Creating a High-Performance Culture, with Chuck Runyon – Episode 220 of The Action Catalyst Podcast

Chuck Runyon, the CEO at Self Esteem Brands including the wildly popular Anytime Fitness, covers ROEI vs ROI, the 4 P’s of work, finding your purpose, the business lesson of It’s a Wonderful Life, the balance of work and play, and why Anytime spends the big bucks as a company on tattoos.

About Chuck:

With more than 20 years of experience managing, owning and franchising health clubs, Chuck Runyon has distinguished himself as a leading authority in the field of fitness. Runyon revolutionized the fitness industry when he and Dave Mortensen co-founded Anytime Fitness – an alternative to big-box gyms which typically feature expensive “frills” that few members actually use or need.

Under Runyon’s leadership, Anytime Fitness has earned numerous industry accolades, including the #1 Franchise on the planet, according to Entrepreneur magazine in 2015 & 2016, “One of America’s Most Promising Companies,” according to Forbes, and the “Fastest-Growing Fitness Club in the world,” according to the International Health, Racquet and Sportsclub Association (IHRSA). Additionally, Anytime Fitness has been honored as a “Top Franchise for Minorities” and “The Best Place to Work in Minnesota” three years in a row.

In 2012, Self Esteem Brands, the parent company of Anytime Fitness, acquired Waxing the City under Chuck’s leadership. Waxing the City specializes in providing outstanding, high-quality facial and body waxing services for women and men. Waxing the City has been named in Entrepreneur Magazine’s “Top New Franchise” list.

The Action Catalyst is presented by the Southwestern Family of Companies. With each episode, the podcast features some of the nation’s top thought leaders and experts, sharing meaningful tips and advice. Learn more at TheActionCatalyst.com, subscribe below or wherever you listen to podcasts, and be sure to leave a rating and review!

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(Transcribed using A.I. / May include errors):

Host
Chuck Runyon is the CEO at Self Esteem Brands, which is includes Anytime Fitness and also Waxing the City. And he and his business partner Dave Mortensen, co founded Anytime Fitness is just been an incredible, incredible success story, and they got a new book called Love Work inspire a high performing work culture at the center of people, purpose, profits and play. So Chuck, welcome to the show.

Chuck Runyon
Thanks for having me.

Host
How in the world, wasn’t Anytime Fitness, like the fastest growing gym for like, 10 straight years or something?

Chuck Runyon
It was. And I want to take people back a little bit to this pre digital era, right? We were launching this in like, late 2001 2002 and in fact, we launched our first Anytime Fitness before the first iPod. So there were no smartphone. Was any Facebook. And so there was, you know, this idea of having a key fob that would open up every gym door in the world, right? Was just unheard of. And also, people do it and they go to work because of lack of service, or they might have some safety concerns, and so we really created the category of these type of clubs. They just didn’t exist prior to Anytime Fitness. And you know, I think, like most entrepreneurs, they have that story where, you know, people would tell them this idea is not going to work, and it was no different for us. I mean, friends, family, industry experts said this idea will never work, and that’s always a reminder for any of the listeners out there that you know that every idea seems crazy until you prove that it works, and now it suddenly seems pretty common. So but we, you know, we, we stayed steadfast, hoping the idea would work. We weren’t 100% certain, and we applied ourselves. We created this concept. We launched our first gym in May of 2002 in Cambridge, Minnesota. And then the first couple years, I mean, we’re just scratching and clawing to grow this, you know, and we started to really reach some, some acceleration there in 2005 and then the it just really took off. And from 2005 really, till now. And it’s number one, it’s a testament to the business model. But then number two, the fitness industry has had tremendous growth too, so we’re also riding some of those tailwinds.

Host
Yeah. So for people that don’t know, I mean Anytime Fitness, I think you know, most people kind of get from the name, oh, it’s 24 hours, like, highlight some of the other unique points. So like, what kind of what you’re talking about here with the key fob?

Chuck Runyon
Yeah, so for members, right, prior to Anytime Fitness, you’d have to drive a little bit farther to a neighborhood club, and you could only use it during the hours of, say, 5am to like 10pm or 11pm and but with any time we brought it closer to your home or work, because we’re in a typical strip center that you might find with your drive through or your dry cleaners, your subways, your grocery stores, and so we’re very conveniently located, but also you can access our stores, 24/7, 365, and so you can come in anytime you want. It’s typically about five to 6000 square feet, so they’re a little bit smaller than a big fitness club, yet, so they create a little bit more comfort and intimacy. Yet you you get all the programming and equipment you’d find in a big club. And so that mixture of convenience and connectivity and being part of the community, you know, really appeals to our members. So that was, from a member perspective, very convenient, but from an owner perspective, it was such a simple model, because you didn’t always have to be there and the club still operated, so your payroll costs would be lower. You’d have less headache of having to manage so many people in comparison other franchise opportunities. And you know, we gave our elders some freedom on offering things like personal training or yoga or some things they were passionate about. So it really appealed to both our franchisee as a consumer as well as our members as our consumer.

