Fall 2014

Message from Dean Maness – Fall 2014

Fall 2014: The Business of Being Healthy

More than one-third of American adults are considered obese, according to the Journal of American Medicine. Health-related industries have grown significantly in recent years to combat those sobering figures. In addition to the state of our nation’s health, these industries have grown as a result of regulatory reform, technological advances and consumer demand.

The 21st century “health business” is not limited to gyms and doctor’s offices. Trends in wearable healthcare technology, health foods and diets, fitness movements, wellness programs and more have diversified the health market. In this issue of the Baylor Business Review, we focus on the health food, fitness and healthcare industries.

You will read about Baylor alumni, professors, students and friends who are making strides in these industries. From a look at Baylor-funded and alumnus-run fitness equipment startup company Hyperwear to marketing professor Jeff Tanner’s research on children’s food insecurity in Texas, this issue will provide insights about the development of the health-related market and the implications of growing industry trends.

Plus, we’re offering another augmented reality (AR) sneak peek of the new Paul L. Foster Campus for Business and Innovation. This time, with the aid of the Baylor AR app (which is available on iOS and Android devices), readers will get a look inside the new campus, which is set to open for the fall 2015 semester.

Come see the progress on construction when you visit the Hankamer School of Business Homecoming Reception Oct. 31. I look forward to seeing many of you back on campus.

Terry S. Maness
Dean, Hankamer School of Business

Baylor Business Review, Fall 2014

The Rapidly Changing, Highly Disruptive Business of Being Healthy

Fall 2014: The Business of Being Healthy

By Eric Krell

Anyone looking into business opportunities broadly related to healthcare these days can expect to develop an acute case of blurry vision.

That’s because the traditional healthcare industry is in the throes of historical change, thanks to regulatory reform, technological breakthroughs and changing consumer expectations. This change is simultaneously distorting industry lines and expanding the traditional health industry. A steady procession of “healthy” offerings are emerging from the healthcare, technology, consumer packaged goods (CPG) and services industries. This quickly expanding set of products and services includes analytics-fueled population health initiatives, wearable healthcare technology (e.g., fitness trackers and diabetes applications), valuable new dietary trends (e.g., organic, gluten-free and paleo), fast-growing fitness movements (CrossFit and Tough Mudder), bio-sensing T-shirts and other healthy apparel, mobile medicine, social media health-tracking and much more.

This major disruption poses new challenges, opportunities and threats in what might now be called the “healthy business” sector. Knowledge serves as the best treatment for blurry vision. Business leaders and professionals who bone up on the forces reshaping the 21st century healthy business industry will gain valuable clarity on the individual and organizational capabilities necessary to mitigate risks while maximizing the robust and expanding set of healthcare and wellness opportunities on the horizon.

A Fast-Growing and Highly Complex Opportunity

Two figures capture the rapid, complicated nature of the healthy business evolution: 12 million and 3,400 percent.

The first figure is a recent U.S. Congressional Budget Office projection of how many previously uninsured Americans could become insured by year’s end under the Affordable Care Act (ACA), which was signed into law in March 2010 and upheld by the U.S. Supreme Court in June 2012. These new potential customers represent lucrative revenue opportunities for insurers, but they also pose new marketing challenges (e.g., connecting with and selling to prospects with lower incomes than many traditional customers; or, in several states, marketing to prospects whose first language is not English). The influx of newly insured, experts agree, will also pose capacity challenges to the U.S. healthcare system, raising questions such as: Will there be enough physicians to handle the growing supply of patients? Can telehealth/remote-care solutions help ease this burden? How can population health and related data analytics breakthroughs help strengthen preventative care capabilities? How can/should healthcare apps be regulated from a safety standpoint?

