EPISODE 112

Aaron And she said, You know, there’s this really cool assessment called the Birkman Method. You ought to go check it out. So I did, I took it, and then I fell in love with it. Fortunately, I was living in College Station at the time, and their offices were in Houston. So I scooted down there, went through a certification, and ended up doing multiple certifications with them. Where it started was helping me see myself. Oftentimes, if someone got praised for being direct and straightforward and candid and friendly and all these things, the reality of it is that all those positive adjectives also have negative connotations because direct and straightforward can be blunt and crass. And friendly can be, you know, maybe a little too gregarious in some of these things. Decisive can be impetuous. I was working with someone who I admired greatly and didn’t realize that we were not connected. I’m this sort of driver, go-get-it type person, and John, who was our director of agronomy, was someone who was a thinker and more sensitive. And so after doing this work with each other, one day I was walking through our men’s grill, and we had this plant sitting in the corner that hadn’t seen sunlight since the day the plant got put in there and wasn’t going to see sunlight since, and it needed to be replaced. Usual Aaron would have taken a photo, sent it to John, and said, Hey man, please replace this. But subconsciously, I said to myself, you know, he’s going to think I’m mad at him. He’s going to think there’s something wrong. And so I completely changed the way that I communicated with him. And that’s where this sort of whole thing started. And so now John and I are great friends, and we talk about that lovingly and all the other different idiosyncrasies that we have, because we couldn’t be more polar opposites in personalities. And so going through this and having all these life lessons that I’ve learned myself and then helping other people see things, I said, This is a great opportunity. We’re in this world of AI and digital, and everybody’s moving at the speed of light. And these soft skills are the things that I think are really going to be the differentiators, particularly in an environment of hospitality and clubs. I mean, we’re dealing with multiple personalities, egos, friendships, all these things. And so to have self-awareness and to really understand who you are, how you might come across, how you’re perceived by others, that’s really the core of my work. And it’s really been a lot of fun jumping into it.

Derek Love the side that you’re talking about. I think of the general managers that we’ve worked with who are operational experts. They’re great at running an organization, at running a business, at understanding what needs to be done, by when. And, of course, there’s that underlying theme of hospitality that runs through that. But the human side, the people side, having a high IQ, you and I’ve talked about this before, that’s the differentiator and the thing that leads to a member actually feeling like they belong or a team member feeling like they belong. I think we hear so much about the operations of facilities, whether that’s remodeling, running, building, renovating, but when you think about applying some of those same types of actions towards leadership, towards communication, towards culture, what does that look like in practice with the people that you’re working with today or with the people you’ve worked with in the past?

Aaron I appreciate you asking. It’s funny when I rolled this out, the Birkman at Miramont, John kind of looked at me, and he’s like, Oh, it’s a psycho test. You want to have a vanity jealous. And admittedly, I should have rolled it out differently then, and I’ve learned and changed how I do that. And people always ask me, Aaron, when you meet somebody, are you just trying to figure out everything about their personality? And I said, No, I’m trying to figure out how I should show up that’s going to work best for them. And really, that’s where the real epiphany begins, and kind of continues on, because oftentimes most of us grew up with the golden rule, treat others the way you want to be treated. Well, the reality of things is that only works 30% of the time because 70% of us, statistically speaking, the way we behave outwardly, the way that we want someone to treat us, is different. Probably the best example I can tell you of how powerful this other side of our personality is is that a few years ago, when Trump was running against Barack, maybe the first time, I can’t remember, and everybody that they polled said that Trump’s going to lose. There was one polling company that called, and they said, Hey, Derek, I understand you’re registered to vote in Minnesota and so forth. Who do you think your neighbor is going to vote for? And by doing that and asking the question of who your neighbor was going to vote for, the answer is different than who you say you’re going to vote for. And so they were the only polling position to get that accurate. Because our perspective in how we look at things matters and how we show up. If I ask someone, Hey, how would you like feedback? Nine times out of 10, I’m going to get the answer that they think I want to hear. Now imagine, here I am, I am this direct, straightforward person, and someone sees that automatically because our behaviors are observable. And they look at me, and they say, Oh, I want it direct and straightforward. No, they didn’t. And then they get that. And then what happens? Oh, well, there’s the Brillo pad, and they wanted a feather duster. And so that’s where the work starts, but the thing that I have to reiterate is that it’s a journey. Every day it’s a self-awareness journey. My best clients and success stories have been the people who, like anything, are willing to put the time and energy into it.

