Living in the Grey, with Dave Mortensen – Episode 498 of The Action Catalyst Podcast

Dave Mortensen, President and Co-Founder of Self-Esteem Brands / Purpose Brands, continues the conversation with insights on advancement vs perfection, noise vs value, the 80/20 rule of where good ideas come from, listening to the voice not speaking in the room, and how to “live in the grey”.

About Dave:

From cleaning exercise equipment to selling memberships to co-founding the world’s fastest-growing fitness club franchise, Dave Mortensen has done just about everything you can do in the fitness industry.  That wide-ranging experience has helped him become one of the world’s leading experts on “Making Healthy Happen.”  His heartfelt practice of emotional intelligence has earned Dave a reputation, amongst his co-workers and throughout the entire fitness industry, as a thoughtful and generous leader.  And it’s just part of the reason he was named an “Entrepreneur of the Year” by Ernst & Young.

As the President and Co-founder of Self Esteem Brands, Dave leads a global collection of franchises intent upon improving the health and wellness of millions of people worldwide.

In the early days of Anytime Fitness, Mortensen helped spur the company’s growth by overseeing the development and implementation of its integrated security, surveillance, usage-tracking and reciprocity systems.  These days, he’s heavily involved in Anytime Fitness’ evolution from a gym that emphasizes simple convenience to one that offers round-the-clock coaching services, utilizing the latest technology to provide members with support, nutritional information, and a wide array of new fitness training programs.  Mortensen also continues to play an important role in leading the expansion of Anytime Fitness worldwide, frequently travelling to consult with master franchisees all over the globe.

The first Anytime Fitness gym opened its doors in Cambridge, MN in May of 2002.  In the years since, Anytime Fitness has quickly become an international powerhouse — with nearly 7,000 gyms located in all 50 states and nearly 40 countries on all seven continents, serving nearly 4 million members.

Under Mortensen’s leadership, Anytime Fitness has earned numerous industry accolades, including “One of America’s Most Promising Companies,” “Top Global Franchise,” “Fastest-Growing Fitness Club,” a “Top Franchise for Minorities,” and “The Best Place to Work in Minnesota” — four years in a row.

In addition to Anytime Fitness, Self Esteem Brands serves as the parent company to three other rapidly-growing franchises:  Waxing the City – dedicated to providing the finest waxing experience imaginable; The Bar Method – a popular, low-impact fitness franchise with more than 100 studios across 30 states and Canada; Basecamp Fitness – a high-intensity, class-based fitness concept, and most recently Orange Theory, full-body strength training and cardio.

Learn more at SEBrands.com and PurposeBrands.com.

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):

Adam Outland
In this episode, we continue our conversation with Dave Mortensen, the President and Co Founder of Self Esteem Brands, now Purpose Brands, including fitness brands like Anytime fitness, Orange Theory, The Bar Method and others. Weird question, you know you have, you have companies that are focused on they’ll say we’re consumer focused, right? We’re focused on the consumer. And you have some organizations that might say we’re focused on our team, and you can be focused on both. But Dave, if you, if you were like, said, Hey, we actually, we’re part of this culture. We focus on our team first, and through that the customer, we focus on the customer and do everything we can. I mean, how would you explain that relationship?

