During his 28 years at Precor, Paul Byrne helped the Woodinville, WA-based company grow from a home fitness equipment manufacturer to a global supplier of commercial and home fitness equipment. He also helped introduce the elliptical to the industry.

But after spending 13 years as president of Precor and the previous 15 years as vice president of sales and marketing for the company, Byrne says he's "ready for another adventure."

That adventure began on Sept. 1, when Byrne retired and Rob Barker, Precor's former vice president, assumed the role of president.

Byrne began his career in the fitness industry selling Paramount Fitness equipment out of his apartment while getting a master's degree at Syracuse University. Several years later, he co-founded Concept 90, a chain of specialty fitness retail stores. (For more on how Byrne got his start in the fitness industry, watch Club Industry's exclusive video interview.) While at Concept 90, he got to know Precor founder David Smith, who offered Byrne a chance to join the young company in 1985.

"[Byrne] was there at the earliest stages of the development of the company, and he has just grown immeasurably over the years," says Rick Caro, president of consulting firm Management Vision, New York. "He was someone who really believed in change and creating more answers to challenges we had in the industry in terms of new equipment and new expertise."

Byrne's willingness to pursue new ideas was crucial not only to Precor's growth, but in getting other fitness companies to take risks as well, says Jim Birrell, Precor's chief innovation officer and Byrne's longtime colleague and friend.

"I think that ultimately Paul will be viewed as somebody who was instrumental in pushing the entire industry to innovate," Birrell says.

In an exclusive interview with Club Industry prior to his leaving the company, Byrne reflects on the changes he's seen in the industry and offers advice to the next generation of fitness entrepreneurs. He also discusses his accomplishments and failures at Precor, making the difficult decision to retire and the legacy he hopes to leave behind.

Precor's Evolution

CI: How did Precor change during your time there?

PB: In a way, it hasn't, and in a way, it's changed massively. Obviously when I started, it was a very small company, but still $19 million or so. It was decent sized, but it was essentially a one product company. We sold mainly rowing machines and mainly one rowing machine that was hugely profitable. We were just starting to dabble in bikes and treadmills, so a very small single product company, but a great spirit, which is what attracted me to Precor. David was a perfectionist, and that's what Precor means, Precision Corporation. There was this drive and this passion to be perfect that I liked and a spirit that I say drew me there. That spirit is still there.

How it's changed is that obviously we have a super broad line of products. We've reinvented ourselves many times. Back in those days, we had that one product selling through primarily one channel, which was sporting goods at that time, then a smattering of small specialty operations, like Concept 90, which were just starting to emerge, but it was a much more simple business. Now we're basically in every country. We sell through multiple channels just about in every country. We have a broad range of products that we didn't have back then, but certainly the core spirit is still there. One of the great things is that we do have a super solid culture, and anybody that's been there will comment on it.

CI: What role do you think you played in the evolution of that culture, as well as Precor's growth?

PB: On the growth part, I think I have a lot to do with it. I started out really as a product guy. I came in for sales and marketing, but I think I've always had a decent eye for product. I had a decent feel for what could be successful in the marketplace and, you know, the elliptical was the first big hit. Obviously I had a lot to do with that, as did Jim [Birrel] and Bill [Potts, former president of Precor]. And that helped us get into the commercial space, which I thought was so important to our future because just being in retail, it's very hard to build a brand. To me, the way you did that was to get into those key spaces like health clubs and hospitality and universities where you gain the credibility you need to get a solid brand.

So that was the whole point of the elliptical, and it was the first time ever that we had actually developed a new product and introduced it first in the commercial space instead of introducing it in the consumer space because we thought this was so different. We wanted that credibility, and we knew it's going to resonate with that group, and we took a shot. It was actually very controversial internally, but that's what we did, and obviously it was a huge success.

We decided we really needed to build on that because my fear was that we would do the same thing that some other companies did. We used the elliptical as a springboard to other products, and I'm really proud of that. If you look at where our revenue comes from, ellipticals are big, but we sell a lot of treadmills, and AMT (Adaptive Motion Trainer) is super successful, and our strength business is up. Cardio theater was a big, big driver of our growth. So we've kind of spread it around. Now we've got a broad, wide base, and that's important because you can absorb any shocks that come along in any given product line.

Successes and Failures

CI: What do you consider your biggest accomplishments?

PB: Well, the elliptical was personally satisfying because we knew the inventor, and he came to see the people who thought maybe it would be successful, but marginally so. We even showed it to some customers who said, "Meh, some people might like this." We felt it was going to be a big hit, and it was, so that felt good.

The others, that in a way were just as important, were getting into entertainment early. We acquired ClubCom's cardio theater [division in 2004], and this is a time when most of the entertainment was ambient TVs on walls. Nobody was really integrating entertainment units in a meaningful way. So when we bought cardio theater, that's the first thing we did. We went out and we integrated the 12-inch screen into the system so it would fit beautifully and be easy to navigate. It was the right height so that you could watch the television, and you could buy the product so that it had the TV or it didn't, and if you wanted it later you could. It was really thoughtfully done by our design team, and that was huge for us because sales really took off.