Derek So my follow-up question is, is then having that level of EQ, which frankly can sound exhausting to some people. So I have a staff, in a club, I don’t know, with 50, 100 full-time reports plus another 30, 50, 250 seasonal staff. And I have to learn how I need to speak and interact with each one of those people individually to get the best out of them. So I’m not passive-aggressive to them or offensive or aggressive to them. Having that ability is, my guess, what separates good leaders from great leaders. And my second question is, what I’m getting from you is that it’s a learned skill. So you can teach somebody how to improve and enhance their EQ through this method to then be a better leader.

Aaron Yeah, I think for some people, it just becomes more natural. At least it seems like it does. In the average club, 60% of expenses are labor. 60%, right? Think of it this way, dues at the average club is 50%, 60% is labor. Okay, you can’t have a great club without having a great team. Period. And so if you don’t invest in that, you’re doing yourself and everyone else a disservice. The first management job I ever had, I was working at Morton’s of Chicago, and I had been a server there, a wine captain, and worked all the hourly positions, and then I got the opportunity to go into management. What I didn’t know at the time was that every time I didn’t do side work, or I skipped on something when I was a server, it was going to come back when you’re a manager. And I made every mistake in the book, and they did this 360 evaluation, and I was in tears with what came back. And here I was, well-intended, a go-getter, and I was completely unaware of how my actions were being received by others. This may sound very simplistic, but really, all it is is a matter of kind of flipping a switch, and instead of saying what I want to say, think about, is this going to land with this person where I want it to land? My most recent item was called Make an Argument for the Opposition. Oftentimes, we get hung up. Who’s your favorite basketball player?

Derek Magic Johnson.

Aaron Okay, so mine’s Jordan. All right. So automatically we’re two men. We’re going to get bowed up, and we’re ready to have this battle about who the better basketball player is. But if we ask each other to flip the switch and say Hey, you know what, Derek, you make an argument for Jordan, and I’ll make an argument for Magic We’re going to get to a better place a lot quicker.

Derek We’ll probably both come back and say, you know what, we were both wrong. It was Larry Bird.

Aaron You never know. But we’re going to come at it in a whole different place, and we automatically get disarmed. I promise you, and correct me if I’m wrong, but you’re probably already reeling up your MJ facts, right?

Derek Absolutely.

Aaron And I’m already reeling up mine, and we’re arming up, and it just disarms all that. And so it changes the way you think in a very good way.

Derek I just recently read Dale Carnegie’s book, How to Make Friends and Influence People. And there was a part where he says, if you take one thing away from this book and only one thing, it’s to always be trying to see things from the other person’s perspective and point of view. So, it’s exactly what you’re talking about. Let me shift to the member side now, to the board side. Another thing that you’ve written about is, I think you described it as the value gap. Clubs survey their members, I don’t know, annually, multiple times a year. When they do strategic plans, they survey. There’s a difference between the member satisfaction scores, maybe it’s an NPS score, what members are actually telling clubs versus how they’re rating. There’s a discrepancy there. Can you talk about that a little bit?

Aaron So there are sort of three main things that get asked in surveys – your satisfaction, your loyalty, your NPS, and then the value. And what we frequently see is that the satisfaction and the NPS scores are high, and the value scores are low. When you think about a club, and not all clubs are equal, but the initiation fees in the last 10 years have skyrocketed. I mean, clubs that were $50,000 five years ago are $100 to $125,000 now. Dues have gone up. When you think about a club, it’s not a value proposition. It’s a luxury item. And how do you obtain the value of that? Well, the way that you obtain value is one, can I use it when I want to use it? Which I think is the number one thing. If it’s easy to use, and then I feel like I’m welcome there, then you have the opportunity for value. You’ll certainly have satisfaction, whereas sometimes the value thing doesn’t roll up, but it’s still expensive. If you have high satisfaction, if you have a high loyalty – a lot of the clubs that I’ve been at, I’ve seen high satisfaction, high NPS, and extremely low turnover. So if you zoom out, is the value really as important with things? I don’t know that it is.

