The 'mayor of the world' provides a preview of his keynote presentation on leadership at IHRSA's 23rd Annual International Convention
by Jon Feld
CBI: The single event that you're most closely identified with is the terrorist attack on New York City in 2001. Following that tragedy, CBI described the role that some clubs had played in meeting people's needs—for instance, by serving as aid stations. Do you have any personal memories of that?
Rudy Giuliani: I do recall clubs being used for that purpose. But I also recollect that they did more than simply serve as rest stops. Health clubs were a wonderful place that helped people get back to normal, slip back into a relatively normal routine. Club members, individuals who worked out a lot, used exercise to reintegrate themselves, as it were, into life. My wife goes to a club regularly. She stopped after September 11 for about a month, and, for her, getting back to the club was one of the things that helped her to resume living normally. The first time she went back, she told me, she was reminded of the importance of always moving forward.
CBI: Moving forward, then: Recently, voters in California elected Arnold Schwarzenegger the governor of that state. Any thoughts about that development?
RG: It's great in every way. From a political standpoint, I think it's wonderful because I'm a Republican and it's good for our party, but I'm also a person who's interested in public affairs and public issues. California is our largest state, and as a result, often has the biggest problems—if someone can solve some of them, California could well become a role model for the rest of the country. There's a real possibility Arnold can do that because he comes to the office from outside the political system. And for people interested in health and fitness, Arnold, obviously, is a one-of-a-kind role model.
So, from every point of view, Arnold's election is a positive step in a state where things were looking pretty grim for a while. This was a vote for hope, and now, hope has replaced depression. If things had been fine in California, there never would have been a recall; there wouldn't have been the feeling of, ‘Let's try something very different.' I was elected mayor in 1993 because people believed things were so bad in New York City that they were willing to take a chance on a Republican.
CBI: In Leadership, your best-selling book, you observe that leadership is a privilege, and suggest that people are looking for someone who, while stronger than they are, still seems human and accessible. What do you think it takes to be an outstanding business leader? Can you give us an example?
RG: An exceptional leader is one with a wide range of skills and important attributes, principal among them the willingness, the courage, to try things that are new and different. A person can be successful at implementing systems, establishing a routine, that permit a business to run well, but, if they allow it to become static, it will inevitably start to wither. If you don't keep growing your company, it's going to deteriorate. So you need to keep challenging yourself, and trying new things, and growing the business.
No one was better at doing that than Jack Welch, the former chairman and CEO of General Electric. He delivered unprecedented growth year after year, and he did so by employing a number of strategies, a variety of approaches. One of the most crucial was his emphasis on change. When he came to GE, it was basically an old manufacturing business. He transformed it into one of the greatest financial empires, and one of the biggest media conglomerates, in the world. He was constantly reinventing the business.
Welch was also a great coach, and such coaches tend to produce talented ‘children'—people who are able to move on and do wonderful things on their own. For example, Tom Landry and Vince Lombardi each ‘fathered' other great coaches. That's why you run into so many successful people who were trained by Welch, or by other remarkable business or sports coaches.
CBI: When you were overseeing New York City's budget, you adopted an “under-promise/over-deliver” approach, and, in your book, you insist that executives should be as accurate as possible with respect to revenue projections. In the club industry, some public companies have tended to oversell revenues to analysts and investors, who, later, were disappointed by the actuals. What, in your view, are the long-term ramifications of such misstatements—both for the companies themselves and the industry?
RG: You're actually describing a problem that affects all of American business right now. There's been a loss of confidence because there's been a fundamental breach of trust, a violation of the understanding of what balance sheets are all about, and what profits and loss actually mean. It was committed by a small number of companies—nothing like a majority of American businesses—but all you need is a small group of firms doing it, and it makes life more difficult for everyone. Conducting business—especially when you're investing—requires a certain amount of trust. People need to know that the numbers are accurate, and that what they're being told is true. You can factor out a certain amount for salesmanship and exaggeration, but, for people to do their own independent analysis, and make well informed decisions, the numbers had better be accurate.
CBI: You've also described how you ‘managed expectations' when you launched the city's Work Experience Program and Welfare Reform Initiative, which helped more than 60,000 people get off welfare. Rather than make announcements about the program, you simply implemented it. How do you manage ‘responses' when things aren't going well—when, for instance, your club isn't growing as quickly as you'd like? How do you obtain buy-in from staff, members, and vendors then?
