Thursday, May 27, 2010

Welcome to the World of Sales Mr. Superintendent

Golf Course superintendents face lot of challenges in selling major capital projects to management, owners and boards of directors.
In these cases the superintendent is the seller and the management, owners and boards of directors are the buyers.

What are the reasons that make it difficult to sell project to management?

The reasons are:

Tactical vs. Strategic
Superintendents tend to sell tactically while club management buys strategically. This leads to a gap or mismatch between what club management presumes it needs and the arguments used by the superintendent for convincing them what the club actually needs. Focusing on project management tools, techniques, technology etc. will not work with club management as they generally look at the “Big Club Picture”.

What club management needs or what are they interested in?
Club owners, boards and managers are interested in:

Strategic Business Decisions - Decisions that would enable strategic advantage, examples are:
  1. Increased dues income
  2. Reduced maintenance / cost of maintenance
  3. More business activity in rounds, special events and F&B
  4. Increasing Market Share
  5. More Members / Players from your immediate 10 mile radius
Strategic Selling Techniques – They are increasing market share, creating new markets (unique club events, appeal to wider demographics), possible club expansion (facilities), competitive advantage against other local clubs, increasing business revenue, increasing profits and ROI (Return on Investment).

What Club Management doesn’t need or what are they NOT interested in?

Remember, as a rule, superintendents are oriented towards Tactical Selling Strategies, which most clubs’ management are generally not interested in. Tactical Selling Techniques emphasizes on; cutting costs, specific quality improvement and organizational effectiveness.


Operational vs. Strategic

Golf course superintendents are operational in approach and focus on specific tools and features of a project. But club management is generally interested in strategic tools that add value to the membership and business.


Insensitivity to organizational changes

Golf course superintendents need to be sensitive to the difficulties caused by changes in organization culture. Implementation of new project or processes results in significant changes in the internal work environment. For example a new project implementation may require using sophisticated technology while other departments will not reap the benefits. Also, bundling projects so that social members get a portion of capital often works to popularize a project along multiple demographics.

Conflicting needs of various divisions in the organization

Superintendents use a common approach without understanding specific needs of various sections in the clubs’ organization. A superintendent needs to be dedicated and aware at a club-wide level so as to follow a consistent approach across various divisions within the club organization. Even though the golf course is the number one asset at most clubs, funds and improvements can not only be directed to the course.

Varied thinking of club management

Each manager, owner or board member has a different mindset to a new project. The superintendents use the same approach in selling projects without understanding different buyer’s mindsets. The clubs offerings are varied and so is the decision maker’s. Most clubs offer dining, tennis, swimming and fitness as other functions that need capital funding from time to time.

Political under currents

Political undercurrents in club culture also make it difficult to sell a project. The superintendent needs to be alert on any organization changes that may affect the delicate project dynamics.

Insufficient training

Club management often feels superintendents are already practicing project management and strategic planning and the superintendent may require the need advance their education to achieve the clubs’ organization goals.

How to sell projects to club management?

Superintendents often argue that timely capital projects help in higher standards of maintenance. Instead they should explain how new capital projects will lead to more dues income and an increase in rounds played leading to additional revenues for the club. A well executed capital project will enhance the members experience and add value to the club business.

What are the ways to sell a project successfully to club managers, owners and boards of directors?

Superintendents should focus on the following to sell a capital project successfully to club management:


Focus on Measurable Results - Measurable results examples – increase revenue, staff growth and retention, capturing new members, improving on the local club competition. These parameters are integrated with organizations strategic objectives.

Assess Organizational Environment – Assess the organizational inclination towards a new project. This could be done by taking an inventory of successful and less than successful projects. Then identify key reasons for failure or success using surveys and project archives. Having done all the above a better strategy could be derived to sell the capital project.

Ensure Strong Buyer Seller Relationship - A professional relationship should be maintained with club managers, owners and boards. Above all, the superintendent should universally known be trustworthy and capable to carryout the duties of owners representative and / or project management.

Understand Individual Needs - Since club management have different opinions on a capital project, superintendents must invest time and effort in understanding the clubs’ needs.

Avoid Project Management Jargons – While selling capital projects to club leaders superintendents should use simple business terms such as long term benefits, higher ROI, NPV (Net present Value), Savings, Success, Competitive advantage etc. Very little selling ground is gained by explaining that a new irrigation system will report local soil moisture and salt concentration conditions and apply water based on evapotranspiration though the improved Penman-Monteith equation. This type of technical speak will have a negative impact on you’re your layman audience.