Derek There’s a second question that you ask as part of that framework. The first one, I’m going to repeat it – can I use my club when and how I want to? And the second one was, and when I’m there, per your feet, when my feet are there, do I feel welcome and special? Seems incredibly simple to break it down to that simple a framework, but it reshifts the thinking wonderfully.

Aaron As a friend of mine referred to this, the great yellow book, Unreasonable Hospitality, and there’s a great blue book that came before that, which was Setting the Table by Danny Meyer. Both of them talk about what hospitality is. And Danny, I think, phrases these even better than Will and sort of the HQ, the hospitality quotient. And a lot of that has to do with your EQ. And your EQ is, are you there presently? Are you trying to look through things from their perspective? When someone comes in, and they don’t like their cheeseburger, do you blow up and say 95% of the people love our cheeseburger. Or do you really try to show empathy and say, Hey, well, tell me why you don’t like it? What could we have done better? Get on their side and try to make it into an experience. And one of the things that I love about club hospitality is that you see the same people over and over. They’re not going anywhere. You either own it and you find a way, or you don’t. And I’ll be the first to tell you, I’m not always great at it. It’s something I have to work at. But that’s the part that I think is the operational part. Can I use what I want and when I want? That’s where it gets into the governance piece a little bit more, because the facilities have to support that. And the rules and the regulations of the club have to support that.

Derek If value isn’t created solely by operations, and there’s an overlap between the value and the governance, expand on that a little bit. Unpack where you see that alignment breakdown or how clubs can be either anticipating and avoiding that or recognizing it when that’s happening.

Aaron Sure. I had a conversation with a member at a club recently, and he used the gym and he used the golf course. And I said, What’s your satisfaction with the gym? Extremely high. What’s your satisfaction with the golf course? It’s okay. Okay, can you use the gym when you want, how you want, consistently? Yes. Can you use the golf course when you want, how you want, consistently? No, I cannot. Great clubs really think about this piece very intently, and say, Okay, we want to make sure that our members can have access to what they want, when they want, and how they want. And when that gets askew, and I think a lot of clubs have been challenged with this because post-pandemic, the golf thing has gone berserk. And it’s not like pickleball and gym. Those are easy to add more space, relatively speaking. Building another golf course, that’s hard. And so I think that’s where there has to be a give and take with the governance side of things, and saying, Hey, are we getting that right? Are we really thinking through it strategically from that lens? And great clubs are doing that. Mediocre clubs are struggling with that.

Derek A colleague of mine said that he defines truly private clubs as ones where no tee times or reservations are ever required. From high-end distinguished platinum to mediocre, I don’t know how realistic that is for clubs that have a high demand for golf, but at a minimum, to have that conversation at the board level to say, we can’t do that, but what can we be thinking about with that as maybe an unrealistic goal that will at least help us advance.

Aaron I think there are some outside-the-box ideas. I mean, I think clubs that have found enough acreage to build a short course help. I think clubs have invested in making the practice facilities differential. And I think doing field trips and those types of things can help. And certainly, there are operational things about having a tee time system and having a pro that can move things around at the last minute. Because those things matter too. And so going back to that, a high EQ director of golf is going to try to find a solution versus just saying, Yeah, sorry, we’re booked. And that’s where the difference comes into play. And so, from a board standpoint, it’s making sure that those folks are empowered and that your rules hopefully are more guidelines. Great clubs think about things abstractly, and this is a controversial subject, but some people are like, Hey, it’s only foursomes. And then I’ve seen great clubs say, We don’t care how many people you play, as long as you play quick. You’ve got to find what fits for you and then stick to it. But one of the things that Will and Danny both write about in their books is that your rules are meant to be broken. And so, to me, great clubs have a great culture, great guardrails, but not so rigid that everything’s black and white. Because it can’t be.

Derek Talking about unreasonable hospitality, now I want a hot dog. I want a street vendor New York hot dog right now. You and I talked about this a little bit before I hit the record button, but you wrote a really great article. I know it’s the second part of a two-parter, but the title is Left Pocket, Right Pocket. And I would encourage people to go read it. I think it’s digestible, it’s accessible, it’s a brilliant take on the idea that we all carry two kinds of money, and it’s a continuation of this value topic, and how specifically members think about what they’re spending. But I don’t want to jump ahead. Walk me through, share with our audience, a little bit about this idea of left pocket money and right pocket money, and how that shows up at clubs.