These and similarly big questions are changing traditional healthcare in fundamental ways. “The healthcare industry … [is] facing some challenges I don’t think we’ve ever faced before,” reports Jim Costanzo, Ernst & Young LLP’s global healthcare practice leader. “This is a fundamental shift in the way healthcare is delivered in this country, and frankly, around the world.” A recent industry analysis conducted by healthcare investment banking firm TripleTree echoes Costanza’s observation: “Despite its size and growth trajectory, the healthcare industry is plagued with large scale problems and inefficiencies that are prompting a massive transformation in how care is accessed, delivered and reimbursed,” the assessment reads. “The fundamental challenges confronting healthcare have created opportunities for companies with innovative technology and services that address the most costly problems.”

The second figure, published by the Organic Trade Association, measures the growth in U.S. organic food spending from 1990 ($1 billion) to 2014 (a projected $35 billion). Similarly jaw-dropping growth is evident in several other “healthy business” offerings and trends, including gluten-free (GF). Food research firm Mintel forecasts the GF food and beverage market will grow 48 percent from 2013 to 2016, when it will amount to a whopping $15.6 billion. The number of affiliates of CrossFit, a stripped-down strength and conditioning business, soared from 0 to roughly 9,000 between 2005 and 2013. Tough Mudder, an endurance-race event series that launched in 2010, has attracted more than 1.3 million participants to date.

Drivers of Sustainable Change

Fitness and health trends have flourished, typically in a boom-and-bust way, since our country’s founding. Health enthusiasts have at least briefly glommed on to Jane Fonda workout videos, step class, in-home weight machines, and several crazes related to vitamins, jogging and a dizzying array of diets.

That said, consumer’s current health awareness and interest – evident across a wide range of current dietary, fitness, care and medicine domains – as well as related business opportunities seem much more sustainable and less likely to wane due to several drivers, including:

Regulatory Turmoil: While the impact of the ACA on the traditional healthcare industry qualifies as historic, it is far from the only regulation transforming healthcare and bringing about new challenges as well as new opportunities. For example, thanks to the growing use of the number of products described as “natural” — a label with essentially no rules governing its application – the courts are bulging with lawsuits concerning “natural” products that may contain genetically modified organisms (GMOs) or other synthetic materials. As the U.S. Federal Trade Commission (FTC) cracks down, most recently, on questionable claims by makers of dietary supplements, it opens doors for businesses that produce other offerings with similar appeal. (Part of the organic segment’s impressive growth surely relates to the label’s oversight by the U.S Department of Agriculture (USDA). Although the ACA was designed with the intent of improving the efficiency and effectiveness of U.S. healthcare, major problems still loom – and likely will generate future regulatory upheaval and, along with it, new opportunities. Cumberland Consulting Group founding partner Dave Vreeland says the country confronts an “inevitable macroeconomic problem,” in that an outsized portion of federal discretionary money goes to Medicare and Medicaid, which provide the largest portion of healthcare providers’ reimbursements. This federal budget problem may pose a larger long-term challenge than the funding of the Social Security program.

Technology Transformation: As in all realms of life and business, the growing availability of data combined with shrewd analytical tools and hefty processing power is upending traditional modes of decision-making. Consider Propeller Health, a mobile platform that combines sensors, mobile apps and services in the service of respiratory health management to help reduce the cost of care and improve the quality of life for individuals with asthma and related forms of chronic respiratory disease. Propeller represents just one of dozens of companies that have shared new ideas and approaches at Health Datapalooza, a national conference now in its fourth year, focused on “liberating health data, and bringing together the companies, startups, academics, government agencies and individuals with the newest and most innovative and effective uses of health data to improve patient outcomes.” This data liberation also is fueling smart phone apps and telehealth technology that can greatly increase chronic care for a wide range of diseases, including diabetes.

