The arrival in 2018 of a new CEO at health and fitness chain Total Fitness marked more than just a changing of the guard – it saw a dramatic switch in direction that would shift the focus away from the numbers and onto people.
At the time, the chain – headquartered in Cheshire and comprising 17 clubs mostly across the north west of England – was struggling amid a fall in both sales and membership. New leader Sophie Lawler identified the need for a “people-powered transformation” to mitigate a lengthy period of unsettling change that had affected employees’ self-belief.
Established in 1993, Total Fitness features running tracks, Olympic-sized swimming pools and rehabilitation and hydrotherapy services alongside the usual gym equipment. With 600 employees and more than 85,000 members, it has grown impressively. But head of people Andrea Cook, a former regional L&D manager at John Lewis, was frustrated the business wasn’t paying more attention to the link between engaged employees, satisfied customers and profit.
“We had high churn on our front line, which is typical in an industry where students use the job as a stepping stone,” says Cook. “But competing on numbers is a zero-sum game for a mid-market business like Total Fitness, because there are a lot of budget gyms out there. People are our competitive advantage.
“We knew that if we could connect people better to the business, that would make a big difference to engagement, retention, effectiveness and, ultimately, profitability,” says Cook, explaining that the idea of unlocking ‘embedded performance’ quickly became central to the people strategy.
Lawler’s desire to meet front-line teams began the turnaround process but also identified specific problems. “People didn’t know what the strategy was and had no line of sight between their role and the aims of the company,” she says. “People outside the management cadre worked in silos, divorced from the rest of the business.”
The reason for low engagement and high turnover, the pair found, was that many employees were spending too long training new people or delivering ineffective customer service rather than operating effectively. “It was like flying a plane with one engine,” says Cook.
The people team soon doubled in size, thanks to the addition of a new HR business partner and specific support for L&D and admin. And this was followed by people scorecards to give general managers a “bird’s eye view” covering staff numbers, tenure, vacancies, exit interviews, engagement survey results and training records. The aim was to encourage monthly discussions between general managers and regional managers, to increase transparency and accountability around people development.
A set of values was informed by a listening exercise and driven by a steering group of employees from across the business. They were launched at a group-wide summit aimed specifically at heads of department, who had been identified as the least engaged group.
“Sophie was very open and honest about the fact that we had lost our purpose – that is, ‘we believe that everyone is better fitter and that fitness is not one-dimensional’ – and the values would help restore it to the heart of the business,” says Cook. “She admitted we didn’t have all the answers, but explained the progress we had made and what we wanted to improve.”
Each of the five key values – inspire others into action; make it happen; proud and strong together; find a way to win; and act with gratitude – has three components, and they underpin the strategy of connecting people with the business and keeping them longer.
“Now that the values are in place, and people are starting to live them naturally, we can start to build our L&D platform – and re-engineer existing L&D content in line with the values,” says Cook. In particular, she adds, this will mean a focus on both sales and manager training.
None of what Total Fitness has done is rocket science, she admits, but it has already changed the climate in the business, and that’s reflected in everyday interactions: “It goes back to the lack of trust and self-belief we identified. If you can’t trust people or feel they trust you, you can neither challenge the way things are done nor take ownership of your work because you are worried about doing something wrong. It was clear from the engagement surveys that people felt they weren’t allowed to be themselves.”
Cook herself is a case in point. “I used to feel like I had to wear a mask, or several masks,” she says. “Now I’ve been trusted to implement the things I’d wanted to do for a long time. I feel I have a proper voice.”
That’s filtering down into engagement surveys (the proportion of staff who would recommend Total Fitness is up 27 percentage points) and, crucially, into sales. Membership is up and members are staying 15 per cent longer. People-related net promoter scores are, gratifyingly, up significantly.
“Morale has definitely improved,” says Cook. “The senior leadership team have all bought into the people strategy, and we are exceptionally well supported in our strategic focus. We are already reaping the benefits: the business is stable, healthy and growing.
“You can feel the more positive atmosphere as you go around the business. People tell us they look forward to coming to work now.”