Host
You have such a clear culture, yet you gave franchisees some flexibility in terms of what you allowed them to offer.

Chuck Runyon
We did, and you know that is, we’re trying to always balance standardization in the franchise so that every club looked and felt the same, but yet we wanted to, like, amplify the community, passion and personality of our owners. And that’s, by the way, not always easy to do, and when done right. I mean, it’s wonderful for the community and for our franchise owners. When it’s done wrong, we have to fix those inconsistencies, and, you know, the experience nationally, but yeah, I mean, we look at Dave and I as entrepreneurs are always fighting for our franchise owners, and in a typical franchise system, I mean, you get no decision. You know, Whatsoever you have to run the playbook, you know, absolutely airtight. And you know, because someone signs a check to us, and it’s a big part of their life savings. Dave and I want to give them a little bit more autonomy with any time fitness they’re going to have in another brand. And so we’ve always kind of encouraged them to bring a little bit of personality. If there’s something they’re passionate about locally, whether it’s a type of fitness class or, let’s say, a charitable cause, they can get behind that to do things locally, and so it doesn’t have to be standardized across the country. A couple of things people are fascinated by that. If you came to our global headquarters here in Minnesota, I think we’re the only corporate campus I know of that has a full time tattoo room here in our corporate headquarters. And over the course of the last 15 years, I’m gonna guess that we’ve spent over a half a million dollars on tattoos, because we’ve had over 3000 people get them, and we either pay for them or reimburse for them. And so the average tattoo is at least 100 to $200 and so someone will send us a photo. They tell us a reason why they’re getting this, any you know, Running Man tattoo, and they can personalize it anyway they want. And so we collect these stories, and it’s always about some personal transformation they’ve made in their life, or they’ve helped someone make they’ve empowered someone to live a better life. And so it always comes back to that, you know, that purpose driven benefit that we’ve given someone or given ourselves. And so it’s, it’s far be bigger than just treadmills. Me open 24 hours. I mean, this is really about changing lives.

Host
So how in the world do you justify reimbursing 3,000 people for a tattoo is driving profit?

Chuck Runyon
You know, thankfully, I wasn’t very good at the finance part of this growing up. I don’t know. I mean, it don’t, don’t get me wrong. We have business optics on this that we have to, we have to measure. But we also use a term here called R, o, e, i, which is return, unemotional investment. And I just believe that a business can do more than just make money. And so I don’t really know how to measure it, other than the fact that, man, it’s like currency for the soul, right? I mean, not everything important can be measured. And so, you know, I just know that we’ve literally changed a person’s life. We’ve changed 10s or hundreds of 1000s of people’s lives, and we may never know that impact, but when our franchise owners put their head to their pillow at night and they go to sleep, man, it just it feels good to know that you stand for something that is meaningful in that community at a time when, unfortunately, the world’s getting to an unhealthier place. You know, our values are that, hey, we’re going to help people like get to their best selves. It may start with fitness and they start with coaching. May start with empathy, but, and I guess that’s just tough to measure, other than you know that it’s, it’s currency for the soul. It’s the only way I can really, really state it. You know that return on emotional investment, and yet you guys are crushing it. Yeah, we will surpass 4000 units in 33 countries, operating in 17 different languages, on five continents. And I think we’re one of only maybe 15 franchise brands to ever do that, and no one’s done it in that amount of that speed, right that amount of time. So we’ve probably likely done something no other franchise brand has ever done before.

Host
So let’s talk about profit, since we’re since we’re on that because so the book is called Love Work. It’s written about a culture, and then you’ve got these four P’s, people purpose, profits and play. So what is your philosophy towards profits?