Additional Opportunities

Be sure to have all information, needs and benefits for the project and don’t present the project without knowing the odds for approval. Most often a waiting period can be considerable before a failed or unapproved project can be presented before the membership again.

Conclusion

By understanding some of the dynamics of capital project approval your odds of convincing the decision makers on the importance of your project will improve dramatically. Superintendents by nature don’t require selling as part of their daily job description. However, sometime during your career you will be in a position to sell a large capital golf course project, good luck and keep these tips in mind.











Some Basics on Managing a Small Golf Course Crew

With golf courses being squeezed for every labor dollar these are some helpful tips in managing the golf course maintenance with a reduced staff. Special skill is needed to manage an effective golf course maintenance team. Although there are times when it is easier to manage a small maintenance crew than a large crew, managing your small team has challenges of its own. Small teams do not have the same resources or variety that large teams have. You must be especially careful to manage small teams properly in order to successfully finish special events or detailed projects.

  • Hire team members with multiple skills
If your team size is limited, try to hire team members that have a combination of skills or can be easily trained for multi-skilled positions and avoid hiring those that have experience or a preference in just one skill. This way, each team member can have different functions within the group.

  • Plan out carefully and exactly
With a small crew, it is especially important that you are organized and know exactly what needs to be done each day, week and month. You must plan out tasks carefully and not just give out tasks haphazardly. Fit the task to the crew member.

  • Give out tasks in order of priority
With a small team; you concentrate on tasks that are highest priority. You do not have team members to spare or to do extra work, so you must keep your group focused on the most important tasks at hand. When every labor dollar counts this is critical planning.

  • Consider yourself part of the team
If you manage a small team, you must understand that you are also a team member. Unlike a manager of a large team where project management may be your only job, a manager for a small team will often have to be part of the team as well as the manager. This means you will use your skill set and complete some of the project(s) yourself.

  • Allow the team to grow close but still accomplish
Small teams often become personally involved. Each member works closely with one another which can start friendships. This is a good thing when it helps the team accomplish, but can have negative effects if the team setting becomes a social meeting instead of work time. Make sure to balance team friendships with productivity.

  • Always reward in public and discipline in private
No matter the size of the team these are good characteristics of leadership, however, the practice of “reward in public and discipline in private” is all the more important to smaller sized teams. The overall well being of a small team can be severely crippled by disparaging a team member in front of their peers. Group recognition also can be a large scale motivator when sincere and earned by the team.

  • Expect exceptional results
Never lower your expectations for high quality work. Once the small team members have knowledge that expectations are sub-standard a new mindset will be set on lower performance. Expect the best from your small team and train them appropriately, good enough is not an option.

The above is a good beginning to successfully manage a winning, small, high performance team of golf maintenance workers, apply these simple but effective attributes and experience how much more efficiently your team can accomplish the task of fine golf course maintenance with substantially less labor.

Tuesday, May 25, 2010

My Trip to Southern Hills

Imagine my excitement when I discovered that I was on my way to Southern Hills. My wife had arranged to visit with her sister to attend her son’s graduation party. Not being the kind of guy to sit around I planned a little fly fishing at local tail water for one day and contacted the superintendent at Southern Hills.
Unfortunately, I got skunked fishing for wily trout in the tail water so my trip to Southern Hills would have to be the highlight of my trip, did I mention this Southern Hills was in Hot Springs, South Dakota!

Southern Hills of South Dakota is a gem of a golf course located in the southwest edge of the state.







The slick bent fairways, great pure bent greens a picturesque landscape is something special in the Black Hills area.










If you ever get an opportunity to visit I would definitely put this course on your list.

Operated by the city, Southern Hills feels more like a country club. The care that is taken to maintain this fantastic course is overseen by Arlin Fenhaus, CGCS. Arlin and his staff make the course a comfortable and inviting place to tee-it-up.

Although the Southern Hill I visited was not the Tulsa venue of professional tournament fame, I rather would spend my time at Southern Hills, South Dakota. Having lived in Tulsa I have already been to Southern Hills Country Club, it’s nice too, just another kind of Southern Hills.

Friday, May 7, 2010

A Look at Golf Maintenance Budgets

By Michael D. Vogt, CGCS

The need to control golf maintenance expenses may finally get its due among golf club board members, managers and by default golf course superintendents. Let’s not begin cutting budgets before understanding an alternative budgeting process or the possible results.

