Innovation is a trending topic in the business world, notably among technology companies striving for exponential growth. Business innovation isn’t reserved for unicorn technology companies though. The health club industry can greatly benefit from innovation programs too.

Club Automation recently sponsored IHRSA’s June webinar in which Matt Parrott, VP of Business Development at Corporate Fitness Works, presented on building an innovation program for fitness businesses. In this webinar, Dr. Parrott defined “business innovation” as an organization’s process for introducing new ideas, workflows, methodologies, services or products.

What is business innovation?

Business innovation is born when a company or organization decides to introduce new processes or products into their existing structure, oftentimes processes and structures that challenge the status quo.  

These changes are meant to affect positive change within the business, like bringing in more revenue or increasing operational efficiency. Whether you’re working on improving existing methods and practices or creating entire programs from scratch, these changes ultimately breathe new life into your business and have high potential to create new value and boost your club’s growth.

Types of Business Innovation

There are three major buckets of business innovation programs. The first is revenue model innovation, where the main objective is to increase profits. When businesses like health clubs are looking to drive a larger revenue stream, they often look to their revenue models as a first point of reference. They evaluate products and services offered, existing pricing models, and the like. Areas for innovation don’t have to be radical or revolutionary, either. Tweaking one small aspect of your pricing structure or membership model could yield significant results.

The second innovation type is business model innovation. This model requires businesses and organizations to identify which processes, products, or services could be iterated upon to boost company profitability. For health and fitness clubs, an example of business model innovation could include partnering with adjacent companies like sportswear suppliers or health conscious companies. It could also include outsourcing certain tasks that aren’t worth your staff’s time, like member billing calls.

The third and final innovation type is industry model innovation. This is when businesses choose to change industry completely. While the most radical of all three types, it’s a way of thinking that keeps businesses nimble to the ever-changing markets in which they find themselves. A textbook example of a company that followed industry model innovation is Virgin, when they moved from airplanes to broadband.

Why is innovation important?

Innovation not only ensures your members are receiving the best value and service possible, but it also gives you a competitive advantage. If your club doesn’t innovate, a competing club will. A common misstep among large companies in general is the tendency to become complacent. There are countless examples in every industry where the incumbent market leader slows innovation while a hungry start-up competitor slowly steals market share.

In the club industry, innovation may refer to programs, class types, technology adoption, equipment or facility layout. Every aspect of your health club is ripe for innovation, and the willingness to test innovative ideas is a massive competitive advantage.

How can you consistently generate ideas?

There is no shortage of ideas in the world, and your health club is no exception. Your club’s community, from staff to members, has ideas about how you can innovate and improve. The challenge is to encourage your community to share ideas, and this is accomplished by making your health club a safe space to give feedback. The best ideas emerge from brainstorming without fear of rejection. Most ideas never see the light of day because people crush it before it can even be discussed.

Like Dr. Parrott mentioned in IHRSA’s June webinar, there are countless reasons to say “no.” The challenge, then, is to develop a process that allows your team to say “yes.” The first step in purposefully getting to a“yes” is to create an innovation process. Effective process components, like Dr. Parrott mentioned in IHRSA’s June webinar, are: idea sharing vehicles(surveys, forms, performance reviews, customer feedback, etc.), idea vetting committee, feasibility study, data collection/due diligence and a pilot program. The pilot program, in particular, can test the team’s patience.Leaders must understand that mistakes will be made, and failure is the most important result of a pilot program.

What does quality innovation look like?

A quality innovation program can invigorate your health club if properly managed. If your health club encourages idea sharing and has an objective system for ensuring only the best ideas win, you are constantly creating margin between you and your competitors. Not only that, but your health club is delivering a consistently amazing member experience.

The signs of a quality innovation program at your health club are: reimagined business models, new products or services, strategic partnerships and new marketing strategies. Challenge the status quo and your assumptions about the club industry and strive to make these signs an obvious part of your business.

Are you ready to innovate and reinvent the way your health club is managed? Schedule your demo today!

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