How to Measure (and Improve) Your Culture

How to Measure (and Improve) Your Culture

The biggest business buzzword of 2019 is “culture.”

People talk about “improving culture” as a way to improve retention, client acquisition, evangelism … . Everyones want to improve the “culture” at his or her business, but few can actually define it. Until we define it, we can’t improve it. Instead, we take wild stabs at it, like adding foosball tables and free haircuts.

In this series, I’m going to tell you how to define “culture” in your gym. Then I’m going to tell you how to measure it—and how to improve it. Finally, I’ll tell you a secret: There’s something far more important than culture when it comes to keeping staff, clients and yourself engaged.

 

What Is Culture?

 

Your personal culture is the sum of your 1:1 relationships.

Your gym culture is the sum of your 1:1 relationships with your clients.

Your staff culture is the sum of your 1:1 relationships with your staff.

Your culture is not how often your clients visit a bar together. It’s not how long they stick around after a workout or even what they’ll wear to get bonus points in the Open or an in-house competition. Your culture is relationships, and every relationship is 1:1.

You measure your culture by tracking the length of engagement (LEG) of your clients. Great culture keeps clients longer.

 

Culture in the Founder Phase

In the Founder Phase, your culture is the sum of your relationships between you and each client. You’re delivering your service yourself; if you build trust and empathy with your clients, you have a good culture.

A good relationship is a balance between friendship and objectivity. Your clients are not your friends, but your relationship must be friendly. You must stay professionally distant enough to charge money for your service; you must stay close enough to demonstrate you care. It’s not easy.

 

Culture in the Farmer Phase

In the Farmer Phase, your culture is determined by your clients’ relationships with your team and your team members’ relationships with you.

Your team must understand your vision (we call this “The Owner’s Intent”). They must also know that you care about their careers and have plans in place for them (we use the Career Roadmap exercise in the Incubator and Growth programs). They must see the horizon and know they can achieve their career goals on your platform.

Then your team must deliver 1:1 relationships with your clients the same way you would. This is the most challenging part of being a Farmer: handing over the responsibility for client relationships. Every staff person will have different personalities, strengths and weaknesses. For example, one might be incredible at creating workouts for clients but might not have a strong sense of empathy. Or one might be creative but not quite organized enough. For this reason, we always build a safety net into the Farmer Phase: We add a client success manager role for 2-4 hours per week.

 

Culture in the Tinker Phase

In the Tinker Phase, your clients’ relationships should be with your brand. This means they have to align with your company’s values and vision. Now you have six relationships to manage:

—Your client’s relationship with your staff.
—Your client’s relationship with your brand.
—Your staff members’ relationship with their manager.
—Your staff members’ relationship with your brand.
—Your relationship with your direct reports.
—Your relationship with your brand.

In the Tinker Phase, we tell entrepreneurs to build a managerial layer (usually a chief operations officer or general manager, a chief financial officer and a chief sales officer or sales lead). These should be the owner’s three direct reports. In turn, they translate the owner’s intent, vision and mission to the staff.

Good Tinkers should be removed from daily operations but still available to staff who have unique situations. For example, the CEO shouldn’t be the one with the key to the supplies cabinet but should still be available to listen to a staff member with concerns about his or her career.

The Tinker must clearly define brand values. He or she must answer questions like:

“How does our service fulfill our goal?”
“What will we not do?”
“Who is our perfect client?”
“What is the perfect delivery of our service?”
“How far will we go to solve a customer’s complaint?”

She must also define the language and behavior used by the brand. For example, the Tinker must have:

—Staff playbooks.
—A quality control or evaluation process.
—A style guide for brand media.

It seems like the Tinker is too far removed from client interactions to influence company culture. But that’s not true: The Tinker’s role is to define and teach the company culture to key staff who then reinforce the culture by tracking client and staff relationships.

At this level, companies must track LEG as a measure of their client-facing culture; and they must track length of employment as a measure of corporate culture. Many businesses make wild guesses about “employee culture,” adding pinball machines and free breakfast cereal. But they fail to measure the effects of their actions on employee retention. That means they’re not taking their culture seriously; they’re just trying to look as cool as Google.

 

Measure Culture!

 

Like everything else in your business, culture is measurable. That means you can improve culture no matter how poor it is at present. The key is to focus on one relationship at a time and measure your progress.

Maybe monthly pub crawls do build a better culture in your business. It’s possible. But unless you’re tracking LEG, you’ll never know what’s actually helping your business.

Tomorrow, I’ll tell you how to improve your LEG scores. Later this week, I’ll tell you how to improve your staff retention.

