Disruption Cometh

Disruption cometh!

A private equity group is taking Lifetime Fitness private in a $2.8B deal.

Why the move to private by one of the largest fitness clubs in the U.S.?

A March 16th, 2015 Wall Street Journal article cited, “Companies have been facing pressure from boutique fitness classes such as SoulCycle LLC and niche workouts like CrossFit.”

I see and drive disruption every day.   Frankly, I could see it coming.  I predicted that disruption was accelerating in the sector and that the “old-school” fitness clubs need to turn to digital disruption to better serve their clients of today and tomorrow.

In Fitness Clubs Digital Disruption Is Next, I discuss the Uber Effect in the Health and Wellness and in the Fitness Clubs sector specifically.  For example, ClassPass is poised to continue to eat at the revenues and stifle growth within the sector with their subscription based niche studio business model.

Continuing the disruption conversation in Fitness Clubs Digital Disruption – What’s Next?, I share my personal experience at one of these old-school fitness clubs and present digitally enabled strategies for how old-school can become new-school.

The fact is that Fitness Clubs like Lifetime are faced with the reality of Disrupt or Be Disrupted.  Of course when you are public, it is hard to eat your own revenues as you go through the reinvention that disruption often requires.  Going private may just allow Lifetime Fitness to lead the way as a first mover in driving digital innovation into their business model so they can Eat Instead of Being Eaten!

I work in innovation and disruption.  At 3Pillar Global, we partner with our client’s to build the disruptive business models of tomorrow and transform existing business models of yesterday to be more adaptive and competitive by helping them achieve continuous innovation.  The digital world is going to stop for no one.  Businesses today are either leading, following or dying, at an unprecedented pace.

One thing is for sure, we live in an Ever Evolving World.

Do you see other industry sectors or sub-sectors that are ripe for digital disruption?

The Wall Street Journal article sited above can be found here.

Always On

High Performing Organizations are Always On

I am a life long student.  As such, I have seen and read a lot of strategic content on the subjects of Continuous:

However, I have come to the realization that I see little on the subject of Continuous Recruiting.

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The Dream:   Always On Recruiting

What would happen if businesses shut down their sales forces until they were in need of new sales?  Sounds counterintuitive doesn’t it?!

Like sales, recruiting is critical to any business and (I believe) performs best when it is continuous.  When it is Always On.

In sales, companies want new qualified prospects entering the top of the funnel all the time, so that the business can nurture them and drive a non-stop flow of new deals.

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The Reality:  Transactional Recruiting

Most companies wait until they definitively need to hire new employees before they begin recruiting.  Actually, that is not a true statement.  Most companies wait until they have an executive level budget approval and approved position requisition, before they can say they can definitively hire a new employee and thus begin the recruiting process.

While this need-fulfillment or transactional approach makes sense in traditional business management, to include fiscally responsible budget aligned business execution, today is anything but traditional.  We are in a new normal competitive environment that is renewing itself continuously – aka Ever Evolving.

Think about it this way:  Would you want your sales organization to only look for new business when your company was in financial straits?

Then why would you wait to have the best of the best candidates lined up and ready for offers before you actually need to hire someone?

Wait for that key team member to resign or for that big deal to close before beginning to source and interview candidates and you find yourself behind, reactive and transactional.  Now with the clock ticking and the pressure on, you may settle to complete the transaction of hiring and hire the best of the worst, instead of the best of the best.  If you are a services business it can be even more impactful, vacancies often mean lost revenue.

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The Action:  Always On Recruiting

Always On recruiting makes searching for great talent an every day, all the time thing.  Of course, this means that you and your leadership team will have to be on top of emerging and ever shifting staffing needs.  Leaders have to be the barometer.  It is indeed hard to find what you don’t know you need.  However, just like in sales, if you are always networking, prospecting and nurturing your funnel, you will always have qualified candidate flow.

Leaders have to be the barometer.  Balance logic, intuition and gut and you can leverage Always On recruiting as a competitive advantage for your business.

How does your business approach recruiting — transactionally or strategically?

Taking the Pain Out of DevOps

CIO Ken Piddington recently participated in a DevOps blog post with CA Technologies.

