Create an Innovative Culture to Progress Your Business
1 June 2012

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OK, I admit it. I feel a little overwhelmed at the moment. I have just come back from Filex and my head is exploding with new ideas, philosophies and information and I don’t know exactly where to start.

However, I know I have to start because things are moving very fast in the industry at the moment and as an owner of one of the Voyage Fitness Clubs as well as a player on the CFM team, I know if we don’t keep up with the changes or stay at the forefront of the changes, we may very well be left behind.

Jack Welsh the former and famous CEO of General Motors stated a very simple quote as business owners or leaders we need to ‘Change before we have to change.’

This is relevant in almost every industry today with new innovations, new business models, new technology and new consumer trends and demands, leading to businesses having to adopt and change their model, service or method of delivery at a pace unseen in the history of business.

It certainly is relevant for our industry as well as 30 year industry veteran Thomas Plummer exclaimed at Filex he has seen more change in the industry in the last 3 years than the previous 30 years.

So what do we need to do in our organisations, to be set up to lead the way in adopting the positive progressive changes within our industry?

The key according to every business magazine and book I have read in recent times is in setting up your business to have an INNOVATIVE mindset and culture.

WHAT MAKES AN INNOVATIVE COMPANY

According to the CNN Money Website last year the top 10 most innovative companies in the world were in order:

1. Apple 2. Google 3. Nike 4. Amazon 5. Charles Schwab 6. 3M 7. Statoil 8. Exxon Mobil 9. Walt Disney 10. Whole Foods Market

It’s no coincidence that 7 out of the top 10 most innovative companies were also the number 1 ranked company in terms of revenue within their industry. (The other 3 companies were ranked number 2 or 3). What this indicates is if you are set up to be the most innovative business within your industry or market you are very likely going to be the most successful.

Now think of your business in your market? If you have 10 competitors in your area where would your club rank?

Not sure? Lets break it down then.

According to Business Matters Magazine there are 5 ways you can be a more INNOVATIVE COMPANY.

1. EXTERNAL (Product and Service Innovation) – Bringing more profitable products and services to the market. (Eg – Amazon Online Purchase and Delivery)

2. INTERNAL (Competitive advantage) – Saving money through making internal processes as efficient as possible. (Eg - Automated production lines)

3. EMPLOYEE ABILITY – Having people who can genuinely out-think their competitors. (Eg – Steve Jobs)

4. CULTURAL – A focus on innovation leading to a significant increase in employee engagement. (Eg – Apple)

5. PERCEPTUAL – Companies that live and breathe innovation become a workplace of choice for the best and brightest. (Eg – Again walk into an Apple Store you want to be a part of the innovation. You want to be a part of “What’s next”)

Now lets put it into context for our industry and businesses.

What are some examples of fitness businesses being INNOVATIVE in one of these 5 areas and how does your business compare.

EXTERNAL (Product and Service Innovation) - The most prevalent example of this is the innovation in the way many fitness clubs are training their clients. Functional training, Metabolic Training, Cross-Fit Training, Results based training are now the most in-demand methods of fitness training in America. So in demand is this type of training due to the improved results (Ie – Fat Loss), more enjoyable experience (Flipping tyres, climbing ropes) and improved functionality (Improves golf game or day to day functioning) that clients/members are paying 3 to 10 times the amount they would for a regular gym membership. This is an example of bringing a more profitable product or service to a fitness club.

INTERNAL (Processes) – As a fitness business we have a very difficult time to keep track of our member interaction. New developments in club software make this tracking and member interaction process more automated. If this automated process saves you or your team 10 hours a week or 520 hours a year that would be a significant internal innovation that would save money and provide a competitive advantage.

24 hour clubs have reduced overheads of their business by taking out the majority of staff hours that a regular club would have. As a result their overheads are much lower and they can provide a lower priced membership and a competitive advantage.

EMPLOYEE ABILITY – This comes down to the club recruitment process. Do you hire employees that are set in their ways or employees that are progressive and open to the progress and innovations in the industry? Do you restrict your hiring to those that are already in the industry or look at those with a unique set of skills that could improve your innovation as a company?

CULTURAL – During his seminar at the Filex Business Summit, Managing Director and Founder of the Fitness Network, Nigel Champion, referred to using FedEx days with his team to improve innovation and engagement. FedEx day is an invention of an Australian software company, Atlassian, who once a quarter gives every one of their employees 24 hours to work on anything that relates to improving the product or service of the company and deliver it to the management at the end of the 24 hour period. Encouraging your own team to brainstorm and create ideas that will improve your business is a fantastic way to spark an innovative culture.

PERCEPTUAL – From an outsider perspective how innovative does your business look? What does your club brand, website, marketing, social websites tell the prospective golden employees about your business? If you go to the GO HEALTH CLUB website without having to visit one of their clubs the perception is this is a very innovative company. In summary, you will gain and retain better staff by communicating that you are an INNOVATIVE club that is at the forefront of the industry.

STEPS TO ADOPTING THE INNOVATIVE CULTURE

Business Matters magazine suggests as an owner or leader of your business there are 6 steps to creating an INNOVATIVE Culture.

1. LEAD THE WAY – Your club must dedicate resources, money and time to innovation. It must start from the top. You need to commit, listen, support, and provide autonomy and encouragement for your team to be innovative.

2. REWARD AND RECOGNITION - Atlassian, the creators of the FedEx days, have trophies and awards night at the conclusion of the FedEx days. Provide incentives and give recognition to employees that spark innovation within your club.

3. CREATE A PROCESS - Identify what the challenges and opportunities of your business are so your team is focused on what they are creating innovative ideas or solutions for. Next, create opportunities for staff to brainstorm (Eg - once a quarter or ongoing), have an effective decisions making process about those ideas (Management meeting), have a testing process for these ideas (Eg - sample size marketing campaign) and finally a process for implementing them.

4. COMMUNICATE - You need to make the process and purpose of innovation within your business crystal clear. Relate it to their day-to-day jobs through KPI’s and job descriptions. Communicate your innovations externally to the public as this builds pride and recognition of your team. (Eg – Fitness Australia awards, Local community business awards, Social Media)

5. MEASUREMENT – Evaluate the effectiveness of your innovation. Measure the % of ideas that are implemented and the % of those ideas that save or make money for the organization.

6. GET MOVING –Change provides great opportunities but can also create challenges if you are slow to act. Work hard to get your club moving with the times and you can be a part of the exciting progressive changes that will make you the leader of your pack within your market and the industry.