Aaron So I’ll preface this by saying I grew up very humbly on the west side of Columbus in a little condo. Both my parents worked, and when I graduated high school, I taught preschool for Head Start, worked with some underprivileged folks, and worked with folks at every socioeconomic class. And what I’ve noticed through my life is that everybody has what I kind of call left and right-hand pocket money. So one pocket is money that you will freely spend because whatever that service or product is, it is so good that you just don’t care. A great example of that is Starbucks. Their $6, $7 for a coffee, and your financial advisor can tell you how much money that can add up to if you save it. But for some people, they just don’t care. And it’s about the routine, it’s about the system, it’s about being able to use what I want when I want all these things. Then the right-hand pocket is the stuff where it’s like, I’m really going to think deeply about that. And it doesn’t matter if you have a billion dollars or $5. We have four drivers in my house. So both my girls are old enough to drive. When they DoorDash, it drives me berserk because we can drive and we can go get it. For them, it’s a convenience thing. And so for them, it’s a left-hand thing. And for me, it is a right-hand thing. And I think when we think about that and how that shows up in clubs, if we’ve made the experience seamless, if we’ve made it easy, if we’ve made it thoughtful, if we’ve made it feel right, it becomes left-hand money. They don’t care about it. Just like, Oh yeah, it’s fine. And clubs, psychologically, already sort of have this advantage because everything’s just built on an account and so forth. I think when clubs are able to do that, that’s where they gain success. And I would say this with any business. Great businesses build great brands, great products. They charge what they charge, and they don’t apologize because the value is so good. And I think great clubs build everything around the member experience and the team member experience. I think both are equally important. That’s where it becomes left-hand money versus right-hand money.

Derek As a manager, you know something shifted when you hear members starting to calculate my membership in terms of cost per round or questioning why my pint of beer costs as much as it does. Those are some signals that they’re thinking about spending not the way that you’re trying to provide to them.

Aaron Have you ever been to a Discovery Land property?

Derek Yes.

Aaron Okay. So I had a friend who worked at Vicaro, which was one of their first properties. They’re known for these incredible comfort stations where there’s all sorts of stuff. So we’re out there one day, and I asked them, Rob, you got all these kids that live right here. What happens if one of them comes here and they ransack this thing and take everything? And his answer, I thought, was absolutely brilliant. He goes, Aaron, our members pay $27,000 dollars a year to be a member here. And if that kid’s here three times a year and he takes a few extra Starbursts or whatever else, is that really worth us worrying about? Because in the grand scheme of things, it’s all going to get paid for anyhow. Now, if it becomes something where it’s habitual, then maybe we’ll deal with it. But I thought that was such a high EQ answer to think about it more holistically than just what that one experience is. Because there’s always somebody who uses more towels in the locker room or takes the toothbrushes or whatever else. But if that’s how they’re getting their value and they’re not hurting anyone else, there are times you gotta zoom out and just say, hey, is that really worth that battle?

Derek And what happens when boards, when leadership starts asking those questions really honestly? You brought up a point in one of your other articles about initiation fees. Maybe I did join at $50, and now it’s $125. Like, would I join the same club at $125? Do I still feel like I’m getting that same type of value?

Aaron I think that’s a really important question for boards to ask, particularly right now, because initiation fees have skyrocketed. In so many clubs, I’m seeing this tension of opposites, where you have someone who joined the club 20 years ago, and they want it to be what it was 20 years ago. In fairness to them, okay. So, if you joined club xyz 20 years ago and you paid $35,000, and your dues were $500 a month, and you bought a home next to the club and it was a $300,000 or $400,000 home. There are areas where those homes are now a million five, two million, and people are buying some of those and tearing them down and putting up $6 million houses. And there are folks that are saying, I’m willing to pay whatever for this. Well, what is that doing to your membership base? And is that really what’s appropriate for your club? Your GM can’t answer that question for you. This is a cultural thing. And this is where I think it’s really important for boards to stay strategic and think about, okay, yes, we could raise more initiation fees and have more capital income if we raise our initiation fees. Is that the best way for us to get from point A to point B? Or would we be better crowdsourcing that off our existing membership and keeping us at the level of club that we always intended to be? And I think great clubs think about that. Mediocre clubs may get a little over their skis there. And I think it’s important, shifting gears a little bit from a financial model of this, are sources of capital. Club benchmarking talks about this all the time and how important it is to have enough capital to fund the engine. Well, I think the source of capital is even more important because if it’s all coming from initiation fees, then it’s all new member money, and where’s your existing coming from, and then you have a bunch of renters versus owners.

