The Action Catalyst
REMASTERED: Creating a High-Performance Culture, with Chuck Runyon (Fitness, Leadership, Franchising, Business)
Tue, 22 Oct 2024
Chuck Runyon, the CEO at Self Esteem Brands including the wildly popular Anytime Fitness, covers ROEI vs ROI, the 4 P's of work, finding your purpose, the business lesson of It's a Wonderful Life, the balance of work and play, and why Anytime spends the big bucks as a company on tattoos.
I just believe that a business can do more than just make money. I don't really know how to measure it other than the fact that, man, it's like currency for the soul, right? I mean, not everything important can be measured. And so I just know that we've literally changed a person's life. We've changed tens or hundreds of thousands of people's lives.
And we may never know that impact, but it feels good to know that you stand for something.
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Chuck Runyon is the CEO at Self-Esteem Brands, which includes Anytime Fitness and also Waxing the City. And he and his business partner, Dave Mortensen, co-founded Anytime Fitness. It's just been an incredible, incredible success story. And they got a new book called Love Work, Inspire a High-Performing Work Culture at the Center of People, Purpose, Profits, and Play.
So Chuck, welcome to the show.
Thanks for having me.
How in the world, wasn't Anytime Fitness like the fastest growing gym for like 10 straight years or something?
It was. And I want to take people back a little bit to this pre-digital era, right? We were launching this in like late 2001, 2002. And in fact, we launched our first Anytime Fitness before the first iPod. So there were no smartphones, there wasn't any Facebook. And so there was this idea of having a key fob that would open up every gym door in the world was just unheard of.
And also people mostly didn't think it would work because of lack of service or they might have some safety concerns. And so we really created the category of these type of clubs. They just didn't exist prior to Anytime Fitness. And, you know, I think like most entrepreneurs, they have that story where, you know, people would tell them this idea is not going to work.
And it was no different for us. I mean, friends, family, industry experts said this idea will never work. And that's always a reminder for any of the listeners out there that, you know, every idea seems crazy until you prove that it works. And now it suddenly seems pretty common. So but we, you know, we we stayed steadfast. Hoping the idea would work. We weren't 100% certain.
And we applied ourselves. We created this concept. We launched our first gym in May of 2002 in Cambridge, Minnesota. And then the first couple of years, I mean, we're just scratching and clawing to grow this. And we started to really reach some acceleration there in 2005. And then it just really took off. And from 2005 really until now. And number one, it's a testament to the business model.
But then number two, the fitness industry has had tremendous growth too. So we're also riding some of those tailwinds.
Yeah. So for people that don't know, I mean, Anytime Fitness, I think most people kind of get from the name, oh, it's 24 hours, like highlight some of the other unique points. So like what kind of what you're talking about here with the Keep Up.
Yeah. So for a member, right, prior to Anytime Fitness, you'd have to drive a little bit farther to a neighborhood club. And, you know, you could only use it during the hours of, say, 5 a.m. to like 10 p.m. or 11 p.m. But with Anytime, we brought it closer to your home or work because we're in a typical strip center that you might find with your dry cleaners, your subways, your grocery stores.
And so we're very conveniently located. But also, you can access our stores 24-7, 365. And so you can come in anytime you want. They're typically about 5,000 to 6,000 square feet, so they're a little bit smaller than a big fitness club. So they create a little bit more comfort and intimacy, yet you get all the programming and equipment you'd find in a big club.
And so that mixture of convenience and connectivity and being part of the community really appeals to our members. So that, from a member perspective, is very convenient. But from an owner perspective, it was such a simple model because you didn't always have to be there in the clubs they operated. So your payroll costs would be lower.
You'd have less headache of having to manage so many people in comparison to other franchise opportunities. And we gave our owners some freedom on offering things like personal training or yoga or some things they were passionate about. So it really appealed to both our franchisee as a consumer as well as our members as our consumer.
You have such a clear culture, yet you gave... franchisees some some flexibility in terms of what you allow them to offer we did and you know that is we're trying to always balance
standardization in the franchise so that every club looked and felt the same. But yet we wanted to like amplify the community passion and personality of our owners. And that's, by the way, not always easy to do. And when done right, I mean, it's wonderful for the community and for our franchise owners. When it's done wrong, we have to fix those inconsistencies in the experience nationally.
