As a university professor teaching Principles Microeconomics, we invariably talk about production, costs, and profit maximization.
And as a fitness enthusiast, I try to share with my students academic research on the connection between fitness and profitability.
But the burgeoning relationship between Reebok and CrossFit may take this connection to another level altogether.
And in the process, potentially setting a prime example for corporate leaders regarding how a company can simultaneously enhance their brand, their sense of internal community, and their bottom line by encouraging employees to be open-minded about embracing team-building fitness regimens.
CORRELATION BETWEEN INDIVIDUAL FITNESS AND CORPORATE PROFITABILITY
Conceptually, understanding the connection between fitness and profitability is relatively straight-forward. Other things held constant, the logic is as follows:
Corporate profitability rises with greater worker productivity and lower costs;
Healthier employees are (a) more likely to be productive because of greater energy levels and higher self-esteem, and (b) will cost the company less money by virtue of fewer sick days, lower absenteeism, and reduced health care costs;
Therefore, encouraging employees to be healthier should boost their productivity, lower costs, and thereby enhance corporate profitability.
The majority of the academic literature on this topic (consider Examples A, B, C, D, E, and F) generally supports the conceptual thinking above...though there is some research to the contrary (consider Example Z).
ADDRESSING EMPLOYEE EFFORT AND INTERACTION
Two of the greatest challenges facing managers at companies throughout the world are:
How do we motivate our employees to provide their max level of effort?
How do we break down inter-office barriers so as to enhance the level of community and teamwork within an organization?
After all, poorly motivated employees tend to be minimalists, and internal dysfunction among employees deflates morale and is seldom positive. Neither are consistent with the goal of profit maximization.
To the first point and tying the conversation back to fitness, it is not uncommon for firms to have a fitness center on-site for staff or subsidize off-site gym memberships in order to reap the "worker productivity benefits" espoused above. Having such programs generally improves employee recruitment and retention as well.
To the latter point, it is not uncommon for firms to employ a "company retreat" or similar "team-building activities" to improve internal employee dynamics.
However, most companies show little interest or concern in how their employees attain physical fitness. Either with respect to the style of workouts they engage in (be it running, weightlifting, and the like) or the setting (be it in isolation or in a group).
In short, most companies have not effectively sought ways to enhance both employee fitness levels and employee inter-office interactions in one fell swoop.
That said, Reebok and CrossFit may be on the cutting edge of how to wed corporate branding initiatives with work-style and life-style choices in a way that simultaneously addresses corporate issues associated with employee effort, engagement, and interaction.
MAKING GROUP FITNESS PART OF CORPORATE CULTURE: THE REEBOK-CROSSFIT PARADIGM
After being acquired by Adidas in 2006, Reebok was seeking new direction. "We lacked true brand management", according to Reebok's President Uli Becker. "We lacked strategy. We asked ourselves 'what will we stand for?' "
The strategic direction they chose was to become a powerhouse in fitness, building upon their history dating back to the 80s when Reebok was instrumental in women's fitness and aerobics.
With this new strategic objective in mind and using product innovation as their calling card, they introduced such footwear as Easytones, Zigs, and RealFlex which significantly boosted the company's profile and street credibility in recent years.
But with respect to fitness itself they wanted to "change the process" according to Mr. Becker. "We wanted to deflect the boredom and drudgery of the journey usually associated with working out".
As Reebok was re-establishing its brand, CrossFit introduced the sport of fitness to the world in 2007 at the inaugural CrossFit Games under the guidance of founder Coach Greg Glassman.
CrossFit itself is a strength and conditioning regimen that combines weightlifting, sprinting, gymnastics, powerlifting, kettlebell training, plyometrics, rowing, and medicine ball training. It requires proficiency in 10 areas of fitness including endurance, stamina, strength, flexibility, power, speed, agility, balance, coordination, and accuracy.
As their sport and visibility grew over the next several years, it became apparent that CrossFit was becoming a potentially robust sponsorship opportunity for an astute company wise enough to buy into CrossFit during its rapid expansionary phase.
Reebok was that company, entering into a 10-year partnership with CrossFit as of November 2010.
"Most sports apparel and footwear brands are about making people fans of a team or sport. We wanted to be the company to encourage people to be more active", said Reebok's Chief Marketing Officer Matt O'Toole. "We wanted to show what fitness can do to people's lives, so the partnership with CrossFit was a natural fit."
And not more than one year removed from the birth of this partnership, Reebok has taken this partnership to heart as they have embraced and engrained the CrossFit fitness approach into their corporate lifestyle in numerous ways.