In the post, Ken comments that “While it (DevOps) may be an “IT methodology,” DevOps is driven by human behavior, and improving the relationship between developer and operations groups is the first priority.”

Wholeheartedly agreeing with Ken on this statement, I believe DevOps Isn’t A Role or An Organization, It Is A Culture!”

Across our customers at 3Pillar Global, we are seeing that DevOps is about the balance of people, process and technology.

First and foremost, DevOps is about breaking down the silos between Dev and Ops.

Secondarily, you just can’t smash silos and expect a snap of the fingers entree into mature DevOps. Organizations must have the people in place that are capable of and willing to lead the change needed to support successful DevOps. Far too often, and the bigger the organization the worse it gets, there are people capable of, but unwilling to lead the positive change necessary. Change for not just DevOps, but for any change that is aligned to the competitive future success of a business. I call this Passive-Compliance — ‘I Will’ in word, but ‘I Won’t” in action. You may recognize it as bureaucracy, politics or fiefdom defense. If you can’t quickly retool people’s skills, you may unfortunately have to replace them with players experienced at shifting culture, process and sense of ownership across technology organizations.

Third, and this is where Ken and I may disagree a bit. The larger your organization, the more important it is to have an objective third party working side by side with you. A third party will not just assist in bridging the Dev and Ops silos, but will also help you drive the people, process and technology change needed. Now to be successful, your 3rd party partner must be sponsored at the highest executive levels in the organization and thus be empowered to objectively influence the change necessary to shift a culture and operation. Because frankly, most companies lose their objectivity along the way. Emotions, loyalties, domains and politics get in the way. A strong partner won’t be of the pure consulting nature, as you won’t need the help knowing what to do – you know what you need to do. You will want a practitioner. Someone that has been there and done it, repeatedly for companies your size and with your organization structure. Not telling you what to do and how to do it, but doing it with you. Helping you drive the cultural shift needed to put your company on the path to achieving mature DevOps.

You can find CIO Ken Piddington‘s recently shared DevOps blog post with CA Technologies here.

3 Things

Stop the madness, please!   

I can’t even go to Flipboard or LinkedIn anymore.  The preponderance of articles and blog posts are becoming lists, regurgitating lists.

Are you tired of:

We live in a very distracting, information overload era.  The Internet brings a bounty of free advice and knowledge.   “Give it a Google” and you can get lost for hours consuming information that truly does nothing for your effectiveness, execution and productivity.

Do a search on “Time Management” and you get 486,000,000 results (in 0.39 seconds). 

You can continue reading all those blogs and try to put a dent in the 486M websites out there promising to make you a better time manager and thus, a more effective manager or leader — Or, you can be pragmatic like me.

Every night before I go to bed, I write down a list of the 3 most important things I need to accomplish the next day.

3 THINGS:

Not only do I sleep better because I have written the big (3) things down that would have kept my mind spinning all night, leading to a non-restful, productivity impacting sleep.  I am also prepared for the managed chaos that the next day will inevitably bring to my ideal calendar.  (If this does not resemble your reality, please let me know what line of business you are in)

You see, I start my day with a short list of 3 things that, if done, positively impact the strategic trajectory of my business.  My day is not done until those 3 things are.

However, not long after my day starts, the speed of business kicks in and as a senior leader, a big part of my day is consumed in helping my teams successfully do their jobs, navigate the unexpected and drive our business.  Coaching, mentoring, developing and even healthily debating their strategies and priorities in support of their teams and objectives.

The key word here is Team.  We are OneTeam!  We win-lose, succeed-fail as OneTeam.

Some leaders look at turning the organization chart upside down, implying that the leader reports to or rather serves their direct reports, as management not leadership.  I disagree.  I think a leader WORKS ON the business by coaching and motivating their teams to the end of becoming more effective and productive.  The aim is empowered, scalable teams that are growing in their abilities daily.  That lifts a business.  That grows a business.

3 Things.  Try it and let me know what you think.

Do you have any pragmatic solutions that work for you in balancing the strategic and leadership tasks you need to get done every day?

