| Editor’s Welcome |


Disruptive innovation, a term coined by Clayton Christensen, describes an innovation that creates a new market by applying a different set of values, which ultimately, and unexpectedly, overtakes an existing market.


Christensen, the Kim B. Clark Professor of Business Administra- tion at the Harvard School of Business, first identified and defined the concept in 1995, and, since then, it’s become a Holy Grail among entrepreneurs, investors, and others. Disruptive ideas, processes, technologies, and products—they open the door to a wide new world of business, and human, opportunities. “Because companies tend to innovate faster than their customers’ lives change,” Christensen explains, “most organi- zations eventually end up producing products or services that are too good, too expensive, and too inconvenient for many customers.” Conversely, he points out, “An innovation that is disruptive allows a whole new population of consumers access to a product or service that was, historically, only available to consumers with a lot of money or a lot of skill.”


If he’d visited IHRSA’s 31st Annual Interna- tional Convention and Trade Show last month in Los Angeles, or if he were to flip through the pages of this issue of CBI, Christensen, I think, would find many examples to support his tenets. Chuck Runyon and Dave Mortensen, two of the


cofounders of Anytime Fitness, the Hastings, Min- nesota–based fitness franchise, had successfully operated big-box clubs (too good, too expensive, and too inconvenient?), but realized that—from both the owner’s and members’ perspective— they left much to be desired. Their new business model: Anytime Fitness, a club with a small footprint (3,000–5,000 square feet), highly focused offerings, inexpensive dues, and low payroll (10% of overhead). In their initial stages, disruptive businesses, Christensen notes, often involve simpler products and services, smaller target markets, and lower gross margins. But then, if the concept is sound and executed efficiently, they grow and prosper. This year, Anytime Fitness expects to open its two-thousandth club, which will make it the largest coed fitness franchise in the world. And Runyon and Mortensen haven’t stopped thinking, and step- ping, outside of the box (see “The ‘Not So Secret’ Millionaires,” pg. 38). Lisa Welko, the founder of Ellipse Fitness Mayflower, a 2,500-square-foot operation in Appleton, Wisconsin, has an innovative notion of her own (see “Enter the Classes-Only Studio,” pg. 26). She’s one of a number of entrepreneurs who are experimenting with a model that offers group-fitness classes only and breaks even with just 120–150 members (“simpler products and services, smaller target markets”). In addition to her own club, Welko already has nine franchised locations. Sounds disruptive to us. —|


4 Club Business Internat ional | APRIL 2012 | ihrsa.org


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VOLUME 32, ISSUE 4


Kerry Brett


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