But yeah, I mean, we look at Dave and I as entrepreneurs are always fighting for our franchise owners. And in a typical franchise system, I mean, you get no decision making whatsoever. You have to run the playbook, you know, absolutely airtight. And, you know, because someone signs a check to us and it's a big part of our life savings.
Dave and I want to give them a little bit more autonomy with any type of fitness they're going to have in another brand. And so we've always kind of encouraged them to bring a little bit of personality. If there's something they're passionate about locally, whether it's a type of fitness class or let's say a charitable cause, they can get behind that to do things locally.
And so it doesn't have to be standardized across the country. A couple of things people are fascinated by that if you came to our global headquarters here in Minnesota, I think we're the only corporate campus I know of that has a full-time tattoo room here in our corporate headquarters.
And over the course of the last 15 years, I'm going to guess that we've spent over a half a million dollars on tattoos because we've had over 3,000 people get them. And we either pay for them or reimburse for them. And so the average tattoo is at least $100 to $200. And so someone will send us a photo.
They tell us a reason why they're getting this, you know, running man tattoo and they can personalize it any way they want. And so we collect these stories and it's always about some personal transformation they've made in their life or they've helped someone make, they've empowered someone to live a better life.
And so it always comes back to that, you know, that purpose driven, um, benefit that we've given someone or given ourselves. And so it's, it's far bigger than just treadmills meet open 24 hours. I mean, this is really about changing lives.
So how in the world do you justify reimbursing 3,000 people for a tattoo is driving profit?
You know, thankfully, I wasn't very good at the finance part of this growing up. I don't know. Don't get me wrong. We have business optics on this that we have to measure. But we also use a term here called ROEI, which is Return on Emotional Investment. And I just believe that a business can do more than just make money.
And so I don't really know how to measure it other than the fact that, man, it's like currency for the soul, right? I mean, not everything important can be measured. And so, you know, I just know that we've literally changed a person's life. We've changed tens or hundreds of thousands of people's lives, and we may never know that impact.
But when our franchise owners put their head to their pillow at night and they go to sleep, man, it just feels good to know that you stand for something that is meaningful in that community at a time when, unfortunately, the world is getting to an unhealthier place. You know, our values are that, hey, we're going to help people, right, get to their best selves. It may start with fitness.
It may start with coaching. It may start with empathy. But I guess that's just tough to measure other than, you know, that it's currency for the soul. It's the only way I can really state it, you know, that return on emotional investment.
And yet you guys are crushing it.
Yeah, we will surpass 4,000 units in 33 countries operating in 17 different languages on five continents. And I think we're one of only maybe 15 franchise brands to ever do that. And no one's done it in that amount or that speed, that amount of time. So we've probably likely done something no other franchise brand has ever done before.
Let's talk about profits since we're on that. The book is called Love Work. It's really about a culture, and then you've got these four Ps, people, purpose, profits, and play. What is your philosophy towards profits?
No, I mean, look, it is the financial lifeblood of a business. And this was written specifically for those who are involved in a small to medium-sized business. And make no mistake, you have to have financial profits in your business. That is why we work. And the four Ps are a formula that have to be linked together. But we make very clear in the book that if you take out profits...
the other three cannot sustain themselves, right? Where if you take out, say purpose, you can still have a sustainable company with like people, profits and play. But I mean, again, you have to make money in a business. And by the way, when you're making money that provides opportunities for your team, you can reinvest in them and you can change more lives, which has more purpose and play.
So, you know, financial, I mean, you have to, you have to perform, you have to make money. And so we talk about that and, you know, some of the, And by the way, the book, I hope when people read it, they get a sense of empathy for just how tough it is and how much we admire those who own their own business.
