How To Have Hard Conversations in Hard Times Ep 200

In this episode of the Gym Secrets podcast, the host shares strategies for navigating tough conversations with employees during challenging times. He recounts a recent experience with gym owners discussing compensation concerns and emphasizes the importance of transparency and collaboration in decision-making. By presenting options and involving the team in the process, he advocates for fostering a sense of unity and ownership, which helps avoid resentment and builds understanding. The host also stresses the value of explaining the business realities and the personal sacrifices made by owners, using a relatable example of having to let a trainer go. He concludes by encouraging listeners to support the podcast through word-of-mouth, underscoring the collective effort needed to overcome adversity and strengthen the business's mission and culture.

• The Gym Secrets podcast focuses on customer acquisition, increasing customer value, and retention in the gym industry.
• The host shares lessons learned and failures experienced in the journey of running a gym business.
• The podcast aims to provide insights and strategies for gym owners to succeed.

"Welcome to the Gym Secrets podcast, where we talk about how to get more customers, how to make more per customer, and how to keep them longer, and the many failures and lessons that we have learned along the way."

This quote sets the stage for the podcast's focus on business strategies for gym owners, emphasizing customer-related aspects and learning from past experiences.

• The host stresses the need for effective communication during challenging periods.
• Regular calls with gym owners are conducted to address concerns promptly.
• The host's personal experience with confrontational situations is shared to provide context for the advice given.

"I wanted to make this quick video, how to have hard conversations in hard times because I had...I've just been on calls all day long."

The quote highlights the host's commitment to supporting gym owners through constant communication, especially when facing tough conversations and decisions.

• A gym owner's issue with trainers demanding a higher revenue split is discussed.
• The host empathizes with the frustration felt when facing such demands.
• The host reflects on personal growth, moving from anger to more constructive responses in business disputes.

"And I had a gym owner who came up and was like, hey, I had all my trainers get together and they were like, hey, we're not happy with what we're getting paid. We want a 60 40 split on the revenue from the gym, right."

This quote presents a specific scenario of employee discontent regarding compensation, which serves as a case study for the broader discussion on handling difficult conversations.

• The host recounts the evolution of their leadership approach from authoritative to collaborative.
• The initial strategy of top-down decision-making led to resentment and division within the team.
• The host suggests that involving the team in the decision-making process can prevent negative outcomes.

"But the reality is, it really doesn't work well when you do that, because then they just get really pissed off and they're like, screw this guy."

This quote captures the consequences of an autocratic leadership style, emphasizing the importance of adapting to a more inclusive approach to maintain team cohesion.

• The host outlines a framework for introducing changes to the team.
• Reiterating the shared vision of the business is crucial before discussing changes.
• Acknowledging external circumstances that necessitate change helps in gaining team agreement.

"Whenever I have to introduce a new change we remind them of the vision, right? Which is like, where are we trying to go, right?"

The quote conveys the strategy of aligning the team with the overarching goals of the business to facilitate acceptance of necessary changes.

• The host advises on being transparent about financial challenges with the team.
• Presenting the variables being considered for cost adjustments encourages team understanding.
• The host emphasizes the connection between financial sustainability and achieving the business's mission.

"And so right now, we are bringing in less than what we're spending. And so if we want to accomplish that goal of transforming the community, et cetera, we have to change something."

This quote directly addresses the need for operational changes due to financial constraints, linking it back to the shared mission to motivate the team towards finding solutions.

• The speaker discusses the financial difficulties faced by their business.
• They present three options to address the financial strain: reduced working hours, staff layoffs, or pay cuts.
• The speaker has chosen to take a significant pay cut themselves to lead by example.

"Option number one is that everyone here takes two weeks off a month, right? Option two is we just have to let go of half the staff so that when we come back, that there's something to come back to, right." "I'm taking a pay cut. I'm taking half of what I normally take or less than that, or I'm taking home zero right now."

The quotes outline the three options proposed to mitigate financial issues: reduced working hours for all, laying off half the staff, or everyone working for half pay. The speaker emphasizes their personal pay cut, highlighting their commitment to finding a solution that involves shared sacrifice.

• The speaker emphasizes the importance of unity and shared sacrifice during tough times.
• They express a preference for a solution where everyone takes a pay cut, as it fosters a sense of togetherness.
• The speaker is transparent about their own pay cut, setting an example and building trust within the team.

"So I'm starting like, you all are going to get paid. I'm getting paid nothing. Okay? And so if you start like that, it's like we're in this together, right?"

The quote demonstrates the speaker's leadership strategy, which involves taking the first step in sacrifice to encourage a sense of unity and collective effort among the team members.

• The speaker suggests involving employees in the decision-making process to increase their buy-in and understanding.
• They believe that presenting options rather than dictating decisions helps employees feel ownership over the outcomes.
• The speaker emphasizes the value of transparency and sharing information to prevent resentment or misunderstanding.

"Now, obviously only offer options that you would support, right. And I think why this kind of approach works is because you're not presenting your decision. You are presenting options and allowing them to participate in the decision."

This quote explains the speaker's philosophy on decision-making, advocating for a participatory approach where employees are given options to choose from, fostering a sense of involvement and responsibility.

• The speaker does not rely on traditional advertising but instead on word of mouth to grow their podcast.
• They ask listeners to share the podcast with others as a way to support and spread the content.
• The speaker believes in the power of personal recommendations and the goodwill it generates.

