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I have seen the mantra of “People First, Always” work in organizations of all shapes and sizes. You could define the byproduct of this approach as engagement, but in “The Affinity Principle,” I extend the definition to include a natural liking, agreement and connectedness within the team that expands the concept of engagement into a state of Affinity! When your talent is supported, focused and engaged, Affinity thrives.
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The following is excerpted from “The Affinity Principle: People First, Always” by Grant Gamble, Chapter 16 (August 2020).
Sweat, tears, vulnerability and authenticity
One of the greatest points of vulnerability in my career happened when my wife, Jana, and I were living in Brisbane, Australia. Our two young kids, Jack and Ellie, weren’t even in school yet and I was consulting with a large firm in the fitness space. An opportunity came up to purchase a small health club chain that included a large day spa and after much debate, we decided to go for it. We had spent a lot of time doing our due diligence and even though the business was losing a moderate amount of money every month, based on my experience and projections, I believed that we could turn it around fairly easily.
On our first day officially working in the business, we started answering the phones and there was call after call from frustrated members who had canceled their memberships months before and were still getting billed. It turned out that there were hundreds upon hundreds of members being billed that had asked for their membership to be canceled, often repeatedly and for months on end.
On paper, the business was losing a moderate amount, but in actuality when we canceled all these entrapped members, the business was losing a seemingly insurmountable amount of money every month.
We had budgeted for losses, but not at this cataclysmic level. This left us completely vulnerable.
It appeared that the general manager of this business had been holding these cancellations over because he was commissioned on the monthly billing income. The sellers claimed they had no idea about what was going on and were not prepared to accept any responsibility. When we spoke with our attorney, the advice we got was that we would need a lot more money than we had to battle this out in court, given the seller’s deep pockets.
Facing the harsh reality of do or die, we went to our team. We had come in with a lot of confidence in our ability to turn the ship around, but we now had to go to the team and tell them that we were unsure of our ability to navigate out of this mess. I explained that I would approach the landlords and appraise them of the situation and ask for some grace over the foreseeable future.
I mapped out our strategy, which involved a huge tightening of belts, curtailing some of the grandiose plans we had for the clubs, and my wife and I would be working an inordinate number of hours to fill the gaps. We also committed to doing a lot of the renovations and improvements that we felt were non-negotiable with our own hands.
The team took this news relatively well. We’d been very transparent with them from the outset and had given them no cause to doubt us to this point. We were incredibly vulnerable, and I believe they genuinely appreciated the predicament we all faced. They agreed to do their collective best to help us get the ship back on course.
We then had to go to the landlords and admit our financial vulnerability. After all of my assurances that we had a really strong strategy and the money to execute the plan, we were going back, cap in hand. Based on what I now knew, our cash reserves would be stripped dry in less than six months. I think the fact that I was completely transparent with them and incredibly vulnerable as a result, both landlords agreed to work with us… that was at least a start.
To cap all this off, the flagship club in the city underwent a rezoning of its free parking spaces, and what had been almost 170 free adjacent on-street parking spots suddenly became metered, charging high inner-city rates. Somehow, our landlord “forgot” to tell us this was happening when we took over the lease for the space. Some members simply quit, while most others had to question if they’d keep their memberships due to the high parking rates. We were down to 10 free parking spaces for members for the majority of the week.
What ensued was the toughest 18 months of our lives.
We put in all of our liquid assets, sold our house and everything that wasn’t bolted down, I cashed in my retirement policy, we took out a second mortgage on our home back in the states that we couldn’t sell because of the 2008 crash, and now our mortgages exceeded the rent we were getting on that house. We subsisted on the minimum draw possible in order to put everything back into the business. We often went to the grocery store wondering if we’d have enough to pay for that week’s groceries.
Our kids, who at the time were 3 and 4 years old, spent a lot of time at the clubs while we worked, and Jana took on the majority of their care. On top of the financial, physical, and emotional stress, that took a tremendous toll.
Jana also took on marketing and taught herself graphic design. Her innate marketing gifts helped push the clubs in the right direction and in her spare time, she taught Pilates, worked in the day spa, on reception, painted walls at night and on the weekends, and took care of two little ones.
I was running constant defense trying to juggle the creditors, keep all stakeholders informed and intact, and squeeze every cent out of the operations. On weekends and during every spare minute, I donned the tool belt and did demolition work and rebuilt spaces to optimize our rentable space. We added kids’ amenities and rentable spaces and each little increment helped.
As we drew closer and closer to breaking even, it seemed harder and harder to cross that line. I would stare at the numbers almost trying to will them over the line. I took to going door-to-door to survey the market and canvas potential members. We spent every waking hour working on the clubs and in the clubs, but time was running out.
The landlords had been incredibly reasonable, but their patience was not without bounds. At this point, the team had not missed a paycheck, but we had asked a lot of them. They helped us with the kids, worked extra hours and gave their very best, even on the worst days. They had become family, but as such, they were in the inner circle and knew that we were fraying at the edges.
When things get this frayed, Affinity seems unattainable. We felt like we were swimming up a raging torrent, not flowing with the current. But at all points we remained open, honest, transparent and subsequently vulnerable.
We learned that Affinity can rise around you, even when you least think it possible.
In the end, I had to take a second job to cover our rent and groceries. We had completely run out of cash reserves. With me working a second full-time job and traveling overseas one week a month, that left the majority of responsibility for the clubs and the kids on my wife, who was exhausted and beyond frustrated with the predicament we found ourselves in. We were completely vulnerable emotionally, as well as financially.
Throughout this saga, we put it all on the table. Our hearts, our souls and literally everything we had to offer. We were completely vulnerable from day one until the day that we started to break even. Almost two years later, we ended up selling the businesses as profitable enterprises. By this time, we had accrued so much debt that we walked away completely empty-handed and exhausted, but our integrity was intact, and we were proud of what we had achieved in a relatively short period of time.
The lessons from this time are etched in my psyche and when we reflect on how we got through it all, we come to the conclusion that it was a lot of things, but most of all it was the Affinity we had created with our team and the frequent and transparent communication we had with our landlords, stakeholders and creditors.
The genuine vulnerability that we had exhibited throughout these trials and tribulations had instilled trust and helped align the power of Affinity.
We had sought the team’s help, their counsel, their support, and received it in return. In large measure, I think it was because of the courage and honesty we displayed when we shared with them the predicament that we found ourselves in.
Jana and I look back on those days and marvel at the fact that we survived. And there is no doubt that the humanity of the situation, the shared experience we had with the team, created the Affinity I reference throughout this book.
“The Affinity Principle: People First, Always” is available now wherever books are sold and can be purchased via StartupNation.com.