here’s an awful lot about my Total Fitness journey that feels down to fate,” says CEO Sophie Lawler as she explains how, 20 years ago, she first started her fitness career with the operator, working as an instructor and membership consultant to pay her rent while studying.
“The majority of my journey was in fact with Fitness First, both in the UK and internationally,” she continues. “By the time I stepped down in November 2017, I had all the battle scars of the mid-market. We’d gone through significant growth, a huge restructure, a massive turnaround, the sale of the business… I knew I’d developed a large skill set that was likely to be transferrable, and as teams began to consolidate and our management roles naturally came to an end, I decided to take some time to work out what really drove me.
“I started picking up consultancy projects for distressed, multi-site businesses in other sectors – casual dining and retail – as I felt it might be time to move out of fitness. But then I had a conversation with someone who mentioned a new CEO at Total Fitness. I knew the business well and felt I had a lot of insight to share, so I looked him up on LinkedIn and it turned out he’d studied the same degree – politics – at the same university as me, at the same time as me, so I dropped him a note inviting him to meet for coffee.
“When we met, I offered to do three to six months’ work on a day rate basis and it snowballed from there. It turned out that he, Rob Payne, was interim and about to step down. I then got a call from the shareholders – North Edge Capital – to meet with them, and I found their approach so very different and so refreshing for a private equity house. They were clearly looking to set me up for success in what would be a first-time CEO role for me.”
A lasting love affair
She continues: “The other selling point was the fact it was Total Fitness. It was a tough gig, but I quickly remembered why I loved the business 20 years ago. It’s a high volume, mass market product that brings full service to as many people as possible – at the lowest possible cost to the consumer, in difficult marketplaces – because everybody deserves that.
“I also remembered why, even 20 years ago, I could see how the business would get tough. Delivering full service at the lowest possible cost is exceptionally difficult, and the changes in the market over the last 10 years have added further complexity. Factor in the macro-economic stuff too and it makes for something that’s very difficult, but very compelling.
“When I left Fitness First, I took with me grit, resilience and a real belief in the purpose of a middle market product. There’s so much opportunity. It would have been too frustrating not to have taken the role.
“The only thing standing in the way was me. I didn’t know I could be a leader. I held a limiting belief that funnily enough had resulted from some positive feedback from previous management. I had been told I was a great Number Two. ‘I couldn’t do it without you, Sophie, you’re a brilliant Number Two’.
“It took numerous conversations with industry people I trusted – Steve Ward [former ukactive CEO] and David Langridge, formerly of Fitness First and now MD of 1FitLife, among them – to realise I could be more than that. They asked me what it was about the CEO role I thought I couldn’t do, and I didn’t have an answer apart from being scared.
“So that was that. I became CEO of Total Fitness, and the first and only female CEO in the UK commercial fitness sector. But this isn’t about gender. I got the role because I’m absolutely the best person for the job.”
A plane with one engine
The results already being delivered at Total Fitness, just one year on from Lawler joining as CEO, pay witness to this: member NPS is up from 17 to an all-time high of almost 50, while membership has grown by 6,000 over the year.
“To put that in context, it’s like having another club,” observes Lawler. “At the close of May, we reached 90,500 fully subscribed (paying) members; we’re servicing 100,000. This higher number includes our teams, their families and populations like our 80+-year-old members who train for free; we have age-related membership prices.”
So, what changes has Lawler implemented to bring about this change in fortunes?
“Our industry starts and ends with people, so I spent my first three weeks visiting our clubs and listening. All my strategic assumptions about the challenges in the business – the commercial model, the operating model, the leverage of the business – turned out to be accurate. But the unknown quantity, and the awesome surprise, lay in our teams. They had immense pride and positive intent. The pride was very local – not much pride for HQ, and very little engagement with the business as a whole – but nevertheless it was something to work with.
“It was clear to me that the embedded performance potential of the business lay in its people, if I could just engage them. But I wanted to be able to quantify things, so I worked with a former colleague and now founder of Coachopolis, Neil Tune, to do some maths around our people.
“I had around 650 employed staff, but with some part-time that equated to 510 full-time equivalent. We then looked at their service profile – how long people had been with the business – because that very much defines how effective someone can be in their role, in terms of hard skills. We made an assumption that, if you’ve been in-role for a year, you can be autonomous and competent – but more than half my workforce, 58 per cent, had been in-role for less than 12 months.
“We made a few more assumptions: that if you’ve been in role for six to 12 months, you’re 75 per cent effective; three to six months you’re 50 per cent effective; and zero to three months 25 per cent effective, because we give so much training when people start that you probably only spend a couple of weeks in-role in the first three months.
“When we did that maths, just on service profile, the number of effective employees came down to 370 full-time equivalent. We then did an anonymous employee engagement survey and discovered our Employee Net Promoter Score was -12, so we knocked another 12 per cent off our total. We knocked a further 10 per cent off to allow for the lack of alignment and purpose within the business.
“In terms of the number of effective employees, this theoretically left me with around 290 – less than 60 per cent of my workforce. That’s like flying a plane without an engine.
“My number one strategic objective for the business, and it remains number one still, was therefore clear: to increase employee connection to the business so we could keep people for longer, build the service profile back up and start to restore the engine.”
Leadership at all levels
Lawler continues: “A business in turnaround – and I’ve learned this the hard way – needs more leadership, more ownership, at all levels. We’ve therefore put significant investment behind developing a new leadership culture: one that’s based on my personal leadership philosophy of authenticity, courage and ownership.
