he approached it while at Carmel CC. 22:02 - Member unrest led to some tense times in his leadership and John talks about how he handled a group of members who opposed the club's direction. 26:29 - In 2016 the member demographics began to change at Carmel and he talks about how he handled the influx of younger members with the established legacy members. 30:31 - Words of wisdom from John on how to handle bridging the generation gap between members. Episode Transcript Ed Heil [00:00:01] You are listening to Crush and Club Marketing, a podcast for progressive club leaders ready to increase their club's revenue. Time for change begins right now. John Schultz, CEO of the Club Leadership Alliance, has been around the block. Prior to his current role, he was the GM for over 20 years at Carmel Country Club in Charlotte, North Carolina, taking over a club with financial challenges. He put his flywheel emotion and turned the club around with more than $60 million in capital improvements in two decades. In this episode, John Schultz shares his stories of change management, navigating, shifting club demographics, member assessments and of course, member conflict. Balancing the evolving needs and goals of private clubs, including the shifting demographics of new, younger members with long standing members, town halls, conflict and debate that goes with assessments and day to day communication challenges that frankly, just go hand in hand with running or leading any business, including clubs, are endless, all you club leaders know. Our guest in this episode, John Schultz, has been there and done that. He built his career at Carmel Country Club with more than 20 years of service, after doing nine years of military service, which I'm sure there were some days in the Marines that might have been easier than his days as a GM, but that's probably another story for another podcast. Needless to say, when you stay in one place for over two decades, you do a lot of things right, and you also had to deal with a lot of change. Today, Schultz is the CEO of the Club Leadership Alliance, and it is a collaborative effort between The McMahon Group, Club Benchmarking and Kaplan, Keebler, and Wallace. Their mission is to aggregate the best practices they've seen from the hundreds of clubs that they work with, and then help clubs take advantage of the knowledge they have gleaned. What better guest could we have for an episode on change management and managing shifting club demographics and dynamics? Thanks so much for joining me today. John Schultz [00:02:13] Glad to be here. Appreciate being invited. Ed Heil [00:02:15] Well, this is a I know this is an important topic for a lot of people. Leadership positions at clubs, and and man, with your your history at Carmel Country Club for almost 20 years. I guess the first question I have for you is, what is the key to making a long run like that at one place? John Schultz [00:02:37] Yeah, 20 years is quite a while. And. And it's not like I had one plan going in and trying to move through and only executed to this one set of objectives and priorities. It's constantly moving. It's constantly changing. It's listening and seeing what's going on. It's feeling where the industry's going, what what people and members are looking for and the experience that they that they want from their club. And and that changed in many times through the dynamic. When I, when I first got to Carmel, they were in financial distress and the membership was, sliding. There was some debt and we really had to analyze where the club needed to go and and take advantage of those things. But also it changes, and about every five years we would take a new look out to to the future and see what was what were the opportunities and how could we, take advantage of where we were in the Charlotte market and, and what would make people, the most satisfied and, and engage at their club. Ed Heil [00:03:48] This kind of reminds me of a conversation I had with John McFadden, last year from the Union League, Philadelphia, where he came into a club that was, you know, a little financially distressed, and, and hearing what you're saying, there's a the two words that came into my mind are brave leadership. And, you know, can you just talk about what that was like to walk into a situation where you're relatively new, unproven, and you're going to lead out of this, you know, kind of challenging times? Can you maybe just speak to what the mindset is and what it was within you that that gave you that ability to do that? John Schultz [00:04:29] Sure. And Jeff is an inspiration to all of us and a, you know, visionary that jumps out there. And, and I hope to just be a portion of that. So, you know, when you look at the opportunities and the areas and what you can get done in a reasonably, financial responsible way and, and see where the club's going, I tend to look not necessarily, at the clubs next door and what, what they're doing, in our backyard because you get too homogenous when, you're only staying within that, constraint. And what are what are the resorts doing? What are the hotels doing? What are people doing? And the better restaurants and, and that kind of thing. So looking