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Transcription – Blair McHaney Show 143

Chantal:               This week, we’re going to dive straight into my interview with Blair. I started off by asking him to share his definition of “innovation”.

Blair:                      Innovation is any new idea that gets adopted and adds value, period. I don’t care if it’s fitness business or anything else, and it’s critical that we reframe what innovation is, in order to operationalize it. If we don’t, if we don’t get clear, hard edges on that description, then people leave innovation to our vendors, you know, the people that are really spending money on R&D, when I promise you, somebody at your front desk has innovations that you should be deploying now.

Chantal:               Okay. Talk us through what, or perhaps where, are the opportunities to innovate within our fitness businesses.

Blair:                      Let’s define “product” in the fitness business. In the fitness business, our customers … I just came back from Midtown Athletic Club’s new grand opening of their Chicago … it’s unbelievable, unbelievable facility by the way. Beautiful plant and equipment, but the other thing they have are really great people, processes, policies. They’re constantly listening to their customers, so when you define “product” in our business, you can’t separate the tangibles from the intangibles, because that’s the way people experience the product. So the experience literally becomes the product in our business.

The things that go into making up an experience are certainly the plant and equipment, is it clean, do things work, but it’s also the people that I see every day, the policies that they are being asked to police, the customer-facing processes that I’m taken through, the procedures that the company has for repairing, for whatever it is. All of those things are the product. Everything I named is an opportunity to innovate, every single piece of the product.

Chantal:               It’s interesting you mention the experience, because since I’ve been in the States, I’ve made an effort to go to a number of different facilities, and just a couple of days ago, I went into a particular facility, and I walked out of there going, “That was a 10-out-of-10 experience.”

Blair:                      Oh really? Awesome.

Chantal:               Because of all of those boxes that you just mentioned, all of those boxes were ticked, and it was everything from the front desk experience to the processes that they had within the business, down to the instructor training.

Blair:                      So there’s consistency …

Chantal:               There was consistency.

Blair:                      … and there’s alignment in there, and so that’s when the product is really singing, is when there’s alignment throughout everything, and so when you are intentionally designing around a singular purpose and that purpose, everything that you do becomes a fractal of that purpose, whether it’s to create loyal life-long fans or whatever it is. Then you look at everything, and I mean everything. Like cancellation process, have you really designed it to create a fan out there, or is it designed to capture more money? The onboarding process of your employees, your interview process, how you … Every single one of those things is an opportunity to innovate.

Chantal:               Do you think that businesses often fall down because they don’t think about all of those elements, or they might have a few of those elements correct and a few of them that [crosstalk 00:03:08]?

Blair:                      No, I think they fall down because they look at everything in a silo and not as a single integrated system, and businesses that really differentiate are single integrated systems. Everything makes sense. Compensation, the way that you compensate, doesn’t do damage to the vision of the company. The metrics that you track every day, the things that different managers are looking at within different departments, don’t do damage or do violence to the customer experience. So when you say, “We’re going to build loyalty, and the way we’re going to build loyalty is by delivering a world-class customer experience,” that is nothing but marketing blather until you can embed and align everything in the company. Everything in the company, how you train, the metrics. You’ve got to look at your compensation plans. You’ve got to look at everything.

Chantal:               So if I was a fitness business owner listening to the interview at the moment, and I was unsure as to whether or not I had all of those things in place or I was doing all of that, what would be step number one for me to identify within my own business whether or not I was on track?

Blair:                      Here’s a great test: Assume that a third party was going to come into your business, and that you were not allowed to speak about what your strategy is, and that they were not going to be handed any marketing material about what your strategy is. Two things. And there was nobody in the business. There were no customers in there, and they got to inspect everything in your business. What artefacts would they find that says this is what your culture was about? Think of it like an archaeological dig. I’m here, there’s no people around, what artefacts am I going to uncover that says wow, this was a customer-centric company.

I’m thinking you look at meeting agendas. You’d look at position descriptions. You’d look at compensation plans. You’d look at how they evaluate positions. You’d look at … That’s one thing, is what artefacts exist. The other thing would be if a customer comes in, and you’re in the middle of a busy operating day, and they are watching the interpretive dance of your business and operations, and they had to guess what your purpose was without you putting it on your wall, could they? Could they look at actually what’s happening, because you can do that in some … Go into an Apple Store and see if you can, by looking around, feeling what that … what are they presenting and how display stuff and how they interact with people. Why are there no lines here? What are they … You won’t get it exact, but if you said what are their core values, you’re going to get close.

Chantal:               Get close to it, yeah. Let me ask you this. How important is it for us to have a constant understanding of what real-time customer [crosstalk 00:05:54] is?

Blair:                      I’m so glad you said “constant” and “real-time”. It’s critical, it is mission critical, and I don’t mean the annual, the semi-annual. I don’t mean just Net Promoter Score … love Net Promoter Score, but not just Net Promoter Score. If you’re not constantly have an intake process for customer feedback … I could get into so many details about what kind of feedback you get, whether it’s solicited or unsolicited. Everybody gets the unsolicited off Yelp, and I’m filling out a piece of paper in the gym and that, but that’s all unsolicited. You need to solicit feedback, especially in our business, which is more like B-to-B than B-to-C. There’s a contract between two parties, it’s an ongoing relationship, and that should trickle in every single day into an organisation.

That way if you are doing your job as an innovator and as a change agent, and you’re making changes continuously, that’s how you understand. You don’t run a bunch of reports from the top down once a year, say here’s our scores, here’s the initiatives from the smartest people in the room, hand them out, and then let’s see what happens next year. That just … it doesn’t work. It doesn’t work. That’s why Medallia has grown so fast.