"The only way this grows is through word of mouth. And so I don't run ads. I don't do sponsorships. I don't sell anything."

The quote highlights the speaker's reliance on organic growth through word of mouth, eschewing paid advertising and sponsorships in favor of personal recommendations from listeners.

• The speaker discusses the necessity of difficult conversations in business, such as firing an employee.
• They advise against negative reactions or speaking ill of the former employee.
• The speaker shares a personal experience of backlash from clients after letting an employee go.

"Sometimes you have to let a trainer go, right. Sometimes it just doesn't work out. It's okay. It's part of business, right?"

This quote acknowledges the tough decisions that business leaders must sometimes make, such as firing an employee, and frames it as a normal part of business operations. It also advises on maintaining professionalism during such situations.

• Business owners often cannot share all details behind their decisions due to legal constraints.
• Customers may be unaware of the full context in which business decisions are made.
• Owners appreciate customers who express their concerns and show that they care about the business.
• Trust between the business owner and the customer is essential, especially when decisions affect customer experience.

"I cannot share all of the information around a decision because of legal reasons."

This quote highlights the legal limitations that business owners face regarding transparency with customers, which can affect how decisions are communicated.

"Do you think that it may be possible that I have more information that I'm working with than you are to make this decision?"

The owner is suggesting that they possess additional information that the customer isn't privy to, which justifies the decision made.

"I would bet that if I were able to open up the kimono and show you all of the information that I have here, you probably would have commented the same decision that I had and probably even sooner than I am."

The owner expresses confidence that if the customer had the same information, they would understand and agree with the decision made.

• The business owner asks for the customer's trust in their decision-making process.
• The owner reassures the customer that their goal is to ensure a great experience for them.
• The owner implies that the customer's input is valued and that they are committed to finding a suitable replacement for any personnel changes.

"All I'm asking you is to trust me that I really want this business to succeed just as much or probably more than anyone else."

The owner is seeking the customer's trust, emphasizing their personal investment in the success of the business.

"I will find a trainer that you will like just as much as you did her."

The owner assures the customer that they will find a replacement that meets their expectations, showing commitment to customer satisfaction.

• Business owners must educate their employees on the financial realities of running a business.
• Employees may not be aware of the operational costs and the actual profit margins.
• Transparent communication about business economics can help manage expectations regarding revenue sharing.

"So the gym owner who brought this up had his trainer say they wanted a 60 40 split of the revenue."

This quote introduces a scenario where a gym owner is confronted by a trainer's request for a specific revenue split.

"Of $100 that comes in the door, I was like, do you know what the margin this business is? Do you know? I was like, it's 12%."

The owner is explaining the profit margin of the business to highlight the financial constraints and justify why a 60/40 revenue split may not be feasible.

• The speaker discusses the financial impact of a crisis on their business, highlighting a 20% loss due to the situation.
• They contrast their situation with that of employees who still get paid while the business owner not only doesn't get paid but also loses money.
• The speaker emphasizes the unfairness but acknowledges it as a reality of running a business.
• They explain the necessity of making adjustments based on the mathematical reality of the situation.

So if we've lost 20% currently, just through this whole corona thing, we lost 20%.

The quote indicates a significant financial loss for the business due to the pandemic, which is a common challenge faced by many during such crises.

• The speaker brings attention to the inherent risks of business ownership, such as signing a substantial lease and the potential personal financial consequences.
• They compare the repercussions of poor performance for employees versus the business owner, illustrating the greater stakes for the latter.
• The speaker aims to convey the gravity of business decisions and the personal risks they entail.

I sign my name on a $400,000 lease. Like, do you guys want that? They can take my house. You do a bad job, you go home. I do a bad job, I lose my home.

This quote underscores the personal financial risks the speaker takes on as a business owner, which are not shared by the employees.

• The speaker discusses the importance of transparency and communication with team members during difficult periods.
• They believe that presenting information clearly can lead to shared understanding and acceptance of tough decisions.
• The speaker acknowledges that not all decisions will be popular or even agreed upon, but stresses the importance of unity and collective effort to overcome challenges.

Once you present them the same information, many times they will come to the same conclusion you did, and they'll be like, all right, I understand why you did that.

This quote illustrates the power of communication and providing information to achieve understanding among team members regarding difficult business decisions.

• The speaker highlights the advantage their gym has over others due to a strong culture, clear mission, and shared values.
• They encourage the team to see the crisis as an opportunity to grow stronger and more dedicated to their goals.
• The speaker believes that these elements will help them survive the crisis when others may not.

Not only that, there's going to be a lot of gyms who aren't as unified as we are. They don't have the culture we have. They don't have the mission we have. They don't have the values we have, and they're not going to be able to make it out.

The quote emphasizes the competitive edge provided by a unified team with a strong culture, mission, and values, particularly during challenging times.

• The speaker offers a framework for having difficult conversations during hard times, which involves sharing the decision-making process and information with others.
• They suggest that helping others understand the rationale behind decisions can lead to acceptance, even if there is disagreement.
• The speaker closes with an encouragement to the audience, hoping the advice was valuable and inviting engagement with their content.

I think the easiest thing is helping them make the decision with you. Not that you are actually necessarily listening to what they're going to say, but more so presenting the options as you saw them with the information that you had.

This quote advises on a strategy for involving others in the decision-making process, which can lead to better understanding and support for difficult decisions made by the business owner.