Consumer Power: What happens when mainstream social media usage (already increasing at mind-boggling rates) evolves beyond “what I’m doing” updates to peer-to-peer and relative-to-relative sharing of medical histories, genetic tendencies and preventative regimens? That evolution already is in high-gear, judging from venture capital investment and conference content. One of the panels at this year’s Datapalooza IV, “Connecting the Quantified Self with the Healthcare System,” examined how personal self-tracking with wearable sensors and computing can be integrated with professional healthcare offerings. Population health refers to the segmentation of patients into different categories for the purpose of providing more effective care, or “outcomes,” in a more efficient way. By adding millions to the insured population, the ACA greatly expanded the scope of population health. Just as retail and consumer packaged goods (CPG) companies routinely segment customers into groups for marketing and service purposes, so, too, will healthcare providers, insurers and pharmacies segment patients into different categories to provide more effective and cost-efficient care. The predictive analyses required to make so-called population health improvements represent a major business opportunity. “We have more healthcare data than we’ve ever had in the history of the world, and that’s not hyperbole,” notes North Highland Vice President Fletcher Lance. “But how do we use that data to lower costs and improve outcomes?” Companies that can answer that question will thrive in the decade ahead.

Ongoing Investment: The amount of money available to healthcare and healthy business companies is already high and expected to increase. “Healthcare is the largest, fastest growing, and most complex industry in the world,” the TripleTree report states. The U.S. healthcare system accounts for more than $2.5 trillion in annual expenditures, or roughly 20 percent of the country’s gross domestic product (GDP). By 2020, healthcare spending is expected to surpass $4.5 trillion, according the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS). According to The Wall Street Journal, venture capital investment in medical software and information services has more than doubled from 2008 to 2013, soaring from $461 million to $998 million; the number of investments also more than doubled during that period, from 67 to 139.

Super Healthy Skill Sets

Will Cross Fit and Tough Mudder go the way of Tae Bo and the Jazzercise? Perhaps, but it won’t matter. The technology, money and innovation flowing into healthy businesses is unlikely to abate any time soon, which makes the following skills and capabilities increasingly valuable to an expanding number of organizations:

Data Analytics and Technical Savvy: Despite its historic transformation, blurring boundaries and extreme challenges and opportunities, the healthy-business sector is no different from any other industry in that it has a great and growing need for leading edge data analytics skills. One of the most promising areas of healthcare – mobile or remote care – also qualifies as one of the greatest mysteries: Why haven’t we been able to email our general practitioners for routine diagnoses and prescriptions in the past 15 years? The question will soon fade from our collective minds. Consumers already can pay $1,500 per year to join MDVIP, a personalized healthcare program that provides immediate access to primary care doctors who provide remote care via the Internet and email and who also develop personalized wellness programs.

Creative Collaborating: More frequent and more innovative forms of partnerships and collaboration will be needed to make healthy-business companies successful. For example, consider the extremely long and expensive journey the creation of an expensive blockbuster drug requires in the rigorous U.S. regulatory process. Now, imagine creating a new blockbuster drug that does not require years of expensive regulatory hurdles to be cleared and does not drain patients’ savings accounts. Bill Matassoni, a retired McKinsey and BCG partner and the founder and chief executive officer of The Glass House Group, began picturing this approach a few years ago. The keys to doing so, he reports, are a more win-win approach and a bigger room. “Right now the room is very small,” he says, meaning that collaboration innovation is relatively minimal, as it has been for decades. Pharmaceutical companies, for example, tend to work with Food and Drug Administration (FDA) regulators after they have a new drug ready for trial. What if regulators and research and development executives met before the drug development process kicked into gear to identify a wide range of expenses and time-consuming steps that might be pruned from the process to produce more affordable medicines much more quickly? Similarly, how can medical providers, insurers and patients collaborate in a more proactive and preventative fashion without foisting the patient into the role of medical bill mediator?

Ethical Leadership: Harnessing many health innovations raises safety and ethical questions, including this one: Should downloadable mobile health apps be regulated – and if so, by what body? “Anybody can download an application that promises improvements in health,” notes Pivot Point Consulting Partner Jon Melling. “If your application hasn’t been approved from both a calibration perspective and an efficacy perspective, the end users don’t know what they don’t know.”

Mainstream Marketing: A recent Russell Reynolds Associates survey finds that 70 percent of pharmaceutical company executives expect their sales and marketing organizations to evolve further in the coming years. The same holds for other types of healthy business. Makers of unregulated healthy and natural products will need to market based on their reputations as trustworthy companies. Healthcare providers will compete for doctors and patients. And insurers already are launching new ways – e.g., Spanish-language spots in many markets – to reach millions of new prospects.

