Q&A: Eric Schreimann on the Ins and Outs of Employee Ownership
St. Louis’ Club Fitness — January’s cover story — is unique in that it’s employee-owned, a characteristic that’s rare in the fitness industry. The brand became employee owned in 2015, after founder John Crocker decided to retire and transitioned the business from sole ownership into an employee stock ownership program (ESOP).
Here, CEO Eric Schreimann discusses the challenges and opportunities of employee-ownership.
What did the transition from sole ownership to an ESOP company look like? What were some of the challenges you had to overcome?
John had established the company 25 years prior, and had really run it like a small business. This was an opportunity for him, as part of a succession plan, to make that transition. Some of the challenging parts were on the financial side — getting the financials in order and prepared to make that transaction complete. It was a time-consuming process getting the company in a good position and prepared to sell to the ESOP trust.
And then really just the education, learning about the ESOP. What does that mean for the company? What does that mean for the founder? What does that mean for the employees and the longevity? We had to look at how to effectively communicate the transition to them so they really understood what an employee-owned company was, and what the value was. We had to convey how the success of the company could have a direct impact on their success as well.
Now that it’s been a few years since Club Fitness has made the transition to an ESOP company, what initial impacts are you seeing?
At this point, it really differentiates us in the industry, especially among our competitors here in the St. Louis market. And of course, we don’t have employees — we have employee-owners. Everything we do or an employee-owner does on a daily basis has an impact on our member experience, obviously, but it also has a direct impact on them. Our staff, our team, has skin in the game and they have a vested interest in the overall success of the organization. It’s pretty exciting.
Other than the stock ownership program, are there any other ways you strive to make employee-owners feel valued?
We’re very focused on employee engagement and employee development. We regularly have committees where we’ll bring a group of folks from all over the organization at different levels and different positions to brainstorm. We talk about what’s working, what’s not working, ideas and best practices.
And we’re nimble enough where we can identify some of these great ideas and best practices and plan and execute very rapidly. We seek feedback from the field and our associates know their opinion is valued. We try to find different forms and different avenues to reward and recognize and seek feedback in any fashion that we can, to really ensure our employee-owners are engaged and feel that value.
What will be key to your continued success as an ESOP company and health club in general?
I think it’s two-fold. One obviously is to continue to be an organization that values employees and employee development, whether this is a short-term opportunity for an employee that’s home from college, or somebody who wants to make it a career. We want to make sure they feel valued and that we mentor and develop them.
We also have to ensure we don’t become complacent and happy with just where we’re at today, that we’re always forward-thinking on how can we provide a better experience for our members. The key is not staying stagnant, always trying to have incremental improvement and growth in the organization.