for those opportunities outside just "clubdom". And I have to admit I stole many, many ideas from many clubs around and repurpose them. And, and put my name on it and took credit for it and and and enjoyed the success from some of those. But it was outside the industry that really brings more opportunity. And, you know, the hotels resorts tend to be further ahead of us, and many in the Florida market, of clubs have to be more progressive in, in what they're providing. The competition is, much more, tighter down that way. So, so if you look at those areas and seek out what, what is going to be the next, the next big thing and, and try to take advantage of those and be on the front end. Carmel, was more open to, being progressive in the space because we weren't as traditional and we weren't as classic as some of the other clubs around. So we had the opportunity to take advantage of that, be a little risky and not a lot of risk, but some that would allow us to build, the, the, resort style pool and have social, engagement that was not typical. And so that social thing is really the first initial, area that I started at Carmel was to take advantage of the events and club functions and expand those things so that the, the members that lived around the, the club felt like that was their outlet. And to build that up was really our first, issue. We couldn't build anything because we had debt. So, I was able to really get the momentum going and it became their home away from home, as everyone likes to say. And the membership growth started, when we announced the pool, the year we announced the pool, put out the pretty drawings with the, you know, the tiki bars and all the rest of it, we brought in 131 new members, and paid for the pool in. Just the one year, of initiation. Ed Heil [00:07:39] What year was that? John Schultz [00:07:40] That was 2008. Okay. And so, right. Ed Heil [00:07:43] Before the the downturn. Yeah. John Schultz [00:07:45] Well, this was seven eight. Yeah. And then that roll that that success then rolled into the next big thing. So we proved that we could pay for it. We got out of debt. We, paid off the pool. And then we started the next big thing, which was in 2009, which at Carmel, a 36 hole facility allowed us to renovate the South course. Rees Jones came in and we did a 10 million, a $10 million renovation right in the middle of that disaster recession that we went through, and in 2009 and ten and came right out of that, paid that off, the growth, came after it, and it allowed us to roll right into the next big thing. Ed Heil [00:08:33] So that really I want to come back to the next big thing, though. But just to frame this up a little bit, what I always think for, for GM's is how they relate with the board. Right? And having that sort of like a relationship that provides a GM to be visionary sometimes to execute on on big ideas, the next big thing. How would you describe your relationship over the 20 years with the board at Carmel? John Schultz [00:09:03] Well, it's got to be a partnership because, there's not many. There's a few GM's that are making these decisions on their own. I'm not sure they're any. And we have to legislate up to, board members and the membership as a total in in are these good ideas and are they going to be successful and what is what's the outcome going to be? There's a there's a, Jim Collins, chapter. In "Good to Great" that's that he's written recently on social, sectors and in this, chapter, he talks about ledgers that that nonprofit, GM CEOs, have to legislate these decisions. We can't just make the decision. We have to provide that information and persuade the decision makers. And it's really a great, book or chapter to about 60 pages. I'd recommend it highly. And the other one, I'm not to be a Jim Collins, just, fan here, but. Ed Heil [00:10:08] I'm a fan. John Schultz [00:10:08] It's called The Flywheel Approach, and in there it talks about how I'm saying this next big thing, you, as you go around in a circle and you have a vision and you, and you act on it, it allows that, flywheel to spin. And the faster you can get the flywheel to spin, you get more and more done. And in turn, the confidence, grows, the momentum grows, and the membership has trust and faith in where you're going. I can tell you there was not a lot of people were not necessarily, at Carmel or saying, oh, the thing we need next is a swimming pool, right. But a golf club, with 36 holes. And the board, unanimously jumped in on this idea because it it was the next big thing that really allowed us to be successful. Ed Heil [00:11:03] And that sounds like what you were describing earlier. I mean, before I interrupted you was just really that flywheel, like you got that thing going and people started. I'm assuming the membership trusted you more. They believed in you. They got it, you know, got behind what was happening. Is that kind of what happened? John Schultz [00:11:18] That's right. And and then they invite their friends out to the pool. They invite them to social events. And the the more the community started engaging and seeing the animation and the fun and the, lifestyle that was happening, that was that was part of, the