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Fixing ‘Invisible’ Problems complexity of the business and what’s at stake,” says Curtis. He suggests it makes sense to first tackle critical driver areas—those that really drive costs. Audits can be comprehensive or quite selective, scrutinizing every component of a club’s operation, or focusing, perhaps, on a single ele- ment. For Carol Nalevanko, the president of the Village Health Clubs and Spas, a key issue is cleanliness. That’s the focal point of the audit that she and her staff conduct at the company’s three high-end, multi- purpose, Phoenix, Arizona–area properties three times each year. “The audits not only encompass cleaning and maintenance matters,” says Nalevanko, a current member of the IHRSA board. “They’re also a great way to teach our department managers and front-line staff what ‘attention to detail’ really means.” Art Curtis Carol Nalevanko THE AUDIT PROCESS What’s the best way to go about developing an effective audit process? If you haven’t performed an audit in the past, or if your results have been inconsistent, it might make sense to design and construct the process from the ground up. But, no matter how much you intend to cover, or what you want to concentrate on, be prepared to dig deep. The effort begins by outlining a procedure simi- lar to that created by Curtis. You’ll need to determine the initial scope of the audit, he says, making sure that the club’s owners are comfortable with the information you’ll be requesting. If an independent third party is going to be involved, you’ll also need a letter of engagement. Next, hold a kick-off meeting with your staff so they understand the purpose of the audit process and what will be required of them. When you do the research, by conducting the actual fieldwork, do so in an unobtrusive fashion so you don’t disrupt normal business. Bear in mind that you’re taking some staff members away from their normal duties. And, of course, there should be a formal report- ing and responsive follow-up. Tharrett offers a few pointers: The club manager and all of the department heads should be involved in the audit process. People shouldn’t audit their own departments, and a great deal of cross-check- ing should take place. “You don’t want the fitness director auditing the fitness department, or the 58 Club Business International | JUNE 2014 | ihrsa.org What to Focus On • Risk management and safety standards • Operational standards for the front desk, locker rooms, pools, group exercise, fitness floor, massage, etc. • Staffing levels • HR practices—certification requirements, CEC, OSHA, etc. • Membership practices—specific rules or policies the sales staff is expected to adhere to • The level of membership growth • The member enrollment processes—specific steps expected to take place • The member experience/member satisfaction, e.g., the Net Promoter Score (NPS) • The level of revenue/profitability generation • Fitness department practices—testing, personal training, group exercise classes, etc. • Aquatic department practices—pool chemistry, lifeguard issues, programs • General cleaning and facility maintenance practices • Communication/social media review • A competitive review What Questions to Ask • What does the workflow look like? • Do you have appropriate systems and controls in place? • If not, how does your club compensate? By simply adding more staff? Or is important work not getting done? • What work is being done, and why, and how does it contribute to the overall success of the business? • If it doesn’t contribute, then why is it being done? • Are there adequate resources available to accomplish the job, and if not, what are the consequences and alternatives? • Is the work being done at the right level, and by the right people? • Are different departments/functional areas of the club integrated? Or do they operate in silos? housekeeping director auditing housekeeping,” he explains. “You want to make the audit process as objective as possible.” In terms of areas to address, Bill McBride, the president and CEO of Active Sports Clubs, a San Francisco–based chain, recommends starting with the issues of people, production, and member engagement. “In my view, those are the areas of highest opportunity,” says McBride, IHRSA’s ex-officio. Download the Free IHRSA App: ihrsa.org/app