Beating the Common Cold

Beating the Common Cold

Just how does one go about Beating the Common Cold?

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Question 1:  How many bacteria are there out there that are responsible for the common cold?

Answer:  0

It is a trick question.  The answer is zero because colds are caused by viruses, not bacteria.

Wikipedia reports that, “Rhinoviruses are the most common viral infectious agents in humans and are the predominant cause of the common cold. Rhinovirus infection proliferates in temperatures between 33–35 °C, the temperatures found in the nose.”

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200 – There are about 200 viruses that are responsible for the common cold.

1 Billion – The approximate number of colds caught in the United States annually.

$3 Billion – The approximate amount spent in the United States on over the counter drugs to fight the cold annually.

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Question 2:  How many cures are their for the common cold?

Answer:  0

Another trick question.  There are no scientifically proven cures for colds.

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Adults – Get 2 to 3 colds a year.

Children – 5 to 9, with preschoolers coming in at 8-9.

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Question 3:  How long does it take to recover from the common cold?

Answer:  On average 7 to 10 days

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60% – the percent of the time antibiotics are prescribed by doctors for the common cold.

Funny thing is that antibiotics fight bacteria, but bacteria doesn’t cause colds.

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So, I got sick last week.  Went home from work early on a Tuesday and slept from 4:30pm to midnight on the couch.  At midnight, I rolled from the couch to the bed.  All in, I slept 14 hours and woke up feeling like absolutely crap.  I debated, go to the doctor (again) to get antibiotics or wait this one out.  After giving it a Google, I reminded myself of the realities of the common cold I share above.  (Thanks to the information available at Center for Disease Control and Prevention and the U.S. National Library of Medicine.)

I decided to take an alternate route for this cold.  I am tired of taking antibiotics needlessly and I have to toughen up and just deal with the reality of colds.

I did these 3 things and today – 7 days later – I am back to about 80%.

I suspect that the research is right.  At this pace, I will be pretty much recovered in 7-10 days.  Can’t get back the time I lost, but hey, I caught a cold and had to toughen up and just deal with it.

Catching a cold is likely inevitable for each of us.  Just think that with 200 viruses out there, when it is cold out, the viruses are running rampant.  Doors, hands, even the chairs you sit in at your local Starbucks, are all susceptible common cold transfer agents.

Last Question:  How many days are people with the cold contagious?

Answer:  People are contagious for 2 to 3 days after catching a cold.  But, I’d stay away for up to a full week to be safe!

Stay healthy!!

DevOps Cultures Require Change Leadership

“DevOps isn’t a role or organization, it is a Culture!”

I was fortunate to have coffee last Friday with a CTO of a multinational mass media corporation based in New York.  We covered a lot of different topics like innovation, digital disruption and time to market, but he got really passionate when we entered the area of DevOps.

It seems that even the most modern and fastest moving of the household name companies out there are still grappling with the notion of DevOps.  Specifically, that DevOps is not a new organizational unit that has to be stood up, roles that have to be hired for or even experience that has to be executively recruited.

DevOps Cultures Require Change Leadership

To realize DevOps, it will take the right leadership and that right leadership has to lead a cultural shift.  If Culture is community behavior, it stands to reason that a cultural shift is all about shifting the behavior of a community.  That community is the workplace.

Community behavior in a “modern” company often looks like:

OR

Some workplaces operate with a silo structure that resembles:

Solving for DevOps

Many companies right this minute are having executive leadership team conversations that involve building a new organizational function that carries the title DevOps, whose function it is to sit between the CTO and CIO organizations to realize DevOps in their business.  They’ve got droves of analysts figuring out where to pull the budget from, which jobs to eliminate, which organization structures to revamp.  All in an effort to speed the time that newly developed working software can move along the conveyer belt of develop-test-deploy-support at a faster pace so that more new software gets deployed and supported by Operations sooner and continuously.

WRONG SOLUTION!!

Companies already have their DevOps professionals.  They just fail to Realize it.

Companies already have their DevOps experience.  They just fail to Unleash it.

Company leaders have their DevOps organization, they just need to Lead it.