The first thing needed to logically address golf course budgetary issues is a written standard of golf course maintenance. These standards must be concise at describing golf course conditions on a daily basis at each unique club.

The Standards

Standards are written guidelines for golf course maintenance minimums. These standards should be carefully drafted by the committee with major input from the golf course superintendent. The standards should include items such as follows:

ANY TOWN GOLF CLUB
GOLF COURSE MAINTENANCE STANDARDS
2010

Any Town Golf Club is characterized by an extremely high level of grooming and manicuring with an emphasis on creating tournament conditions on a day to day basis. Any Town Golf Club’s standard of maintenance is very expensive and will be expected to be maintained on a daily basis throughout the season (April 1 – October 15)

The following are basic Golf Course Maintenance Standards. Your clubs standards should be very detailed leaving little to interpretation.

Greens
* Overview: All greens are to be smooth, uniformly turfed, firm but not hard, well defined and free of all major pest problems. Cups, poles and flags are to be uniform, clean and in excellent repair.

Mowing frequency Daily
Mowing equipment Walk Mowers (Type)
Cutting height 1/10 - 5/32 inch (weather dependent)
Daily Putting speed 10.0 - 11.0 stempmeter
Cups changed Daily prior to play
Ballmarks repaired Daily
Dew removal/whipping After mowing

Greens Amenities:
Tournament poles
Zinc cups / No Liners
Logo flags
Replace flags & cups 5 times per year

Tees, Collars & Approaches
Overview: Tees smooth, completely turfed, level, firm but not hard, clean, properly directed, with amenities in good condition and repair, consistent and uniform. Markers rotated consistent with cup rotation system and aligned with the line of play.

Tees
Mowing frequency 9 holes 5 x per week
Mowing equipment Walk Mowers (Type)
Cutting height 1/4-3/8

Greens Approach & Collar
Mowing frequency 9 holes 5 x per week
Tee markers changed Daily
Divots repaired (par threes) Daily
Divots repaired (par 4s/5s) 4 x per week

Amenities:
Ballwashers/trash containers - All Tees All holes
Benches Every Hole
Tee signage - Purchased Every Hole
Yardage monuments Every Hole
Divot buckets on Par 3's Every Hole

The above a basic set of standards and would be applied to every area of maintenance.


Cycle - Times

Once a set of standards are created routine job tasks can be timed, we refer to the time it takes to perform these routine tasks as cycle-times.


                                              Labor Needed to Mow Greens

If the club establishes cycle-times for each routine labor requirement a labor budget can be formulated on this basis.

Our experience has shown that 55% to 65% of private club income was expenses incurred in operating typical private 18-hole golf or country clubs relate to turf maintenance. While these percentages sound excessive let’s examine the importance of the golf course facility to the club; the majority of members (Over 70%) stated that the main reason for joining the club was “For the High Quality Golf Course” :

• Country club courses are generally better maintained than public courses
• Play is usually faster, since the course is not clogged with beginners
• Since the monthly dues cover the cost of golf, it may be a good value for the person who plays golf often
• Golf outings and social functions may lead to job or business opportunities
• Families often enjoy the benefits of club memberships for health, well being and to associate with like-minded people in their community

The Zero - Based Budget

Starting with all line items being zero the budget exercise begins. Labor, based on predicted activities can constitute the beginning of the process. The standards and cycle-times should yield an hourly total for routine maintenance. Labor dollar amounts should be relatively simple to assign to job tasks; for instance, mowing greens would not require a high wage earner to accomplish, while applying fertilizers and chemicals to green surfaces will require a more experienced higher wage earner.

Advantages of Zero-Based Budgeting:

1. Efficient allocation of resources, as it is based on needs and standards
2. Drives managers to find cost effective ways to improve standards and operations
3. Detects inflated budgets
4. Useful for golf course maintenance operations where the output is difficult to recognize
5. Increases motivation by providing greater initiative and responsibility in decision-making
6. Increases communication and coordination within the club’s organization
7. Identifies and eliminates wasteful and obsolete operations.
8. Identifies opportunities for outsourcing.
9. Forces cost centers to identify their mission and their relationship to overall goals.