And it tells us really some stories about how we made mistakes, about when we were a smaller business, we just weren't very good at strategic planning. We weren't very good at budgeting, and we weren't very focused in how we apply our resources. And I can tell you if after doing this now for 20 years and working with small businesses,
Most small, small businesses are not very good at strategic planning. They're just not very rigorous or disciplined in their financial planning. And if I could go back in time, I wish I can do that. So this book walks you through some of that and specifically how to do some of that for as being a small to medium sized business. And but but make no mistake.
I mean, if you have to make money, you have to show profits to have a growing, successful business. And so, you know, that is the lens we operate from. We also talked about the currency lifestyle. But, you know, a lot of it's focused on knowing your numbers, knowing your strategy and making sure that your business is improving and growing.
So talk to me about purpose. How does a company find its purpose or where does that come from or how do you bring that about?
Yeah, so in the book, we talk about like, you know, what if you sell widgets, right? What if you're not in the fitness space like we are? We give you some tips on how to find your purpose and how to elevate it within your company amongst all of your stakeholders. So we're very explicit in that. But I got to tell you, you know, I remember I've been in the fitness industry beyond almost 30 years now.
And in my early years, I didn't use purpose. I didn't really understand purpose. how it would move people, how it would amplify their performance.
And then I learned it with Anytime Fitness and the books, they'll give you some moments on when like I had this epiphany and I started to see the difference on how it like really deeply stirs people from the inside and like, you know, takes them to another level when it comes to, you know, working a little bit harder, asking an extra question, I mean, going the extra mile on behalf of the consumer.
And so, you know, if you think just in basic terms of, You know, IQ, you know, using your head, and then what I like to call heart power and brain power. You combine those two. And so I really want to make sure that our team has their heart into this initiative, not just their brain into this initiative.
And when they put those two things together, I'm telling you, it really amplifies the performance of a team, of individuals. And I can just see it in their eyes. And so, you know, and the facts are, right, millennials, right, specifically, would rather work for a company they believe in and earn less. then work for a company they don't believe in and work more.
And our industry, you know, employs a considerable amount of millennials. So it's important to them that they have values and they can align with what the company stands for. And so, but I actually said, I think this is every generation now is kind of aligning to that. But if you do employ millennials, I mean, they care about more about purpose than maybe previous generations.
And so to me, it just comes down to performance. So it's, there's like, I call it the economics of purpose. It's, you know, people, I mean, they would get out and they would jump out of bed on a Monday morning ready to tackle that problem because they believe in the mission. They believe in what the company stands for. And it's just combining your heart power with your brain power.
What are some things as a leader that you think you guys do that help sort of cultivate that sense of purpose?
Yeah, one of my favorite movies is It's a Wonderful Life with George Bailey. And we talk, you know, George Bailey, if you remember, gets a chance to see what would have happened if he had never been born, right? How would his town and the people around him been impacted? And so we use that as one of the examples in the book is what if your company had never existed, right? Who would be impacted?
Whether it be providing jobs to some of your employees or whether it's the value of your products and services and how they're making your consumers' lives better. And so start with if our business didn't exist, who would be impacted? And then once you start to see, hey, look, yeah, we are doing something that provides value to people. Now you've got to find a way to tell that story.
And so we do that in our internal meetings. We actually invest in some videos to, you know, share how we've impacted our franchise owners, impacted our members. And so, you know, I think a CEO has to be in part a storyteller of what How the brand impacts the world, right? What the service and product we provide, how it enriches people's lives.
And so we just frequently do that in various forms of medium, whether it is written, whether it's oral storytelling at our meetings and all staff events and at our annual conferences. That's the signature moment when we invest in some very nice created videos to explain that, hey, we do more than just make money. We actually impact people in profound ways.
And so once you find out how you do it, now you get to invest in some storytelling. It's so easy to identify with a cause. I mean, that's another thing. If you just make something like shoelaces, right, it doesn't seem like it's that... romantic or that sexy or life-changing. But guess what? Any company can go out there and find a cause to identify with.
There are so many big or micro causes in your community. Find one. You can have your company devote a little bit of time, a little bit of resource, a little bit of money. You can host some fundraising events. Galvanize your team around a cause. I mean, that's another idea shared in the book. It does not have to be a direct link like we are to health.
