A little over 2 years ago, I was employed as a fitness coordinator in a struggling facility. Membership was down; classes were poorly attended and frequently cancelled; and the staff was divided and overwhelmed. Operational costs kept increasing while revenue generation seemed to be at a standstill.

Fast-forward to today, and I’m happy to report that I’m now the health and fitness manager in the same facility, albeit
a revitalized one with membership at an all-time high. How did we achieve such a dramatic turnaround? The answers came from within us but required the expertise and facilitation of an external consultant and formal operational review.

The downward spiral of poor financial performance, customer dissatisfaction and low staff morale is an unpleasant journey that no one wants to make. When times are tough, what is a business owner or organization to do? In our case, being a fitness facility within a nonprofit organization offered many advantages but posed many challenges as well. At the YWCA Health + Fitness Centre, we were fortunate enough to have a supportive chief executive officer who approved a comprehensive operational review and external consulting services. The process was enlightening and enormously beneficial, although painful at times. Here’s how we moved up and out of the downward spiral, with tips to help you determine if you need an outside review; a description of what such a review was like for us; and how to survive—and thrive—after a formal operational review.

Do You Need
an Outside Review?

The first question for a facility manager might be “How do I know if I need outside help?” Your bottom line is always your best measuring stick. At the YWCA, we found that our revenues were stagnant while our expenses had been steadily increasing over a 3-year stretch (2001–
2004). Globally, the fitness industry was growing, but our business was at a virtual standstill. In 2004, our expenses were over the top, exceeding our budget by $83,899. At the beginning of 2005, we were faced with the harsh reality of not being able
to keep our doors open any longer. Fortunately, our leadership believed in the services we provided, and gave us a budget of $10,000 to hire the highly recommended consultant John Frittenburg of the JF Group in Mississauga, Ontario, and Kelowna, British Columbia.

We knew we needed Frittenburg’s expertise based on the following factors. See if your facility shares any of these indicators:

  • financial status is one of “hemorrhaging” because you’re so deep in the red;
  • membership numbers fall (our membership dropped from 2,100 in 2002 to 1,900 in 2004);
  • member retention is below the industry standard of 68% (our retention fell from 67% in 2001 to 63% in 2003);
  • all in-house expertise and resources have been utilized and exhausted, with little or no results (we had experienced high staff turnover and maintained an attitude of being more of a community center than a high-end business);
  • staff is so consumed with surviving day-to-day that there is no time or energy left to plan for the future; and
  • current staff cannot recall when operations (facility, membership, programs, services and policies) were last reviewed, updated or examined.

Rather than allowing things to get to the dangerous level, where a full operational review is warranted, you would do well to follow Frittenburg’s prudent advice: “Wise organizations build operational reviews into their regular business planning cycle to ensure that they stay in step with the needs of their customers and are constantly prepared to respond to changes in market conditions.” He states that protecting your market position and strengthening your business model are best accomplished when everything is relatively calm, and you have time for positive and meaningful reflection.

What to Expect in a Review

In commencing our operational review process, most staff had no idea what to expect. Some were dubious that an outside expert would truly know what our organization or facility was all about and what our specific needs would be. How could an outsider fully appreciate our situation and, furthermore, what kind of bizarre sweeping changes were we going to be coerced into making? Our concerns were quickly put to rest in our first meeting, where open and honest discussions about how we wanted to be identified as a facility and how we could creatively adapt to meet and exceed our members’ needs were encouraged. We set aside two full working days to revisit our vision and mission statement, identify our key obstacles and determine how best to move forward, given constraints such as budget, time and staffing.

We were challenged to address what we had been doing well and what we hadn’t been doing well and were encouraged to think outside the box. The most exciting aspect of the process was the complete and total involvement from all corners of the organization: customer service, programmers, directors, cleaning staff. We all had a respected voice and learned a great deal from one another. If we had remained negative, pessimistic and obtuse, we wouldn’t have made any progress. Instead, we chose to bring together key resources for a successful process.

Elements of a
Successful Review

To make your review effective, gather any and all financial reports, facility statistics and member feedback from the past 3–5 years. Then, set aside quality uninterrupted time (i.e., at least 1 day) to meet with staff and the consultant to explore the following:

  • Assess who and what you are.
  • Revisit your mission and vision statements.
  • Reestablish who your target market is.
  • Examine and interpret numbers from financial reports.
  • Clearly identify your operational shortcomings and assets.
  • Apply relevant, industry-trend information to your operations, as identified by research reports by groups such as IHRSA and IDEA.
  • Expend energies and financial resources in the crucial area of member retention.
  • Strive for total staff buy-in regarding the group commitment toward change.
  • Assign “champions” to specific areas to increase individual responsibility and accountability.

Frittenburg says that an “operational review will likely reveal practices, procedures or policies that need to be changed. Therefore, the organization should accept this fact and be prepared to enact changes arising from research and planning activities.” He cautions that sometimes organizations embrace the notion of engaging in a review process but are reluctant to act on its results. So, from the outset, you should establish a mindset that change is not a bad thing, so long as it has been appropriately planned and is adequately resourced. Change can indeed be frightening. Our group became decidedly committed to making the necessary changes to attain the ultimate goal of becoming a thriving, busy fitness facility once again. We felt motivated and united in our common objective.

