Bar none, the toughest time I’ve ever had was going through COVID.
In 2017 we undertook a US$90m development of our flagship club in Chicago. The biggest risk we’d ever taken, it represented the start of a new vision for our company – a multi-year project, combining all of the experience and skills and knowledge I’d developed over my 35-year working life.
We were in the thick of it when we had to close. I’m the third generation running a family business and before the pandemic, I felt at the apex of my career, but then was suddenly presented with the prospect of the business failing on my watch.
It was personally devastating, because it crushed my dreams, emotionally devastating because I had to lay people off – which went against everything I was trying to do. Then there was the element of failure and this being a family business. We were also too large to get any government support, so having been such a believer in the system, I felt very let down.
Unique situation
This was a unique set of circumstances and a unique situation. Previously, although we’d had various challenges and tough setbacks, I had always felt I could work through them and find solutions. But this was a case where we were told to close whether we liked it or not. I’m used to winning and have never felt so helpless.
I made the very risky decision to keep investing in the new vision – I thought if I’m going down, I’m going to burn all the way! I hoped the investment in creating state-of-the-art clubs would give us the opportunity to come back stronger once we were able to reopen and it’s easier to do renovations when there are no members around.
We had to engage with bankers while having no revenue, but fortunately they agreed to lend us money for capital investment.
It was a Thelma and Louise-style, ‘drive off the cliff moment’ and the stress was incredible. Sleepless nights, putting on weight. I was on Zoom all day long. My wife and I were eating and drinking too much and not exercising enough. It was terrible.
Keep enough chips
I don’t remember the date we became cashflow positive again, but I personally didn’t turn the corner until the beginning of 2023. It wasn’t just about having my company back, it was about thriving again. Not all the clubs are back to where they were – some are way ahead and some are still behind – but 2023 was a record year for us in terms of revenues and profits.
What did I learn from all this? That you can never have too much cash! As a privately-owned, family business, having a sound balance sheet had always been one of our core principles and that paid off in spades. When we were confronted with this existential threat, we were able to zero in on some of the things we needed to do because we didn’t have the choice to do otherwise. Nothing focuses the mind more effectively than the hangman’s noose!
Finishing the final two club renovations became an all consuming priority, as did taking the company’s IT platform from the stone age to the digital age.
Sense of worth
But I was disappointed in myself when I realised how much of my sense of worth was tied up in the success of the business. I have a wonderful family: a great wife, great kids, sisters, nieces, nephews, parents. I’m blessed in that sense and this experience made me realise I hadn’t appreciated it as much as I should have done.
My father, who died recently, was there supporting me every step of the way through the crisis. There were days when some people thought it would be better to just sell the business than reinvest, but there was no way that was happening with my dad and me. When we ran out of cash, both he and I put more money into the company. He’s a very tough act to live up to, but nothing years of therapy can’t cure!
There was a book which really helped me called The Biggest Bluff: How I learned to pay attention, take control and master the odds, by Maria Konnikova, about a psychology professor who became a professional poker player. She said to win you have to use your skill, keep your emotional control when you get a bad break and make sure you have enough chips in your stack to play the next round. I found it incredibly helpful to think in those terms.
I also kept the Nietzsche quote in mind: ‘What does not kill me makes me stronger’, although my conclusion is that if I could have avoided the experience, I’d be a little bit weaker and still be okay!
What does not kill me makes me stronger (German: Was mich nicht umbringt, macht mich stärker) is part of aphorism number 8 from the ‘Maxims and Arrows’ section of Friedrich Nietzsche’s Twilight of the Idols (1888).