Dave Mortensen
It’s funny, you either you’re a team or you’re a customer, or you’re or you’re a product, right? A lot of people get enamored with their product, and that can be a gap, too, because we’re so enamored with what we have or what we deliver, we forget about some of the key components. We obsess about stakeholder value. So and stakeholder value changes year over year over year. In fact, strategy has to be aligned to your stakeholder value, and it’s one of the biggest misses businesses will do, because we get really excited about an idea we have that we think is going to deliver somewhere. So an example would be, let’s say we have a new customer journey, a new product we want to deliver to our customer, and our customers love it. They love it. It is like the best thing they’ve seen yet. Now, the but is, the but is to deliver it. It’s harder for our operations people to deliver the product, and there’s no gain for them. So their stakeholder value comes in. How well do you think we’re going to deliver it, even if our customers love the product and everything, but I have no value to it, and it takes me a lot more work to deliver something, and I see no gain by doing it. Guess what? Our franchisees aren’t going to be attracted to that. So when we build something out, we build out what’s called a stakeholder map. There’s no perfection, right? The stakeholder map, you put down a stakeholder map of every stakeholder in the business. And then you take your strategic priorities, your key things, and you go, how does this impact every stakeholder? And stakeholders can be your staff. It can be you as the investors. It needs to be our franchisees. It needs to be their staff. It needs to be our customers. It needs to be our vendors, which we like to call partners. Think of all those stakeholders, and you look at the impact points. Now it is impossible to create a win, win, win, win, win scenario. What you don’t want to create is a win, lose, lose, win, win, lose scenario. So I care more about creating some wins through the organization, but making sure we don’t create losses. Why we do it? Yeah, so you can balance that strategy and redefine it to strengthen it so every stakeholder is either neutral or winning in the scenarios. And if you can create neutral to winning strategies for all of your stakeholders, guess what? The value will get spread across your organization. And every year you’re going to find out, yeah, we got to spend a little bit more time on our customer this year. We got to spend more time on our team, and it’s going to flow. But when you get too caught up on one stakeholder all the time, guess what? You’re losing in other areas, and you’re blinded by and that’s where you create blind spots, and you can’t figure out why you’re not executing that well.

Adam Outland
And it’s, it’s incredibly difficult to find decisions that net out even neutral to wins. I mean, you have to iterate and think through all these angles. You know, Jeff Bezos says you got one way doors and two way doors is a common reference he made in building Amazon, right? These one way doors or decisions you got to really think about, because we when you walk through the portal, it’s going to be real expensive if you have to walk it back right a merger and acquisitions, then you got a bunch of two way doors where, hey, you know, if we test this, it doesn’t work, we can yank it right back, minimal cost. I’m curious, you know, what were some of those one way doors outside of maybe the acquisitions that you made, that that that stick in your mind is like, hey, we really had to put a lot of thought into this, this decision, before we move through that door?

Dave Mortensen
We’ve had many one way doors on, sometimes we won them and sometimes we’ve lost it, right? You have wins and losses on one way doors. We love an agile approach. In most of our innovations, so agile, meaning, you know, let’s not build it all out. In fact, I’ll give you this. I think the biggest weakness of organizations is perfection. Perfection, to me, is growth in advancement. So if you’re always advancing forward, that is perfection. You know, I can say one of my proudest things of anytime, fitness over the last what are we going on? 23, 24 years? What? What that may be is that every year we’ve seen positive growth in our business. We’ve had literally positive growth for 20 plus years and positive store openings for 20 plus years, meaning every year we have more stores than we did last year. That’s really, really, really hard to do, but that’s been a focal point for us to make sure that we always create advancement and not try and get too caught up in perfection, because when you try to be perfect, you miss a lot of the little pieces of the of the puzzle, and all of a sudden that perfection becomes really ugly, or you never advance it. A lot of times, you get caught up in the in the wheel of perfection, and you never get ahead of the curve. I would rather, you know it’s speed over execution. You talk about that all the time. There’s no left and right. In fact, this would be, I’ll go political for a moment. A world of politics, we have so many people that are far left and we have so many people far right, but I’m going to tell you all the answers are in the middle, and until we start meeting in the middle and living in the gray, which is harder to decipher, because you have to hear things you don’t necessarily always agree with. But guess what, if you’re willing to listen to both sides and iterate something really wonderful, you live in the gray. You’ll get a lot more done when you start getting too far left and you get real enamored with a really good idea, but you’re getting a lot of pushback. You’re either going to try and get to the gray, which good businesses do, or you alienate the other side, when you start to do alienations. Guess what? At some point in time, we’re going to run into a place where you burned your culture, the business isn’t flourishing, and you’re sitting there scratching your head, going, Man, this idea is so good. Well, guess what? It wasn’t that great.