But that was really gratifying. That was significant growth, and it was broad-based, it wasn't just the elliptical. It was everything we sold. We acquired Icarian at that time and the strength sold well, so I think that was one of the more significant and successful moves.

CI: What do you consider to be your biggest failures?

PB: I like to quote Jackson Browne when it comes to that. I forget what song it is, but he has a line in one of his songs that says, "We forget about the losses, and we exaggerate the wins." And I kind of like that. My memory…I don't remember those failures that much, but they were there. The good news is there was never anything catastrophic. If I look back, I look at acquiring Icarian... I wouldn't call that failure at all, but I look back and think I should have invested more in. We bought it, but it required more resources. I should have hired more engineers sooner. We should have amped up the product development more quickly. So in a way, kind of a missed opportunity there. We've caught up, but that was definitely a lesson in if you're going to do something new, make sure you fully analyze the resource needs and allocate the resources to make sure you're successful.

Other failures have been just product things that didn't maybe work out as well as we thought. The stretch trainer, which is a great product, has been successful, but it hasn't been a home run. We've had a few home treadmills when we tried to do low-end that fell flat on their faces, but those things all happen. Luckily, the big bets have paid off.

I think it's really important to learn from [mistakes], but I'm not a big believer in rear-view mirrors. It's what's here and now and it's what's in the future that's all that really exists. You have to learn, but you can't dwell, and you can't get scared.

(Later in the interview, Byrne recalls what he considers to be his greatest failure.) I just remembered, it was buried so deep in my brain. When we did the StretchTrainer, I decided that it needed a lot of marketing. We actually tested an infomercial with the StretchTrainer, and that was very expensive. We had to shoot in Florida, we had talent, we used a famous physical therapist, and everything was great. The ad was great, the product was great, there was just one problem—it never sold. So that experiment was one that certainly taught me a lot about direct marketing. I know now that direct marketing is a big, big bet, number one. And number two, you better have the margins built into the product to pay for a huge, huge advertising cost. From a dollar point of view, that was probably my biggest screw-up.

Taking the Lead

CI: How would you describe your leadership approach?

PB: With my team directly, I try to give them a lot of space. I think if you asked any one of them, they would say I'm like the opposite of a micromanager. I try to manage the way I like to be managed, which is totally hands-off. And I have to say as an aside how lucky I was in the early years of Precor to work with Bill Potts, who was president most of the time when I was here. Bill left me alone completely and also allowed me at the same time to be part of the senior team where I learned operations and finance. It was tremendous on-the-job training, so I think Bill was really, really critical in getting me where I was just with his style.

I appreciate that same style, so I try to give it to my guys. We agree at the beginning of the year what are the goals, what do you want to accomplish, and that's very clear. But once that's established, I let them run. We meet once a week and catch up, and if it's off course, I tell them. But I think my style is more questioning. I play devil's advocate a lot. I'll take positions sometimes that I don't even believe in, but I want to see if that direct report is going to fight back and how much he or she believes in their position. I don't like to be the Shell Answer Man. I think it's more important that they come up with the solutions and defend the solutions. If I felt really strongly about something, I'll tell them and pull out the president trump card, but that's rare. I try not to do that.

CI: What was the learning process like when you transitioned directly from vice president of sales and marketing to president in 2000?

PB: When you just look at it on paper, it looks like it was handed to you. But I started in 1985, so it was 14 years or so to becoming president. As I said earlier, working with Bill was fabulous because we had this senior team that we made all the decisions together, and it was a way for me to really learn business. So you had that kind of situation, and then you had just the fact that we kept changing over time. Being vice president of sales and marketing at a $19 million business that had one product that was selling through one channel is completely different when you fast-forward 14 or 15 years later to an international business with a much more full product portfolio selling through multiple channels, so I got to learn all that as I went along. I think I was really ready by the time I got to 2000 to take over.

CI: How has your leadership approach changed over time?

PB: When you first get into the role, you're coming out of a functional role. I think in the early years, it's hard to let go of being the one who directs, in particular, that area. You're president, so you're still in many ways directing it. It took me a few years, but I was able to back off completely and be a leader.

I'm watching Rob, who's taking over for me now, and I've counseled him that's one of the things you really need to be cognizant of. You're no longer the operations head of whatever area; you're the president, and those are really two different things. So the role has to be setting the direction, making sure you're surrounding yourself with a great team, understanding the importance of culture and buy-in and everybody moving in the same direction. That's about communicating on a regular basis, getting out and talking to people and making sure people are excited about what you're doing. That's completely different from being part of a functional area, and that's a transition that I think I was able to make. That's a fun, fun part of being a leader, and it's a part I'm going to miss quite a bit.

Trends and Advice

CI: What stands out as the most important changes that you have seen during your time in the industry?

PB: From the equipment perspective, obviously I've seen a lot of changes. When I first got into the business, it was basically a strength business. It was Nautilus and Paramount and some free weights. Augie [Nieto, founder of Life Fitness] was kind of just getting going selling people those funky bikes called Lifecycles to whomever he could convince to buy them. And he may have had some kind of stationary bike, but that was it. Even treadmills weren't there in any major form. There were a few treadmill manufacturers that were mainly medical. So the big change that I saw early on was the move to cardio, not necessarily away from strength, but to balance strength.