START TODAY

Nothing leads cultural shifts like action.

You want to lead a DevOps revolution in your company, try this non-radical, non-budget impacting set of actions:

My premise is that you already have the DevOps function and talent within your business.  Leaders just need to do what leaders do – lead change so that the company continues to adapt to an every evolving world.   By taking the first step to softening the silo walls between IT and Development, you will accelerate the change.

That Information Technology pro that you just moved to Development will help the Development organization see the world through the eyes of the IT organization that has to keep business services securely running non-stop.

The Development pro you just moved to IT will help the IT organization see the world through the eyes of a developer who is pressed to write error free code that can be deployed rapidly to serve the company’s revenue generating efforts.

Commit to change in an ever evolving world and Watch What Happens!

Too simplistic an approach?  Have you tried it?

Starbucks Digital Experience

I want a voice into the coffee blends my local Starbucks brews!

At Starbucks this morning, I got some of the worst news one could get on an early Monday morning.

Sulawesi is likely to be replaced.  

My first emotion was disappointment.  Second was frustration.  And then, stimulated by the other regulars in the conversation, the third was illumination – a not so big idea, that could be big for the Starbuck’s Digital Experience.

Let me explain what actually happened.

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You see while in line at my friendly neighborhood Starbucks, chatting with the regulars at that hour, the discussion centered on the bold coffee “Sulawesi” that Starbucks had been serving through the month of February.  A solid bold coffee!

One of the Baristas overheard the conversation and joined in as the official Starbucks representative.  The sentiment was that we had all been enjoying Sulawesi and the Barista attested that it had indeed been popular with the regulars.  When one of them suggested, “You should just replace Pike with Sulawesi and bring Komodo Dragon back!”  The Barista hesitantly replied, “Well, I think Verona is replacing it.”

WHAT?  SAY IT AIN’T SO!  HOW CAN THAT BE?

We just shook our heads.  Pontificated what we would do if we were Starbucks CEO Howard Schultz for a day.

Now the conversation grew as others began to overhear the banter and bold talk.  Many of the other regulars entered the conversation.  Someone, also disappointed with the news on Sulawesi, said, “Verona?   What do we have to do to bring the Dragon back?  Why don’t you ask me what I want to drink?”

So, I had an idea, but needed to do some quick research to make sure Starbucks wasn’t already asking us what we wanted to drink.

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I found a recent Time article, in which Starbuck’s CEO Howard Schultz says he “has a lens on almost every community in America…..  At 4:30 in the morning, I wake up and see the numbers of basically every store from yesterday.”

Well Mr. Schultz, you and Starbucks might have a lens into yesterday, but you don’t know what is on our minds today and what we expect from you tomorrow.

Then the not so big idea clearly illuminated itself.  Starbucks simply needs to continue the innovation they already have underway with their Starbucks Digital Experience.

You see, as Howard Schultz points out in his Time interview, Starbucks does collect all kinds of information about me.  Via the Starbucks App, they track my purchases, know what stores I frequent, the times, how many coffees, lattes, refills and pastries I buy.  The application even gives me rewards for all my patronage.  Free songs in the “Pick of the Week.” I can find the closet stores when traveling in unfamiliar areas.  And, I can even view all my account history – Wow, that is a lot of coffee!

However, my Starbucks Digital Experience doesn’t tell me what I want to know now?

I can’t track what I liked and didn’t like in the App.

And, Starbucks doesn’t ask me anything.

The App doesn’t ask me anything other than my birthday and credit card number.  Rather, it collects information and tries to anticipate me through data analytics.  Starbucks HQ has no idea how I am feeling today and has little to no context on the conversation we had this morning about their coffee selections.

We want more Sulawesi and Dragon.

Starbucks needs more context.

I want a voice on what coffees you brew in the morning.  And, based on the conversation this morning at my local Starbucks, the other regulars want a vote too.  After all, we are some of your most frequent, loyal and loving customers

So Starbucks, why not have the Starbucks Digital Experience ask me and my friends what we want you to serve when we come in to get our morning coffee?  Why can’t we tell you what we like and what would most delight us?  