Adam Outland
Yeah. I mean, you point to something and that that’s interesting is that, you know, we in these institutionalized businesses that we all end up creating as we scale, when you get to a certain level of leadership, you can get to this place where the institution reinforces that you’re always right. You know that’s it’s kind of a scary place to be because you’ve done this right. I mean, gosh, Dave, you built this huge business. You now, you must now always have the right answers, and the institution kind of reinforces that, because if you say something and you’ve it sounds like you’ve recruited really good people willing to challenge you, but it’s it might be hard to disagree with Dave, because he’s got this this evidence to validate that he makes great decisions, right? And this leads maybe to one of my final questions before we do just a quick lightning round, which is, how do you maintain a culture where people continue to challenge you in spite of your success?

Dave Mortensen
One, you have to be welcome to be challenged, and you gotta, you gotta embrace it and ask for it. As leaders, as we grow in leadership, less, people want to challenge you, and you’re absolutely right, so you need to ask them to, I need to hear your opinion, and that’s where you get curious about the voice not speaking in the room. Always ask the voice not speaking what’s going through their head, because that’s where you’re going to hear some great things. What we tell our company all the time, and I think this is important for business, is there’s an 80/20 rule in almost everything you do. And I’ll tell you this, great ideas of for our organization do not happen at corporate. Do not happen out of my mouth. They don’t 80% of the ideas that come to the table are pretty good ideas. 20% is noisy, right? We all know that. But if you go out to your field, to your customers, your franchisees, and out there, 80% of what they give you is noise, 20% is value. But guess what’s in that? 20% gold, and you gotta sift through 80% of the noise to get to the gold. A lot of people aren’t willing to work hard through the 80% to get to the 20% and inside that 20% you’re going to find gold for your organization. And what they do is they get enamored with their 80% ideas at their business, and they never find gold anymore. You got to continue to strive to find gold.

Adam Outland
That was a great point that, you know, people can be enamored in the surveys and how we listen to our clients and and there can be, yeah, to your point, there’s a lot of noise in those surveys, and they don’t, you know, it’s kind of like Steve Jobs said, you know, we listen, but at the same time, client doesn’t know what the future of the iPod is like. We had to imagine that, but we did, in our listening, find that people wanted access to music, you know, and in there, we can interpret what that might look like for the future of the business. So just quick, lightning round question, Dave, this has been awesome technology. You brought it up, is part of the reason you guys acquire emerged with orange theory. Sorry, what technology have you been playing with that is really fascinating to you right now? What’s been what have you been tinkering with in the technology realm?

Dave Mortensen
You know, like everyone else, AI is so intriguing right now, and we have to be learner mindset and figure out how to utilize AI. I’ve never sounded so smart sometimes because of AI, yeah, AI takes what I say and makes it a lot better, right? So, but I’ll say this in ideas, and I know you went into technology, I’ll say AI is everyone needs to be embracing AI, you know, to have good AI, you have to have great data a lot of organizations, it’s something we’re cleaning up, even in our organization is the data warehouse where all that information is stored. And how do you get to the information? So AI can really work the engine appropriately, right? So AI is a big one. I love Blinkist for an example. You know what Blinkist is?

Adam Outland
Yeah, it’s like the short, short books, right?

Dave Mortensen
Because I have my attention span short. I need something that gets me to the answers quick, because I also am not fast at reading. So when I read, I can get bored really, really quick. Blinkist helps me. So that’s something I utilize for my learning and education, because I can get to the points and operationalize them really, really quick. So tools like that for me to advance my learning is where I get really intrigued, and I know that about myself, and that’s part of having self awareness, of figuring out how you best learn you know, and how you best educate.

Adam Outland
And because you said you don’t read full books as much, the different question I want to ask you here was, who are the people that you’ve spent time with over the last year or so that you’ve learned from in the last year?