Chantal:               Before we chat further about customer data collection, I know that many of you will be very familiar with Medallia, but just in case there’s anyone that isn’t, I wanted to give you a very brief overview. Through the Medallia platform, what they do is capture customer feedback in real time and deliver insights and actions across an organisation. The process and the information that they provide, basically it empowers organisations and employees to become, as Medallia puts it, more customer-obsessed in their daily decisions. I think it’s probably fair to say that many club owners would agree that they do collect customer feedback, but perhaps they could be more consistent with the process. So I asked Blair to help us understand that, in addition to Medallia, what options are available for club owners and managers to become more proficient in collecting this information from their customers.

Blair:                      You already have some data you can use. You have operational metrics. You have usage data. You have demographic data. And you should be looking at that data differently. I encourage people that when they’re signing a customer up, have some easy way to score them on their previous history. Give them a 1 if they’ve never had a health club membership before. Give them a 2 if they used to have a health club membership, and had one in six months. Give them a three if they’re a current health club member. At least now, you’ve captured another data point where you can maybe start to look at attrition and that.

On customer feedback, it’s really the decision … and God, I don’t want this to sound like just amorphous corporate-speak here … but it’s really the decision as to whether you want to operationalize voice of customer in your business. Operationalize means that it becomes a daily part of your process, not a monthly, not a bi-weekly. It becomes a daily part of your processes, and that it’s easy to layer in, so that suddenly everybody understands what’s happening with the customer journey, everybody at your front lines understands how they’re contributing to the customer journey, and everybody has an opportunity to give their ideas on how to improve the customer journey. Then you’ve operationalized it. That’s really the decision people have to make. You wouldn’t have that intake that frequently unless you wanted to operationalize it, which becomes a …

Chantal:               That needs to be that decision first and foremost.

Blair:                      Yep.

Chantal:               Okay. One more question for you Blair, and that is can you share any tips with us for establishing an innovation culture within our fitness business?

Blair:                      Yeah. Number one would be you have to get customer feedback. Don’t innovate unless you are really trying to understand the problems your customers have, where they’re doing workarounds, and also what they’re raving about. If you’re just making these decisions, we’re going to spend a million dollars this year, and you’re doing this, I guarantee it’s like you’re sailing with navigational data, and you’ve forgotten that there’s a weather out there, you have no weather data. So number one, you should be getting customer feedback continuously.

Number two, make sure that the customer feedback is spread throughout the organisation, and I mean throughout, every department, every team understands the feedback relative to them and they get it at a regular cadence. Daily, some teams will get it weekly, but make sure it’s spread everywhere.

The third thing is more about the kind of culture that you’re going to build and whether there’s a willingness for me to say I have an idea. That’s what I’m going to be talking about on Friday, is what that kind of culture looks like, where people want to say here’s a way to improve the employee experience, here’s a way to improve the member experience. Those are innovations.

The biggest thing … Okay, I’ve got a fourth one, sorry.

Chantal:               Please.

Blair:                      Redefine innovation. Make sure that you redefine innovation with your teams as any idea that can improve what we’re doing, that we can adopt and adds value. Anything.

Chantal:               I’m not going to let you get away quite so easily with that number three, because I want to … And I don’t want to give away what you’re talking about …

Blair:                      No, that’s fine.

Chantal:               … in your presentation, but I think it’s a point of interest for a lot of people, and that is my understanding of what you just said is giving your employees a voice to be able to put forward suggestions. Is that what you’re saying?

Blair:                      Yeah, and quite honestly, in our Fast Five I recommended the book, “Primed To Perform”. That’s what I’m going to be talking about, is why the Primed to Perform, what they call the three direct motivators, play, purpose and potential, why that unleashes motivation, why that unleashes innovation in any organisation or team, and why the indirect motivators of emotional pressure, economic pressure, and inertia kill innovation. And then how to balance those things, so that you get the right kinds of behaviours, because we do have to have tactical behaviour … you know, check the box type behaviour … we do have to have some of that in some places, but it’s really the adaptive behaviour that drives innovation, and so that’s what I’ll be talking about.

Many thanks to Lindsay McGregor and Neel Doshi at the Vega Factor team, VegaFactor.com. I’m going to throw that out there, because anybody can go in there. Their surveys are free, and you can measure your own what they call total motivation, yet there’s a teams survey and there’s a leadership survey. So thanks to Neel Doshi, Lindsay McGregor, and especially Simon Bray from Vega Factor, who we brought here and had him do a workshop on culture with a bunch of our customers. We just did it Sunday here in Chicago.

Chantal:               Is that right? Can you spell that out for us? Is it V-E …

Blair:                      Yes, V-E-G-A F-A-C-T-O-R dot com. VegaFactor.com.

Chantal:               So we will make sure that that link also goes in the show notes. Excellent.

Blair:                      Yeah, great.

Chantal:               So, I’m going to have to come along on Friday now to see this presentation. This is absolutely essential. If people want to get in touch with you, if they want to find out more about your business and what you do, or perhaps just delve into this a little bit more, where’s the best place for them to contact you?

Blair:                      For me, it’s Blair@Medallia.com, but our website for what we do in the fitness business is MXMetrics, which stands for member experience metrics, MXMetrics.com.

Chantal:               Excellent. Well, Blair, thank you so much for joining us today. I really genuinely appreciate your time …

Blair:                      It’s fun. I love it.

Chantal:               … and sharing your knowledge with our listeners.

Blair:                      I love that you guys are like … it’s about the fitness business. I love that.

Chantal:               That is what we’re here for.

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