Some organizations and individuals will see healthy business opportunities and the related skills’ needs more clearly than others. Baylor University’s Hankamer School of Business, for example, has offered an MBA in Healthcare Administration (full-time and executive programs in multiple locations) for several years – along with a joint JD/MBA in Healthcare program. Graduates of these programs and their colleagues probably are less susceptible to blurry vision when focusing on the most important risks to manage and the healthiest and most valuable opportunities to exploit.

For more information about the MBA healthcare programs available at Baylor, visit baylor.edu/business/healthpolicy.

Baylor Business Review, Fall 2014

Healthy Bears

Fall 2014: The Business of Being Healthy

By Becca Broaddus

Whether it’s going to the gym, eating better or recovering from illness, being healthy is an ambition for most people. But for some professionals, being healthy has become a business endeavor too. From fitness to nutrition to healthcare, Baylor Business graduates are contributing to health-related industries. We talked to five alumni who cater to the growing health-focused market.

View/Review: The Evolution of Workplace Wellness Programs

Fall 2014: The Business of Being Healthy

By Julie Carlson

Engaging in a walking meeting instead of meeting in a conference room; taking a yoga class during the middle of the work day; buying fresh produce at the farmer’s market that is set up in your office parking lot. These scenarios are not the stuff of imagination, but actual components of some corporate wellness programs—those employer‐sponsored services designed to improve the health and well being of employees.

Workplace wellness programs have evolved in waves. In the 1960s and 1970s, wellness-oriented large corporations built expensive employee fitness centers. In the 1980s and 1990s, companies began to offer personalized health risk assessments using biometrics and other health indicators. Smoking cessation, stress management and nutrition programs were designed to help employees reduce health risks.

“Pioneering companies such as Steelcase, Chrysler, DuPont and others originally grounded wellness in safety and occupational injury prevention. It has evolved more holistically in the last several decades to be seen as a total population health improvement strategy that impacts physical injuries, absenteeism, productivity and of course, healthcare cost increases,” said Dr. Tyler Cooper (BBA ’94), chief executive officer of Cooper Aerobics Enterprises, Inc., a wellness forerunner.

With the dawn of a new century, wellness programs have entered a third wave that looks at both health and productivity. Programs are more holistic in nature, focusing on not only physical health but also emotional, mental and spiritual health. Today, approximately 70 percent of companies have some form of a wellness program while 90 to 95 percent of large corporations offer programs that look at employee well being.

Dr. Ann Mirabito, associate professor of Marketing at Baylor’s Hankamer School of Business, is a recognized scholar on workplace wellness programs.

“Wellness programs come in wide ranges. Some are narrow and offer services such as flu shots and gym passes and others are more comprehensive and look at the needs and desires of the employees. These are much more data driven,” she said.

No matter the scale of the program, Mirabito said, successful wellness programs share a number of characteristics.

Foremost, well-run programs enjoy strong leadership. Top managers are engaged and personally committed to wellness, and also have genuine concern about their employees’ health. Mirabito points to John Mendelsohn, past president of MD Anderson Cancer Center, who would greet employees by asking the state of their wellness.

“These leaders are not engaged in wellness strictly for the bottom line; instead they want to offer the benefit of good health to their employees. The best companies create a culture of health,” Mirabito said.

Secondly, these programs are comprehensive in scope and convenient for employees. Many wellness-oriented companies redesign their employee cafeterias to offer more nutritious – but still tasty – meals. They also make fitness opportunities easily accessible. MD Anderson stations elliptical machines around its buildings. Employees can use these at any time of day, even if they can spare only a few minutes for fitness.

High-quality programs are not necessarily costly ones. Companies with successful programs have learned to leverage partnerships both internally and with outside vendors to provide essential components of the programs.

