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Strategic Planning for Club Executives

Bill McBride Founder, President & CEO Active Wellness & BMC3

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What Happened To These Brands?

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Industries That Have Died

Horse & Buggy Railroads (in historic form) – Government Intervention Arcades Music Stores / CDs / Remember Cassettes Video Stores Book Stores PDAs Pay Email Accounts – American Online Dial Up Getting Film Developed Maps Newspaper Classified Ads The Landline / Long Distance Charges / Calling “411” Public Pay Phones VCRs / Fax Machines Phone Books, Dictionaries, Encyclopedias Remember “Floppy Disks” and “Tapes” “Buttons” / BlackBerry Human Touch / Boundaries / Paper

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Objectives

²  Create a vision, mission and core objectives

²  Create a Strategic Plan

²  Use strategy for decision making

²  Understand your market and competitive landscape

²  Develop your company culture and align staff goals to deliver your Strategic Plan

²  Create your Value Proposition & Value Chain

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Blah, Blah, Blah…

What are you doing long term to not only survive

but thrive?

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8 out of 10 businesses fail… Why?

Forbes/Entrepreneurs – Eric T. Wagner

#1: Not really in touch with customers through deep dialogue

#2: No real differentiation in the market (read: lack of unique value propositions)

#3: Failure to communicate value propositions in clear, concise and compelling fashion

#4: Leadership breakdown at the top (yes — founder dysfunction)

#5: Inability to nail a profitable business model with proven revenue streams

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How do we “NOT” become obsolete?

How will you not become obsolete as a company and us collectively

as an industry?

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"Only three things happen naturally in organizations: friction, confusion, and

under-performance. Everything else requires leadership.” ~

Peter Drucker

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All organizations are perfectly aligned to get the results they are getting…

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Getting & Keeping Customers

²  “The primary job of a business is to sell something to its customers. Everything else - the cleaning, the organizing, the stocking, etc.- is also important but not the real reason you open your business.”

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Definition

²  strat·e·gy noun \-jē\

²  A careful plan or method for achieving a particular goal usually over a long period of time

²  The skill of making or carrying out plans to achieve a goal

²  First known use 1810 – First military applications date to 6th century BC

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Definition

²  1. A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem

²  2. The art and science of planning and marshaling resources for their most efficient use. The term is derived from the Greek word for generalship or leading an army

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Synonyms

Arrangement, Blueprint, Design, Game, Game Plan, Ground Plan, Master Plan, Program, Project, Road Map, Scheme, Plan, System

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General Patton

²  It is a historical fact that limited supplies in General Patton's control during WWII resulted in far greater battlefield success than the same supplies would have in the hands of lesser generals

²  Why?

²  Two characteristics defined Patton’s style and approach: 1) Clarity in purpose and 2) Communication, coupled with absolute accountability

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Strategic Approach – 3 Parts

²  Understanding the current state environment

²  Understanding the desired future state environment and desired outcomes

²  Developing the strategy and planning for the implementation of a successful approach

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²  Execu&on  without  strategy  is  dangerous  ²  Strategy  without  execu&on  is  worse  than  meaningless  –                

it  causes  a  lack  of  faith  ²  Good  strategy  requires  strong  discipline  –  saying  no  to  

many  good  ideas  so  you  can  focus  on  the  good  ideas  you  already  have  

²  Being  great  at  1-­‐3  strategic  ini&a&ves  is  a  stronger  posi&on  than  being  mediocre  at  4-­‐6  strategies

Execution & Strategy

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What Are Your Metrics?

Jack Welch from GE said:

“If I had to run a company on THREE measures, those would be…”

•  Customer Satisfaction•  Employee Satisfaction•  Cash Flow

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Don’t Ever Shoot Yourself! Poor Design Can Cause You To…

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Vision – Mission - Values

Vision

Mission

Our vision is to make fitness more fun, accessible, and welcoming for all. Our vision is to make a lasting positive impact on the communities we serve.

Our mission is to build and inspire healthier, active lives through high touch interactions and technologies that support a better quality of life.

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Active Core Values

Our core values exemplify who we are, what we believe and what we hold dear. They also set the tone for continuous improvement and our goal to raise the bar.

Authenticity

Community

Teamwork

Innovation

Versatility

Excellence

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Your Vision

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Your Mission

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Your Core Values

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Value Proposition

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Useful

Usable Desirable

What will you charge?

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Value Chain

² Determining the costs of delivery on every level

² Deciding on what you will offer and what you will not offer within the cost/expense model you can support with your value proposition and profit optimization

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Simple Practical Place This Shows Up…

² Someone on the team wants to buy something because “We Need It!”

² Who Needs It? GM, Fitness Director, Member or Prospective Member?

