By Richard Alm / The Dallas Morning News
Knight Ridder/Tribune Business News 

Dallas - January 21, 2001 - Robert Dedman Jr. literally grew up at ClubCorp Inc.

Both Mr. Dedman and his father, company founder Robert Dedman Sr., recall the little boy who frequented the ClubCorp offices amid meetings on buying land and building golf courses.

�He was always there,� Mr. Dedman Sr. recalled. �When he was five, somebody asked him, �Bobby, when you grow up, what do you want to do?� He said, �I want to be a businessman like my daddy.� �

And so he has. Mr. Dedman Jr. moved into ClubCorp�s chief executive chair three years ago, his father�s successor. He�s begun to put his stamp on the company, speeding up growth, forging alliances with new partners and pushing a traditional service business into the Information Age.

A business school graduate who spent three years on Wall Street, Mr.  Dedman Jr. has already pulled the trigger on some of the biggest deals in ClubCorp history.
In the last three years, ClubCorp spent hundreds of millions of dollars to acquire new properties, joined with Jack Nicklaus� company to develop golf courses and raised capital by selling a minority stake to an outside investor for the first time in company history.

The aggressive approach is paying off. Privately held ClubCorp won�t divulge its net income � although chief operating officer Jim Hinckley said the company regularly meets its goal of 20 percent growth in operating profits.  Revenue rose from $830 million in 1997 to an estimated $1.1 billion last year.

For better or worse, ClubCorp�s future now lies with Mr. Dedman Jr., although Mr. Dedman Sr., his 75th birthday coming up next month, remains chairman of the board and comes to the office nearly every day.

Even if it wasn�t time to retire, it was time to slow down, Mr. Dedman Sr.  said, and his son was ready. �A lot of companies change out the CEOs at 65 and bring on the younger people,� he said.

Companies often stumble at major transitions � from entrepreneur to manager, from one generation to another. Sometimes founders won�t cede real power to their successors. The second generation doesn�t always possess the drive and vision of the entrepreneurs who created the business from scratch.

By all accounts, the handoff is going smoothly at ClubCorp.

�The key to their being able to do that is Dedman Sr. having in place top senior management,� said Tom Stine, co-founder of Golf Datatech, an industry research firm. �Dedman Jr. hasn�t had to do it on his own. He�s been able to learn not only from his father but also from these executives.�

Starting at Brookhaven

Mr. Dedman Sr. was a Dallas lawyer, employed in the 1950s by oilman H.L.  Hunt, when he stumbled upon his destiny at a golf course in Rancho Mirage, Calif.
At age 30, he saw how a golf course could magically increase the value of adjacent land from $2,000 to $200,000 an acre. A few years later, he persuaded a developer to sell him 40 acres of land in what was then far north Dallas, where he laid out Brookhaven Country Club.

ClubCorp�s empire isn�t built on selling home sites. The company showed that economies of scale could pay off in what had been a mom-and-pop business. 
Today, ClubCorp ranks as the world�s largest operator of golf courses, private clubs and resorts. Its 250 properties, stretching to Australia, Asia, Mexico and Europe, include such jewels as North Carolina�s Pinehurst Resort, Virginia�s Homestead and Ohio�s Firestone Country Club. North Texas properties include Stonebriar Country Club and downtown Dallas� Tower Club.

For Mr. Dedman Jr., ClubCorp was a constant in his life. Growing up, he worked in a bag room, golf shop and tennis center at Brookhaven. In the early 1980s, he worked in corporate planning while attending law school.

Mr. Dedman Jr.�s only work outside ClubCorp was a stint at Salomon Brothers Inc. from 1984 to 1987, specializing in mergers and acquisitions.  Working on Wall Street, he said, taught him to value assets and exposed him to a variety of management styles.

Mr. Dedman Jr. returned to ClubCorp in 1987 as the company�s chief financial officer. Two years later, he became president. 

�He had to earn the respect of all the other executives that had been here a lot longer than he had been,� Mr. Dedman Sr. said. 

Over the next decade, his father gradually ceded authority and the son took over day-to-day operations as chief executive in January 1998.

�They had an interesting relationship,� said Mr. Hinckley, who joined ClubCorp in 1970. �Robert [Sr.] sort of said, �You listen to me for five years, and then I�ll listen to you for five years.� They had to work through how they were going to work together.�
When a son takes over for his father, the pitfalls include resentment on the part of executives who were leapfrogged and arrogance on the part of a prince-turned-king. 
Mr. Dedman Jr., now 43 years old, says he earned ClubCorp�s top job, but on the way up he forged good working relationships with the rest of the executive staff hired by his father. 

�When he came on board, he was a great listener,� said Pat Corso, who
joined ClubCorp in 1985 and now serves as president of Pinehurst Co., the
company�s resort division. �He didn�t have the attitude that �This is the family
business and I know everything.� 

In their demeanor, the Dedmans resemble another famous Dallas business family � the Perots, the father folksy and flamboyant, the son buttoned down and analytical. 
Associates describe Mr. Dedman Sr. as a classic entrepreneur, a glad-handing salesman quick to size up people and situations, a gut-instinct decision-maker.

Mr. Dedman Jr. runs the company by the book, not by the seat of his pants.  He�s most comfortable with financial analysis and checklists for decision-making. 

