The right fit

Why do management companies exist?
There is a whole spectrum of golf facilities. On one extreme are truly small businesses with gross revenue in the hundreds of thousands per year. On the other extreme are golf resorts that gross tens of millions each year. Golf course management companies were formed to provide professional management to golf facilities.

Ray Davies says not all management companies can be labeled as good or bad.

Historically, golf facilities have been operated independently under various forms of management structures. Municipalities were likely the first to hire professional management. California Golf started that way in Los Angeles. Professional management provides proven business systems to increase the effectiveness of a golf business. Just as the industry has demanded that golf course superintendents change dramatically throughout the years from skilled farmer to professional manager, the golf business as a whole has moved from mom-and-pop-type operations to big business.
When a golf facility is not operated in a sustainable manner that meets the needs of ownership, professional management is an option that should be considered.

How are management companies different?
Some management companies only operate courses they own. Others focus on private clubs or high-end daily-fee operations. Most are small, with the average number of courses being about four. I found this surprising when I learned it because the few larger companies that create the standard image of management companies are atypical. Golf Course News used to list all the management companies and the courses they operate on an annual basis.
The larger companies are inherently more bureaucratic. Decision-making is much more complicated than in our small company with 13 properties. The president of the company, Tom Isaak, is only a short drive from all of our courses and every superintendent can pick up a phone and call him any time.

Why are 13 percent of golf courses throughout the country operated by
management companies?
Golf facilities operate under a number of different business models: private ownership, municipalities, private equity clubs and homeowners associations, among others. Each golf facility has its own objectives and needs. Many are operated purely as a for-profit business, others as municipal amenities, or in the case of private equity clubs as not-for-profit organizations. Many forms of management exist for each type of business. If you look at the needs of a golf business, the form of management employed usually reflects the business needs of the organization, regardless of the profit motive.
Management companies meet the needs of their clients, or they would not exist.

Will management companies grow to manage 50 percent of the courses throughout the country?
No. I don’t see that. It’s hard to tell looking 20 years ahead, but I don’t see a dramatic increase. More and more facilities will look at professional management, and some will see it as a benefit, so growth will occur, but not to 50 percent or even close to that in my view.
Whenever there are economic downturns, some facilities will look at management companies in their effort to find solutions to their economic problems. When business is good, most managers will continue to do what has performed for them in the past. When facilities aren’t able to sustain themselves, they will naturally ask, “Are we managing the business properly?” and “Are we doing the right things?”

Is there a type of course that tends to be run by a management company?
Courses that are owned by management companies such as municipalities that do not have in-house golf expertise, private clubs that want to avoid having board members directly involved in day-to-day management, and real-estate investors who are new to golf and must have professional management as a requirement of bank loans come to mind first.
Every business must be operated in an economically viable manner. This might only be a break-even goal for a municipal facility. It might be a certain return on investment for a daily-fee facility. It doesn’t matter. They all need to be operated effectively to be successful.

Do superintendents look at management companies negatively?
It is a mixed bag. The predominant view is negative. As more management companies have found that superintendents are not a commodity, there are more examples of superintendents who are happily employed by management companies.
The reputation in the 1980s and early 1990s was poor. There have been a lot of stories from unhappy superintendents throughout the years. There was even a recent example of this on the Golf Course Superintendents Association of America forum. There have been instances where superintendents were treated badly. I did not want to work for a management company when I graduated from Cal Poly in 1984. Some of my peers went to work as superintendents right out of school, working for management companies. Management companies seemed to think that one qualified superintendent could supervise younger and less expensive superintendents.
This is not a view I share. At our courses, we have qualified GCSAA members as superintendents. Half are certified members, and they average 20 years experience as superintendents. Most successful management companies have a high regard for the contributions of golf course superintendents, and the number of times qualified superintendents are fired to be replaced by less-qualified and less-expensive people is not as common. It still happens because I hear the stories, but the truth is that we make more money with a better superintendent, so this is not a place to economize.

Was there more focus on the bottom line?
There is always a focus on the bottom line. Otherwise it would not be management, but mismanagement. Superintendents who work for companies that are managed well are usually happy. Golf course management companies have learned that good superintendents make a tremendous contribution to the bottom line. The trend toward hiring more competent superintendents for each course shows this lesson continues to be learned.
Many of the contributions of the superintendent are less tangible to a business because of the tradition of accounting for golf course maintenance as a cost center only. All the major sources of revenue to golf are a direct result of golf course maintenance. So it is a mistake in thinking to have a goal of reducing golf course maintenance. The goal should be to maximize the return on maintenance dollars.