They have the largest CrossFit "box" (CF lingo for "gym") in the world on-site at the company's headquarters in suburban Boston.
They have hired 5 CrossFit trainers onto their full-time staff (including Head Coach Austin Malleolo and fellow coach Denise Thomas) to not only engage in brand management and product feedback but also be available on-site to train Reebok employees daily in CrossFit WODs (CF lingo for "Workout of the Day" where the trainer leads the class through a series of challenging physical exercises).
Tying these developments in with my earlier discussion of fitness and performance, Reebok's willingness to make CrossFit part of their corporate culture has had noticeable impacts on inter-office employee dynamics.
"It breaks down the corporate hierarchy, encourages greater collaboration and co-worker engagement, and creates greater insight on marketing our products better", according to Reebok's Head of Fitness Chris Froio.
It boosts employee morale by giving workers water-cooler and lunch-time discussions over how they survived that day's WOD. "In all my years with the company, I've never seen anything grab employees this way", said Reebok's VP of Human Resources Bill Holmes. "Furthermore, the programming is scalable and inclusive so that there is something for everyone."
It creates a greater sense of corporate community because employees appreciate that their employer cares enough about them to provide such unique fitness opportunities in the comfort of their own workplace.
It creates a greater sense of corporate purpose in that Reebok employees are more engaged in pushing the CrossFit brand if they are able to see the material benefits of the sport upon their own personal fitness and wellness levels. They better identify with the end-product, and this lends itself to greater passion in trying to sell the product.
CONNECTION BETWEEN COMPETITIVE GROUP FITNESS AND COGNITIVE ABILITY
And it just might make people more productive cognitively as well, which goes a step further from the earlier assertion that being fit may make one more productive simply from having more energy and alertness.
Harvard Professor Dr. John Ratey is one of the leading authorities on how exercise can impact brain activity. In his 2008 book entitled "Spark", Dr. Ratey's research shows how aerobic exercise enhances our brains to learn, improve mood and attention, lower stress and anxiety, and even reduce some of the effects of aging on brain activity.
The edge that CrossFit may have compared to standard isolated training programs with respect to sparking cognitive ability is that the short burst, quick change of pace format inherent in a typical CrossFit WOD arguably creates a more heightened sense of alertness and awareness than, say, jogging 3 miles around a track or simply going from one piece of equipment to another in the weight room.
The CrossFit approach forces the practitioner to almost put themselves into "survival mode" both physically and mentally, which may create greater cognitive sparks post-workout than the more traditional approaches to fitness.
This may help to explain why Reebok is heavily vested in tying CrossFit training methods to the sports of hockey and lacrosse...2 sports where short, quick and unanticipated bursts of energy and agility are necessary for athletic success.
THE POTENTIAL OF GROUP FITNESS REGIMES TO ENHANCE THE CORPORATE EXPERIENCE
Ultimately, corporate leaders want their employees to be happy. A happy employee is more likely to work hard, engage their colleagues, and take pride in the company's mission and profitability.
My take-away is that group fitness dynamics have the unique ability to serve dual purposes in corporate America which could enhance a company's bottom line in 2 key ways:
Such fitness programs encourage workers to be more fit, which based on academic research should make them more productive due to higher energy levels, greater alertness, greater self-confidence, less absenteeism, and (according to Dr. Ratey) greater cognitive activity.
Such fitness programs foster a corporate culture which enhances the level of community, morale, connectivity, and pride by providing an opportunity for colleagues to engage in group exercises that foster a sense of accomplishment and teamwork while creating a heightened sense of awareness of the corporate mission and brand initiatives.
In the case of the partnership between Reebok and CrossFit, the relationship is still too young and the data still too sparse to unequivocally conclude that creating rigorous, team-building group fitness opportunities will boost Reebok's operating profits.
But judging from the on-campus buzz and banter I witnessed over the course of my 2-day on-site visit, it is clear that employee energy, morale, interaction and engagement-to-tasks is high...as is their passion to sell the fitness brand which has already had transformative effects upon the company's strategic direction as well as the wellness of its employees.
With an impassioned and motivated workforce who can speak with first-hand knowledge regarding the benefits of the brand they are selling, it's hard to imagine anything but success for this corporate partnership and strategic branding initiative.
Dr. Patrick Rishe is the Director of Sportsimpacts, a sports consulting firm specializing in market research and economic impact analysis for professional and amateur sporting events. He is also an Associate Professor of Economics at the Walker School of Business at Webster University in St Louis.
Follow Patrick on Twitter @SportsDocRock or visit www.patrickrishe.net