�Some of it�s probably the way they�re wired,� said executive vice president Doug Howe, a 19-year ClubCorp veteran in charge of U.S. clubs. �Robert [Sr.] is far more the entrepreneur and left-brain oriented. Bob [Jr.] is in the right-brain, business-school model.�

The divide between father and son isn�t absolute. Both operate in a collegial fashion, not tied to a chain of command and willing to share power within the company and let subordinates make many key decisions. They share a belief that deal-making involves building long-term relationships, not conniving for short-term gains.

�There are two things a parent gives a child: One is roots, the other is wings,� Mr. Dedman Jr. said. �A lot of my values I�ve inherited from both my parents.�

Mr. Stine said ClubCorp has the right man it needs now, just as it had the right man 40 years ago. ClubCorp is now simply too big to be run effectively on an entrepreneur�s luck and pluck, he said. 

�When it becomes as large and powerful and international as it is,� he said, �it has to take on more of a corporate mentality.�

The art of the deal

Different styles or not, Mr. Dedman Jr. intends to follow in his father�s footsteps by keeping ClubCorp on a fast track.

The game plan involves buying clubs, building new properties and increasing the customer base. 

�I don�t think it�s growth just for growth�s sake,� he said. �It�s got to be profitable growth.�

Mr. Dedman Sr. built ClubCorp one property at a time, one deal at a time.  Under Mr. Dedman Jr., the company gobbled up a dozen or so individual clubs, but what�s stood out has been the big deal.

In early 1999, the company invested $32.5 million to buy a 25 percent stake in ClubLink Corp., Canada�s largest golf course operator. A month later, ClubCorp joined another company in the biggest deal in industry history, paying $393 million for Cobblestone Golf Group�s 45 courses, 24 of which ClubCorp kept.

�We have the opportunity to look at every portfolio [of golf properties] that�s out there, and we will be very selective in the deals we go after,� Mr.  Dedman Jr. said. �Cobblestone is a good example. You had unique assets and markets we wanted to be in.�

Over the years, ClubCorp has worked with Mr. Nicklaus on several projects.  In July 1998, the two big names in golf formed a partnership to build and operate as many as three dozen signature Nicklaus courses over the next decade. �The numbers on a piece of paper work only if you have the right partner,� said Ira Fenton, president of Mr. Nicklaus� Golden Bear Financial Services. 

Growth by acquisition requires capital. To get it, Mr. Dedman Jr. turned to Wall Street.

In October 1999, ClubCorp received a commitment of $300 million from Cypress Group LLC, a New York-based private equity firm. So far, Cyprus has invested $225 million in ClubCorp.

James Singleton, Cypress Group vice chairman, said the investment amounts to a vote of confidence in Mr. Dedman Jr. and his vision for ClubCorp.

�I can�t tell you how important a CEO is to us in making an investment,� he said. �We try to look for big growth platforms, and ClubCorp is a phenomenal growth platform.�

Quality and technology

For a company of 32,000 employees and 500,000 members, each day presents a challenge: making sure the customer walks away satisfied at ClubCorp outposts from Beijing to College Station.

�You can�t put enough systems in place to be watchdog,� Mr. Dedman Jr.  said. �Every company is going to have a culture � good, bad or indifferent.  The role of a leader is to shape and mold that culture.�

Mr. Dedman Jr.�s vehicle for instilling ClubCorp�s values has been dubbed Star Service, a quality-control initiative that targets employees from top to bottom. He even wrote a 165-page book about it: Our Star Service Journey, published in 1998.

Star Service preaches a gung-ho attitude and service with a smile. It encourages teamwork, pride and integrity. It even reminds employees of little things � call everyone by name, have fun, pay attention to details.  Employees are urged to create �magic moments� for customers � that is, something they�ll talk about all day.

At every one of the company�s properties, employees take part in a morning lineup, a brief meeting that focuses on examples of how ClubCorp staff puts Star Service into practice. 

�You�ve got to translate all this theory stuff into reality,� Mr. Dedman Jr.  said. �That�s how we drive that culture.�

He concedes that there�s little of substance in Star Service that he didn�t learn at his father�s knee. The program, however, illustrates the difference between the two men.
The father spread the gospel by word of mouth and example. In a far-flung organization, the son established formal lines of communication with lineups and folding cards enumerating ClubCorp values.

ClubCorp is investing $50 million in upgrading its technology, Mr. Dedman Jr. said.
ClubCorp signed a deal with Dallas-based LifeCast.com a year ago to provide information to members via the Internet. In April, ClubCorp founded Avendra LLC, a business-to-business Internet portal for the hospitality industry, bringing on board such heavyweights as Marriott International Inc.  and Hyatt Hotels Corp.

�It�s a people business, and technology enables us to provide a better experience,� Mr. Dedman Jr. said. �You�ve got to have systems that lead you to the action stage.�
After just a few years on the job, Mr. Dedman Jr. is changing ClubCorp. And he�s changing, too. He isn�t the same kind of executive he was three or five years ago.
He still relies on analytical skills and strategic planning, but after more than a decade in the executive suite, associates say, he�s acquiring a feel for the business.

In that respect, he�s becoming a bit more like his father. Mr. Corso put his finger on it: �What he�s developing is intuition.�

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© 2001, The Dallas Morning News. Distributed by Knight Ridder/Tribune Business News. LUB, UDS, OAT