community. It allowed them it would create that demand, and they would then, of course, join the club. And and now there's a waiting list of almost 200, people on the waiting list, which is partially, you know, yes, it's Carmel, but it's also just the life, style that's, that's out there right now from the, pandemic. Ed Heil [00:11:57] And you had mentioned in a previous conversation that in your time there, and correct me if I'm wrong, you did 60 million in capital projects. Is that right? John Schultz [00:12:05] We did. Yep. And no assessments. All of that was initiation fee growth. Combined with, you know, operations were always, in the, in the black. And so we would fund capital improvements, and maintenance capital and all of those things. And I would be, remiss in not mentioning, you know, our net worth over time increased at one of the highest levels across the country and recognized as one of the better growth patterns. It was consistently going up and adding net worth. Over that time. Wow. And just a little bit there. We never missed a budget. Inside of that, 20 years. Wow. Good. Ed Heil [00:12:50] That's awesome. What was your most challenging initiative that you that you put out there that, that required the most, maybe, arm wrestling? John Schultz [00:13:00] Yeah, it was probably that, it was it probably came into the the 2009, golf course renovation just because of the timing and the uncertainty with the recession and, that kind of thing. And, and it and it created some dissension that didn't really come out in, in holding up the project or delaying it or changing it at all. It just created, it was at the time when, corporate atmosphere out in the, in the world was question everything, and communication and transparency was not really one of our best, skills at that time. And we learned from that. And, and found that being more, transparent and, and the entire industry moved in that direction and corporate world had moved in that way to just being, more open about what things are going on behind the scenes. And, and I, we really focused on that following that, situation, we kind of had a, uprising within the membership, and a couple of board members got voted on by petition, and, and it and it created just, you know, there was a blip there and just, satisfaction level, but it was, mostly tied to a lack of communication and transparency at the time. Ed Heil [00:14:28] Interesting. I mean, that alone. So in the spirit of just, of, managing conflict, I mean, that is one of those moments. How did you handled that? Like with the membership, too? Because, I mean, you you know, that that can you know, what we says in the absence of information, people always go to the worst place. They make up their own mind and they go to the worst place. But and to recover from that can be hard. Like we we used to talk to our kids about the trust board, you know, say you put a little in, you earn this trust. And what just takes one second to lose it all. So how do you get back on track? John Schultz [00:15:00] Yeah. So, so this was one of those moments in time where you had to take that introspective look we had done right about the time we, we did a membership survey, and, and this is one of those member satisfaction surveys that gets down into the most granular level. And one of the questions, or five questions in there was what do you think of the game? And so coming out of that survey, I out of a ten point scale, my number was 6.9. Okay. For those of you out there that, apply that to a, you know, a, a grade scale, that would be a D plus. For somebody who's this. Ed Heil [00:15:46] Close to a C, though. Yeah. John Schultz [00:15:47] Well, you know, that was my average in most of my schooling, but. And what? It was just a negative group out there just, wanting to pillage and burn and that kind of thing at the time. But it did make us have to say. All right. I was on the cover of magazines at the time, and there were a lot of things going on, and I had to say introspectively. What's that about? But it's what the members thought. So I had it was that point of inflection to say, you know, I need to respond to this. And we did, and it really allowed the club and it's kind of what has made me what I'm doing today in the governance area is to find the, and set out the roles and responsibilities, set objectives, and create clear lines of responsibility within the leadership of the club management committees, board. And it allowed us to grow that process to where we're setting objectives. Were establishing, long range plans. So everybody knew what we were doing. And we were then communicating that and using that as the means to which to share with the membership why we're doing what we're doing. And and it allowed us to really build on, those, things that, advanced the club and the leadership to where the trust became even greater. And so that, that that lesson allowed the communication, transparency and advancing, governance to the point where, Carmel was recognized as having one of the best governance, board policy manuals and processes and systems that is around. Ed Heil [00:17:42] You're right. Got it. It's interesting. The, you can take that experience