11 May Les Mills: Uncertainty provides opportunity
Rachel Bevans from The Healthy Brand Company interviewed Ryan Hogan, CEO of Les Mills Asia Pacific to understand what they’re doing differently in response to Covid-19. This case study was written for First500, Australia’s professional network for mid-sized business
Setting the context
The core business of Les Mills Asia Pacific (LMAP) lies in licensing exercise programs to gyms, while their second tier delivers instructor training and development. While LMAP services Australia and South East Asia, the business itself has been impacted by the closure of clubs all over the world, says Ryan Hogan, CEO of Les Mills Asia Pacific.
“Les Mills is primarily a business-to-business organisation built on relationships and our whole ‘why’ is to create healthier businesses by helping more people fall in love with their club,” Ryan told brand consultant, Rachel Bevans, a regular contributor to First 5000.
“The healthier their business, the healthier our business,” Ryan explained.
Since 23 March 2020, when the clubs began closing, COVID-19 has severely impacted LMAP and its customers, with virtually all revenue disappearing for the duration they remain closed. It is expected that income will increase to around 65% and that it will take the better part of 18 months to return to pre-COVID-19 levels.
Whilst Australia is in a good position, Southeast Asia is less certain.
“I think we stand to come through this quite well,” said Ryan. “We’ve been working very hard to support our clubs and instructors, and the feedback we’ve received has been resoundingly positive and appreciative.”
So whilst much of the revenue has gone, Ryan and his team are busier than ever.
“Uncertainty provides opportunity,” he said “and harnessing those opportunities is strangely energising and exciting.”
“We’re working in extraordinary times. This situation requires more thinking and often involves decisions that would ordinarily never even be considered. And because of this, my senior leadership team and I have to be across all the decisions; it’s currently very difficult to delegate. Our whole business is relationships-based so we have to work harder to turn things around for our customers, so we can turn it around for us.
Ryan told Rachel Bevans he joined Les Mills because it’s purpose-driven and aims to create long-term value for all its stakeholders. Employees are strongly aligned to the organisation’s purpose: “we’re for a fitter planet”; and its three core values: “one tribe”, “be brave” and “change the world” drive their behaviour both internally and externally. So whilst they’ve had to abandon their strategic plan, LMAP’s purpose, values and culture have helped them stay on track through the COVID-19 challenge.
“By using our value propositions to guide our decision-making, it’s relatively easy to see what we need to do. Because if the action will support our goal to help create healthier businesses by helping more members fall in love with the club then we’ll do it. But if it doesn’t support this value proposition, then we won’t.”
What has been important during the initial stages of COVID-19?
Employee engagement has been critical, and we’ve achieved this using clear and regular communication, weekly check-ins each for the teams in Australia and Southeast Asia, virtual drinks with the Australian team, Zoom workouts with the team in Southeast Asia, and a monthly all-staff check-in meeting.
Club engagement has been achieved using regular check-ins with key accounts, and constant contact with smaller accounts. We also created and delivered a series of support webinars for our club customers located across Australia and Southeast Asia.
Engagement with our instructor team has also remained a priority, and we’ve achieved this via communications from both a global and local level, including the development and delivery of a series of support webinars.
It’s also been important to stay connected with suppliers and industry bodies. Also, the senior leadership team currently meets on a weekly basis, to start rebuilding our strategic plan.
What have you been doing differently that you’ll likely take forward post-COVID-19?
We’re learning how to do more with less – that’s our strategic question, which we will carry on asking post-COVID-19.
Pre-COVID-19, our business involved a lot of travel. Those costs amount to more than we probably realised, and not just financially (with it being more expensive and restricted to travel in the future), but also the costs that it has on our people – such as disrupting the regular exercise regime and being away from family and loved ones. We’ve also learned how to video conference and use MS Teams to its potential, so I suspect we’ll travel a little less in the coming years. These are some are the lessons that we’ll take with us as we move forward after COVID-19.
Most of the team want to return to the office, but now that we know how much can be achieved remotely and the associated benefits, such as less travel and savings on childcare, flexible working is something that we’ll probably consider integrating more of. Video conferencing has become a powerful tool, including for team bonding through virtual events such as their Friday night drinks and workout sessions.
We’ve had LES MILLS On Demand – a consumer facing app that delivers access to 800+ workouts – for a couple of years now. It’s distributed through the gyms and they can on-sell to end users. Since the gyms closed their doors, the app has maintained brand engagement with end-users, which has helped to sustain the brand equity in the marketplace.
Through this time, we’ve learned a lot about what works and what doesn’t. Until COVID-19, we’d struggled to achieve the uptake for LES MILLS On Demand that we’d hoped for but when the gyms closed it exploded, globally, with an 800% increase in usage in the first month, which included a tripled subscriber base in Australia.
Moving forward, it’s a strategy for our Business Partnership Managers to support, because if we can retain some of that 800% growth then we can bring in a whole new revenue stream and build brand equity directly with end-users.
What do you see as the biggest opportunity for your business post-COVID-19?
Maintaining the digital subscribers whilst getting all our clubs and instructors back up and running.
How is your business going to do things differently post COVID -19?
1. Address the big strategic question “How can we do more with less?”
2. Reduce travel and evolve customer engagement to video conferencing.
3. Continue use of MS Teams, video conferencing and Friday night drinks/workouts for employee engagement
4. Adopt flexible working that fits into our regular work rhythm.
5. Drive the LES MILLS On Demand app to build brand equity directly with end-users.
What are your tips for other leaders?
1. It’s not just about you, it’s about everyone as it affects everyone’s livelihood.
2. Maintain clear and regular communication, especially with employees.
3. To be in it for the long-term, keep your customer relationships strong, even if it’s at your own financial cost.
How is your business going to do things differently post COVID-19?