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Each spring, Dr. Kevin Roth, professor of administration sciences, teaches Strategic Management, a capstone course for students pursuing an MBA. As part of the requirements for that course, students work on a live case, much like clinicals for nursing students or student teaching for education majors.
"We've been pretty successful at placing students either individually or as a small group with a wide range of organizations," Roth said. At the end (of the term), they provide a presentation to the organization, and the organization provides feedback. It puts the students in a professional consulting environment."
Lucy Ames is well acquainted with Roth through their mutual affiliation with Clarion's Small Business Development Center. Ames had been a business consultant for SBDC, and Roth is its director.
Ames was approached in 2013 by Larry Smith, president of the board of governors for Pinecrest Country Club. Smith knew of Ames' work with SBDC and asked her to also sit on the board and provide some business advice.
"At my very first board meeting, my first question was what I ask of any company: I need to understand the organizational structure. 'What kind of legal entity are you?'" Ames said. "No one knew."
Once she found those answers, her next question was, "How are we making money?"
"No one could answer, partly because we didn't have good financial records, and most of the board was, then, comprised of non-business people who did not know if the information they were getting was correct or not," Ames said. "It led us to a place of 'We need to figure out who we are, what we can do, how we can make money. To do that, we need a strategic plan.'"
Ames met with Roth and Cindy Nellis, assistant director of Clarion SBDC and recent Clarion MBA program graduate.
"We started a good outline of a strategic plan and realized that the scope of what we needed was bigger than that particular board could do," Ames said.
Josh, Cameron and Nate
After completing their bachelor's degrees, Josh Domitrovich, Cameron McConnell and Nathan Conway returned to Clarion to study for Master of Business Administration degrees. Domitrovich took a graduate assistantship with Student Orientation, Acclimation and Retention; McConnell accepted a graduate assistantship with the College of Business Administration and Information Sciences; and Conway's graduate assistantship was with SBDC.
"Mrs. Nellis approached me one afternoon at work and asked me if I would be interested in participating in a strategic planning process the next Saturday," Conway said. "I eagerly accepted."
At the Pinecrest board meeting, Conway intently observed the debating and the occasional quips, but above all, he saw the passion the members had to reshape, reorganize and rejuvenate their beloved club.
"The motivation they expressed that Saturday morning triggered the memory of a conversation I had had several weeks earlier with Dr. Roth," Conway said. "I approached him and explained that I saw an amazing opportunity for Pinecrest to be utilized for the upcoming (Strategic Management) course."
Along with Conway, McConnell and Domitrovich would also be taking Roth's class.
Digging in
"We immediately delved into the scope of our consulting," Conway said. "Cameron had a strong focus on finance and economics, Josh on management and human resources, and myself in accounting."
They evaluated Pinecrest's structure, attending board meetings and sitting with the company's leaders.
"We knew the goal was a strategic plan, but before that could be accomplished, we had to get a feel for the culture, people and processes at Pinecrest," Domitrovich said.
"Our purpose for the organizational and strategic assessment was to provide Pinecrest with the recommendations, strategies, fundamental approaches and skills to exploit their resources, all while mitigating their weaknesses," Conway said. "The first thing we did was to strip the organization's processes down to the core. We had to fully know all of the internal and external factors impacting the organization."
"They looked to us like three consultants. Conversing with true professionals gave us an indescribably amount of knowledge," Domitrovich said. "The most frequent conversation we had was about change. We explained the difficulties that would surround change and that our suggestions weren't derived for our own good, but for the betterment of Pinecrest – to have financial solvency. If they wanted to be here next year, change had to be made."
"During the meetings, any time one of us was speaking, everyone in the room was paying attention," McConnell said. "Every single person in the board meetings knew that the club needed to be transformed, and they were willing to make sacrifices for the club to survive and operate like a well oiled machine."
One of the first changes made was to hire a CPA in place of the bookkeeper, Ames said.
"Now, we had a true picture of how much money we had and didn't have, and how much the kitchen was costing us. We leased it out, and it was costing us $52,000 a year to keep open, and we were only recouping $26,000. Someone else walked away with the profit."
The pro shop was run in a similar way.
Domitrovich, McConnell and Conway also dug thoroughly into the industry and its trends before making recommendations to the board.
"Decades ago, golf courses were able to be very successful establishing themselves as a social club," McConnell said. "The benefit of being a section 501(C)(7) social club is the tax exempt status. In order to achieve this status, the club's money has to be generated entirely from membership dues. However, with the combination of declining membership and golfers, as well as the presence of strict regulations and environmental laws, most golf courses need to consider generating revenue from more sources than just membership dues."
"We all had different focuses, and we all had different outlooks on the same issues," Conway said. "It sparked friendly debates and cross examinations of each other's thoughts, with the end result always being a well-thought-out action for Pinecrest."
"We sought to provide a holistic perspective: Here's what we saw – strengths, weaknesses, opportunities and threats, and most importantly, what needed to be addressed immediately," Domitrovich said. "We used visual aids at the presentation to emphasize our findings and suggestions. It was an 'Aha!' moment for them – they didn't realize the immediacy or extent of the need for change."
"The board moved forward with the majority, if not all, of our suggestions," Domitrovich said. "The benefit was mutual: We gained real-life experience, and they gained an outside perspective.
"Now, everyone has a clear understanding of what we have and what we don't," Ames
said.
Ames said people who have reviewed the document describe it as outstanding, and they
ask, "Where in the world did you come up with $50,000 to get that done?" They are
both thrilled and shocked to learn the answer.
"The board frequently spoke of our 120-plus-page report as their 'bible,' referencing it at every board meeting. What a tremendous feeling of accomplishment it gave us, three young professionals about to step into the professional world," Domitrovich said.
"As business students, we complete numerous case analyses and business plans as assignments, but we never get to see if all of our research and time is accurate or would be implemented," McConnell said. "In this case, however, we were actually able to help a business stay alive and had the opportunity to see our strategies come to life."
"We felt 100 percent prepared. A lot of that came from the capstone course, the purpose of which is to tie together all the courses, to give students the ability to put theory into practice," Domitrovich said. "Each course built off the last and worked cohesively together. Little did we know we'd have a chance to put all our hard work into action."
"It redefined who we were as a club, going from an exclusive, hands-off type of organization to one that is, for the first time, being run as a business with an emphasis on knowing we have to make money to survive," Ames said. "When the guys came in, they took the skeleton and developed it into a living, breathing, walking, eating entity. They created something very real out of something that was a lot of fluff."
"It wasn't just a class project for us. This was as real as it gets for Pinecrest. They believed in us to provide guidance, and we had to deliver," Domitrovich said.
Onward and upward
"The edge it gives them is huge," Roth said. "It gives them the ability to go in and say, 'I've done well in the program as a student,' but it also gives them the ability to say, 'I've taken what I learned and applied it, and here is the work I've done.'"
"It sets them apart," Nellis said. "They're being consultants. They're at the front end, not the back end: 'Here's what we have assessed, here are various ideas and recommendations."