and sort of parlay that into turning it really into a positive, which is what you guys did. But, you know, I hate to I don't want to get overly granular here, but for some people who might sit there and go, well, but how did you do like when you would you tried to say, hey, we we made a mistake. We should have been more transparent about this. They how did you do that? Did you do it like in an email blast that went out to everyone? Because that's the first step. The rest is how you do everything after that. But what's that first step look like? John Schultz [00:18:16] Yeah, it and this tends to be, how most of us operate with doing the newsletter. You know, the newsletter is due on the 10th. And by the and that's the day everybody starts doing the newsletter and then, you know, all the different communication pieces, whether it's the website, social media or wherever it is, we're always in our reach. I say we, are always but it tends to be reactive. We need to respond to this instead. Let's get proactive and. Yeah, and at the time, my communications director, came up with the idea that let's get ahead of it, and, let's put together a calendar of 12 months and let's go ahead and figure out what the topics are that we're going to share with the membership. Every year we get the same comment from, the members that there's no grass on the fairways. You just cut it down and burned it to the ground every spring. Well, it's because the leaf blade drops all of it, the grass drops all of its leaves, and there's nothing but a stock left. It happens every year. It's the same grass. That's how Bermuda grass acts. And so we would get these complaints. Let's go ahead and answer the question in advance. So we took the opportunity. And it's 12 months based on each department. And every department has a different set of things that they're going to then talk about, and share with the membership. And it's generally the same story rewritten every single year or message because it tends to be, you know, what's cyclical. And then we just, add to it and it's now a big spreadsheet that's, you know, many pages, many depth, of topics. And, and we just, we just keep adding to it. And it was really a successful piece to keep us ahead of the message. Ed Heil [00:20:12] Interesting. So by doing that, you're you're sort of removing the possibility of someone questioning and being very upfront about the, the various issues that are that are going to happen. Like, you know, it like you said, like every year it's sort of the same thing. John Schultz [00:20:26] Yeah. Try to get ahead of the ones that you can, because, you know, there's going to be something that that surprises you, right? Try to be prepared for the, events that are in front of you. And then, when you're surprised on something, hopefully there's some trust built in. Or the best answer is when we the staff don't have to give it. It's when a member read it somewhere or knows it from another source, and they answer the question to say, hey, you know, that was listed over here on the website, or this is over here, and I heard it over, you know, through the committee system, using the board and the committees to be, talking heads for what we're doing and how it's getting out. There is another means to get the information to the membership. That way they feel engaged with what is happening. Ed Heil [00:21:14] Let's talk to let's talk about you touch earlier about, you know, on that the time where there was, perceived lack of transparency and clarity around vision or whether that was I, it sounds like that was something that was happening, but, and you said something about a fact is like different factions, which which happens. I mean, I don't I don't know if there's a club in America that hasn't experienced that in a group of people that rally around in a, a contrarian view, potentially. In the time that you managed those situations, did you have sort of a go to way of handling those or what was, you know, and I guess, you know, at the time it can really feel like crisis for, for a general manager or for club leadership. What did you learn in those situations? John Schultz [00:22:02] Yeah, some of those are the school of hard knocks. And, having spent nine years in the Marines, I tend to, meet things head on, and, weren't necessarily, thinking about how to persuade somebody. I would just try to knock them over, but that doesn't work anymore certainly and the, idea of moving forward. Yeah, it's, we had quite a few, at Carmel. When I first got there, there was a situation where the seniors and honorary members had put in a situation where they wouldn't pay any dues after the fact after they were 65 years old. So changing that system, was was difficult and trying to, you know, get them to understand why you couldn't just use the club for the rest of your life for free. And put that burden on the rest of the membership. And we would use what would be common, tools out there today, whether it's, fireside chats or, you know, newsletters or just going out and talking to, smaller groups, getting getting the board members to maybe go out and talk to smaller groups, one on one and share with them and, and allowing members