Life Technologies: C-Suite with Jeffrey Hayzlett

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Nov. 19 (Bloomberg) -- On this week's episode of "C-Suite with Jeffrey Hayzlett," host Jeffrey Hayzlett travels to San Diego to visit biotech giant Life Technologies to find out how the C-Suite is preparing for the company’s acquisition by Thermo Fisher (Source: Bloomberg)

I knew for a long time that the way people were working out was stupid.

All is well in the house of crossfit.

It is a revolution, a juggernaut.

I can't stop it and no one else can.

I look at your c-suite and your boardroom and i see this.

We have been asked repeatedly is this a cult, but cults usually come with some kind of crazy belief system.

This is a disruption in the traditional distribution model of fitness training.

I'm jeffrey hayzlett.

I'm on a journey inside the biggest brands in america.

I have been a cmo, ceo, and a boardroom cowboy.

Now i'm visiting the executives in charge of the most powerful companies in the world to see how they have tackle the challenges of the c-suite.

We're going to look at a movement that is changing the fitness industry, crossfit, a $100 million company that looks like a gym that i used when i was in elementary school.

A have jump ropes, a ball, a tire, some weights, a pull up bar.

They have developed a one-of-a- kind intensive workout regimen.

They have 60,000 trainers and nearly 8000 affiliate gyms.

Over 100 countries.

They make money from the affiliates themselves paying in and they make money on the certification of the trainers.

They have a growth rate of 70%. 61 countries.

50 new affiliates a week.

This is hot.

It looks like one of their biggest opportunities is the crossfit games.

This could be huge.

It is a whole new sport.

It fills up stadiums.

It is a great way to get the brand out there.

They have key partnerships with brands like reebok.

How is that affecting the bottom line?

How do they maintain that community identity that sparked this movement while attempting to expand to a wider market?

I am curious about the guy leading this, coach glassman.

He is a training guru turned entrepreneur.

He is the sole owner of the company and runs the business his own way.

He writes nothing down.

No rules.

No officers of any kind.

There doesn't seem to be a structured program.

Anything goes.

It is working and working well.

How will he keep control with all of these affiliates all over the world?

Every successful business has passion.

But, it takes more than passion to run a business.

It takes profits and revenues.

I want to see if crossfit has what it takes.

Crossfit's top affiliates are in san diego for the company's annual trainers summit.

It is at meetings like this that coach glassman reinforces the brand identity to those spreading the message.

The honor here is not that i started this revolution, it is that i am standing in front of the best trainers on the planet.

The best.

The revolution in wellness and the businesses that are part of it, the health and wellness cannot be separated.

This crazy craze of fitness that you are the global purveyors of, it is coming from you, you are the wellspring for it.

It is a revolution, a juggernaut.

I cannot stop it.

Nobody else can.

The affiliates in his room represent the trainers and gym owners who are paying for certification and recruiting new people into crossfit.

In short, they are the folks feeding the bottom line.

Glassman has to make sure they are committed to the brand.

It is visually unique.

It is a brand.

It is a visual identity.

You have done something that makes people look different.

This has an enormous potential.

We are serially successful.

With our growth, with the spread of the word.

This is a business story that is growing as fast as the fitness story.

Coach, tell me the story of crossfit.

How did you get started?

I knew the way people working out was stupid.

I opened my own gym for the first time.

I convinced a bunch of local friends at the way they were working out was not effective or correct.

We built a mass movement out of this.

How much are the start up costs?

$3000 would secure your licensing fee.

Then you need the space and the gear.

A couple of ropes and a medicine ball.

People have started this in alleys, public parks, abandoned lots.

It is a multimillion dollar business on a multibillion dollar industry.

That's exactly right.

We have a rapidly increasing revenue.

We are increasingly profitable.

But we are holding a diminishing share of the total crossfit ecosystem.

That is actually by plan.

Why do you have a diminishing share?

Is that because anybody can do it and get it for free?

The point is that our revenue is tied to what it is we do in leading the community.

As the community grows, we scale nicely and comfortably.

We are increasingly profitable.

But the community is growing at an even greater rate.

These are his top lieutenants.

They are not your typical suit and tie executives.

Both are devotees that embody the brand and ensure that glassman's vision is executed consistently throughout crossfit.

What does your c-suite look like?

Dealing with the leaders of the company?

It is absolutely loose.

That is its brilliance.

We speak frequently with greg and understand the vision back and forth, a positive inner -- interaction, and open lines of communication that allow us to function so well.

The executives and the company recognize the informality of the way things work.

We are going to get the guidance that we need in very informal settings.

There is a core of us that operate around greg.

As that filters down and as we grow, there is structure.

What comes below as is infinitely more structured than what is above us.

There is not a lot above us.

Small companies can afford to have an unconventional c-suite, but as crossfit tries to expand, will that lack of structure hurt them?

Do you think you can scale it as you grow?

For sure.

We have scaled it immensely already.

We are going to continue to scale in this fashion.

