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A Formula For Fitness
Excerpts from Club Business International cover page story on Gale Landers, CEO of Fitness Formula and IHRSA 2000 Board President
By Bradley A. Keeny and Craig R. Waters
If Hollywood were to make a film about the life of Gale Landers, the president of Fitness Formula, Ltd., he would probably be played by Kevin Costner or Robert Redford.
Landers, a quiet, but self-assured farm boy, born and reared in Ottawa, a small town in mid-central Illinois, where his parents raised corn, soybeans, horses, hogs, and sheep. Loves farming, but business is in his blood. Is a serious, subdued student who excels, inspires others, especially in sports. Is president of his class, captain of baseball and basketball teams, and most valuable player (shortstop) in high school. Attends Western Illinois University, in Macomb, on a baseball scholarship, where he earns a bachelor's degree in accounting, a master's in athletic administration. Finally, compelled by his passion for business, he packs his bags, and heads to Chicago.
There, in America's third-largest and, arguably, most vital city, Landers finds his first real job, managing the Riviera 400 Club, and first professional mentor, Herb Salberg. Landers earns, learns, turns the club around, becomes part of the Chicagoland club scene. Then-dramatic turning point-he meets the late Michael Gitlitz. The year is 1984. The Fitness Formula, Ltd., has just been born.
The years pass. Calendar pages fall. Landers in the field, still the shortstop, not letting many opportunities get by. The Fitness Formula (FF) sets up separate, limited partnerships to facilitate growth develops a national reputation for spotting, and capitalizing on, fitness trends; is among the first to partner with hospitals; leads the way in community involvement.
"The Fitness Formula is one of the most dynamic and creative club management companies in the country," notes John McCarthy, the executive director of IHRSA. "And Landers is the guy who finds the deals, puts the deals together, raises the money, does all of the build-outs . . . ."
"He has a real hard-work ethic, and is as dependable as can be," observes Rick Caro, the president of the newly formed chain, Racquetball and Fitness Clubs, Inc. "A real achiever, but modest and self-effacing-a self-made guy who's grown up in the industry, grown up with it, and become one of its acknowledged leaders."
The city lies, content, at Landers' feet, but his eye is on the move, considering his next move, calculating opportunities-to contribute, or to beat his own record. And, each year, he does. The pace picking up. The playing field, larger. The tributes and trophies accumulate. 1999 a case in point: In March, he is elected the president of IHRSA. In May, he marries Anne Tisenga, 29, a financial planner. Outside, in Sundance, Utah. On horseback. (Maybe Redford would be best.) And, he announces a crowning deal, a 75,000-square-foot facility, on top of Union Station-the very center of the city's transportation hub-that FF will develop in partnership with the Rush/Presbyterian St. Luke's Medical Center.
To find out what might now be in store for IHRSA and the industry, CBI asked Contributing Editor Bradley A. Keeny to visit at length with Landers. Keeny's account will have to suffice until the movie comes out.
Club Business International: To begin with, I guess we should say, Congratulations. You got married six months ago. How did you meet your wife.
Gale Landers: At church-the Willow Creek Community Church, one of the largest churches in the U.S. There are about 18,000 people in the congregation. It's a nondenominational Christian church-kind of a church for the unchurched-but one predicated on basic Christian values. We were involved in the same ministry, called Good Sense, that provides simple financial planning guidance for people who are looking for assistance-teaches them about the basic budgeting process.
CBI: Getting back to business-you've always wanted to own your own, haven't you? Any idea why?
GL: My father, who was a farmer, owned his own business, and, other than the weather, had a lot of control over it, over his own livelihood. That was the environment I grew up in, and it appealed to me; it was ingrained in me from the beginning-that entrepreneurial spirit. I wanted to be in control of what I did and how I did it. I also liked the idea of leading a team, of being the captain, because you really need a team to be successful-especially in this industry.
CBI: You have a master's degree in athletic administration. Do you find that what you were taught relates very much to what you actually do?
GL: I think the curriculum just helped to channel my desire, and got me thinking about sports facilities and the management components of a business I thought I might want to become involved in. The accounting courses, however, have proved extremely helpful; for someone who wants to work on the business side of the fitness industry, an accounting background is fantastic.
CBI: All of the Fitness Formula's clubs are known for their design, interiors, and appointments. Some, such as the Gold Coast, are clearly world-class. You've described your club development approach as a hub-and-spoke strategy. Would you care to explain?
GL: We've identified specific areas, in key commuter locations, that are both close to home and close to work. Exactly where we go is driven by the real estate dynamics of the particular site. We do a very thorough psychodemographic analysis of the trade area, including a demographic breakdown on the people living there; this research helps us to size and program a facility properly. One of Fitness Formula's distinct advantages is that, because we're Chicago-centric, by the time we move into a market, someone in the firm has lived there, or has spent a lot of time there-so we tend to really understand an area's subculture.
CBI: If you had to identify the factors that have made it possible for FF to develop clubs successfully, what would they be?
GL: It really comes down, No. 1, to our ability to understand the market for a given site. Even though all of our clubs revolve, in a sense, around Chicago, it's a very big city, with lots of unique neighborhoods, with a wide range of ethnic groups. I think we have a keen ability to analyze and understand these markets. And, No. 2, we finance the clubs properly in that we don't overleverage them; we know and respect the fixed costs a club can carry. And, No. 3, which is probably the most important-we tell our employees, over and over again, that they're our most valuable asset. We constantly instill in them our five core values-which have to do with integrity, safety, friendliness, superior service, and improvement-and it's paid off.
CBI: We understand that FF also stages little conferences, group trainings, for its employees. What's the rationale for in-house instruction?
