Insights on Innovation, Risk Taking from 5 Industry Leaders

Did you make a $2 million “bet” during the COVID-19 pandemic? Sounds kind of crazy, but Steve Schwartz, CEO of Midtown Athletic Clubs, did just that.

Schwartz was just one of five industry leaders who shared their thoughts on innovation and risk taking during the COVID-19 pandemic and into the future. Joining Schwartz in this series of short interviews, recorded for the March Future of Fitness: Trends in 2022 virtual event were Carrie Kepple, co-founder and CEO of Styles Studios Fitness; Will Bartholomew, founder and CEO of D1 Training; Bill McBride, co-founder and CEO of Active Wellness; and Andrew Alfano, CEO of Retro Fitness.

To view their thoughts (and what that $2 million “bet” was), watch the video above.

Schwartz kicked off the video at about two minutes in and shared that he categorizes innovation in two buckets: incremental and disruptive.  

“It’s almost impossible for people from within an industry to do disruptive innovation because you have a legacy system, you have something that works, you want to just improve it,” Schwartz said. “Also, we’re really good at killing radical ideas.”

Starting at 19:10 in the video, the conversation with Kepple begins, and in that section, she talked about the lens that her team uses for any decision and spotting opportunities.

“We have one strategic filter we use, which is, is it frictionless, not for us but for the customer?” she said. “But the lens we look through to see if it’s going to be worth it or not is what the customer wants. We try really, really hard not to look through our own lens about anything.”

She also shared an exercise her team does quarterly to “slay zombies” from their business.

At 32:40 into the video, Bartholomew offered insights into how his background playing college football and starting his business from the ground up helped his business survive the pandemic. He did something that most money managers would never advise: he liquidated his personal assets so he could be in all cash.

“That way, I could stand in front of my entire franchise system and say, ‘Hey, don’t let go of any employees. We got you. We’ll worry about royalties after we make it through this,’” he said.  

People respond to the owner and leader of a business taking personal action, he reasoned.

“Some of the most painful moments of my life created the biggest opportunities and the most growth,” he said. “I don’t love them, but when they happen, [with] my personality and my wiring, I have taught myself that now is not the time to retreat; now is the time to step in and actually lean into a punch.”

At 47:53 into the video, McBride shared how he has always believed that success is due 50-50 to luck and hard work.

“Born in America with parents that love me and sent me to college, had good mentors—all those things that I couldn’t control—that’s luck, that’s fortune,” McBride said. “Did I work hard and look for opportunities? Yes. Did I fail sometimes and have bad luck? Yes. So when you talk about opportunities, you got to feel like, hey we’re going to be lucky, and I’m always going to be positive, and I’m looking for those opportunities when they show up. And they show up. And a lot of times if we’re in a negative frame of mind, we don’t see them. So the first thing about opportunity is paying attention and looking for it, being curious.”

At 59:09, Alfano offers insights on innovation from his perspective. He came on board as CEO in May 2019 and had a two-year strategic plan to restructure and transform the brand. And even as the COVID-19 pandemic upended the industry, Retro Fitness stayed on point with that plan, he said.

“So instead of preserving, we leaned in,” he said.

That decision may have come in part from Alfano making decisions from a rewards perspective more so than from a risk perspective.

“I have always been, in the world of the bulls and the bears, bullish,” he said. “If you don’t try it, they won’t buy it.”

Operators need to be cutting edge to keep up with the competition and to stay out in front of the competition, something he does for the company and for Retro Fitness’ franchisees, he said.