What are several pros and cons of working for a management company?
The answer would depend on the management company. It is difficult and unfair to generalize. I can only address our company. Some of the pros in our company are budgets that match expectations, appreciation for the contribution of superintendents, strong planning that superintendents are key participants in performing and status as a peer of the general manager.
The cons are directly related to the pros. There is a lot of planning and assessing of the business. Your weaknesses will feel more visible because you are working for a golf course superintendent. You will be held accountable for the effectiveness of your planning and your execution. “Trust me” is not the basis for decision-making. You will need to be able to communicate your ideas in the context of the customer and the business.
The good news is you are working for people who know and understand your work. The bad news is you are working for people who know and understand your work.

How does a superintendent bring value to a facility?
The superintendent creates the product that the other managers on the site are selling. The quality of the product is the most fundamental piece of a golf business plan. High-quality turf conditions, consistent with the green-fee structure and superior to the competition, is the primary contribution of the superintendent.
We provide superintendents with various resources. This includes his staff, maintenance equipment, irrigation system, maintenance facility and supplies. Superintendents create value by efficiently organizing their operations to utilize these resources. Well-managed irrigation systems cost less to operate and perform better. Well-managed turf equipment costs less to operate and produces a superior product. Well-managed people perform at a much higher level and result in lower workers’ compensation costs.
Superintendents, who create quality turf conditions efficiently, place the business in position for success in their market.
A superintendent’s key asset is technical knowledge that is leveraged through effective problem solving and high-quality decision-making.

Is the potential for a superintendent to advance his career greater in a management company?
Yes and no. There are opportunities in a golf course management company for superintendents who are oriented toward the big picture and are operating a golf course within the constraints of the business environment. Management companies have the potential for advancement, but I would not say it is greater. Superintendents advance their careers by acquiring a better job with increased compensation, usually with a new facility. With a management company, there is the opportunity to move up within the same company compared with the superintendent who takes a better job with a different facility.
Career success is built on solid accomplishments and do not have to be made within one company. Job security comes from the ability to do good work. A great superintendent will never want for opportunities, and those opportunities are industrywide.

Is there better pay and benefits working for a management company?
Pay and benefits are factors of market conditions. We will always hire and retain the talent needed to make our business plans work.
The gross revenue potential of a facility, what I call the size of the platform, has a significant impact on the compensation. If we operate a facility with gross revenue of less than a million dollars, we are not going to be able to afford a compensation package that is top dollar. A high-volume course will have a larger budget and higher course conditioning expectations, resulting in a larger compensation package for the superintendent. High-end resorts and private country clubs will always bring top dollar because they are big platforms.

Are high paying country club jobs more risky?
Often they are. Whenever you’re working for an employer that really knows your work, that has technical knowledge and when you are working with peers who understand what you doing, you’re going to have more security compared with working for a private club whose member board cannot appreciate what you do technically. You will be rated only on the perceptions of the current board, and you are completely accountable for problems whether they are within your control or not.

What’s more gratifying or desired, the pay and the risk or the security?
Each of us must answer that question. We all define success our own way. Self-awareness is the key.

Is working for a management company a good career move?
Every superintendent position represents a good opportunity for someone. A good career move is any position that provides the opportunity to use your abilities and provide learning opportunities. Management companies operate courses at all price points. Superintendents should be moving to larger facilities with increasing responsibility. By responsibility I mean the larger revenue source that the course they are caring for represents.
A superintendent that moves from a golf course with gross revenue of $2 million to a course with gross revenue of $3.5 million has an increased responsibility. In the private country club side of our industry, the membership fee of the facility will determine whether the superintendent is taking on increased responsibility. If you are moving to a club with a membership fee of $25,000 after working at a club with a $10,000 membership fee, you have more responsibility. You are on a larger platform where there is more risk and more rewards.
However, not everyone is looking for increased responsibility and a top-dollar job. Some superintendents want to be appreciated, have an interesting course they will come to love and work with people they like. If you are happy with your position and a higher paying job comes up, it doesn’t make sense to move simply for pay. You need to know what job satisfaction means to you and work to obtain a position that provides you those attributes.
My responsibilities keep me on the road a lot. I drive more than 40,000 miles every year visiting our courses and investigating business opportunities. All of our courses are in Northern California, so I don’t have to fly much. Working with golf course superintendents and using my agronomic knowledge to leverage our businesses is rewarding for me.