The Flywheel Turns on Trust

The Flywheel Turns on Trust

This series is about the Flywheel Principle and how I’ve built our mentorship practice to maximize its effect.

In the first post, I explained what it takes to get your wheel turning in the right direction and then how to build momentum and grow.

The second post showed how your personal flywheel is different from your business flywheel.

In the third post, I explained how you can remove flat spots in your wheel and obstacles from the road.

To close out the series, I’m going to talk about trust.

 

The Axis of Your Flywheel

 

Put a barbell on a rack. Place your hand on the sleeve. Spin it. Track how long the sleeve spins. That’s a measure of balance and friction. Good barbells have sleeves that spin longer.

Now put a 45-lb. plate on the sleeve. Grip the edge of the plate. Spin it on the bar. No matter how long the sleeve spun on its own, it will spin far longer with a plate on it. This is called rotational inertia.

Now put that plate on a rusted barbell that doesn’t turn at all. Spin the plate hard. It might turn a bit … but it will grind against the sleeve. It won’t turn for long. And you’ll have to use greater force to get it moving.

No matter how big your flywheel, it will spin faster and longer on a frictionless axis. And the axis of your flywheel—in business and in life—is trust.

I said that there are six “handles” on your gym business flywheel, and that pushing on any of them will make your business grow faster and last longer.

But if your axis doesn’t turn smoothly—if you don’t have trust—none of your pushing will work nearly as well.

 

The Six Handles

 

First Handle: Teach the Vision

Your staff and your clients know when you’re lying. If you’ll say anything to make a buck, they’ll see it. They’ll know when your values are different from their values. They’ll know whether you’ll have their back or throw them under the bus. But if they trust you, they’ll believe in your vision and pursue it to the death. Read more about Aligning the Vs (vision and values) here.

 

Second Handle: Improve Operations

Your staff and your clients know you’re not perfect. If you say, “I made a mistake. I should have charged more. And I should have focused on coaching instead of selling you open gym,” that’s going to be a difficult conversation. But the outcome depends on trust: If your clients trust you to do the best thing for them in the end, they won’t leave. If they don’t know why you’re making these decisions, or if they distrust your values, they will. And they should. They’ll argue. They’ll join another gym in revenge. They’ll try to recruit other members to go with them. These aren’t rational actions: They’re emotional ones, and they happen because there’s no trust.

 

Third Handle: Upgrade Team

Your staff has to understand their opportunities and responsibilities and trust you to measure them the same way every time. “That teacher hates me!” is now a common complaint among students who get bad grades. That means they don’t trust the teacher to provide equal attention and grading. If you sit with your team and set goals with them, show them their opportunities clearly, answer hard questions and give them feedback regularly, they’ll trust you. If you don’t, they’ll be susceptible to people who want them to fight with you (yeah, they’re out there).

 

Fourth Handle: Keep Clients Longer

When does your bank call you to ask, “How’s everything going in your business?” In my experience, that never happens until you close your account. Then, when the banker calls, I roll my eyes because I know the bank doesn’t really care; it just wants me to leave my money in the vault. Building trust with your clients means constant contact. You must re-sell them on your value. Just like a marriage.

 

Fifth Handle: Sell More

When your clients know you’ll give them the best possible prescription, they’ll pay for your suggestion. When they know you’ll run bait-and-switch marketing to get more clients, they also know you’ll say anything to get more money from them. If they understand that you value fairness, your rate increase won’t be a surprise. But if they see that you just value more clients, more clients, more clients, then they won’t trust you to give their goals much attention. Word gets around.

 

Sixth Handle: Get More Leads

When future clients see an ad, they might not take action. In fact, most won’t. And over time, as the high-trust early adopters move to something else, the rest of us need to trust you before we buy from you. We need to go to your website and see proof. We need to see other clients who look like us. We need to read or watch something to see if you know what you’re talking about. We need to trust you. Even Facebook now tells high-level marketers they need to publish a lot of free content to build authority (another word for trust) on their platforms. Gyms that publish a lot of media spend far less on Facebook ads (sometimes $0). Paying for attention isn’t the same as establishing trust.

 

Trust and Leadership

 

The axis of trust is important in your business. It’s also critical for your personal flywheel (listen to this podcast from Naval Ravikant on “compounding relationships”). But of course, there’s a lot of overlap.

Local physiotherapists and chiropractors refer their clients to my gym, Catalyst, because they trust me as a person. Local parents trust me with their kids because they see me volunteering in the community. And my wife trusts me to work long hours (and travel) because she sees me work hard to be a dad when I’m home.

