Is Third party management a Good Idea?
Story published at 16:47, Friday, February 27th, 2015
Page last updated at 5:06 pm, Friday, February 27th, 2015
Ian Bulleid is International Sales and Marketing Director for Troon Golf the world’s largest golf management company and a founder member and past chairman of the Golf Consultants Association.
It is hardly surprising in my current role that I would be a strong advocate of the virtues of third party management. I’d like to believe that I can take the blinkers off and give reasoned consideration as to why more and more owners are seeing the contracting of a third party management company as a sensible way of optimising the returns from their business.
Contrary to a widely held belief, good management companies do not “takeover” businesses, they enter in to a true partnership with the owner, working to their goals and objectives and enjoying (or suffering if the contract is incentive linked!) with the shared success or otherwise of the business in their charge.
Successful management companies trade on their ability to develop effective strategies and design operations to deliver the most effective returns. For me, Troon’s ability to share global experiences and tap into diverse expertise across cultures and economies differentiates our proposition for owners.
No longer is the General Manager or Golf Director expected to be a jack of all trades, equally able to turn his or her hand to all the different elements of the golf business, but is able to turn to a central resource for help. We have a robust channel of communication, that opens up our network providing valuable advice and expertise to the individual property’s management teams.
There are a number of myths about third party management which I would like to dispel:
The first is the idea that a Management Company imposes their one size fits all style to each property. The truth is that the Management Company is not the owner or a lessee – they are agents of the Owner, Membership, or Board of Directors. It is their responsibility to identify the most effective structure, factoring in regional trends and idiosyncrasies to bolster the property performance.
The second is how management companies look to enforce their identity. The world’s best management companies are in most cases encouraged to associate their brand with the property to the benefit of trade and consumer engagement. From our perspective, it is the owner’s asset and they should have brand utility and presence that compliments their business, not complicates or forces in on it . We believe it’s good to have a choice.
The third misconception is that a management company is going to completely restructure the organisation upon entry. A good management company will assess the current lie of the land, where there is performance improvement potential, and work with the existing management on elevating the efficiency and performance. At Troon, we try and create an environment where those excited about quality, professionalism, career opportunities, and accountability will do very well. Performers love to be held accountable and given the opportunity to shine!
Then there is the old chestnut about how expensive it is to use a management company. The truth can be far different and we are in fact, net positive in many of our contracts when you consider cost saving in procurement, operational
efficiencies, and associate retention before revenue growth is even considered. The fact we have consistently grown in size over the last 20+ years is a testament to being able to deliver financial results to our clients and show value for our fees.
We are often challenged over size and concerns that as a single unit personal attention is somehow lost. In truth, the idea that a smaller company with fewer resources gives better and more individualised attention is contradictory. The simple fact is that scale means that you can devote more diversified resources – not less – even as additional properties are added.
Finally, there is a view that the organisation has failed in some way because they are considering outside management. In truth, organisations have relied on outside expertise for decades to manage areas of their business in which they do not have a core competency. The most progressive and successful Clubs have realised this and have sought objective, third party management services. There is no shame in being open to innovation and striving for a better business.
So next time you are looking for a new General Manager, you might want to consider third party management as an alternative, we would love to hear from you!
Ian Bulleid is a member of the Golf Consultants Association and can be reached at firstname.lastname@example.org