RG: You need to have a plan that's designed to produce the maximum results that you believe you're capable of achieving. If you don't believe in it—change it; come up with a plan than you do believe in. Then, if you're not growing or performing spectacularly right away, refer people to the master plan. I'll go back to sports again, because I love to use sports analogies.
If you take over a losing team, no one expects you to win a championship the first year out. What they do expect is some progress the first year, and some more progress the second year. If you get to the third or fourth year, and you're not close to a championship—then you have a problem.
So what do you need? You need a program for long-term growth. You need a plan that says, three or four years from now, we'll be competing in the Super Bowl or the World Series. Here's how we're going to do it—we're going to acquire a certain number of players this year and a certain number next year; and we're going to train them and teach them how to win . . . If you have a blueprint like that, one you believe in, then it's reasonable to say to people, ‘Give me a little time. We can't show you dramatic results just yet.'
If you can show people some results, you can get them to buy into your ultimate success.
CBI: That sounds fine in theory. But how about giving us a real example.
RG: Bill Parcells, the coach of the Dallas Cowboys, is a perfect example of someone who has routinely exceeded the very high expectations that people have of him. If Dallas were playing .500 ball right now, Parcells would have met everyone's expectations, but, instead, he's gone 8-4. Nevertheless, no matter what happens for the rest of the year—unless things collapse completely—he'll have gotten through his year-one program, and will have earned his players' buy-in. They're convinced that his program works and that it's going to work down the road.
If you have some early success, it can carry you for a couple of years. If you take over a business that's not doing well, you're not going to turn it around in one day, but, if you can demonstrate that some aspects of it are improving—people will trust you, they'll buy into the plan.
CBI: You're committed to the importance of a solid ideology and strong beliefs. Right now, club owners—like many other businesspeople—are having to contend with all of the effects of a weak economy: e.g., a reduced availability of capital, a weakening of consumer demand, tougher competition, etc. How can your philosophy help them deal with adversity?
RG: You have to know what your long-term goals are— it's that simple. Even though you're going through a difficult period, those inviolate objectives, those sacrosanct goals, will sustain and motivate you, and reassure you that you'll be able to get through the difficult patch and, eventually, succeed. When the economy is weak, you just need to keep things going until it improves; then, when it recovers, you can strive for the record profits.
CBI: Another attribute that you cite as being crucial to your own—and to any leader's—success is a strong, nearly insatiable, work ethic. You give credit for this conviction to the very first judge that you clerked for, who told you that for every hour you spend in court, you have to spend four hours in preparation. How does what you refer to as ‘relentless preparation' help you to manage expectations, performance, and outcomes?
RG: It's critical to the process. Relentless preparation is, perhaps, the single most important factor in achieving success; it's essential in the case of leaders, who, after all, have to push everyone else to prepare. Study, study, study! Try to learn as much as you can about the area that you're responsible for. Make sure that you know much more than the next person. Every bit of information that you acquire, all of the knowledge that you possess, gives you a competitive edge. The best football teams are always the best-prepared teams.
CBI: Can you provide us with a little preview of the speech that you're going to be presenting at the IHRSA convention next month? What are the most valuable lessons that you'd like to impart to club owners? How can they profit from your experiences?
RG: When we were running city government, we really tried to steer it, to orient it, towards the needs of the people. I think it's equally important that club operators understand whom it is that they're serving, whom it is that they're trying to help, and make sure that their product offering is relevant to their clients' needs. Knowing your customers well—what they need, what they want, what will work for them—and keeping one step ahead of the demand is what makes a health club very successful, rather than ‘just another gym.' Another major point I'll be making is that people, including fitness professionals, need to recognize, accept, and respond appropriately to the fact that clubs are a part of the preventive healthcare equation. More and more, clubs are being viewed that way, and it's vital that the people who comprise the industry understand that.
In America, we've always thought of the healthcare system as something that happened after the fact—after people became ill. We've got to think of it as something that happens before the fact
Clubs can help change the concept—and the performance of—the nation's healthcare system.
Jon Feld is a contributing editor for CBI and can be reached at kjfeld@rcn.com.