GL: It gives us the ability to speak directly, and effectively, to the company's specific issues and concerns. We're able to control the environment, and to expound and explain our own philosophy, so we can really customize the sessions and make them more powerful. When everyone is on the same page, working together on the same concept, it also leads, inevitably, to greater accountability and better follow through. It's a much more efficient way to apply a systematic approach to what you're trying to accomplish.
CBI: What are your current goals for FF?
GL: The mission of our company is to grow our Chicagoland network; we want to be in the 10-12-club range, and to fill in specific market areas to support our multiclub strategy.
CBI: We've asked about the strengths of FF. What do you think are your own? As a club operator, what are your most valuable skills or attributes?
GL: Competitiveness-I'm extremely competitive; that comes from my athletic background. I think I'm able to cast a vision for what we want to achieve as a company, to establish core values, to build a team and then lead it-leadership, I guess. I think people regard me as someone who's reserved and modest, and I do try to listen before I speak. One thing I might add is that I have a sense of self-security-based on who I am personally and my Christian values-that provides me with a firm foundation.
CBI: Changing the subject-what are your goals for IHRSA as its current Board President?
GL: There are a number I'm passionate about and intend to pursue aggressively: unfair competition, the 100-million-member initiative, the repositioning of IHRSA as an industry-wide association, its new marketing campaign, the public's perception of the industry, and integration of the Industry Leadership Council (ILC). The ILC-a blue-ribbon group of industry achievers who care deeply, and intend to do something, about unfair competition-wasn't created by IHRSA, but the association has been intimately involved with it from the outset. The council's goal, of raising $1 million to fight unfair competition, has already been reached-the first time, in history, that this sort of war chest has been assembled. IHRSA is filling a very valuable role for the ILC, providing wisdom, cohesion, and direction, and I'm very optimistic about the eventual results.
CBI: One of the criticisms that's been laid at the industry's doorstep is that it hasn't gone a very good job of leveraging one of its most valuable assets-the intelligent, talented, and, in many cases, accomplished people who belong to its clubs, and understand and endorse the importance of exercise.
GL: That's undeniably true, and it has ramifications across the board-whether you're talking about public policy, unfair competition, selling more memberships, appealing to new populations, or enhancing the industry's image. Recently, U.S. Senator Charles Grassley (R-IA), who's 66 and chairman of the Senate Committee on Aging, volunteered to serve as an "older poster boy" for exercise-someone should take him up on it. We need to identify members of Congress who belong to our clubs, believe that our product is important, and may be willing to support what we're trying to accomplish. George Bush Jr., is a big supporter, as was his father, who worked out at The Houstonian. We should do the same with bankers, investors, journalists, and other member constituencies.
CBI: What other unique things do you think the industry can do to promote greater recognition, and appreciation, of the value of regular exercise, and increased utilization of clubs? How do we reach the nonclub population?
GL: Well, I think a lot of very good suggestions are contained in 50 Million Members by 2010: The American Fitness Industry's Plan for Growth, which was authored by IHRSA's executive director; McCarthy identifies 10 major growth opportunities-e.g., families, the baby boomers, special populations, Generation X-and explains how club owners can do a much better job of appealing to and serving these groups. The association has sensitized the industry to the issue, gotten it thinking about new approaches, and people are beginning to come up with some clever, productive ideas. But I'm dreaming about bigger things-such as Congress mandating physical education for schools; or the Internal Revenue Service (IRS) making memberships tax-deductible; or insurance companies subsidizing them. I still hope that, eventually, the Surgeon General's report on health and physical activity will have the same sort of effect the earlier report on smoking did. And I'm confident that technology-which can now document usage and results-is also going to have a major impact.
CBI: FF has obviously been quite successful at forging relationships with hospitals. Is that a viable approach, for the industry at large, for accelerating membership growth?
GL: It is-without a doubt. IHRSA, and a growing number of its members, as well as other club owners, are beginning to recognize the open-ended opportunity that's afforded by medical affiliations of a variety of sorts. They're being to see how partnerships-particularly with hospitals-can help frame a new understanding, mission, definition, of what a health club is and what, in the future, it can be. I think the new model that emerges is going to be a much broader one-that clubs will become something like a one-stop center for a person's health. But, for that to happen, we've got to acquire the specific healthcare skills that, at the moment, we don't have within our industry. Another promising development is the fact that more and more doctors, especially the younger ones, acknowledge the value of exercise.
CBI: The industry seems to be maturing rather quickly on several fronts-for instance, the number, size, and sophistication of the deals that have been taking place recently is impressive. Do you think the industry's finally attained business legitimacy?
GL: Absolutely! It is, after all, a $10-billion industry, and there are tremendous growth opportunities emerging within it. One of my dreams is for our industry to become one of the 'darlings' not just of Wall Street, but of the rest of the investment community as well. There are a lot of companies out there right now that are attracting appreciative stares and flattering comments.
CBI: You've been a member of IHRSA's board of directors for two years now; what have you learned from that experience?
GL: It's been one of the most enlightening and exciting periods in my professional life. IHRSA is the only industry association with members in more than 50 countries, and, as a result, it has both a global perspective and global responsibilities. That forces board members to think in macro terms-in a broader, more analytical and visionary way than they would if managing their own companies-and, in the process, it also forces them to expand, to grow. It really challenges your strategic skills. But one of the pleasant epiphanies that results is the realization that the worldwide industry is poised not only at the edge of a new millennium, but of what seems to be a period of unprecedented opportunities . . . and another is that no one is better positioned to take advantage of them than the members of IHRSA.
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