Making A Better Tokyo American Club (MABT)
Tokyo American Club- A Better Place For Our Members, A Members Forum
One of the MABT has confirmed that the contract for the General Manager has just been renewed. This was done by the Board of Governors. He continues to draw his high salary that has been the subject of much frustration among the membership despite the economic difficulties of the TAC.
Further, the Food & Beverage manager has tendered his resignation and will be leaving the Tokyo American Club in coming weeks. The Assistant General Manager is now looking after F&B.
As the management of the American Club has apparently managed the TAC to the brink of financial failure, a group of 4 TAC members teamed up with 4 TAC board of governors. This group was named ‘The Working Group 2” or TWG2.
This TWG2 presented their recommendations for how to fix the problems of the TAC. They were very candid about what needed to be done. Following their presentation, when asked if they “were confident that their recommended changes would be implemented?”. the group unanimously responded “No”. They responded on how getting information was slow and painful at TAC.
It was apparent to all present that there was a split between TWG2’s recommendations and some members on the board. Although the positions of all the BoG (board of governors) was unclear, one board member made clear that he was against their recommendations in several instances. In one case, he responded that the loan could not be renegotiated. When asked by another member, he revealed that he was the one who negotiated the loan at 4 plus % interest for the club but did not clarify why he was unwilling to renegotiate and his position varied from that of the 4 TWG2 members.
The overall conclusion was that the problem of the club is not just an inept general manager playing the committee and board system, but also some individuals on the board of governors. There are definitely some good people there, but there are also some people that need to move on.
A recommendation was made, and accepted by the President, to have a further meeting for the Board of Governor candidates to debate or state their positions as being for change or of the group that would continue the status quo and continue to block change and not make the changes necessary.
An American Chamber of Commerce (ACCJ) board member asked the General Manager if he paid for the development of yet another new TAC site that was described earlier in the meeting. With a bit of stumbling around saying something about a ‘backend’ the GM confirmed that he did use budget to develop a new website. The member went on to explain that the TAC must shift their thinking. “The paradigm must change” he stated. He illustrated his points by explaining how at ACCJ he paid nothing for web development, the chamber magazine, the upkeep of the website or virtually anything else. This comment was a brilliant illustration that TAC needs people with fresh minds.
Although we have not covered all the questions and comments of the membership in this summary, the conclusion we made from all that we need to rid the club of blockers on the board of governors and elect people who are willing to implement the changes. One BoG member (mentioned above) seemed to indict himself at the meeting as being against change later on multiple points. Later arguing with the TWG2 members about providing information that the 4 clearly stated they had not received. The positions of the other BOG members and BOG candidates for the upcoming election remains unclear at this point.
The great work of the 4 board of governors and the TWG2 made it known that their work must be implemented otherwise we will have to continue “these
If you have any comments or would like to add any further points, please feel free to do so in the comment section below. We will edit this summary accordingly to incorporate your comments.
Stay tuned!
“So what are the issues we need to discuss at the Town Hall this week? Strangely enough, it’s a little more complex than it first appears.
1. What progress, if any, has been made since the last Town Hall meeting? Judging by the announcement, “management and leadership” seem like they think they have everything under control. Strange that TWG2 seems to have been left out. That’s scary: these are the people that got us into this mess in the first place, and it’s highly unlikely that they possess the wherewithal to get us out. We need to make sure that they understand the deep concern that many members have about the future of the Club, and the best way to make sure that happens is that you come along and make your feelings known.
2. What has happened to TWG2? We have all heard here and there about the recommendations they have made so far, but the consensus around the Club is that – at best – they’re being sidelined, and at worst ignored. That’s not a comment on the individuals involved, but rather a reflection on the way that the status quo makes every possible effort to protect itself. The Town Hall should offer us the chance to hear what they have to say, without censorship and self-serving obfuscation by BoG and management.
3. What’s happening with management? Rumors abound that some contracts are being renewed, and others thrown out the window through inaction. By any stretch of even the most fevered imagination, 10 executives on high salaries with no accountability for results means we’re paying too much for way too little. At the very least, the BoG should use the Town Hall to present a series of options for a way forward. Otherwise we’ll have to make our opinions known via the upcoming elections! We should also be asking for a complete review of staffing (how about showing an org chart?) and an objective look at outsourcing.
4. Talking about outsourcing, where are we at with proposals to outsource certain functions like IT, Engineering, F&B etc? The Traders Bar Tattletale says that management reckons they’ve “looked at this before, and it doesn’t make sense”. Sure it doesn’t, if you’re trying to protect your job! But the market realities say something completely different, and many of our companies have already done BPO and Service outsourcing succussfully. If you have some experience in this area, why don’t you come along and share your view on how to do it right!
5. What’s the story on Governance? The gossip mill is running hot that the BoG is working on a new governance set-up … it beggars belief that it chooses (1) to do this behind closed doors, and (2) doesn’t take advantage of technology to make sure that it interacts with the membership to get consensus rather than act by fiat. The Town Hall represents your chance to tell people that you are interested in the results of these discussions, that you’re “mad as hell”, and that you demand a more contemporary way of making decisions at our Club.
