The Big Question

Cynthia MontgomeryCynthia A. Montgomery (GGFA OC Keynote Speaker)
Timken Professor of Business Administration and immediate past head of the Strategy Unit at Harvard Business School

If you think that strategy is something for nerds, not fitness professionals, think again.

Consider this story.

Last year at a party outside of Copenhagen, a friend introduced me to a restaurant manager who had just returned to the city after years of overseas assignments.   We began talking and he asked what I do.  I said I was writing a book on strategy.  His eyes lit up and he proceeded to tell me his business story.

For most of his career he had managed Ritz Carleton restaurants in various exotic places around the globe.  When his wife got homesick, they returned to Denmark, and he became the manager of a once-prominent restaurant some distance off Stroget, Copenhagen’s main pedestrian street lined with shops, bistros, and life around the clock.   The restaurant had long been known for it’s sophisticated Italian food and had been successful for decades until competing eateries introduced a variety of edgy new formats and cuisines.

Over time, various managers at the restaurant had responded to the competitive challenge tactically, adding all manner of new dishes to the menu, raising and lowering prices, changing décor.  The result by 2012 was that no one knew what the restaurant’s “secret sauce” was all about—literally and figuratively—and the business continued to drift while neighboring restaurants thrived.   By the time my acquaintance was hired, there wasn’t much left to lose.   Taking up the job in the fall, with winter coming fast, he realized he had to think strategically. For him, the process began by asking a simple question:  Why would people walk two-and-half blocks to our restaurant?   In a city with scores of restaurants, it was exactly the question he had to ask – or better, to answer.

strategyThat simple question embodies the essence of strategy.   Whether you’re selling upscale veal or downscale pizza, or managing a gym or a global conglomerate, the spirit in that question cuts to the core of what a business stands for and why it matters.   When customers have many other options, you have to give them a compelling reason to come to you.

The restaurant industry is highly competitive.  It’s easy to get into, customers have a lot of choices (thus a lot of power), and rivalry among players is intense.  The fitness industry faces a similar tough reality.  To survive, even more, to thrive, you must give customers something that means more to them than what others are offering.    You have to stand for something, and that something has to be something that a sufficiently large group of customers value and are willing to pay a sufficiently high price to get.

Strategy is not about doing what everyone else is doing and it’s not about trying to appeal to every customer.  It’s about distinctiveness.    It’s about choosing whom you will serve, why you will matter, and how you will deliver, hour after hour, day after day, on that promise.

For most businesses, and business-owners, these are not choices that are made once in a lifetime.  They are choices that evolve and change as industries evolve and change and as customers evolve and change.   The goal is to be relevant.   For most companies, that is a moving target.

Consider this:  If your business went away –if it closed its doors for good—who would care, really?   How long would it take, and how difficult would it be, for customers to find another gym that could provide those services as well as you did?  The answer to these questions is your business’s added value.   It says why the world is different because the business exists.

It’s another way of asking:  Why do you matter?

Can you answer it?

Register TODAY for the GGFA Owners’ Conference held at the Grand Hyatt in NYC on September 30th and October 1st to hear more …

Franchisees:  register now button

Suppliers:  register now button

About the AuthorCynthia A. Montgomery is the Timken Professor of Business Administration and immediate past head of the Strategy Unit at Harvard Business School, where she’s taught for over twenty years. For six years she led the strategy track in the School’s highly regarded Owner, President, Manager Program (OPM), attended by top managers of mid-sized companies from around the globe.  Currently, she is a core faculty member in the School’s Advanced Management Program.  For more, click here:  http://cynthiamontgomery.com/biography/

 

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About GGFA

The Gold's Gym Franchisee Association is the independent voice of the Gold's Gym franchisees.
This entry was posted in Best Practices, Management & Operations, Membership Sales & Retention, Training. Bookmark the permalink.

One Response to The Big Question

  1. Mike Epstein says:

    Thank you Cynthia! You bring to light exactly what strategy is all about and what we have been discussing as owner’s for quite a few years. The competition and need to differentiate ourselves is now more important than ever. I am really looking forward to continuing the discussion of Gold’s Gym owning the middle position and standing for something and with your help, truly learning and understanding how to develop a strategy to help us grow and thrive! Your big question is one of the biggest we all need to answer! Mike Epstein, GGFA President

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