Disadvantages of Zero-Based Budgeting:

1. Must define standards and decision units, as it is time-consuming
2. Forced to justify every detail related to expenditures
3. Necessary to train managers. Zero-based budgeting must be clearly understood by managers at various levels to be successfully implemented.
4. The volume of information may be so large compressing the information down to a usable size might remove important details to middle and lower management
5. Honesty of the managers must be reliable and uniform. Any manager that exaggerates input information skews the results.

The wild card in any golf maintenance labor budget is weather and its related impact on dollars needed to provide standards that are acceptable to membership. During the course of the golf season weather and is unique impact on golf course maintenance and should be addressed to keep labor expenditures to a minimum. The superintendent must communicate with regular frequency and to the predetermined authority on additions to the allotted funds in each category of the maintenance budget. Hot humid weather can increase fungicide application rates and frequencies, or drought can increase power and water use. The superintendent has the training and expertise to make these decisions but must also be a good communicator when it comes to variances in budget forecasts.


Building a golf maintenance budget from zero takes into account individual line item areas such as fertilizers and chemicals for example. These commodities are needed to safeguard turf from disease, insect damage, weeds and to control growth and enhance playability (8% - 15% of total budget). The arsenal of chemicals available is far better in terms of safety and function than in years past. Increases in price have steadily made an impact on cost of protection. An application program with specific dates, rates and cost per square foot can easily be forecasted with the use of modern spreadsheet programs. Basically, programs to spray herbicides, fungicides, fertilizers and other chemicals can be forecasted by most professional golf course superintendents. Pricing these products is generally preformed through competitive bidding. Be aware that generic turf chemicals have become a formidable product offering in recent years, only your superintendent will know which generic substation will produce the results the club desires.

Equipment maintenance and repair are often large additional expenditures incurred in the golf maintenance budget (3% - 7%). An examination of repair records should take place to arrive at a decision whether to keep or retire equipment before the cost of operation excides the cost of repair or/or inconvenience due to chronic equipment failures resulting in poor conditions and not achieving standards of maintenance.

Drilling down into each line item is necessary to establish a zero-based budget.

Historical or Incremental Budgeting

Incremental budgeting uses a budget prepared during the previous period’s budget or uses actual historical performance as a base. Incremental amounts are added for the new budget period as desired. The allocation of resources is based upon allocations and increases of the previous period based on increased activity. This approach is not recommended as it fails to take into account changing economic or operational circumstances based on proven methodology. Moreover, it encourages “spending up to the budget” to ensure a reasonable allocation in the next budgetary period. It leads to a “spend it or lose it” mentality.

Advantages of incremental budgeting:

1. The budget is stable and change is gradual, usually based on a global percentage
2. Managers can operate their departments on a consistent basis
3. The system is simple and easy to understand
4. Conflicts are avoided when departments appear to be treated similarly
5. Co-ordination between budgets is easier to achieve
6. The impact of change can be seen quickly

Disadvantages of incremental budgeting:

1. Assumes activities and methods will continue in the same way
2. No incentive for developing new ideas
3. No incentive to reduce costs
4. Encourages spending up to the budget so that the budget is maintained over subsequent years
5. The budget will become out-of-date and no longer relate to standards or type of output desired
6. The priority for resources may have changed since the budgets were originally set
7. There may be budgetary slack built into the budget, which is never reviewed.
8. Managers might have overestimated their requirements in the past in order to obtain a budget which is easier to work within, and which will allow them to achieve favorable results

Variable and Non-Variable Expenses

Many budgetary expenses are referred to as non-variable expenses. These expenses are considered mostly stable no matter how many rounds of golf are played. For instance, if a club has 10,000 rounds or 30,000 rounds, fungicide applications on greens will most likely remain the same. Conversely, the club that has 30,000 rounds is essential busy most of the day, labor hours to mow fairways can be expected to increase unless perhaps part-time labor is introduced later in the day, during a slow play period, to avoid overtime or increase cycle-time, running up the cost of labor to mow fairways. Variable and non-variable expenses should be considered when formulating budget forecasts. In the latter example, by using part-time and spit shift labor we may be able to smooth variable expenses and create a more stable labor expense in relation to increase rounds. Our goal is to identify variable expenses and control escalation during increases in usage.

Comparison of Expenses

Across the country, many superintendents have had their budgets frozen or reduced, which is likely why some clubs look to compare course operations and budgets with hopes of increasing resources.