Communication is key to a successful program. How employees find out about the programming and from who can make all the difference. Mirabito said wellness information must be delivered at the right time and in the right way in order to engage employees.

Robust programs feature a network of employees who act as wellness ambassadors and encourage their colleagues to participate. “We have found that people like to be invited by people. They are more likely to participate in response to personal invitations,” Mirabito said.

So how does a company determine how to structure a wellness program? Cooper said companies should look at several factors to determine the right program, products and services.

He said companies should examine their workforce and consider factors, such as age, gender and physical location. These are some basics that drive the type and frequency of programming.

“While manufacturing businesses with an older workforce may require hands-on programs, technology and service-driven firms with younger workforces usually do better with online, telephonic or mobile solutions,” Cooper said.

Companies should also look at the total picture of employee health. Instead of programming that provides a lot of services to everyone, employers need to use their wellness dollars responsibly. Cooper suggests programs that tackle the most common health risks and conditions will be the most successful.

Budget also should be considered, but companies should focus the overall investment on what is proven to have an impact on individual health.

“Hands-on health improvement programs that work with the highest risk population can be expensive, but can also mean big savings down the road in productivity and healthcare costs,” he said.

Employers can determine the return on their investment by looking beyond dollars and cents. High levels of program engagement (from 50 to 80 plus percent) and employee improvement in overall population health risks and employee satisfaction are commonly used to define success.

“If engagement is high and the overall employee health score is improving, then the cost will take care of itself,” Cooper said. “Many companies only focus on the financial ROI [return on investment] and not enough on the more significant impacts of having healthy employees. Healthier employees will improve absenteeism and productivity. These factors represent approximately 75 percent of the overall impact of an unhealthy workforce.”

Following this advice, even the smallest business can maintain meaningful wellness programs. The startup considerations are the same – strong leadership and effective communication. In fact, Cooper said lack of leadership and under-communicating what is available can make wellness programs unworkable.

“Unworkable programs also are ones that spend money on too many options with the hope that everyone will participate sooner or later. Companies should focus and spend more on what works,” he said.

Cooper cites Devon Energy out of Oklahoma City and Network Engines located in Plano, Texas, as companies that have focused on simple strategies that are meaningful and impactful to the user and easy to measure.

“Devon made onsite health screenings available at every location across seven states, provided each participant with a one-on-one review of their health information, and then made available face-to-face and telephonic outreach to engage employees to change their health. They offered a lower medical premium for employees who followed the steps and a gift card for those who followed through with health coaching. Fun program tactics like exciting onsite screening events, walking meetings, stairwell (climbing) campaigns and company-wide wellness contests were also used. For their largest site in Oklahoma City, they opened an onsite gym and tracked utilization on a monthly basis,” he said.

According to Cooper, Devon also tracked the health of its entire workforce and found that more than 85 percent used wellness services within the year. That led to improvement in health in all clinical areas and saved the company more than $2.5 million on their medical premium renewal.

“Unlike Devon, Network Engines is a small employer with less than 150 employees. Their wellness strategy focused on annual health risk screenings, employee lunch seminars, walking clubs, relaxation training and department challenges. Employees were provided with a medical premium discount for participating in each activity,” Cooper said. “At the end of the second year, the groups actuarially estimated a 5:1 cost benefit ratio. Estimates were based on absenteeism trends in cohort population of employees who were engaged in the program for the full two-year period.”

Wellness programs have attracted their share of criticism. Some critics argue workplace wellness programs cross the line into employees’ personal lives. Others contend that ROI gains come from shifting healthcare costs onto less healthy employees. Mirabito agreed there is a potential for abuse. “It comes back to the corporate leader,” she added, “The best companies respect employees’ dignity and offer programs that help employees achieve their personal goals.”

Both Mirabito and Cooper see wellness programs expanding. The Affordable Care Act (ACA) allows employers to offer incentives to employees who take part in a program. For example, employers can use up to 30 percent of healthcare premium for employee incentives.

