Meet the Mid-Market CEO Award Winners
Since 1986, Chief Executive has honored outstanding CEOs with its annual Chief Executive of the Year award, a peer-driven award that has honored many extraordinary leaders, from Jack Welch and Bill Gates to Ann Mulcahy of Xerox and David Cote of Honeywell. Over the years, judges have tended to favor leaders of large, complex companies. Chief Executive felt it was time to honor outstanding, mid-market companies that deserve recognition. These enterprises are the backbone of the economy, generate tremendous growth and often become major, global firms in their own right.
October 28 2013 by JP Donlon
Anytime Fitness: Beyond ROI
“Where we are today, it seems obvious that it was a great business model; but 11 years ago, no one thought our concept was a good idea—not my family, not my friends, not anyone in the industry,” notes Chuck Runyon. “To launch a business, you have to be determined and believe in yourself. No one can do that for you.”
When 1,300 associates are passionate enough about their workplace that they tattoo their bodies with its trademark, a company’s leadership has got to be doing something right. If you aren’t impressed by employee devotion expressed by permanent body ink, Anytime Fitness’s growth figures will surely wow you. This Minneapolis-based chain that began as a single fitness facility in 2002 now has 2,300 clubs in 50 states and 16 countries and revenues of more than $484 million.
Anytime Fitness’s breakout success in the crowded, low-margin fitness-club business is founded on a novel concept for its industry: providing its members with 24/7, low-cost access to a network of workout facilities that are 30-to-50 percent smaller than average. “When my partners and I owned a large fitness club, we realized that most of our members used the same workout areas every day, yet we had this huge facility and big payroll,” explains Chuck Runyon, CEO of Anytime Fitness. “We thought, ‘let’s carve out what people use the most, reduce the square footage and use technology to shave our payroll cost.’”
The result? Anytime Fitness clubs typically range in size from 4,000 to 6,000 square feet; focus on cardio machines, free weights and resistance exercise equipment; and they dole out keys and personal security devices so that members can safely come and go—any time of the day or night—to any of its facilities anywhere around the globe. Early on, the company’s founders opted to embrace franchising, viewing it as a less capital-intensive expansion method. Today, its 2,300 clubs are 99 percent franchise-owned.
Like its members, Anytime Fitness’ franchisees are attracted to the independence the company’s concept offers. “Profitability is the No. 1 metric with franchising; but beyond that, we provide balance,” says Runyon. “When you buy into Subway, you’re buying a 65-hour-a-week management job. With us, you can leave at 2:00 p.m. and the franchise still runs itself.”
While the concept behind Anytime Fitness was clearly a winner, the company’s leadership philosophy—one the founders describe as ROEI or Return on Emotional Investment—is as integral to its success as its business model. Its founders think of themselves as “coaches” helping people, whether employees or gym members, become better people. “There are different levels of being an employer,” explains Runyon. “Some companies are good at reinvesting in employees, but it’s about helping them become better employees. We invest resources to help our employees become better people.”
Like many companies, Anytime Fitness holds employee workshops, but these are often on topics that have little to do with running a fitness facility. “We call them ingredients classes,” notes Runyon, who says topics range from tips on gardening and financial planning to parenting. “At our last annual conference, 50 percent of the speakers and content were about specific business issues and 50 percent were about personal growth. We want to make our employees better people vs. making them better employees. I think that is a differentiator.”