to be heard. Probably 90% of it is just that they've been heard and that we're going to consider their side of things because they they think some think that the board is so close minded, they're only doing these things for their own best interest. And I've yet to see any club that behaves in that manner. And isn't, thinking what's the best for the entire club? And, and it isn't their personal agenda. It tends to be how does this impact the club in the best way. And that isn't necessarily understood outside the boardroom. Ed Heil [00:23:57] You know, it's so interesting you just said that because that is sort of the perception, I think, of a lot of members of clubs, which is that, oh, people just want to get on the board, or they want to lead committees because they want to push their own initiative forward. But you're saying you really haven't seen a lot of evidence of that? Yeah. John Schultz [00:24:16] That's true. It happens. There are some. But they've got to persuade a a larger group that their agenda item is something they need to do. And then after they get into the board, I mentioned these, two gentlemen who got on the board by petition, after they got in and sat and listened and actually heard the information firsthand and were part of of those decisions, not a single thing changed of what they wanted to do, because then they had the information. And this again, is that "a-ha" moment when we shared it with people, they went, oh, well, that makes sense. Why wouldn't you do that? Well, without sharing it, without, making it, known. The question is there, and they think something frivolous is go or, you know, something else is going on behind the door, right? Ed Heil [00:25:10] Something nefarious. Yeah. John Schultz [00:25:12] No, there you go. Ed Heil [00:25:13] And I'm not a great you know, I'm not. I'm not like, I'm a C student, too. So someone taught me that word. So I just want to sort of maybe sort of, pivot a little bit to this where, and just with some of the conversations that I've had recently with different people and, we just did an episode with Frank Vain, from the McMann Group, as you're, well, familiar and, and he's referring to this time, it's like the next golden age of clubs and coming out of the pandemic. And, one of the things he said in a talk that I saw him at was, the pandemic is the single best thing to happen in private clubs. And with that, now you've got, waitlists and you've got a lot of younger members, you know, that for that prime 42 year old young family that's looking to join a club, that, you know, they're excited. They want this experience. It's just maybe a little bit different than, the other things they've done in their lives. And so how do you, how much of this at Carmel would you have with as far as like balancing the enthusiasm and the things that young members want versus the old guard and what they're really, you know, what they think is right. What they think is the, you know, is best for the club. And you have much of that in the time you were there? John Schultz [00:26:29] Oh, sure. So and we had this situation starting in about 2016. I remember because we, we were starting to get, negative feedback that we couldn't no, the members couldn't sign up for events and we couldn't, there were waiting lists for everything, and we couldn't, they couldn't utilize the club, which is a threat to the club, because if that gets around, well, you can join and you might be able to get on the golf course. At the time, the golf course was not playing as many rounds as they are today. But why would you want to? Because you can't get into any of the events. So we had to actively try to manage out of that situation. So some of it was how we were taking reservations. Some of it's, expanding the number of events, creating more. And so it, it led us to just taking an introspective look and saying, how can we solve for this challenge and this problem with, expanding, creating more and, and or utilizing the, the facility in a, in a more proactive way. And so back to your question. My answer would be not very popular with the older, members that are out there, and I wouldn't necessarily share this in my marketing, pieces, but the members that are joining are 42.5 years old with 2.5 kids, and that's our market. And if you just take the business sense here and apply, who's our market and where are we going to get members from and who are going to replace them? It's the 42.5 year olds that we need to be focusing on. It isn't that we're not trying to be multi-generational and create, programs and events and things that that all ages can take advantage of, but our primary market, we're we're the younger members. And so that was our focus in swimming pools and, events and creating, you know, engagement, for that group that would expand who we are. So that was that was our primary motivation. Ed Heil [00:28:40] In the in the spirit of our earlier conversation around transparency and things like that, how how open were you with some of the older members that this is where we need to go and this is what we need to do. And and how was that received? John Schultz [00:28:53] Well, if and I don't remember all those