²  If we buy it – what do we gain?

²  If we don’t – what do we lose?

²  If you can’t answer these – why buy?

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Elevator Pitch

²  Why was your club founded?

²  What are you famous for?

²  What makes you different in the market place?

²  What can you say about your club that no one else can say?

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Elevator Pitch

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Michael Porter Harvard - WSJ

²  The serious study of strategy is usually credited to “Competitive Strategy,” a landmark book published in 1980 by Harvard Business School Professor Michael Porter.

²  In the classical economist’s view of the world, numerous players in a market compete against each other, driving prices down and quality up, and keeping profits modest. In Mr. Porter’s view, strategy is all about escaping that model of “perfect competition,” and instead creating a strong position for your product or service that allows it to garner outsized profits.

²  He cites five key competitive “forces” that will determine the ability of your product or service to achieve a strong strategic position:

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5 Forces

² 1. Entry

² 2. Threat of substitution

² 3. Bargaining power of buyers

² 4. Bargaining power of suppliers

² 5. Rivalry among current competitors

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3 Generic Strategies to Create Superior Profits

²  Overall cost leadership. If you keep your costs lower than anyone else’s, you can sustain profits. This was the strategy of computer maker Dell Inc., for instance, or of Wal-Mart Stores Inc.

²  Differentiation. If you can create something that is valued as unique – think Mercedes automobiles, or Apple computers – you can succeed in making more money than others in the industry.

²  Focus. By focusing on the unique needs of a particular group of buyers, a particular geographic region, or a particular segment of the product line, you may be able to earn above-average returns.

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“Stuck in the Middle”

²  Porter argues that it is critical that companies make clear strategic choices about their approach. The worst position, he argues, is to be “stuck in the middle,” without either clear price leadership, a clearly differentiated product, or a distinct focus.

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“Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne

-WSJ

²  “Red Oceans” vs. “Blue Oceans”

²  Cirque du Soleil, the Canadian company that redefined the dynamics of a declining circus industry in the 1980s.

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4 Actions

²  Which of the factors that the industry takes for granted should be eliminated?

²  Which factors should be reduced well below the industry’s standard?

²  Which factors should be raised well above the industry’s standard?

²  Which factors should be created that the industry has never offered?

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Blue Oceans Approach

²  Businesses should focus less on their competitors and more on alternatives.

²  They also should focus less on their customers, and more on non-customers, or potential new customers.

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Notice Three Things On The Previous Slide

•  Sustaining Technology – Bringing a better product into

an established market •  Low-End Distribution – Addressing over-served

customers with a low-cost business model •  New Market Disruption – Compete against non-

consumption

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For Example in my world…

Club O is a star: High Market Penetration / High Growth Opportunity – FEED IT Our Free Standing Studio Model: Question Market – Low Penetration / High Growth Opportunity Club N is a Cash Cow: Limited growth opportunity – High/Stable Penetration Club S, C, A: Dogs – Mature Penetration / Limited Growth & losing $ - Sold 2 & Closed 1

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Dr. W. Edwards Deming “The Deming Cycle”

² Another version: OPDCA (Observe) or PDSA (Study)

²  In Six Sigma programs, the PDCA cycle is called “define, measure, analyze, improve, control (DMAIC)

Continuous Quality Improvement

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Maslow’s Hierarchy of Needs

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Gary Hamel’s Pyramid of Human capabilities

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Tom Chandler

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McKinsey’s Three Horizons of Growth

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SWOT Analysis

Strengths Weaknesses Opportunities Threats

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Strengths

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Weaknesses

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Opportunities

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Threats

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People Performance Grid

High Values / Low Performance High Values / High Performance

Low Values / Low Performance

High Performer / Low Values

V A L U E S

PERFORMANCE

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High Performer / High Values

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Low Performer / Low Values

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Low Performer / High Values

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High Performer / Low Values

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Measure It

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“Leadership is the art of accomplishing more than the science of management

says is possible.”

1 + 1 = 3

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Strategy Outcomes

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3 Things You Will Act Upon…

1.

1

2

3

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Developing the Strategic Plan

² Creating the Strategic Plan

² A Template has been provided for your use…

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30-60-90 Day Operating Plans

²  People

²  Product / Program (Service)

²  Production

²  Club Specific / “Hot Spot”

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People

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Product/Program (Service)

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Production / Revenue

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Club Specific / “Hot Spot”

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30-60-90 Day Planning Initiatives…

1. 1

2

3

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Contact Information

Bill McBride

Founder/President/CEO – Active Sports Clubs & BMC3

Cell: (415) 299-9482

Email: BillMcBride@BMC3.com

Email: Bill.McBride@ActiveSportsClubs.com

www.linkedin.com/in/billmcbride | www.BMC3.com