If superintendents move from a private club to a management company, would they lose freedom?
Golf course superintendents at private clubs are quite independent, but they have controls placed on them by their boards and general managers.
Some management companies restrict or control purchasing decisions that limit superintendents more than at private country clubs. One of the important values a management company brings is buying power. To consolidate purchases to best position the company to buy at the best price is an important aspect of good management. But price is only one aspect of the transaction. Service issues, which include delivery, billing, problem resolution and technical information, are important factors as well.
Our policy is to create buying agreements with more than one vendor if possible and allow the superintendents to use their own discretion when selecting suppliers. If they are paying more for a product than is available from a preferred supplier, they need to justify the decision based on the net benefit to the facility. We do not retain rebates from these buying agreements. The rebates go back to the facilities, to the maintenance departments, where the superintendent controls their use.
Our superintendents have more freedom. They also have more responsibility outside their department. They need to understand our business plan and the critical role they play. They also must contribute to the management of the entire operation. We ask the golf professional and the general manager to communicate to the superintendent the needs of the customer.
If the greens are bumpy and customers make comments to the golf shop staff, we expect the comments to be shared with the superintendent. I do not allow general managers or golf professionals to tell a superintendent how to remedy a maintenance problem, but they are required to bring the issue to the superintendent and have him provide them with information to be shared with our customers regarding how the issue will be resolved. The golf professional must be an advocate for the customer with regard to course conditions, but it is the responsibility of the superintendent to determine the actions to be taken. The superintendent is the one with the technical knowledge to determine how to best resolve turf condition issues.
Conversely, the superintendent is expected to inform the golf shop staff when the carts are not clean or the food service is causing customers to complain. The superintendent is not to tell the pro shop how to resolve the cleanliness problem or tell the food-and-beverage staff how to deal with food problems, but they must communicate customer related issues to the people we pay to solve them.

Are their management companies that don’t work that way?
The traditional thinking is departmental. Superintendents are department heads. They might not be supported when they raise issues related to other departments. You can often have wars existing between the superintendent and the golf shop because there is a lack of coordination in serving the customer. The golf shop is going to hear the turf conditioning complaints, and yet they’re powerless to fix them. Without good information from the superintendent they are not able to communicate with our customers effectively and will catch the brunt of any dissatisfaction. They get tired of this quickly and will often point the finger at maintenance implying incompetence. The superintendent is undermined by their words, and now you have hard feelings.
If everyone is working together and if the golf shop knows there’s an issue from the customer, when they call the superintendent, they’re not going to get an angry guy. They’re going to get a guy who’s told what’s going on and what the questions are. He’s going to give that golf pro what he needs to deal with his customer, and the superintendent is going to care about that customer because they are trained to care.

Do management companies tend to manage maintenance budgets more efficiently?
Throughout the years, I have looked at a large number of golf course maintenance operations. Some are well run with tight controls that produce similar results to ours, without the benefits of our buying power. Others are poorly managed with purchases made on short notice and with high service demands.
Management companies will consistently manage budgets closely. There’s a lot more scrutiny. Staffing levels and purchasing decisions are determined based on their ability to fulfill the business plan.
I have a large family, and when we wait until 5 p.m. to think about what we are going to have for dinner, we have limited choices. The same is true with operating budgets. If the golf course maintenance plans are made before the budget process, then opportunities are created to buy efficiently. If decisions are made at the last minute, then it is going to cost more.
In our company, the budget is the cost of a plan, and the budget is not approved without a plan. The plan has to produce the turf quality that will make us the best in a market consistent with the resources available.

Would you recommend a younger superintendent work for private clubs then go on to a management company or vice versa?
If you want a career maintaining high-end private clubs, it’s important to go to work for them as soon as possible and stay there. A young person should intern at private clubs, then become an assistant and then a superintendent. It’s not an effective strategy to work at a municipal golf course with the hope of someday working for a high-end private facility. You can work at a high-end daily-fee course and move to a private club, but it has to do with who’s doing the hiring.
Private country clubs don’t know our profession that well, and the people making the hiring decisions tend to hire based on past work experience – someone who has worked successfully at a club similar to theirs.

What if a management company is running a high-end course?
A superintendent can move to a management company operating a high-end course if they have the skills and abilities required to be successful in that environment. In this circumstance, the management company will be an employer that can discern your abilities and will not hire on resume alone, but will focus primarily on your competency. They can look at you and determine whether you’re skills and abilities meet their needs. When a knowledgeable person hiring a superintendent determines the needs of the facility, the technical strengths that a successful superintendent would need at his facility are made apparent.
A career move for a superintendent isn’t dependent upon whether the facility is operated by a management company. The issue is more personal. What is your definition of job satisfaction and what opportunity provides you the ability to obtain it?
Determine where you want to go with your career. Then identify what career path will allow you to acquire the skills and abilities that the owners of that business will want from you. Then obtain positions working for people that will allow you to acquire those skills and abilities. That might or might not be a management company.

So there are good opportunities in both cases?
Sure. Every golf course represents a good opportunity for someone. Good career opportunities are most often found when the superintendent has sufficient self-awareness to know what leads to job true satisfaction. Every position has its down sides too, so it’s important to know what you want to avoid as well. GCN

For more information on CourseCo, visit www.courseco.com.