Derek When I’m thinking of the work that you’re doing at Viewpoint and the club leadership roles that you’ve had in the past, you’re helping leaders understand how they show up, how that affects their teams. I’m thinking of like, is it a chicken or an egg? Is it the board that recognizes in a general manager a person who is self-aware enough who has the EQ to lead this correctly? Or is it the GM who has that EQ that can come in and help guide the board as to the best ways to shape member experiences so that it is creating the perceived value of our club, our brand, our identity, our reputation in a way that is positive, in a way that’s impacting us, helping us grow, helping us attract more of the right type of members here.

Aaron I think great clubs are thinking about that. I was speaking with a colleague a couple of weeks ago who’s out in the job market right now. He’s a director of agronomy, and my advice to him, as I said, when you’re going through these interviews, I would encourage you not to think about whether or not you have the technical skills or try to prove that you have the technical skills. They’re going to figure that out. You’re a director for agronomy, where you’ve been, your resume tells that story. This is about how you show up. Do you fit in the room? Are you someone that they want to interact with? Can they see yourself being relatable? And I think that’s what is most necessary in club leadership more than anything else. You certainly have to have the technical skills. But it’s the soft skills. It’s the emotional intelligence. It’s the ability to be able to see things through multiple perspectives. I’ll be the first to tell you, I’ve made every mistake you can make trying to data somebody to death. And you can’t win an argument with data. You can only win it with emotion, and you’ve got to meet them where they are. And so I think you’re dead on in that you’ve got to find that right EQ balance. Got to have the technical stuff. And that’s really the easy part. This human part, that’s where it’s hard, really hard.

Derek Last question, thinking about the generations to come, what’s your perspective on the future of the private club industry? You’ve operated clubs, you’re advising clubs, you’re coaching leaders that are running them, and you are a leader. Are you optimistic about the future of the industry?

Aaron I am with some caution. So I think where clubs are going to have an advantage is that they have the ability to lean into the EQ side more than most. And I think there’s going to be an evolving and growing need for human interaction and social time, because you’re going to have more work from home, you’re going to have more automation with things, and humans by nature are social beings. And so they’re going to need that more than any other place. I had breakfast with one of my former members at Carmel this morning. We were talking about this same thing. He had a son who works from home, and it’s like, where does he get his social outlet from? I think clubs are going to become more and more important from that standpoint. And I think that the clubs that lean into that and keep this human element, and really do it well, they’re going to have a lot of opportunity in front of them. I’m optimistic for clubs that lean into that because I think that’s really where the value is going to be.

Derek For people who want to read more, learn more, your website for Viewpoint EQ is viewpointeq.com. Great place to learn more about Aaron. Read his great blogs. Read the left pocket, right pocket concept on your own. And I think you describe it better than I’m able to. Thank you for coming on. Really, really appreciate your time today.

Aaron Derek, this has been awesome. Thanks so much.

Derek This conversation is a good reminder that when members talk about value, they’re rarely talking about price. They’re telling us how easily the club fits into their lifestyle and how it makes them feel when they’re there. Aaron’s perspective, shaped by decades of leading clubs and now coaching the people who run them, gives us a practical way to think about the gap between satisfaction and value and what it takes to close it. And one more thing. We’ve launched Clubs Made Meaningful Insights, and we’d love to have you as one of our readers. Original content, frameworks, perspectives, and ideas on identity, belonging, member experience, and club culture. Weekly insights in your inbox that you can share with your board or your leadership team. Sign up at clubsmademeaningful.com. At Sussner, we help private clubs build brands that create belonging. If this episode resonated with you, please share it with someone in your club world. And until next time, let’s create something worth celebrating.