Trust means that people know you will do the right thing even when it’s hard. That you will make the choices that will ultimately benefit them. That you have their best interests in mind.

Leadership means that you have earned the collective trust of your group.

Where will you lead us?

 

Other Articles in This Series

How to Build an Unstoppable Business
Building Your Personal Flywheel
Removing Speed Bumps

Removing Speed Bumps

Removing Speed Bumps

In this series, I’ve been talking about building your business flywheel and your personal flywheel. I told you how to get each one turning, how to build momentum and then how to keep it going forever.

Now it’s time to talk about the things that stop your flywheel.

 

Flats, Potholes, Roadblocks, Detours

 

First, of course, it’s hard to push a poorly shaped wheel.

Here’s your business flywheel, as a refresher:A yellow circle as a representation of a business "flywheel."There are six handles on the flywheel. Push any one and the wheel turns faster—unless one is missing: Then you have a flat spot. It’s not a wheel at all. It requires ridiculous work to make one simple turn, and you can’t speed up because you’re flat.

For years, marketing was the flat spot on the wheel for many gym owners. You’d upgrade your team through weekend certifications. You’d keep clients longer because you gave them amazing experiences. You’d sign up 100 percent of the people who came through the door. But … almost no one was coming through the door.

So you’d push really hard through the “get more leads” part of the wheel. You’d put out enormous effort. You’d run a short-term challenge or something and make just enough money to keep the wheel barely moving. Phew! Then you’d hit the next flat spot: Your staff would get burned out and leave.

It’s pretty hard to push a hexagon down the road. But that’s what most gym owners are doing every day. We fix that problem in the Incubator.

 

Severe Tire Damage?

Now the wheel is turning smoothly, and you’re working hard to speed it up. You’re getting leads and signing them up. You’re teaching your vision to your staff and the local community, and it’s sinking in. They get it. You’re streamlining operations and giving every client the same excellent value. Faster and faster the wheel turns …

… and then—bam!—you stop dead. Or you hit a bump and lose most of your momentum.

Those bumps could be:

– Low rates.
– Toxic clients.
– The wrong coaches.
– Your inability to make hard decisions.
– Your unwillingness to have hard conversations.
– Your cash flow runs out.
– Your fear.

Of course, your personal flywheel can also hit bumps: your home life, your fitness, your health—these can all derail you.

 

Can You Do the Hard Things?

 

Your job as a leader is to knock the bumps off your flywheel and clear the road ahead. Your success as a leader is 100 percent dependent on your willingness to do these hard things. In fact, it’s the only thing that matters.

It doesn’t matter how much you know, or read or watch. It doesn’t matter how much you pay your mentor. All that matters is your ability to do these hard things.

Can you work hard? Of course you can: As a fitness entrepreneur, you’re used to hard work. You can grind. You can do it for 16 hours a day. But these aren’t the truly hard things: These are the “easy hard” things.

The “hard hard” things are firing a coach, raising rates or telling a client “this isn’t going to work anymore.”

The “hard hard” things don’t usually get easier because they’re big. And they’re rare. You don’t get a lot of practice doing them.

The “hard hard” things are the things that move the flywheel. Not “grinding.” Not reading 1,000 books every year.

 

Help With Hard-Hard Decisions

After working with thousands of fitness entrepreneurs, I know my value as a mentor really comes down to this: Can I help you do the hard-hard things?

We publish information and education every single day. I get three to five emails back every day (and I love them—thank you!). If you follow the instructions in these emails, you will push your flywheel. You will get results.

But those results pale in comparison to the results you’ll get with a mentor. Because experience shows you where to push. And empathy puts another hand on the wheel.

Mentors remove obstacles. Let’s travel this road together.

 

Other Articles in This Series

How to Build an Unstoppable Business
Building Your Personal Flywheel
The Flywheel Turns on Trust

Building Your Personal Flywheel

Building Your Personal Flywheel

In the previous article in this series, I told you How to Build an Unstoppable Business. I used Jim Collins’ “flywheel” concept to illustrate.

I told you how to identify the six handles you can use to roll your business forward. We teach you how to remove obstacles, push on the six handles and get your flywheel turning in the Incubator.

In the Founder Phase, you’re really going to be pushing your flywheel yourself. But if you’ve made a smooth wheel and haven’t placed any speed bumps in your own path (like underpricing), you can still get the wheel turning pretty well.

In the Farmer Phase, you can get other people to help you turn the flywheel. You turn specific handles over to them one at a time. Gradually, your job becomes leadership: getting everyone to push together in the same direction.

And, finally, your job is to have someone else take over the leadership role so that you can work on your own flywheel.

