“Remember not the former things, nor consider the things of old. Behold, I am doing a new thing; now it springs forth.” – Isaiah 43:18-19
Adapting To Find New Opportunities
This past weekend, I reread an article that appeared in the Harvard Business Review last October entitled, “Adapt Your Business to the New Reality.” There were a couple of reasons why I reread the article. The primary one being the authors highlighted the fact that in economic downturns, or "disruptions," new opportunities are presented to businesses for growth. As the authors of the article point out, the success companies are able to realize lies in their ability to adapt their business model to the behavior changes exhibited by the consumer. The article highlighted the success of the cosmetic company, Lin Qingxuan, who, after experiencing a 90% loss of in-store sales, were able to shift their focus to digital engagement, utilizing in-person stores and the shop assistants to become online influencers; the company has experienced a 120% growth in revenue from its low point in February 2020.
Staying Creative To Meet Members Where They Are
A critical point established in the article is that businesses must focus on understanding the changes in consumer behavior. Prior to COVID, e-commerce had already begun to shift, and the pandemic acted as a catalyst to accelerate the change in online shopping. Ronn McMahon, CEO of the Greater Wichita YMCA, had the foresight to see the need for the Y to have a digital delivery platform for its programs, and we were fortunate to be included in the early development of YMCA360. Michael Marquez, Annie Doyle, and Bruce Caudill – along with our operations team – are working hard to advance our Y in the digital world. Last week, I watched Michelle Wells lead an amazing online culinary class, just one example of the creativity our team is exhibiting to help us evolve in a rapidly changing world. Though the digital platform is filled with many fitness competitors, the breadth of YMCA programs, particularly when we tap into the National Y Movement alongside our deep commitment to the development of community, may give us a unique edge in this sector.
Accomodating The Return Of Members
When we first reopened our community centers back in September, we moved exercise equipment throughout the facilities to create enough space to ensure comfort for our members. As the restrictions have eased, we have been able to use spaces, such as the gym, for programs and we no longer wanted to have equipment placed there. We also did not want to return the equipment back to where we once had it (it was an eye-opener to recognize how closely packed in we had the equipment to serve more members). Two weeks ago, Loren Johnson, Ed Bressette, and the facility teams along with the operations team, moved 88 pieces of exercise equipment into storage. Creating space and social comfort for our members was clearly a necessary adaptation coming out of the pandemic, but the challenge we will face is adapting our business model to this new normal with less equipment. Will there be a return in the use of the centers, and if so, how will we accommodate the return? Will we be able to use the digital platform to help meet the demand? Can we influence our members to utilize both our in-person and digital platforms?
For the past few months, the operations team has been exploring the use of outdoor space as an option to augment our current operational model. This past winter, we used tents for our services out of necessity; can we develop that concept to be more effective and functional? This next week, we are meeting with consultants to determine possibilities, utilizing the Mel Korum Y’s sports park. Can this facility be adapted to become a viable option for fitness and youth programming throughout the year, capitalizing on an indoor/outdoor option? Could it then become a template for future development? As the authors of the article point out, success in this rapidly evolving world will require some risk or investment to capitalize on the changes in consumer behavior. Is such an investment warranted? Will it produce enough of a return?
Changing In Uncertain Times
Understanding how we need to adapt to the disruption produced by the pandemic is not a perfect science. We do not even know if the change in consumer behavior is permanent. There are many who feel the disruption is temporary and that our members will return at some point. There are two risks in that approach: (1) what if members do not return – where will we be if we wait to find out and discover we are wrong; and (2) if the behavior does return to what it was, the question is, by when? Are we willing to wait, and what is our business model in the meantime? We have expanded our partnerships with three school districts – Tacoma, Clover Park, and Franklin Pierce. This will bring in additional revenue. The early learning center is operating at capacity, generating a strong positive variance. Do we add a new early learning center on our Mel Korum Y campus? Will that mirror the success we are experiencing in University Place? We are hoping to find out; Michelle LaRue is working with Triangle2 Solutions to conduct a market study to test whether there is enough demand for us to build a new early learning center in Puyallup.
Our Y currently has about 45% of its pre-COVID membership base. Fitness analysts are predicting a spike in membership come this fall. We are forecasting our membership to return to levels somewhere between 55% and 60% of pre-COVID numbers by the end of the year. What is our strategy to evolve as an organization and position us to grow? Virtual? Partnerships? Early learning? Outdoor? Perhaps a combination of some or all of them?
This is a critical yet exciting time for our Y. I continue to be amazed at how hard you all have worked to position us to be able to take this next step. We would not even be in this position were it not for your commitment. I continue to be in awe of who you are and your dedication. Thank you.
#StayStrong #StayWithUs