An interesting question is perhaps golfer’s expectations and the related course maintenance to satisfy those expectations has gotten out of hand (standards). Is it time to scale back on items as bunker maintenance (variable expenses) which is fast becoming equal to cost of greens maintenance? Is out-of-play maintenance critical to the overall golf experience? Is a vast array of annual flowers superior to perennial plantings? The key is to document and communicate changes needed to sustain a healthy bottom line during difficult economic times.

There are few reliable methods to compare golf course maintenance budgets, it is essential to point out that the validity of such comparisons is dubious, at best. The difficulty associated with comparing course operations can be attributed to such items as:

• Managed sizes of turf on greens, tees and fairways
• The number of sand bunkers and bunker design
• Number of annual rounds of golf
• Water and soil quality and inputs needed to achieve desired standards
• Geographic location of the club

Comparisons may be useful in certain circumstances. The list below provides a few indicators that can potentially be used to compare and contrast courses:

• Maintenance cost per acre
• Maintenance costs per hole
• Labor hours per week
• Labor hours per hole
• Maintenance dollars per golf round
• Percentage of variable and non-variable expenses of budget vs. total golf related income

In 2007 a major golf association studied the maintenance expenses of more than 66 private clubs in a major metropolitan area. Of the clubs surveyed in three distinct regions an 11% differential was observed in average maintenance budgets. In another 2007 set of country club statistics of major country clubs in a Midwestern metropolitan area the variation in golf course maintenance costs was just over 12% .

As we have continued to follow golf course maintenance expenses the trends in maintenance costs has generally increased well in excess of the increases in the Consumer Price Index.

There will be further pressures on expenses due to volatility in oil prices. The increases in oil prices will not only increase what is normally only 3% -5% of the typical budget, but will also increase the cost of most fertilizers and chemicals that are derived from petrochemicals and costs of delivery that will significantly impact budget line items.

Cost Control

Then there is the question of competition and the number of golf courses that have been added in the past decade. In the US, we have added over 20% to golf course capacity since 1988. While it is true that basic demographics relating to the aging of the “baby boom” generation will support some additional golf capacity, it will not absorb all the capacity that has been built. Reduction of pricing and the reduction or elimination of initiation fees has left many private clubs opening their doors to the public or enlisting the likes of manament companies or maintenance contractors to manage the golf course. These difficult management decisions are all part-and-parcel due to increases in operation expenses.

Over the years superintendent’s need for larger budgets was in order to keep pace with costs of maintaining status quo. What kind of help is the superintendent getting?

Let’s take for example a walking greens mower. A 22” mower in 1988 was $2,500.00 and is over $6,500.00 today. Inflation rate within the last 20 years is 82.44% , which would put the adjusted cost of the $4,561.00 for the greens mower, 32.5% greater than the inflation rate. The machine will not produce a significant decrease in mowing height or quality. Clearly, today’s superintendent is not getting much help in lowering expenses from the equipment manufacturers.

What can a golf club’s Manager or Board of Directors do to control costs?

• Become more knowledgeable about basic maintenance practices
• Ask for alternatives, generally more than one method or piece of equipment is available for specific tasks
• Demand cycle-time information

The real point of this article is not to ridicule the golf course superintendent, but to call attention to the fact that the actual assembly of golf course maintenance budgets is being neglected. What can be done to correct the situation?

• Superintendents need to start asking some new questions – How can we become more efficient?
• Equipment manufacturers need to get focused on creating more cost efficient and productive machinery
• Managers and Boards need to seek education on golf maintenance issues
• The USGA and GCSAA need to focus their efforts on providing increased education for General Managers and Boards
• Maintenance cycle-times and maintenance standards needs to become an operating “Best Management Practice”

Conclusion

Reinventing historic, incremental budgets must be accomplished if clubs are to stay competitive in the private golf market. Zero-based budgeting places the output desired first through carefully drafted standards and researched cycle-times, the resources are only appropriated after standards are met. To place restrains on a mangers and superintendents to reduce budget spending by an arbitrary percentage is unrealistic. With a zero-based budget a decision can be made to curtail or eliminate a job task and the dollars saved can be immediately identified.

Unitized cost of production is easily identified through zero-based budgeting. Cost controls are simplified once the budget is formulated. Fixed and variable costs can be identified through upswings in usage and relating operational costs. The zero-based budget makes sense for a troubled economy when cost controls and even budget cuts are the order-of-the-day. The process of zero-based budgeting helps to increase overall business acumen in your managers and will help everyone understand the complexities on forecasting golf course operational expenses.