Six trainers will train 60 trainers, and 20 or 30 of them will go open up a crossfit.

Each one of those will have anywhere from 100 to 500 clients.

Is it a mission?

Definitely.

All is well in the house of crossfit.

You can be crazy proud of all of it.

I am standing in front of the best trainers on earth.

It makes me proud.

I am out of here.

We hit 5000 affiliates last november.

We are likely to hit 10,000 this year.

Approaching 80,000 trainers.

Those numbers were 45,000 a year ago.

We have a growing growth rate.

This is a disruption in the traditional distribution model of fitness training.

Our structure and decision- making may look like a church or a biker gang.

More towards the church or the biker gang?

The biker gang.

You do not get this camaraderie in a boardroom.

This is necessary.

Money is how we keep score.

Fun is more important than money.

When i was part of a c-suite of a fortune 100 company, we had regular meetings that we had to participate in as a management team and as a leadership team.

How do you pull that meeting together?

Interesting company.

Virtual offices.

We had no locations.

We were working out of homes.

We are a web company.

We have our website.

It is hosted somewhere that none of us have ever been.

The staff is scattered throughout the world.

Pretty strong high density in california.

I have them in canada and on the east coast.

We had to find ways to do this, to get together.

Besides meetings like this, what are the other ways that you guys get together?

The company has several homes where we bring people in and hang.

We might stay there weeks or six months.

We have meetings at 3:00 a.m., have meetings on jets and meetings in africa.

We just get together.

Tonight, we are going to go to the course again.

That is a fan favorite.

Then we are going to hit up the beach.

We have food and football.

We have volleyball.

I said all this, and chuck goes, you know we have work to do.

There will be time.

We are going to get the work done.

Our structure and decision- making may look more like a church or a biker gang than it does to corporate america.

I think it works with better efficiency than what is happening in corporate america.

More like a church or like a biker gang?

The biker gang.

I'm headed to the navy seal obstacle course.

This is not a bonding experience.

It is integral to the business, just another day at the crossfit office.

Why do you tie this into the business of crossfit?

These guys are bonding.

This is the ultimate teambuilding exercise.

How many businesses do this?

Not many.

How many would pay thousands of dollars to have seals training?

To be the best warrior like these guys are trying to be?

It makes sense.

How much business is getting done here today?

You are out working.

You will have a little barbecue.

How much business gets done in this environment?

The best business.

You do not get these moments of camaraderie and shared suffering in an office environment, in a boardroom.

This is necessary.

This is more important than a lot of the training we will do.

[applause] we're going to start jogging back to the area where we have food waiting.

It has been a big thing in the media about you owning 100%. why is it important for you to do that?

It is not important that i own it.

It is important that the ownership be kept with those that are running the company.

We will put this thing into trust when i am gone.

It will never be on the market.

I think it is too important to be sold.

We have a runaway business spawning 10 new businesses a day.

They have a 97% survival rate at the five-year point.

I'm a former fortune 100 officer.

When i walked into a boardroom, it was a boardroom.

There was mahogany on the wall.

The way we did business was a certain way.

That is the way you see most business being done today.

When i look at your c-suite, and your boardroom, i see this.

What is it that you see when you think about the c-suite and your leadership, and how you do this?

The c-suite is me.

What i say goes.

For good or ill.

That is how it is.

We have an office.

We come in there and get on laptops.

We do our programming meeting once a month.

Off you go.

There is a lot of times in a franchise operation, this is different.

Sometimes you see more than one location they get territorial.

In terms of this guy is encroaching greed are there multiple ones where you are at?

My nearest competitor is 800 meters away.

We run 800 meters.

It doesn't matter.

You refer to other people?

When people call me on the phone, one of the questions i ask is where do you live?

If you are close, do you know there is a gym closer?

I tell him.

It is up to me what to do in my business.

Crossfit does not tell me what to do with my business.

Anything i feel that would make my business better, if i painted my walls green, it is completely up to me.

I can do whatever i want.

If it was a franchise, you need to do these certain things, i might have some thoughts, i don't know if i want to change that.

Because i am unfettered, i feel like i can do whatever i want whenever i want to do it.

The only control from up top is the use of the actual crossfit name.

There is no structure at all as to how we run our gyms.

Coach told me early on, build a place that you would want to work out and people you would want to work out with will show up to work out with you.

That is what everybody does.

It works.

You're making money though.

Yes.

It is all great to have fun, but money is how we keep score.

Fun is more important than money.

From the owner on down, everyone at crossfit shies away from the f word, finances.

With a major television property like crossfit and new affiliates joining every day, this company is bringing in the bucks.

It is time to hear some tangible numbers and get to the bottom of this thing.

The games are about making money for crossfit.

How do you make money?

I don't think anyone thinks about adding another zero.

Every time i bring up the question of money, everyone moves me to the community.

We will be committed to delivering the right messages to the right people for the right reasons.

Crossfit exists in empty warehouses and converted gyms.