 

The Six F’s

 

One gym is enough to make a living. But entrepreneurs often want more in their lives: They want another business or a bigger stage. They want a wealth platform. I call this the Tinker Phase, and Tinkers build personal flywheels.

The handles on your personal flywheel are:

Fitness—This is your physical and emotional capacity to meet your challenges. Are you ready? Can you manage your stress, your physical output demands—and your response to both? Can you last long enough to finish the race?

Finances—Do you have the capital necessary to invest in your big goals, and are you prepared for the increased financial risk at this stage?

Freedom—Do you have enough wealth to create choice? Are you free to spend your time and money in constructive ways? Do you have enough positive constraints to keep you focused?

Family—This is the sum of all of your relationships. Are you surrounded by the right people? Do your relationships make you happy or angry or sad? Who surrounds you, and where are they taking you? Where are you taking them?

Faith—This handle represents the belief that order exists among chaos, that we are not helplessly falling, that we have control over our destiny, that happiness is attainable.

Future—Do you have a goal? Do you have a clear vision of what you’d like to achieve next? Do you have a plan to get there? Are you focused?A yellow circle that represents a flywheel; it is surrounded by the words fitness, freedom, finances, family, faith and future.

Destination: Smiles

 

Where’s the flywheel rolling to? Happiness.

One of my most controversial articles this year was called “Fat People on Mars.” In that post, I wrote that the ultimate goal of all of this—business, fitness and money—was to achieve happiness. But happiness isn’t a static state: You don’t simply cross the border into heaven, find a seat and sit down for eternity.

Happiness is an active process. To be happy, you have to keep the flywheel moving. That means a balance of challenge and triumph, of focus and creativity, of finances and time. People are happiest when they’re moving.

 

Other Articles in This Series

How to Build an Unstoppable Business
Removing Speed Bumps
The Flywheel Turns on Trust

How to Build an Unstoppable Business

How to Build an Unstoppable Business

Your gym business can last for decades … if you build it the right way.

First, you have to get it moving smoothly.

Imagine a huge, heavy flywheel—a massive metal disk mounted on an axle. It’s three stories tall and two feet thick. Your job is to get the flywheel turning on the axle as fast and as long as possible.

But first, you have to remove the dead spots: the flat parts of the wheel. Then you have to remove obvious obstacles from your path. Then you can start pushing.

But where to push?

 

The Six Handles on the Flywheel

 

There are really six handles on your flywheel—six pressure points where you can push to keep the thing turning.A yellow circle named The Two-Brain Business Flywheel.

Our Incubator program is built to help you smooth out the wheel, remove the speed bumps and then push each one of those handles at the right time. In short, it helps you make the first real turn of the business flywheel.

Think about the big wheel on “The Price Is Right.” You can use any one of the handles and the wheel will turn faster.

Our handles are:

  • Teaching your Mission and Vision to everyone around you.
  • Improving your operations.
  • Upgrading your team.
  • Keeping your clients longer.
  • Selling better.
  • Getting more leads.

There’s no denying it: Your first pushes of your business flywheel are all-out efforts. They’re really hard. But your mentor is going to ensure you’re pushing in the right direction.

After a lot of effort, you’ll get the flywheel to make one complete turn.

As you start to get the wheel moving, you’ll see the first few results. Keep pushing, and the wheel will turn more smoothly. Eventually, it will have just enough momentum to make a full circuit on its own. But keep pushing and the flywheel will start to gain some speed.

Each turn of the flywheel builds upon work done earlier, compounding your investment of effort. It moves a thousand times faster, then 10,000, then 100,000. The huge, heavy disk flies forward with almost unstoppable momentum. You’re not pushing harder, but the flywheel goes faster and faster.

When your flywheel is moving, your job is to keep it rolling down the road to wealth faster and faster.

 

The Value of Consistent Effort

 

There’s never one big push that makes the flywheel turn faster.

If someone said, “Which push really made the difference? Was it the first? The 10th? The 27th?” you’d find the questions ridiculous. But that’s how the media portrays business success: as if one breakthrough moment made all the difference.

What really makes a difference? Pushing the flywheel. Now, in the Incubator, we install those six handles on your flywheel. Then we push on each handle, in order, to make the wheel go around.

Businesses never transform from “good” to “amazing” through one short-term effort but rather through the continuous pushing of the flywheel to make it go faster and faster.

After the Incubator, the next stage of mentorship is what we call the Growth Stage.

In the Growth Stage of our mentorship program, you’ll work to push the flywheel faster and faster.

