I was walking through the food court the other day just as the mall was about to close.
The big chains—Dairy Queen, Arby’s and Orange Julius—had already shut down their doors to customers; their workers scrambled to close up so they could get out of there right at 6 p.m.—the moment their shift was scheduled to end.
Meanwhile, the smaller, family-owned food joints—a Vietnemese, a sushi and a Greek restaurant—were still serving to the public.
Shoppers raced to the food court hoping it would still be open, and lined up at the still-open restaurants—stoked to grab a quick dinner on their way out.
Playing out in front of me was a perfect display of the dichotomy between entrepreneurship and hourly wage employees.
I don’t blame the Dairy Queen employees working for $11 an hour for wanting to close up and get out of there the moment their shift ended. There was no incentive for them to accommodate the demand and stick around to continue to serve eager customers for another 10 minutes.
On the flip side, the owners of the Vietnemese, Sushi and Greek restaurants had huge incentive to sell the rest of their curry chicken, tuna rolls and lamb souvlaki in the final minutes of the evening: They had the chance to sell any leftover food they would otherwise throw out, and earn more money in the process! Their decision to work another 10 to 15 minutes benefited them, and also the happy customers. Entrepreneurship—and human nature—in action.
Imagine the same situation at a gym:
The last class of the day ends, and a handful of athletes want to stick around for 20 minutes to finish some accessory work:
What coach is more likely to kick up a fuss and kick people out five minutes after the 8 p.m. class ends because he wants to get home? And what coach is more likely to turn away a walk-in prospect just as he’s leaving for the night? The coach making $20 an hour to coach the class, or the coach whose pay is directly tied to bringing in and retaining clients?
Similarly, if a rowing machine stops working, who is more likely to fix it? An hourly-waged coach, or a business owner? What about if the floor is dirty? Or the bathroom is messy? Who is more likely to clean up?
And what about if a client is hosting a fundraiser for his choir? Or is dancing in the Nut Cracker at Christmas time? Who is more likely to support the client’s cause? A coach who barely knows the client, but who happens to coach him once a week? Or the coach who directly earned $1,000 off that client in the 12 months?
Accommodating customers, and in our case clients, really has very little to do with with being a good person, or a good coach. The Dairy Queen worker—the one who chooses to lock the doors instead of serving the last customer begging for ice cream—isn’t a bad person, or even a bad employee. And neither is the hourly-waged coach, who sends his gym owner a text message about the burnt out lightbulb, instead of changing it himself.
It has everything to do with incentives.
If you’re the gym owner, would you rather have coaches who act as entrepreneurs, or part-time coaches you pay $20 an hour—who leave post-it-notes with smiley faces on rowing machines when the monitor needs a new battery?
Just some food for thought…
If you’re interested in reading more about developing coaches to become self-sufficient entrepreneurs who get paid based on a percentage of revenue basis, check out these two recent blog posts that detail MadLab’s 5th and 6th Laws of Gymmin: Coach Compensation and Coach Development.