I think it's important to understand the underlying drivers. We also viewed it as sort of the baby boomers moving through their life cycle, and that's one of the reasons that when the elliptical came along, we jumped on that. We were thinking, first baby boomers ran. They were running in races, doing 5Ks or 10Ks, and working out until they puke on Nautilus. It's really funny, if you look at it now, it's really the same things that are happening with my kids' generation. They're doing CrossFit and all this really tough stuff, and it was the same then. Then, as baby boomers aged, you could see that the cardio modalities took that into account, like the elliptical trainer. We were the first ones to do a low impact treadmill for that very reason, following those changes that were driven by demographics kind of along the way.

I think in the broader sense, we've seen a lot of changes just in the clubs and how they approach customers because early on, most clubs were going after the same customers roughly in the same ways. And I think what you see now, and what we've been seeing, is segmentation getting more and more fine, in a way. You see the Anytime Fitnesses and the Planet [Fitness clubs] and all the low-cost guys. You saw Curves and how brilliant that concept was going after women who were intimidated to walk into a club. Slicing and dicing these customers into their segments and giving them a lot more focused experience is a change that's been happening, and I think will continue to happen.

CI: What would be your advice for somebody starting out in the fitness industry today?

PB: There would be two pieces of advice. One would be just a general statement that I think this business is poised to go to a whole new level. I think that the focus on wellness and health is only going to continue.

But then the next statement would be to be really clear about your customer segment. Know exactly who it is you're targeting. I'd make sure you were very, very specific around that, whether it's a product or a club. What's the segment? What are you going after? And then make sure if you're building the business that you surround yourself with good people and execute. It's not that complicated a formula, but if you don't go in with a clear vision of who is the customer and how am I going to go after the customer, you risk sort of flailing around for a while. A lot of times when you first get started, you don't have the money to do too much floundering, so do your homework up front.

Looking Forward

CI: Why did you decide to retire?

PB: I was just asking myself that. It was just time. I'm 62, and I've been thinking about it for a while. I was actually thinking about retiring earlier, but I wanted to see us through the kind of tough period of 2008, 2009, and I wanted to make sure networked fitness was successful, so I'm feeling good about that.

I'm 10 years out from my own health scare. I had prostate cancer when I turned 50, and luckily it's apparently in full remission, but that's a wake-up call. And my wife, she vouched for running the numbers, and in the 28 years I've been here, I've been away from home for over three of those years flying to different parts of the world. That's a big price to pay for my wife and my family, so I think I owe her a little more time. It may be something she'll grow to regret, but I think that's important. And I just had some other things I wanted to do.

I'm a little conflicted to be honest, but I know it's the right move for me and I'll emerge, probably in some other role, in a couple of years. But for now, there are rivers I want to fish. I'd like to be a little better skier, a little better golfer. I'd like to get my Spanish a little better. But I definitely will come back and talk to people about advisory positions at different businesses. I'll stay involved. I love business, but I'm ready for another adventure.

CI: Why did you recommend Rob Barker to succeed you as president?

PB: I've known Rob since 1995, and we've worked together all that time. He was the guy who I felt embodied what we are. He knows the culture. He knows all the people. He has a demonstrated track record of success. And I felt like he could not only sustain where we are but help take us to the next level. Rob's from the [United Kingdom], and his world has been the EMEA (Europe, Middle East and Africa) and Asia. He's run our international business, and he's done a tremendous job running that, so he'll give the homeland here a much better international perspective.

I think he's brilliant at what we call go-to-market. He's a brilliant sales and marketing guy, and having his experience available more closely to our team here is going to be really helpful. I'm super confident that he's the right guy, and he's going to take Precor to the next level.

I'm staying on as an advisor through the end of the year for sure and probably next year. To the extent that he wants me, I'll be available to him. As a senior seasoned executive, you've seen things and you've made decisions and you have the capabilities to put a bunch of pieces together and predict an outcome that is probably better than a guy who is 30 years younger than you. He may be twice a smart as you are, but he hasn't seen those things yet, so you want to be able to take advantage of that experience in some fashion. That's why I'd love to be involved with young companies that are trying to take their business to the next level, because I've done that, and I know I can help people get there more quickly.

CI: What do you want your legacy to be?

PB: I'd like to think that Precor has such a solid foundation, and at the bottom of the foundation is the people and the culture. And from that, we can adapt to anything in the market and continue to grow and be a great company. That's what I try to focus on. Bringing in the best people we can possibly bring and attract them because we have such an amazing culture that people love to work there. They're passionate about what they do. We have a creed that we read before every company meeting. It's about what we believe in. [The creed begins: "I desire a life without limits. I believe fitness is key to living the life I desire."] Those are the first two lines, so when people come in, they know what they are getting into. We want people who are passionate about our mission and that are smart, self-starters, ask questions, always want to be better. So if you can bring those kinds of people in and create a culture that sustains itself, then we'll be great. I'm not worried about that.

I hope that's my legacy. I hope Precor continues to get better and better and better. That would make me feel great.