Every month, you’ll work with a mentor to make better use of one of the six handles. You’ll grab one and push your flywheel faster. You’ll identify obstacles that might slow your flywheel down, and you’ll remove them.

You’ll push the wheel down the road to wealth.

You’ll be upgrading your mentorship and upgrading the tools you use to grow your business. Here are some of them

  1. Monthly mentor calls.
  2. The Two-Brain Dashboard and Roadmap to Wealth.
  3. Masterclasses.
  4. Monthly Highlight PDF with a planner and key action items.
  5. DFY media templates.
  6. Comprehensive guides on topics such as social media, the flow state, Affinity Marketing, how to grow a PT business, business and hiring plans, “intrepreneurship” (to help you build careers for your coaches) and more.
  7. The Two-Brain Bridge Fund for emergencies.
  8. Peer support.

We want to move you closer to wealth. After you’ve done the first hard pushing on your business flywheel, we want to get it moving faster!

The last step is to train someone else to keep pushing your business flywheel so you can ascend to building your personal flywheel. I’ll write about that in the next article in this series.

 

Other Articles in This Series

Building Your Personal Flywheel
Removing Speed Bumps
The Flywheel Turns on Trust

Don’t Skip “LEG” Day

Don’t Skip “LEG” Day

When we teach metrics to business owners, we keep it simple.

Two of the metrics we teach in the Incubator are ARM (average revenue per member per month) and LEG (length of engagement). These are Two-Brain terms, but their simplicity is making them popular with others, so you’ll see them on software platforms and dashboards everywhere soon.

ARM is really a measure of sales and marketing. LEG is really a measure of your operations.

Each is a multiplier of the other. Amazing operations with no sales? You’re multiplying by zero.

Great marketing with low prices and poor retention? Zero. Failure.

We work very hard on sales and marketing. But our specialty is retention, and good retention isn’t about birthday cards and automated emails. Good retention is about systems.

What’s at stake here? An extra $45,000 per year for you without attracting one single extra client or taking on one more dollar of cost.

 

Breaking It Down

 

Let’s make it simple: If you charge $200 per month and keep a client for one month, then your marketing efforts were worth $200.

If you keep that same client for two months, your efforts were worth $400.

If you keep that same client for a year, your efforts were worth $2,400.

If you keep the client for 10 years, your efforts were worth $24,000.

And the cost to acquire the client was the same in every case!

 

Learn to Retain Members

 

Here’s how we improve LEG through mentorship:

1. We clearly define roles. We want one person responsible for tracking clients. This gives the person a clear focus for a few hours every week.

2. We clearly define success. We measure success by increased LEG. Are you getting better at retention or not? If not, we give you follow-up actions.

3. We discuss industry gold standards. What are the best gyms in the world doing?

4. We map the client journey. What happens and when? Listen to our podcast about it here.

5. We set up automations along the client journey. These automations include flags, emails, actions, rewards, badging, etc. Really, all the talk about “10-year gifts” and “sending birthday cards” is irrelevant without a system behind it. Those are all good ideas, but start at #1 to make sure you can do them consistently. Imagine sending half your clients a birthday card or PR text but not the other half … .

6. We track LEG long term. We want to know your LEG score every single month. Some software platforms (like Wodify) are getting really good at this.

 

Dig Into Your Data

 

We work 1:1 with around 500 clients from every continent in the world. We can’t visit every business in person. But using metrics like LEG gives us critical, unbiased insight into their gyms: If their retention score is low, we know there’s an operational problem.

Every one of us thinks our gym is nearly perfect. We think our systems are amazing, that our clients “get us,” and that we’re building some kind of emotional bank account with them. That’s a fantasy. If your service is bad, your clients will leave. And they should.

We’re blind to operational problems because we think our kid is the most handsome in school.

“Every girl should love you, schmoopie! You’re mommy’s handsome boy!” 

That’s why we need objective data, like LEG. And we need to track it over time to see the effect of our changes. Because we’re also totally enamored with our own ideas, when we start something new it’s the best idea ever!—and we tell everyone about it.

“My baby’s got a new haircut! Everyone else is jealous of you, snugglemonster!”

But is the new idea having any real effect? Unless we’re measuring LEG over time, we don’t know.

Objective measurements like ARM and LEG help your mentor remove personal bias from your business and give you clarity. It helps us prescribe action and build your profit. Sales are fun, but (don’t do it Chris) without retention (resist!) you won’t have a (he’s gonna do it!) LEG to stand on. (groan.)

 

Other Articles in This Series

Are You Already too Big?
The Cure for Commoditization
Selling Accountability
Ascending Your Clients