10 Lessons that Clubs can Learn from Business
In the many strategic planning sessions we facilitate, there is a growing theme of clubs wanting to become more “professional”. Often, we hear from participants that there is a desire for their clubs to become more businesslike, or act more like a business. Sports clubs can certainly learn lessons from business. It is true that there are many “professional practices” that clubs can – and should – adopt from business. However, clubs are not businesses. The leaders of sport must never fall into the trap of thinking they are.
There are two fundamental differences between clubs and businesses.
First and foremost, when someone establishes a business it is usually for the pursuit of financial gain or profit. This is through the provision of a particular product or service. Rarely will a business continue beyond the short-term to provide a product or service if it is not generating a suitable “return on investment”. The purpose of a sports club, on the other hand, is generally to provide sporting, recreational and social opportunities for their surrounding community.
Of course, clubs have to generate enough funds to pay their bills, but the law prohibits dividends and financial benefits being distributed to members (other than in exceptionally rare circumstances).
The second significant difference is that businesses are run almost entirely by employees – people who are paid to provide their time, expertise and knowledge. By contrast, volunteers drive community clubs. They freely and passionately contribute their time, knowledge and often large amounts of money.
A great way is to examine two potentially similar situations. In 2000, over 80,000 passionate Rabbitoh supporters marched between South Sydney and the Sydney Town Hall. They were protesting the announcement in 1999 that the South Sydney Rabbitohs were not going to be included in the new NRL competition. The Full Bench of the Federal Court overturned this decision in July 2001. Yes, supporters were passionate enough to fight for their club all the way to the Federal Court.
Compare and contrast this situation, to the closure of 363 Dick Smith stores across Australia and New Zealand. The closure put 3,000 people out of work in 2016. There were no supporters marching, no volunteer rallies and no court cases to try and keep an iconic Australian company. There were only predators picking over the corporate carcass.
These examples demonstrate the shortfalls of idolising business structures too closely. Clubs should never let the pursuit of professionalism come at the cost of passion and volunteerism. Even so, there are still lessons and practices that clubs can learn from business, which can help make it easier for clubs to be successful.
So can clubs can learn from business?
Here are 10 business practices clubs should adopt:
Induction training for new volunteers
It would be very unusual for a business of any size to simply recruit somebody and then expect them to just do the job. An induction of some sort would almost always occur. The opposite is so often true in clubs. Roles and whole committees will change at an AGM with little to no hand over to the incoming volunteers.
Documented club structures
Very few clubs have a club structure formalised in writing – that is, a diagram that illustrates the roles within the clubs. This is vital for committees, especially new committee members. It shows exactly the number of volunteers that the club needs to recruit, and their functions within the club.
Documented position descriptions
Every role within the club ideally would have a position description that documents and defines the tasks that make up each role. Additionally, it would describe who each role reports to, the level of training and support the role requires, and the time commitment expected of the role. Again, this is crucial information which is often lost from year to year because it is not written down. It is generally much easier to recruit volunteers when they can see exactly what the role entails.
Ongoing training and support (succession planning)
Successful businesses focus on developing their staff and generally promote from within. Likewise, clubs should develop training and support programs that allow volunteers to develop confidently from entry-level tasks to complex roles such as President, Secretary, Treasurer, Coach etc. These do not need to be formal programs, but rather simply a recognition that succession planning is not the same as recruiting the next President, Secretary, Treasurer or Coach – it is developing them.
Clearly defined goals and objectives
Unlike businesses, very few clubs have clearly defined and documented goals and objectives. This means that often, volunteers will work towards what they think is in the best interest of the club. When we start working with committees for the first time, we ask them a very simple question: If your club could achieve just one thing for the year, what would it be? Generally, even in the most united committees, there will be at least six different answers.
The greatest asset of most businesses is their combined knowledge and skill base – in simple terms, the understanding of how to “do” things. In clubs, we rarely hand over knowledge well from one committee to the next, one volunteer to the next. So much knowledge, experience, and learnings can be lost from clubs each year. It is usually a safe asumption that if something is not written down it will be lost. That is why the most successful clubs generally have extensive policies and procedures documented and updated regularly. Most people think policies and procedures exist for compliance purposes. Of course, there is a compliance element, but the reality is policies and procedures are the tools through which clubs collect information. They are also how clubs hand over accumulated knowledge and learnings from one year to the next.
Strong financial accounting and reporting
Generally, most businesses know their exact financial position down to the cent. By contrast, unless clubs use an online accounting system, they are rarely aware of their financial position. Sometimes, they do not even know if they have enough cash to get through a full season.
Use of technology: an online, cloud-based accounting system
Many clubs have been slow to embrace online accounting, preferring to continue to financially manage their club using the traditional spreadsheets, bank statements and cash books. While online accounting systems have a small ongoing license fees, they make the Treasurer’s job much easier. It allows them to provide the committee with far better information to operate in a fiscally responsible manner.
Use of technology: communication
Successful businesses have sophisticated communication strategies. They use technology to store information about their clients and customers, and then use digital communication to remain connected. Conversely, very few clubs keep a database of people connected with the club, other than the current players or members. They rarely communicate outwards to their broader audience, unless they are asking for some form of assistance. Having an up-to-date website, active social media presence, and regular email newsletter allows clubs to engage and grow their supporter base.
Use of technology: online purchases
Clubs can collect any type of revenue stream online. They can use their membership platform or an App such as Team app to generate and pay for memberships. Apparel and merchandise can be sold to members using an online shop, and event registrations can be sold using a ticketing website, like Trybooking. Not only does the use of online technology make it easier for volunteers to manage their tasks, many club supporters actually prefer to pay online.
Clubs are about people, passion, relationships, and tribalism. There are so many opportunities for what clubs can learn. They can be continually innovating and evolving to create great experiences for their loyal community of supporters.