Focus – Using an 80:20 focus when Managing a Health Club

Hard work is important in any business, however, the hardest working business or team does not necessarily produce the best results.

One could be forgiven for thinking that more work completed means better results, however, this can be an illusion.

One valuable way of thinking about work is by using a principle known as the 80:20 rule.

The 80:20 rule or the “Pareto principle” explains how the bulk of our results in life and work comes from only a small number of actions. In other words, 20 % of your actions produce 80% of results or 20% of actions produce 80% of revenue.

Management consultant Joseph M. Juransuggested the principle and named it after Italian economist Vilfredo Pareto, who, while at theUniversity of Lausanne in 1896, published his first paper “Coursd’économiepolitique.” Essentially, Pareto showed that approximately 80% of the land in Italy was owned by 20% of the population; Pareto developed the principle by observing that 20% of the peapods in his garden contained 80% of the peas.

This principle may not be exact in every scenario, however, you will see that in most instances, linear action and result relationships do not occur. In most cases, a small percentage of input results in the majority of the outputs (results)

So how can we use this knowledge in our health club to be more effective and produce better results?

What you focus on in managing a health club is crucial to the end results or revenue that you produce in the long run.

Evidence of health club managers and owners not maximising the use of their time is prevalent and where savvy managers can get an edge over the competition.

For example, when a health club is often underperforming, some key fundamental processes and actions are usually not in place. This includes having a well-developed member retention pathway that is followed by staff and made accountable by management.

I recall a recent example where a health club manager felt they did not have enough time each week to focus on refining or maintaining processes for member retention, yet managed to spend more than 6 hours developing a new outdoor training/bootcamp program.

By carefully evaluating the use of time by using the 80:20 principle, it would be clear for this manager in hindsight that perhaps investing more time into retention activities may have been a more effective investment.

A manager should be constantly searching for 20% of activities that produce the biggest outcomes.
It is easy to believe that all tasks are even, and the more we check off our to do list, the more productive we have been but it’s very important for health club managers to be consistently asking themselves “Am I or our health club team focusing on the “highest leverage” activities?

If we consider the 80:20 rule for a health club we would ask, what actions or activities that we do to produce the biggest result in terms of revenue and profitability?

Now this may be different depending on the stage and maturity of your health club, however, in the early stages, the majority of time should be focused on marketing (to generate new leads) and face to face selling. As a health club manager that may mean the bulk of your time is spent developing sales processes and training your team on selling.

In a more mature health club, the bulk of results will come from member retention initiatives.

Things such as developing member pathways, retention training for staff, retention based reporting, following up with members, interacting with members etc. are high leverage activities.

By understanding the high leverage activities in your health, club this should affect the way you use your time.

If you want to amplify your results, you must first increase your level of investment or activity in those areas. In fact, you should be spending 80% of your time on 20% of activities that produce the biggest results.

If you take an honest appraisal of your current use of time, you may find that you are only spending 5 or 10% of your time on high leverage activities. When this is the case, the reality is that you are unlikely to see any substantial improvements in your health club’s output.

To improve output, you must first input more into few areas that produce the biggest results and you can use the 80:20 principle as a useful tool.