It's keeping people first that makes Geoff Dyer successful
By Neil FrandsenGeoff Dyer, Founder & CEO of Lifestyle Family Fitness
When Geoff Dyer enters a room, people take notice. For those who don't know him, his deep tan and engaging smile are immediately apparent. The minute he introduces himself, one is drawn to his Australian accent albeit softened by living three decades in the States. And for those who know him as the CEO of Lifestyle Family Fitness on the radio commercials, the 6'3" gentleman standing in front of you is as slim and trim as you would imagine he would be.
It's hard to believe this fit adult as a 245 pound overweight teenager growing up in Melbourne, Australia. With drive and determination, he was able to shed the excess pounds and, at age 22, started his journey that would bring him to the United States and eventually lead him to become the CEO of one of the fastest growing fitness companies in the world. But, wherever he has been in his career, it's always been about the people.
"I love this business. I love being around people" exclaims Dyer when asked about what motivates him. Even though he seems to be always busy in new club development, he takes the time to drop in at his facilities when he is in the vicinity.
"Whenever I have a meeting scheduled away from the office, I'll try to drop in to one of the facilities just to talk," continues Dyer. "I like to talk with the front line staff to see how they are doing." These visits are never scheduled so he is sure to get some valuable feedback when he engages the staff in conversation and Dyer realizes it helps build strong relationships. Some may consider this Management by Walking Around but this CEO considers it, "a part of our corporate culture". And, with $80 million in revenues in 2006, this people oriented corporate culture is a key component that sets Lifestyle Family Fitness apart.
The Early Years
Dyer's people skills were honed as a fitness instructor in Oklahoma City. He had moved to the States with his father and quickly showed that he related well with people at the fitness club. His employer noticed his abilities and promoted him to a Management position after only a few months on the job. But two years later, the company was sold and in 1974 it was time for Geoff to move. "I had a choice of going to Texas or Florida at that time", he said. "I liked the weather in Florida better so I came here.
Dyer moved to St. Petersburg where he helped run a small chain of clubs. In 1981, he was approached by a Lakeland businessman who wanted to open a health club in a former dance studio near downtown Lakeland. As part of the deal, Dyer was invited to be a partner in it.
"I had the expertise. He had the money", Dyer said.
The first Lifestyle Family Fitness began selling memberships in January 1982 and opened its doors six months later. With very little competition, membership grew to 2,000 plus members in its first year. Dyer maintained his focus doing everything needed to keep the facility running smoothly. He managed it. He sold memberships. He cleaned the facility. And when the six and seven day-a-week schedule wore him out, he slept in the lobby. His hard work paid off as the club was profitable.
After a year of getting the new facility up and running, Dyer took a trip to Australia. When he returned to Lakeland, he had discovered that his partner used his controlling shares of stock to vote Geoff out of the company. "He thought that running the business would be easy" Dyer explained "so I was out and he took over. He lost money for two years".
Despite the strain in their professional relationship over those two years, Dyer went to his former partner and offered him a buyout option. "He agreed to sell me his shares of the business for the amount that he had invested," Dyer said. "So, for just under $110,000, I was able to take the facility back over". When asked where he got the money, Dyer replied, "I negotiated it for no money down and payment came out of the club's future profits. I even worked out an option to purchase the land". In hindsight, Dyer speculated that his former partner assumed that Geoff would fail and the business would revert back to the Lakeland businessman eventually.
"I paid everything off in a few years" Dyer said with a reflective grin.
In 1988, Lifestyle Family Fitness opened its second location in Winter Haven followed by a South Lakeland location in 1991. That same year, an American Fitness Center failed in Brandon and Chicago-based Bally Fitness took a hard look but passed on the space. "Brandon was nothing like it is today" Dyer said. "They (Bally) felt it was too small a market and too much of a risk." But Dyer moved forward and acquired the space opening his fourth and largest location.
Eight short years later, Bally came knocking on Dyer's door. By 1999, Lifestyle had opened a total of seven facilities, was generating $12 Million in revenue and Bally wanted to buy all of it. "It was nice to know that there was some potential real dollars after all the years of leveraging growth using credit cards and my house," Geoff remembered. When asked what the biggest concern was with the proposed buyout, Dyer stated without hesitating, "The people. The first thing you've got to think about is your employees. Does the culture of the new company line up with the existing culture? How will the employees and the members respond?"
Geoff turned to his friend and advisor Stuart Lasher, Chairman and CEO of the private equity firm Quantum Capital Partners, Inc. In their conversations, Dyer's passion for his business and the people it touched was obvious. Lasher recognized that Geoff's focus was to offer the best and wanted to continue growing the company. Knowing that Dyer's expertise could take the company to new levels, Lasher offered to become an equity partner in the business.