6. What about that loan? If you’ve ever gotten a loan in Japan, you would wonder why the club is borrowing money at 4+% interest rates from a foreign lender. Japan is the land of 1% loans. We need to see action on renegotiating this loan for the new club immediately. We hear that after 20 years TAC will still have not paid down the principle of the loan. Put aside the tommyrot and let’s get this fixed.
7. Finally, what’s happening on branding, and marketing the Club to new members? Those in the know say that this effort has been deliberately railroaded as well, and pushed off to a committee (sigh!) that has met a grand total of … one time. Let’s face it, competition for recreation dollars is pretty tough in Tokyo and it needs a real professional effort if we’re going to attract new members and customers for the banqueting facilities. Your voice is absolutely necessary if we are going to be successful in convincing management and BoG that enough is enough!
Get along to the meeting and make your opinions known. You don’t necessarily need to stand up and make an eloquent speech – often applause or the lack of it is enough to let people know what you think. And with elections coming up, that might just be enough to scare some people into taking action.
You may have very good reason.
In late spring, the club’s membership rejected an additional dues
assessment to members. If you are among the many who had concerns then
about our club’s financial future, you are probably wondering what
happened since then. You might even feel that an update on the situation
is overdue.
You might
-be among the many who are frustrated by the lack of transparency and communication.
-have doubts about the viability of the whole thing.
-just be curious if anything productive has been accomplished in the past few months.
You might even wonder if there is any real willingness to change in the face of a
dramatically changed external environment.
Now is your chance to find out:
Townhall meeting on Wednesday, Oct. 27
18:30, TAC 3rd floor banquet rooms
You will hear what changes have been implemented, what other changes are
being considered, and you will have a chance to make your voice heard.
Come and assess for yourself where things stand, see if YOU think it’s
enough, or if more needs to be done.
We want to see an American Club that is around for generations to come.
See you there!
Sincerely,
Making A Better TAC Team (MABT)
www.abetteramericanclub.com
TAC continues to move toward the precipice. How about some real benchmarking and common sense solutions.
“Capping the well” (cutting the $20 million payroll by $5 million+) is necessary as well as delivering value to members with inexpensive, casual dining.
The mind-boggling Aug. F&B committee meeting sets the stage by using the Roppongi Hills Club (RHC) as the benchmark and weaves a strategy for new TAC’s F&B around it with a Cost of Goods target of 26% which is a mark-up of 4 times to reach the member’s price. And more poison for the patient.
This strikes me as an ultra “bunker” strategy, divorced from realiity. The premise is that TAC members want a RHC equivalent dining experience with an American focus (whatever that may mean). I wonder how many members have ever been to (or heard of) the RHC. More likely, the cheap-and-cheerful dining experience of Global Dining (La Boheme, Monsoon, etc.) and the like is the goal of most members. No one seems to have impressed on TAC that fine dining started to decline (replaced by casual dining) in clubs around the world about 20 years ago. New TAC went big on F&B and now the tail is waging the dog.
RHC is in a business hub and a destination for shopping. TAC is not. The belief that “build it and they will come” will go live early next year.
The dramatic decline in TAC’s F&B sales over the past 15 years is directly due to the internationalized, super-competitive marketplace. TAC does not offer value for money and members have voted with their hip pockets and for diversity. It’s that simple.
The F&B centric TAC is sailing against the head-winds and all will be revealed next year. I have attached to this email a two page financial report which appeared in the Sept. issue of the New York Athletic Club’s magazine (NYAC). The NYAC seems to be doing everything right and offers real value to members with low entrance fees, reasonable monthly dues and good F&B value. And no debt. TAC should be benchmarking against the likes of the NYAC and clubs in Asia, not the RHC. The NYAC has a staff to member ratio of 1:24 vs. TAC’s 1:11. The NYAC marks up their F&B about 2.2 times versus TAC’s plan of 4 times (Historically TAC was a about 2.5 times) Now that’s benchmarking. But that might be just too much common sense to take into the next committee meeting. It is also important to strip room rental (about 10%) out from F&B revenues as this distorts COGs and comparisons, exaggerating mark-ups. “Wastage” may be the culprit in what seems to be a 5 or 6 times mark-up over COGs.
There will be many course corrections next year but the overwhelming $125 million loan at 4% looks like the fatal coup de TAC. TAC has managed to snatch defeat from the jaws of success. A fatal flaw is its “reversal of roles” whereby members serve the interests of a small number of “lottery winners” with a transfer of wealth from member to elite staff. Over the past 25 years most of about $250 million in Entrance Fees which should have gone into reserves for renovation and rebuilding went instead to salaries.
Greg
I think it’s fair to say that many of us on TWG2 have found the experience both fascinating and – at the same time- frustrating. While almost everyone — Board, member and management included — individually recognize that we need to change the way the way we operate, there seems to be great difficulty actually doing it. Ironically, transformation is dependent on those dysfunctional mechanisms we seek to reform. It will be important going forward for all members to stay actively involved and to keep up the pressure for reform. The potential for backsliding once the short term financial pain is deferred remains a clear possibility.
