ClubCorp

The fairway to success┬áWorld-leading private club business owner ClubCorp has built its reputation on serving the needs of its members. CEO and president Eric Affeldt tells Gay Sutton how he has continued to build on that focus while injecting a new dynamic and creativity into the business. Can there be any greater heaven for a man who is an avid golfer than to head up a company that operates over 170 private golfing, sports and business clubs across the United States?  You would think he would be tempted to spend a great deal of time on the green enjoying the exercise, the personal challenge and the company. ÔÇ£Not so,ÔÇØ says Eric Affeldt, CEO and president of world-leading private club company ClubCorp. ÔÇ£ThatÔÇÖs one of the greatest fallacies about my job. IÔÇÖm like the person who lives at the beach but never sets foot on the sand. I went from being an avid golfer to playing just 10 times a year and having my handicap double!ÔÇØClubCorp was created in 1957 by a visionary, Robert Dedman, whose dream was to build an industry out of owning and managing private clubs. For Dedman, the club members were always the companyÔÇÖs most important asset, and that ethos has driven the company ever since. Today, ClubCorp is a recognized world leader in the industry, owning over 170 clubs across the United States, three in Mexico and one in Beijing. ÔÇ£And weÔÇÖve been actively pursuing opportunities in the Middle East and Far East,ÔÇØ Affeldt says. But while a large majority of the companyÔÇÖs properties are focused around golf clubs, golfing is not the end of the story. ÔÇ£WeÔÇÖre actually a membership company,ÔÇØ he asserts. ÔÇ£At our golf clubs, we have everything from dining to fitness centers and pools, and many have extensive tennis facilities. So theyÔÇÖre more like sport resorts than country clubs, and our aim is to provide more and more of these ancillary services so that we appeal to the whole family. We also have 53 what we call business and sports clubsÔÇötypically located on the top stories of buildings in major metropolitan areasÔÇöthat are essentially power breakfast, lunch and dining clubs for business executives to network and socialize.ÔÇØAffeldt has been CEO and president of ClubCorp since its acquisition in 2006 by private equity firm KSL Capital Partners. Much of his first year was spent touring the country, visiting the properties, learning about the business and its people, finding out what they needed to improve their operations and, above all, meeting club members. ÔÇ£When a 50-year-old company that has been owned by one family is bought by a private equity firm, thereÔÇÖs immediately a fear that things will be radically altered,ÔÇØ he explains. ÔÇ£We wanted to reassure our members and our staff that we had no intention of breaking the model of being a private club company. We will always have an audience of one, and thatÔÇÖs our members.ÔÇØ From the staff perspective, he also wanted to create what he described as a sense of urgency and encourage creativity. ÔÇ£We believe that you need to constantly examine your business from as many angles as possible and try to reshape it to best meet the needs of the consumer,ÔÇØ he says. In 2006, Affeldt came into a business that was blessed by a large number of ÔÇ£tenured executives who understood the business, the members and the local markets. The bad news, in some cases, was that theyÔÇÖd been looking at it in the same way for many years, and that was a challenge.ÔÇØ Part of the solution was an infusion of new senior executives who were able to create enthusiasm for the new creative way of working. ÔÇ£IÔÇÖm also a believer that in times of stress or change, you really canÔÇÖt over-communicate,ÔÇØ Affeldt says. ÔÇ£I think I visited 130 clubs in 2007, putting a human face on the company and just letting people poke and prod, ask questions and figure out for themselves that we were here to nurture and grow the company and not anything to the contrary.ÔÇØ The final element to the change process was restructuring the management of the business. ÔÇ£WeÔÇÖve looked at how we can improve the processes and take out cost, without detracting from the member or guest experience at the club level. IÔÇÖd much rather make expense reductions here at corporate than have something negatively impact one of my members at a club.ÔÇØ As a result, corporate staff levels have been reduced by about 30 percent since the end of 2006.Touring the clubs during 2007 was not a one-way communication exercise, though. One of the most interesting lessons Affeldt has learned is that the business is a collection of clubs rather than a chain of clubs. Each has its own local flavor and characteristics and must be responsive to its local membership and conditions.Staff members, too, are much more creative and proactive. Improvements are happening across the board, from the creative use of space so that more exercise facilities can be introduced, to the creation of a range of healthier, lighter menus for the increasingly health-conscious membership, or the in-house development of new member-tracking software to help improve decision making and service improvement.Affeldt is already well on his way to transforming the clubs into family-friendly environments that appeal to everyone. The golfing facilities are already better than virtually any other organization in the world. ÔÇ£If youÔÇÖre a grandparent, you can go and enjoy your bridge night at the club. If youÔÇÖre an avid tennis player or enjoy a good workout, then we offer that. For the kids weÔÇÖve introduced interactive water features. And weÔÇÖre trying to create more programming so that our clubs become core to our membersÔÇÖ lifestyles,ÔÇØ he says.Most of those in the hospitality industry have suffered considerably from the economic downturn, but ClubCorp is experiencing an interesting phenomenon. ÔÇ£In early 2008 we saw an increasing attrition in membership,ÔÇØ Affeldt admits. ÔÇ£But interestingly, this was outweighed by more and more new members signing up.ÔÇØ This trend has continued, and the most surprising figure of all was released in the first quarter of 2009, when the company sold more golf memberships than it had done in 2008.ÔÇ£ItÔÇÖs only my personal opinion,ÔÇØ he concludes, ÔÇ£but I think it echoes the ÔÇÿstaycationÔÇÖ concept. Rather than going to Paris for a week, people are choosing to spend their money more effectively by joining a club. Every member of the family can then use the club every day of the year. And I think weÔÇÖve been a great beneficiary of that.ÔÇØ ÔÇô Editorial research by Paul Wile┬á