The Explosive Years
The stage was set for growth. Dyer had the expertise and Lasher's firm provided capital for taking the business to the next level. But before they could grow, they had to get the infrastructure in place to support the growth. Gone were the days of a small chain that grew and then found people to support the growth. A new business model was put in place. A new Chief Financial Officer was hired replacing a bookkeeper who had been there since the start. Internal systems were put in place in anticipation of the growth. A new commitment to personal training was executed. Stock options for managers were added creating incentives so that the managers would think more and more like Dyer.
"We struggled for the first two years" Dyer remarked.
Even thought it took two years of transition to get everything in place, the dedication to the restructuring for growth was a modest success at first:
1999 - 7 Facilities
2001 - 12 Facilities
2003 - 17 Facilities
During this time, Ballast Point Ventures provided additional funding for growth and it was time for Dyer to take Lifestyle Family Fitness out of Central Florida. The company accelerated into high gear as evident by its growth in the last few years:
2004 - 19 locations with facility number 20 acquired from CPD Fitness in Jacksonville
2005 - 21 locations with the purchase of an additional 8 California Fitness locations in Columbus, Ohio
2006 - 35 locations with the addition of the opening of a center in Cary, North Carolina
2007 - Currently 38 locations in three states with seven scheduled to open within the next few months and negotiations on new centers to open in Indianapolis
But it's still about People!
With all this explosive growth, you would think that Dyer's concern is on opening a new facility and moving on to the next location. Even though he admits that his time today is spent more in meetings related to growth, Geoff is adamant about keeping the same culture with employees and members as a core component. Running a company in multiple states is a new challenge but it still requires the same commitment to people.
"When I visit North Carolina or Columbus, I go to the clubs and talk to the people just like I do here," explained Dyer. "It's my job to make sure that they understand who we are and where we came from. History is critical". He wants to make sure that the employees realize they aren't working for just another health club, but for a club that truly cares. After all, this is a company that bucked an industry standard by going to month-to-month memberships in the late 1990's.
In 2002, Dyer was President of the International Health, Racquet & Sportsclub Association's (IHRSA) and wrote in their industry magazine that month-to-month memberships work as he found out when he switched over a few years earlier. Dyer observed that it is what the customer wants and it forces the club to attend to customers needs. He extolled the concept to other health club operators that they would need to "stop selling a product and produce a product that sells". Dyer switched Lifestyle Family Fitness from yearly memberships against the advice of his bankers and lenders who thought he was stepping off a cliff. "We had an immediate drop in memberships as people left whenever they wanted," he recalled. "However, we had an immediate increase in interest as people wanted a health club where they weren't forced into long term contracts".
With the new concept came new challenges. Since the member could leave at any time, it became more important to provide a facility and programs that the member would enjoy. Getting accurate feedback as to the member's perceptions of the local facility became critical. A few years ago Dyer instituted the "How to Get Better" program. Once a month, employees who have been around long enough to know the corporate culture and their specific facility are invited to a round table discussion. Different employees are selected from different facilities and include front line employees, personal trainers and even employees whose sole function is to keep the facility clean.
They are asked five simple questions. " What do you like at your facility?" " What don't you like at your facility?" "What's the #1 complaint you hear from members?" "Is the training you receive beneficial in your relationship with the members?" "If you owned the business, what would you change".
Management reviews the information and then takes steps to correct any negatives while sharing the positives throughout all the facilities. The results? Many of the individual Lifestyle Family Fitness clubs have started their own internal "How to Get Better" program as they see the value it brings.
In 2006, Dyer realized that there was a growing national trend of teen obesity. Being an overweight teen gave Dyer a first hand understanding of how obesity affects teenagers. Going against conventional wisdom, he created the Free Teen Summer Membership. All of the Lifestyle Family Fitness locations opened their doors to teenagers with the motto "More Teens-More Active-More Often". In outlining the 2007 program, Dyer explains how he wants to give the opportunity to give teenagers the ability to "engage in a healthy lifestyle and establish a life long routine that includes fitness". 2,200 teenagers took advantage of the program in its inaugural year and Geoff hopes to see even more this summer.
What next?
So what's ahead for Geoff Dyer and Lifestyle Family Fitness? In a message to the Tampa Bay CEO Council last fall, Dyer set the benchmark for growth at 100 units before even thinking about taking the company public. With an annual growth rate of 37% over the past few years, he looks well on his way to hitting that mark. And this growth doesn't come randomly. In talking about what lies ahead Dyer remarks, "We have a commitment to growth.a commitment to training. We are active in our site selection. Our plan is to always have ten to twelve in production at any given time." The drive and determination which accounted for Geoff Dyer's weight loss thirty-plus years ago is now seen again as his drive and determination is helping make Lifestyle Family Fitness grow. Like the Steve McQueen character in Dyer's favorite movie Papillon, Dyer is pursuing his goal with complete focus. There is no doubt that this Tampa Bay CEO is well on his way to reaching any goal he sets and will make sure that the culture he developed over the years will remain intact along the way.
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