Chuck Runyon
I mean, look, it is the financial life blood of a business. And this was written specifically for those who are involved in a small to medium sized business. And make no mistake, you have to have financial profits in your business as why we work and the four P’s are a formula that has to be linked together. But we make very clear in the book that if you take out profits, the other three cannot sustain themselves, right where, if you take out, say, purpose, you can still have a sustainable company with, like, people, profits and play. But I mean, again, you have to make money in a business. And by the way, when you’re making money that provides opportunities for your team, you can reinvest in them, and you can change more lives which has more purpose and play. So, you know, financial, I mean, you have to, you have to perform, you have to make money. And so we talk about that, and you know, some of the and by the way, the book, I hope, like, when people read it, they get a sense of empathy for just how tough it is, and how much we admire those who who own their own business. And it tells us some, really, some stories about how we made mistakes, about when we were a smaller business, we just weren’t very good at strategic planning. We weren’t very good at budgeting, and we weren’t very focused in how we apply our resources. And I can tell you if, after doing this now for 20 years and working with small businesses, most small small businesses are not very good at strategic planning. They’re just not very rigorous or disciplined in their financial planning. And if I could go back in time, I wish I can do that. So this book walks you through some of that, and specifically how to do some of that for as being a small to medium sized business and but, but make no mistake. I mean this, you have to make money, you have to show profits to have a growing, successful business. And so, you know, that is the lens we operate from. We also talked about the currency lifestyle, but you know, a lot of it focused on knowing your numbers, knowing your strategy, and making sure. Or that your business is improving and growing.

Host
So talk to me about purpose. How does the company find its purpose, or where does that come from? Or how do you bring that about?

Chuck Runyon
Yeah, so in the book, we talk about like, you know, what if you sell widgets, right? What if you’re not in the fitness space like we are, we give you some tips on how to find your purpose and how to elevate it within your company, amongst all of your stakeholders. So we’re very explicit in that. But I got to tell you, you know, I remember, I’ve been in the fitness industry beyond almost 30 years now, and in my early years, I didn’t use purpose, I didn’t really understand how it would move people, how it would amplify their performance. And then I learned it with Anytime Fitness and the books, they’ll give you some moments on when, like, I had this epiphany, and I started to see the difference on how it, like, really deeply stirs people from the inside, and like, you know, takes them to another level when it comes to, you know, working a little bit harder, asking an extra question. I mean, going the extra mile on behalf of the consumer. And so, you know, if you think just in basic terms of, you know, IQ, you know, using your head, and then what I like to call heart power and brain power. Yeah, you’ve combined those two. And so I really want to make sure that our team has their hearts into this initiative, not just a brain into this initiative. And when they put those two things together, I’m telling you, it really amplifies performance of a team of individuals and and I can just see it in their eyes. And so, you know, in the facts are right, millennials specifically, would rather work for a company they believe in and earn less than work for a company they don’t believe in and work more. In our industry employs a considerable amount of millennials, so it’s important to them that they have values and they can align with what the company stands for, and so and but I actually said, I think this is every generations now is kind of aligning to that. But if you do employ millennials, I mean, they care about more about purpose than maybe previous generations. And so to me, it just comes on performance. So it’s, there’s like, I call it the economics of purpose. It’s, you know, people, I mean, they will get out of they would jump out of bed on a Monday morning ready to tackle that problem because they believe in the mission. They believe in what the company stands for, and as if it’s combining your heart power with your brain power.

Host
What are some things as the leader that you think you guys do that helps sort of cultivate that sense of purpose?

Chuck Runyon
Yeah, one of my favorite movies is It’s a Wonderful Life with George Bailey, and we talk, you know, George Bailey, if you remember, gets a chance to see what would have happened if he was had never been born? Right? How would his town and the people around him been impacted? And so we use that as one of the examples in the book is, what if your company had never existed? Right? Who would be impacted, whether it be providing jobs to some of your employees, or whether it’s the value of your products and services and how they’re making your met your consumers lives better. And so start with, if our business didn’t exist, who would be impacted? And then once you start to see, hey, look, yeah, we are doing something that provides value to people. Now you’ve got to find a way to tell that story. And so we do that in our internal meetings. We actually invest in some videos to, you know, share how we’ve impacted our franchise owners, impacted our members. And so, you know, I think a CEO has to be, in part, a storyteller of how the brand impacts the world, right, how, with the service and product we provide, how it enriches people’s lives. And so we just frequently do that in various forms of medium, whether it is, you know, written, whether it’s oral storytelling at our meetings, at all staff events and at our annual conferences, that’s the signature moment when we invest in some very nice creative videos to explain that, hey, we do more than just make money. We actually impact people in profound ways. And so once you find out how you do it, now you gotta invest in some storytelling. It’s so easy to identify with a cause. I mean, that’s another thing, if you just make something like shoelaces, right? It doesn’t seem like it’s that romantic or that that sexy or life changing. But guess what? Any company can go out there and find the cause to identify with. There are so many, you know, big or micro causes in your community. Find one. You know, you can have your company devote a little bit of time, a little bit of resource, a little bit of money, host some fundraising events, you know, galvanize your team around a cause. I mean, that’s another idea here in the book. It does not have to be a direct link, like we are to health. You know, if you make something that’s a bit more obscure, there’s still no excuse why you can’t infuse some purpose into your company by saying, hey, that’s what we stand for, and we want to help this, you know, this cause or this group of people.