Dave Mortensen
You know, it’s funny, you say that my closest mentors in life are the people I’m closest with a example, if someone said, Who’s, who’s a great mentor in your life, it’d be my business partner. He’s been a mentor because he’s different. He has different thinking. He’ll challenge me. I’ll challenge him. I would say my wife, believe it or not, my wife, because she sees life in a way she lives in, in the gray. She will always take the hard route to figure things out and and keeps me grounded in my approach in life, in every aspect of life, when you look at horrible things that are happening in the world. You understand. Everyone wants to take a side of what that is, and we got to take less sides. And she, she teaches me not to take a side and actually dig deeper into the actual solutions, which makes it great. And then I’ve, over the years, I’ve always connected myself with really smart people. And depending on on what my topic is, I’m intrigued by it. I normally look in it and find people that have those expertise so I can grow and learn as well.

Adam Outland
Love it, if you don’t mind just just quick follow up to that one, because you mentioned, IFA, is there a franchise that you’re kind of like, hey, that’s really cool, because you guys have done extraordinary work in that. Is there a different sector, different franchise, where you really admired what they’ve built?

Dave Mortensen
Oh, dominoes. If you don’t love dominoes, and I’m not a Domino’s pizza guy, but I’ll eat Domino’s Pizza, but it’s how they’ve taken an average pizza. Sorry, Domino’s, they’ve taken an average pizza and found a way to deliver it better than anyone else. I mean, their operational excellence around the way they know their consumer better than anyone, and they know their consumer wants to know they they made it the easiest way to acquire pizza. They made it easy way to deliver and track your pizza, and they get it there fast. It’s just an incredible brand. So Domino’s would be one, but there are so many franchises out there, from big to small to average, that you can grow and learn from Chick fil A. It blows me away that you can go on a corner with Chick fil A, and I know why. And by the way, if you got into their organization, guess what? They have holes too. Don’t think there’s any perfection out there. The day you think you found perfection is the day you got blindsided by your own business. And a lot of people do that and but a Chick fil A, the way they deliver. You hit the corner of all four of those fast food restaurants and you you go into Chick fil A, and you go, how are they? Their customer service is so much better than everybody else. They deliver that, and I am amazed by it.

Adam Outland
That leadership development they have is fantastic. Last one, you’ve come, I’m imagining, it’s fair to say, you’ve come a long way in your own development in life. I imagine you definitely didn’t start as a perfect human being when you were born, you probably learned a lot of lessons along the way. What do you think if you went back and advised an 18, 19, 20, 21, year old, Dave Mortensen, what advice would that Dave benefit from hearing you say?

Dave Mortensen
In anything you do, play the long game. I see so many. It actually concerns me today, with all the things going on with equity and money, people want it faster than they because of all the things, speed is so important to us. We want to get there really, really fast. But you know what the journey and embrace, the journey you’re never going to be talking about your best balance sheet ever. You’re not going to talk about how much money you made. You’re not going to talk about you’re going to talk about the experiences you went through, through the journey that you took, and embrace the journey that is my greatest advice I can give to anyone in development, play the long game and give yourself time to learn, grow and experience. If you’re always trying to go to what’s next, you’ll never get the most out of who you are.

Adam Outland
Wow.

Dave Mortensen
You know, it’s spiritual, emotional and mental and physical health. That is my, my belief. That’s my I call it semp. People ask me all the time, what do you do to ground yourself, spiritually, emotionally, is all the relationships you have. How are my relationships doing? Mentally, I feed my brain with learning and always learning, and then last, keeping a physical, healthy body. If I do my semp, right, I’m usually in a pretty good place. And usually, if I’m not doing well, it’s one of the four.

Adam Outland
And your wife will let you know.

Dave Mortensen
Oh yeah, she’ll let me know, that’s the most important relationship in my life. So if I don’t have that right, the rest of the day is probably not going to go as well.

Adam Outland
That’s great. This was filled with wisdom. One might even say this interview is better than the one with Chuck, since you’re minorly competitive.

Dave Mortensen
Well, we’re competitive, so I’ll take that.

Adam Outland
Dave, just really fantastic. I appreciate you carving out the time for this conversation. I mean, you may have just inadvertently written your next book and all the little anecdotes you just laid out. Thanks for taking the time and pouring into the audience here. Deeply appreciate it.

Dave Mortensen
Well, congrats on everything you’re doing. I’ll look forward to listening to how this all comes together, and appreciate you taking the time with me as well.