conversations, but when you do $60 million of, improvements, and these are aspirational improvements. This isn't just maintenance capital or replacing the roof and that kind of thing. These are these are "Golden Easter eggs" that we're putting out, without assessment. And when you share with them that this is how we're generating the money to, to and the new members to fund those improvements. And it's not on the back of the current members. They kind of get the message pretty quickly that that's the, the tool to to create the, the demand and, and the energy around people wanting to join. So, so they're, you know, if, if they're not having to come off the hip and pay for some of these improvements and things, they're, they're like, great, do it all. We're we're all we're ahead. Why not? Ed Heil [00:29:49] Yeah. Interesting. So, as we kind of turn towards bringing this home, in your experience, I mean, for club managers that might be listening to this GM's, I should probably say, or even, you know, board leaders, that are trying to navigate some of these things and they're trying to make everyone happy where they're trying to make sure, like, we want to do some things that maybe some capital improvements that some members or the young members are on board, but the orders are not. And there might be assessments. What is your message to them? How do they, you know, from what you've seen, what's worked, what hasn't worked? How what would you say to them? John Schultz [00:30:31] So Carmel started off on this and unknowingly, had this, net worth and this growth over time, just by the demand, the activity and the success that we had, we we didn't look out 20 years and go, oh, we want to have an 8%, net, you know, growth over time. And that's our goal. We took care of it on the, operating side with, with the budget, and we took care of it, with the demand. I would say, for those clubs that are out there, that are that might want to look at it, you've got to figure out how to maintain the club as at the status quo with basic dues and the capital fees, and to take care of the the everyday and what you what you have today. And then the growth and the aspirational things come through assessments and, and through the opportunities that that come out there with, the new member growth, especially since there's a cap on generally there's a cap on membership in many clubs and that growth isn't unlimited. So, you know, it's capital planning. It's it's looking out, in the future and being able to project, what's the membership, numbers, what are the initiation fees? What are the replacement costs of of all of the, assets that are already there? And the current members need to understand that the, the replacement cost of those items are their responsibility. It's it's not it shouldn't be on the new members to have to replace the old equipment and the worn out, irrigation system or the roof or the whatever. It's it's on the current members that need to be taking care of the club financially. Ed Heil [00:32:22] Yeah, that is the old, this assessment is actually not for what's coming is for what you've actually enjoyed for the last 20 years or whatever. Yeah. Interesting. How important, how how important is strategic planning in this process to, you know, not only just from a. Health of the club. But even for just bringing members together and rallying around a vision in a in a goal. John Schultz [00:32:50] Well, this is one of the tougher questions that are out there because there are so many facets to strategic planning. Whether we're talking about governance and, leadership and the board. What what where is the club going? What's it founded on? What are its core values? What are the principles that are going out there? And I would say the area here, that's most important is setting those annual goals and objectives in search of what that five, ten year strategic plan is going to be. So it builds on it and it keeps you in a forward, forward momentum and not just a one time, event where we're going to write the strategic plan, put it on the shelf, and, and it just sits there. One of my major goals in the Club Leadership Alliance is to get rid of three ring binders. Those three ring binders that go up on the shelf are just become useless. Instead, this just needs to become an annual update. And and it's a continuous process to ensure that the club's moving in the right direction. And then the bigger every five year kind of thing is to take that introspective look and say, all right, are we still on track? Does something major need to be changed in where we're going? Because the the core values and the vision and mission shouldn't change every year, but, we should set it up so that it's ongoing. And every year the objectives are set to solve a little bit of where we're going. Ed Heil [00:34:33] Awesome. John, thanks so much for, for joining me and for sharing all of your insights. I'm sure it's helping a lot of people and, helped me a little bit as well. So thanks so much. And thank you for listening. If you find this podcast helpful. Be sure to subscribe on iTunes, Google Play, Spotify, or wherever you get your podcasts. Until next time, keep crushing your club marketing.