Yes, we want a vote of sorts!  We want a Voice of the Customer.

(For the record, I am a coffee drinker.  Not a double this, triple pump that, frap drinker.  Just an old fashioned coffee drinker that truly enjoys my Starbucks experience.  I also enjoy good coffee and have a hard time finding a Starbucks substitute in both quality of coffee and environment)

Fitness Clubs Digital Disruption Is Next!

Fitness Clubs May Just Be the Next Taxi Companies

Fitness clubs like those on the following list are on notice that digital disruption cometh their way.  And, it’s coming faster than they may be able to react and adapt.

That is a lot of revenue!

Yes!  These fitness clubs run the risk of being disrupted just like Taxi Companies were in this, the digital era.

You see there is this phenomenon now fondly referred to as the Uber Effect.  Taxi Companies sat on the sidelines, first not believing a crazy business idea powered by software could challenge their domain.  Then secondarily, not just challenge, but totally turn their industry on its head.  Frozen, paralyzed and unable to quickly react, they just sat with a front row seat to the destruction that the proverbial wrecking ball brought to their way of life and dominating control that had of door to door transportation.

Uber created a whole new way for consumers to get from point A to point B, and do so more cost effectively.  The Uber Effect disrupted not just the Taxi industry, but it created a whole new sector within an old and less than innovative sector.  Say “I” if you have gotten into the back seat of one of those old, rickety yellow cabs with no room for you, much less your knees!

Today, Uber still takes market share from Taxi Companies and followers like Lyft have entered the fray, bringing even more choice for the consumer.  The Uber Effect may not end at Taxis.  There is great likelihood that auto manufacturers will feel the Uber disruption in coming years too as the next generations opt for ride sharing and shared vehicle ownership verses personal vehicle purchases.

This same level of disruption is happening to Fitness Clubs.  You may have noticed prices dropping at the traditional fitness clubs and thought that the price wars were simply about shifting share from club to club.  Partially, but not entirely true.

If you work out a few times a week, you may also be hearing the stories of people defecting from your fitness club to studio clubs like:

These single studio, small format clubs are becoming all the rage.  Like all things routine, people are growing bored of treadmills, stairclimbers, weights and spin classes.  They are leaving the routine of fitness clubs to join like minded coeds in studio format workouts.  They are finding new ways to get from point A to point B.

To further complicate matters, the millennials are demographically becoming the target market for the fitness club dollars.

So, now couple the fitness club price wars and the millennials coming of age,  with the single studio workouts and you have the conditions for industry disruption.  But, not just regular disruption.  Like all things in the digital era, all industries run the risk today of digital disruption.

ClassPass may just be leading the Uber Effect of the Fitness Club industry.  With a $60M revenue run rate and entering 5 new markets a month, ClassPass is on pace to be on a $120-$150M revenue run rate by the end of 2015.

ClassPass is a subscription based studio focused business model.  ClassPass has built a highly responsive software platform that powers the business model and works as elegantly on a mobile phone as it does in a web browser.   Not only can your reserve your workouts via your their platform, but you can also track your workouts through the same application.  All done with that powerful device that seems to never leave your side – your mobile phone.

In the markets they enter, ClassPass members get unlimited access to studio based fitness classes.  As their website says, “One Pass.  Unlimited Classes.  ClassPass gets you into the best studios in your city.”  

Unlike Uber, ClassPass does not own the end-to-end experience.  But that doesn’t matter to still realize the Uber Effect.  ClassPass is a mass marketplace for the small studio providers and the purveyor of great choice and quality of studio workouts to their subscribers.  Unlimited studio workouts, for one fee.

I am sure the fitness clubs, like those listed above, are primarily focused on taking share from the other fitness clubs, and thinking there is no way ClassPass will last, nor challenge them.  That’s exactly what the taxi companies thought about Uber and now over 50% of their drivers are no longer driving taxis, they are driving their own cars for Uber and Lyft.

Fitness Clubs Digital Disruption Is Next!  How will traditional clubs compete with the Uber Effect?  How will they compete in the digital era?

I don’t know for sure, but I know digital disruption cometh their way!