“These are all inter-related. Authenticity takes courage – bringing your whole self to work every day and being willing to consult, to publicly recognise that you don’t have all the answers. That allows people to trust you. It allows them to challenge and question, but then to buy in to and understand decisions that are made. That in turn generates ownership. This is what I bring to the table – that’s my twist on leadership.”
Lawler is leading from the front in spreading this new culture through the company. Not only is Total Fitness going through the process of putting all levels of the business through a three-day Personal Leadership Programme, in collaboration with training organisation The Living Leader, but Lawler has qualified as a master trainer to deliver the sessions herself. “I believe this does a lot to build trust and authenticity in the business,” she says.
She enthuses: “The programme is exceptionally compelling. It’s based on a belief that developing the leader means developing the person – that the skills of leadership apply in every situation, both at home and at work. It’s about taking responsible choices, owning your own behaviour and understanding what personal leadership is. It’s brilliant. I’ve taken 70 people through it so far and it’s going to be dynamite.”
Purpose through values
This new leadership culture is also being reinforced by a new set of values, in a pincer movement designed to connect employees to the purpose of the business.
“Total Fitness has a great purpose,” explains Lawler. “We believe everybody is better when they’re fitter. We also believe fitness is not one-dimensional: if you only grant access to a limited product – to a gym, for example – you aren’t providing access to whole fitness. People need access to a broad range of facilities to be wholly fit, and everybody – including the more challenged markets of the north of England where we operate – deserves that. Because everybody needs it.
“So, it’s a great purpose, but the question was: how to bring it to life? Sure, we could point to all our facilities, but that isn’t very compelling. The only credible way to bring it to life is through behavioural values and people. As a member, you have to feel our purpose, not just see it or be told about it.”
She continues: “But those behavioural values had to be created. To do this, we married employee feedback on what Total Fitness meant to them with the qualities we knew we needed in the business to turn it around. The outcome is five very compelling values we felt our employees would understand, and could behave in accordance with. These are our ‘how’, and they explain they ways in which we bring our purpose to life.
“The first value is ‘Inspire Others into Action’, which is about leadership: always being the best version of yourself and, by creating a place where everyone thrives, encouraging others to do the same. The second is ‘Make it Happen’ – balancing head and heart, but always aiming to do the right thing for the business, team and members, taking the initiative and accepting and learning from mistakes. It’s about empowerment. ‘Proud and Strong Together’ is about trust, knowing what we stand for, valuing each other and the strength of the team. ‘Find a Way to Win’ is about resilience, rising to any challenge, looking ahead with success and continual improvement in mind. And finally, ‘Act with Gratitude’ is about being thankful, celebrating every win, appreciating each others’ commitment and focusing on fun, passion and positivity.”
And the combined impact of the new leadership philosophy and valued behaviours? “It has been so powerful across the leadership team. In January, off the back of all this work, we came out of the blocks so hard that by the end of February, we’d already delivered our half-year membership growth target and achieved 107 per cent growth year-on-year – which was more than double the previous year.”
Equally important, Employee Net Promoter Score (ENPS) is up from -12 to +22 – a swing of 34 per cent – and the proportion of employees in the business for less than 12 months has fallen from 58 per cent a year ago to 45 per cent now. “I’m exceptionally proud of that one,” says Lawler, adding: “This focus on people has unquestionably been the driver of the turnaround we’ve seen so far. We’ve run a limited capital investment programme, but that can’t be attributed with the credit.”
Fighting the fight
Lawler does, however, recognise that work must now be done on the fitness product itself. “It’s a case of priorities when you’re moving a business, when you’re trying to bring a purpose to life. You first have to do it through your people, then through your product.
“The limited round of CapEx at the back end of last year really only brought our fitness offering on a par with other operators. Although the clubs had previously received investment, the fitness product had been seriously under-invested in, and these are large clubs – we could have spent a lot more. Wilmslow, for example, is the second biggest health club in Europe at 110,000sq ft. You can imagine the capital that sucks up. Our other clubs are somewhere between 60,000 and 90,000sq ft, so they also require an awful lot of CapEx. Importantly, though, I’ve learned you don’t need to invest as much if you sort out the people first.
“That said, we’ll work on the fitness product and we have a long way to go with it. We’ll need to raise capital for that, but first of all we have to define the fitness philosophy that underpins our purpose. Only then can we work out what our fitness product should look like and what our investment should be. We should have those answers by mid-August.
“What that will also do is help us understand how we build new clubs in the future. Because we’re going to build another club, but we’re going to build it very differently from what’s gone before, not just at Total Fitness but in the market as a whole.
“I can’t give you timings on that, because we have some key questions to answer first. How are we going to build it? What are we going to put in it? Where should we build it? We don’t just want to plonk a flag in the ground.
“What I can tell you is that it will be big and it will be mid-market. The mid market is a challenging place, but it comes back to our purpose. Low-cost membership and limited service provision generate accessibility to participation and membership, but they don’t generate accessibility to full fitness, which is what we all need. We need a running track, we need wet side facilities, we need a variety of group exercise classes. People need that, and somebody has to do it. Somebody has to stand proudly and do it in the vary hard yard of the middle market, in the market where other people don’t want to operate. That’s our fight and we’re bringing it.
“The local authorities do it, but we do it commercially, which is tougher. But that’s our task. It’s the biggest social purpose in this sector – I’m in the trenches fighting the most purposeful fight in the market – and I couldn’t be more excited about that, or prouder to be doing it.”