We recently spoke to the Board about the twin missions driving TWG2 – the need for short-term measures to address the DSCR concerns, and longer-term actions to address the root causes of the Club’s tightened circumstances.
Short-Term Measures: We explained that we believe that it is possible to remove considerable expense from the Club’s operations without impacting services to members. Working closely with the Finance Committee, we are confident that we can recommend a budget that meets the current situation realistically and head-on. We have also recommended some changes to the management structure that help deliver on the four strategic issues below.
Strategic Issues: At the same time, we’ve pointed out that there are four key issues that need to be addressed to effect the transformation that will ensure our long-term success:
1. First, we believe there is a fundamental problem with the governance of the Club. Mostly, that’s our fault as members … but we have to put in place an effective and active governance structure that determines the strategic objectives of the Club and helps oversee management in the delivery of those objectives. It’s great to see that the BoG agrees with this perspective and has launched a Governance Committee charged with making changes.
2. Second, and a necessary consequence of the first, is the need to develop a strategic plan that gives clear direction on what’s important to the club as a corporate entity and the aspirations and expectations of its members. 3. The third plank follows the second – a need for a clear understanding of the Club’s brandand the mechanisms to market that brand among the existing and prospective membership. The Membership Committee is potentially going to take this challenge on board with pro bono help from members who are professionals in this area.
4. The final element is transparency and accountability mechanisms, reviewed regularly by the board andreported to the members. A performance dashboard comes to mind, and we’ve made some suggestions about what this might look like.
These four challenges make for much more difficult conversations: many people have opinions on each of these issues and the unfortunate result can be that the status quo emerges as a compromise. That’s the frustrating part.
To be sure, measurable progress has been made to date. Not least, management has been given more and tighter guidance by the board in the budgeting process. Budgeting to lose a major portion of our remaining equity and basking in self-satisfaction when we lose a lesser amount is now, hopefully, a thing of the past. Executive compensation is in the cross-hairs and governance per-se is finally attracting a measure of attention.
I’d love to get feedback and comments … all reasonable opinions sought and welcomed!
There is a new blog on the Tokyo American Club website. It has the name of “The Heard”. Although there is no need to hire a brand consultant, we wonder where they got this name?
Our biggest concern with doing those posts there is that things will filtered and we’re back to the same lack of transparency that got the management of the club and the board of governors into trouble in the first place.
We’ll put up the first post shortly here so you can comment.
It’s certainly been a lively time for the TWG2 team during the summer holidays. We’ve been digging into a wide variety of topics that include root cause analysis, the Club’s revenue and expenditure projections for the next few years, F&B, strategy and governance issues, outsourcing opportunities, and benchmarks for compensation. We’ve also made a pretty significant contribution to the Traders’ Bar balance sheet!
Some of our members have been active participants in discussions with the Club’s committees, including Finance, Compensation, F&B, Membership, House and others. Special thanks to the Committee chairs and BoG for their cooperation in this process. And similarly, thanks to those of you who have taken the trouble to give us your ideas and opinions these last few months. TWG2 sees the membership as its constituency, and we’re focused on delivering outcomes that ensure the Club meets and exceeds your expectations.
We’d also like to recognize the effort put in by the management and staff in backing us up – we’ve been asking some pretty difficult questions and sticking our noses into every aspect of the Club’s operations, and it’s gratifying to see the positive way in which people are responding to the need for change.
It’s interesting to note that we’re not the only private members club facing these sort of challenges right now. That makes our work, and your support, even more important as we deal with a much more competitive environment going forward. Our goal is to make sure that TAC is well-placed to thrive over the next three to five years, by delivering on a unique lifestyle and community proposition that just can’t be beat!
We’d like the chance to report back to members and get feedback before submitting our final report, and are planning a town hall meeting later in the month for that specific purpose. Please support us – and your Club – by coming along and letting us know what you think.
Hope you’ve had a good summer. It has been quiet around the club, but not for the MABT.
Well, the team has been working with the Board of Governors to come up with ideas on how to Make A Better TAC . You got some ideas from here. There have been weekly meetings and it has been a bit quiet from us as we wait for to hear results of this work.
There will be a townhall meeting coming up this month. We’ll keep you posted as to how things are going. Please come and make your voice be heard. More on the data and time to come.
Hi Bryan, I heard that you mentioned to a member that the TWG2 is planning to recommend that the two months bonus dues be folded into the 12 monthly dues. If this is so, and it may just a rumor, you should be aware of the following:
This has been discussed for many years and nothing has come of it as the current bonus dues which are billed twice a year is an “assessment” which was passed as fiat by the BOG many years ago to get around the requirement that dues can only be raised by a vote of the members. Thus you must have members vote on any dues change. The “assessment” of 2 months dues (euphemistically called bonus dues) was just a sneaky way of getting around the vote and effectively raising the dues. As you know the Full Time staff get 5.5 months salary each year, making their pay 17.5 months. Regards greg