How to Cope With Change

Some of the changes we made after our review were tough. We had to recognize some hard facts, and respond accordingly. For example, with a dwindling instructor pool and only 25% of membership participating in classes, we knew we had to stop expending resources in certain areas and cut back our class schedule. This change resulted in having to manage the unhappy members who enjoyed our classes at off-peak times. It meant upsetting the few in order to reap the benefits of pleasing the many. The positive spin was that we could better manage a smaller class schedule and would have fewer cancellations. We were also able to afford to offer specialty classes such as yoga, Pilates and indoor cycling as part of regular membership fees, and this fact set us apart from our competition. Other crucial facility changes were put into place based on what we discovered through analyzing our membership profile and usage and industry trends. (See “Operational Review Overview” on page 3.)

Good communication was the key to making a smooth transition with these changes. We quickly recognized that we all had to be on the same page regarding delivering facility information and policy change. Nothing leads to more confusion or frustration than when members receive different information from facility staffers. Frittenburg recommends “frequent, accurate and sensitive communication between the organization and its staff and members throughout the entire process. This begins by making sure that everybody understands the purpose of the operational review and how it might influence them.” Frittenburg suggests forming a clear communications plan that sets out how and when information should be delivered to both staff and members regarding the operational review’s progress, its findings and the expected timing of implemented changes.

Why is a communications plan so helpful? “The beauty of [it] is that it helps to remind senior staff to disseminate information in accordance with a pre-established schedule,” he says. “Otherwise, taking time to communicate sometimes becomes an afterthought, given all that’s involved in performing a thorough review.”

How else can you manage change during and after a review?

  • Commit to following through with the consultant’s recommendations.
  • Revisit your renewed goals repeatedly, and stay true to your vision.
  • Anticipate growing pains, and stay positive.
  • Increase and improve staff and member communications.
  • Manage member expectations (i.e., never promise what you can’t deliver!).
  • Ensure that time is given for staff members to truly get to know each other. Foster the sharing of thoughts, perspectives and opinions in regular departmental and interdepartmental meetings.
  • Make management accessible to the membership, and recognize how this alleviates the burden for frontline staff when dealing with difficult members.

Another important caveat to the process of change was the fact that we were operating on a short-staffed basis. Due to our years of operating at a break-even point—and then at a loss—two staff positions were removed to offset budgetary limits. Under usual circumstances, this kind of major shift would cause an organization to crumble. Providentially, we had a vibrant director who excelled at rallying the troops and helped us
all maintain bright “can-do” attitudes. Through team and individual meetings, our roles were systematically adjusted and morphed in order to absorb the dissolved positions. This process was demanding, but served the important purpose of giving every staff member that much more responsibility, pride and ownership into recreating the facility.

How to Manage Success

Our review was followed by 1 year of upheaval and then by 1 year of sweet success. Our 2006 budget was surpassed by over $130,000, and our total membership is currently at an all-time high of over 2,700. Rather than rest on our laurels, however, we made sure to follow Frittenburg’s advice to set new goals and work diligently on maintaining our new standards. The old adage “Be careful what you wish for” rang true. We achieved success, but also had a slew of new challenges!

How else can you have continued success after a review?

  • Recognize that when you attain goals, you must set new ones.
  • Continue to improve communication among staff and between staff and members.
  • Anticipate new problems associated with a busier facility (i.e., crowding, cleanliness, equipment wear and tear, etc.).
  • Build small but frequent reviews of certain aspects of the operation into your annual business plan. This way, the organization is constantly striving for improvement and is scheduling time and resources to positively adjust its operations, notes Frittenburg.

Frittenburg also emphasizes how important it is to “take time to sharpen the saw,” a concept from Stephen R. Covey, author of The 7 Habits of Highly Effective People. You can cut a lot more wood in less time with a sharp saw than with a dull one. Frittenburg explains that pressures to perform sometimes make it hard to justify the time it takes away from woodcutting to hone your tools—the exact tools that are essential to being successful. In the case of fitness organizations, this means don’t get too caught up in the chaos of day-to-day operations at the expense of taking time to “get sharp” in everything that you do.

Reaping the Benefits

Our facility continues to benefit from the many lessons learned in our operational review. Primarily, we are consistently reminded of the fact that it is far easier to retain existing members than to attract new ones. Rather than looking outside our doors, we changed our focus and looked inward. Although we always cared about our members, our systems and policies weren’t always in alignment with our goals. Nurturing and caring for our members through appreciation programs and motivational events added value
to their membership while enhancing
a sense of community. A fitness facility can and should serve as an individual’s oasis—a place of positive interaction,
accomplishment, well-being and relaxation. So long as we strive to maintain this kind of atmosphere, I’m confident that our current position as a facility of choice will remain.