But with the crossfit games, the brand has thrust itself into the global spotlight.

The annual contest among crossfit's elite athletes is both a showcase for the brand's unique training methods and an attempt to create a new sport.

I visited with the gm of the crossfit games to see how it drives the bottom line.

When we look at the games, how are you making money from the games?

The games is not principally about making money for crossfit.

Crossfit works because of our training department and because of our affiliation programs that we have.

The game is a celebration of the community.

It is a definitive test of what we declare -- you have to pay for it.

How do you make money?

By selling tickets.

We have strategic partnerships.

With companies like reebok.

Most of it is funded from crossfit.

It is subsidized by the success of the affiliate program.

You have two forms of revenue.

You have one on the affiliate fees and also the instructor fees on being certified.

What then becomes the other revenue sources?

I know the reebok deal.

Doesn't the games become a way to make money?

Possibly.

Greg has been clear we are not running the games in order to be a third financial engine.

Right now this is designed to support the affiliates.

It supports the other main engines of our company.

It is not designed to be a standalone.

Is anyone adding zeros?

Does anyone say let's go from 6000 to 60,000? let's go from 170,000 at the games next year to 1.7 million.

Who is thinking of that, or is anyone?

I don't think anyone thinks about how do we add another zero.

Everyone wakes up thinking how do we make it better?

Most other c-suite guys are saying -- you don't care about sales?

We are saying excellence is here.

The money will find excellence.

We never found that chasing money will make things better.

We are in a unique position that the core engines of our company are doing well.

We make it better.

In turn, that supports our affiliate community.

The finances take care of themselves.

The entire operation today, how many people do you reach?

In terms of these live media?

Millions.

We had 16 or 20 million page views the week of the games.

600,000 people clicked on the view espn the day of the games.

How do you capitalize on that?

Once that airs and someone says, i saw it, how do you and the business capitalize on it?

Everything we're doing is for the same thing.

We are trying to serve the community.

We are trying to educate people on proper movement and nutrition, proper activity.

How they all come together in a measurable and repeatable way.

The games are one of the components of that.

We are real.

It is better fitness.

Fair enough.

Maybe everyone in -- everybody would say they are real.

Fair enough.

Maybe you are right.

Do coke and pepsi really think they have a different product?

Do they really think there is a substantial difference in one soda versus another?

My guess is no.

They are a lifestyle.

They represent something.

It is image.

They are probably as fanatic as you are.

They could be.

Every time i bring up the question of money, everybody in this company moves me to the community.

Everyone moves me to the real truth.

Is it because you guys have so much money you don't need to keep track of it?

In the end, you have to pay the bills.

What i started, what we committed to was delivering the right message to the right people for the right reasons.

I met with your team yesterday and they said we don't care about whether or not we make money.

You still have to pay the bills.

Absolutely.

Your sights need to be set on excellence.

That does not vary with mood.

We know what our heart rate should be.

But there are complicated mechanisms.

Don't spend more than you're taking in.

I have a dashboard, and i'm watching it all.

Do you look at the close ratios?

No one is selling to close anything.

You don't look at the pipeline?

I do not have a guide for growth.

I'm a process guy.

I'm not an endpoint guy.

Crossfit's management shies away from talking about money.

Coach glassman will take on anyone who attacks the brand.

I've never been afraid of controversy.

This thing was born out of controversy.

I was the guy who said, you are all doing it wrong.

The emperor has no clothing.

You can't be afraid of controversy.

It was born out of that.

Much of the controversy arises from questions about the safety of the company's intense workout program.

How important is safety to the participants?

Safety is always paramount.

What we don't do is sugarcoat the message or the idea of it to the point where we are not telling the truth, which is that anything that works, there is going to be some risks.

We prefer the term risk to safety.

Start low and then ramp up.

Get consistency, do the workouts regularly, then you layer on the intensity.

You guys are all going to keep score for each individual.

Your cumulative score is your team score.

She is giving me her boot strings.

We have been asked, is this a cult.

We have and asked so many times that i started asking, are we a cult?

The worst kind of cult, to be leading one and not knowing it is one.

We started asking, how is this not like a cult?

I know some of the things about cults, they usually come with a crazy belief system.

Here is what we believe -- we believe that there are salient changes you can make in your lifestyle in terms of exercise that make a profound difference in your life.

The bottom-line of success comes out of doing something important, significant.

I am more than ok with that not panning out.

At the end of the day, no regrets.

We will do the right things for the right people for the right reasons.

It turns out that is handsomely profitable.

The people who find a higher purpose to business are the ones making all the money.

What i learned about crossfit, about their c-suite, it is without walls.

It is unconventional.

They operate as a virtual team home, and it is successful.

In the business world, what works now may not work tomorrow.

The leadership is committed to maintaining the core principles of what is undeniably an organic movement and a disruptive fitness industry innovation.

But as the brand expands, as it creates more jobs and adds partners, will its unconventional structure work?

This text has been automatically generated. It may not be 100% accurate.

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