If you make something that's a bit more obscure, there's still no excuse why you can't infuse some purpose into your company by saying, hey, this is what we stand for, and we want to help this cause or this group of people.
Not to suggest that those of you that are in the shoelace-making business aren't important in the world. You're saying that this storytelling, that's one of the most important roles of the CEO.
I really do. The CEO has to be the one. The senior leadership team, it's about, look, Here's the values of our organization. Here's what we stand for. Here's the impact that we have. And in our strategic meetings, I mean, we will mix some of these purpose stories to say, look, if we do X, We will get why.
We'll get the financial return, but let's also talk about what's going to happen to the franchise owner, what's going to happen to our employees, what's going to happen to our members. We talk in sometimes the emotional terms and sometimes in what's very difficult to measure. We talk about that because, again, our team cares about more than just reporting a profit.
And so, yes, I do think it's important to get buy-in. It's got to be top-down, and I think the CEO has to mention it in terms whether it's a state of the union to the team, whether it's, you know, to the network. But I think it has to be part of the storytelling that goes on frequently.
And I even do it in social media, whether it is through Twitter or through Instagram or through our internal dashboards. I mean, I'm always trying to put out there, you know, here's what we do, here's what we stand for, and here's how we're going to improve people's lives.
Let's talk about play. You've got people, purpose, profits, and play. And you've got play as a centerpiece of your culture. Talk to me about the balance of work and play.
I think it is a balance. I think it's the one big aspect that most leaders really struggle with because they're serious, right? They want to get serious work done. And so in the book, we talk about there is science behind play in the workplace and how it fosters collaboration and creativity and alleviates stress.
And we use terms like let's take the work seriously without taking ourselves seriously. And that makes us more approachable, which gives us better relationships with our franchisees.
But, you know, even in our meetings, right, we can be kind of playful, which allows us to be, you know, to be vulnerable and, like, put up ideas on the wall that may or may not work or seem foolish, but that may lead to another idea. The simple fact is this. We spend over half our waking hours at work. We do this more than we sleep. We spend more time here than we do with our friends and family.
And I just think we should have a little bit more fun. It doesn't mean we don't take the work seriously. But, you know, 7 out of 10 people drive to work like they're disenchanted with what they're doing. They're emotionally neutral or they hate their work. That's according to Gallup, and that has not moved in like 20 years. 7 out of 10 people hate their work.
I'm like, that to me seems like a miserable existence. I want to drive to work seriously. something I'm going to devote over half my waking hours to. It's something I enjoy with people I enjoy and something I stand for. And so I got to have fun. And, you know, I'm telling you, there is, you can, there's a science behind it.
It is another one of the four Ps that just elevates your team's performance. And I know leaders have a tough time like embracing it, but if, but if you read the book, it has ideas in there, it's got tips in there, it's got some stories there and it has the data and science to show that play in the workplace makes sense.
All right, I have one more question for you. So before that, where should people go, Chuck, if they want to connect with you or learn about the book or whatever?
They can get the book on Amazon. It is just simply Love Work, one word there, by Chuck Onion and Dave Mortensen.
Awesome. Well, the last thing, if somebody is listening, let's say they are a medium-sized business owner or a big business owner or even a small business owner or whatever, what's the very first thing you would tell them, the first thing you can do that will start to move the needle on restoring the health of your culture?
Be very transparent, be very vulnerable and get your team like just simply go sit with them asking questions and say, hey, I would love to improve the workplace culture here. I think we all would, right? We all want a better place to work. How can we do that? I mean, just your team is eager to give great ideas and to give perspectives, and they want a great workplace environment, too.
They really do. And so this is not just all dependent on the leader, right? Just simply go to them and say, I don't have all the answers, but let's make a goal here in the next year to have a great workplace environment that is all about high performance. It can also be about more. We can have some fun along the way and we can impact some people. How can we do that together?
So I think if you really bring the team in and they all buy in and they can all weigh in, man, you still ain't got the whole team aligned to making this a great place.
Chuck Runyon. Chuck, man, thanks for being an innovator and for advancing the currency of the soul. I really appreciate it, man.
It's been a pleasure. Thank you very much.
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