Host
Not to suggest that those of you that are in the shoelace making business aren’t important. You’re saying that this, this storytelling, that’s one of the most important roles of like, you know, the CEO.

Chuck Runyon
I really do, the CEO has to be the one, or, you know, the senior leadership team. It’s about Look, here’s what the values of our organization, here’s what we stand for, here’s the impact that we have. And in our strategic meetings, I mean, we will mix some of these purpose stories to say, look, if we do X, we will get y, like, we’ll get the financial return. But let’s also talk about the you know, what’s going to happen to the frantic center? What’s going to happen to our employees, what’s going to happen to our members. We talk in, sometimes the emotional. And sometimes in what’s very difficult to measure, we talk about that because, again, our team cares about more than just reporting a profit. And so yes, I do think it’s important to get buy in. It’s got to be top down. And I think the CEO has to mention it in, whether it’s a State of the Union to the team, whether it’s, you know, to the network, but I think it has to be part of the storytelling that goes on frequently, and I even do it in social media, whether it is through Twitter or through Instagram or through our internal dashboards. I mean, I’m always trying to put out there. You know, here’s what we do, here’s what we stand for, and here’s how we’re going to improve people’s lives.

Host
Let’s talk about play. You got people purpose, profits and play, and you’re you. You got play as a centerpiece of your culture. Talk to me about the balance of work and play.

Chuck Runyon
I think it is a balance. I think it’s the one big aspect that most leaders really struggle with, because they’ve, you know, they’re serious, right? They want to get serious work done. And so in the book, we talk about there is science behind play in the workplace and how it fosters collaboration and creativity and alleviate stress. And we use terms like, let’s take the work seriously without taking ourselves seriously, and that makes us more approachable, which gives us better relationships with our with our franchisees. But you know, even in our meetings, right? We can be kind of playful, which allows us to to be, you know, to be vulnerable and like put up ideas on the wall that may or may not work or seem foolish, but that may lead to another idea. The simple fact is this, we spend over half our waking hours at work. We do this more than we sleep. We spend more time here than we do with our friends and family. And I just think we should have a little bit more fun. It doesn’t mean we don’t take the work seriously. But you know, seven out of 10 people drive to work like disenchanted with what they’re doing. They’re emotionally neutral, or they hate their work. That’s according to Gallup, and that has not moved in like, 20 years. Seven out of 10 people hate their work. I’m like that to me, seems like a miserable existence. I want to drive to work something I’m going to devote over half my waking hours to at something I enjoy, with people enjoying something I stand for, and so I gotta have fun. And you know, I’m telling you, there is you can there’s a science behind it. It is another one of the four P’s that just elevates your team’s performance. And I know leaders have a tough time like embracing it, but if, but if you read the book, it has ideas in there, it’s got tips in there, it’s got some stories there, and it has the data and science to show that play in the workplace makes sense.

Host
Alright, I have one more question for you. So before that, where do you, where should people go, Chuck, if they want to connect with you, or, you know, learn about the book, or whatever.

Chuck Runyon
They can get the book on Amazon. It is just simply Love Work. One word, by Chuck Runyon and Dave Mortensen.

Host
Awesome. Well, the last thing, if somebody is listening, let’s say they are a medium sized business owner, a big business owner, even small business owner or whatever. What’s the very first thing you would tell them, the first thing you can do that will start to move the needle on restoring the health of your culture.

Chuck Runyon
Be very transparent, be very vulnerable, and get your team like just simply go sit with them, asking questions. Say, Hey, I would love to improve the workplace culture here. I think we all would, right. We all want a better place to work. How can we do that? I mean, just your team is eager to give great ideas and to give perspectives, and they want a great workplace environment too. They really do. And so this is not just all dependent on the leader, right? Just simply go to them and say, I don’t have all the answers, but let’s make a goal here in the next year to have a great workplace environment. That is that’s all about high performance, but can also be about more. It can be, we can have some fun along the way, and we can, we can impact some people. How can we do that together? So I think if you really bring the team in, and they all buy in, and they can all weigh in, man, you get you suddenly got the whole team aligned to like making this a great place.

Host
Chuck Runyon, Chuck man, thanks for being an innovator and for advancing the currency of the soul. I really appreciate it, man.

Chuck Runyon
Been a pleasure. Thank you very much.