Cooper said the ACA has two other significant implications. “First, smaller employers are provided tax benefits for implementing wellness programs. The United States Department of Labor as well as Health and Human Services recognized that with the majority of employers in the U.S. being classified as small businesses, they needed an advantage to invest in wellness. The second ACA implication is the restrictions on health insurance carriers to focus more of their administration fees on wellness services for their clients. This has created a resurgence of technology enhancements to carrier programs as well as an increase of covered services for plan holders,” he said.

According to Cooper, one of the hottest topics in wellness is “outcome-based” programming that use incentives and penalties for changes in health, rather than for simply participating in health events.

“The biggest evolution is away from trinket prizes, time off and gift cards for participation and toward the use of lower/higher medical premiums as incentives. This has been the ‘carrot or stick’ discussion amongst employers and is widely debated,” he said. “Wellness has moved from just doing stuff to changing stuff as we continue to face an ever unhealthier population. Wellness programs incorporate consulting, leadership and cultural changes that lead to healthier habits for employees. Employers will continue to push the envelope to promote employee accountability for their own health and the impact that it has on the business’ bottom line.”

Mirabito said wellness appeals to older workers and to the millennial generation, which has a much more holistic view of health.

“Workplace wellness is not a ‘fringe’ idea. Wellness is a big social movement. Many progressive companies are tapping into the movement to help their employees build healthy and satisfying lives,” she said.

Baylor Business Review, Fall 2014

Learning in 360: Lighting Up the Competition

Fall 2014: The Business of Being Healthy

By Barbara Elmore

The story of Light Bohrd begins with a young skateboarder and his engineer father who envisions photographing his son on a lighted skateboard. Essential to the plot is a university that encourages technological innovation and entrepreneurship, and a multibillion dollar apparel company that seeks new products to improve athletic performance.

The end of the story is not yet written, but Chris Forgey, Light Bohrd’s president, is developing the plot.

When Forgey, a mechanical engineer, first started a kitchen-table experiment to put lights on his son’s skateboard, he did not imagine competing with thousands of other people for a $25,000 prize. He merely wanted pictures of his son flying through the air with lights showing beneath his skateboard.

The next sentence of the story might say “Simple as that,” but what appears to be simple often follows a winding path. The tale continues with Forgey’s prototype: “It turned out better than we expected,” he said. Crude, yes. But the lighted skateboard worked the way he wanted it to work. He continued to innovate, creating a skateboard boneyard.

With the help of an electrical engineering student, he tinkered more, producing a longer board with embedded LED lights, without the baggage of switches, wires or batteries. His focus shifted from artsy to more visibility, with lights on the back and front. This was a nod to students and urban professionals who ride longboards to work.

“The boards had illuminated graphics originally, and they were on skateboards. We went to longboards because there was more real estate to work with. Longboards became the primary product we were trying to get to market,” he said.

Success followed, but Forgey wanted to expand the opportunities. He began a relationship with Baylor University and its Technology Enterprise Initiative (TEI), chaired by Greg Leman. Leman now directs the two-year-old LAUNCH Innovative Business Accelerator at the Baylor Research and Innovation Collaborative (BRIC).

Forgey graduated from Texas Tech University. He was introduced to Baylor by friend Kevin Ludlum, who at the time was executive director of development at the Hankamer School of Business. The two had gotten to know each other at Texas Tech, where Ludlum earned a master’s degree. “I knew there were some Texas Tech grads that were entrepreneurial and for whom faith played a role in life,” Ludlum said. Forgey, for example. Ludlum contacted him to become a member of the TEI board of directors. Forgey agreed and brought his project.

Leman’s entrepreneurial programs bring together innovators and students. His work through BRIC, which is designed to commercialize research, shows students how to work effectively as consultants.

“The students bring nothing but their energy and dreams,” Leman said. “You put them together with entrepreneurs and they create value.” The program guides the students through a process that lets them shape their ideas to help move ventures forward.

BRIC is the biggest opportunity Baylor has to make an impact on research that lands in the marketplace, Leman added. One important part of the program is it challenges companies to think broadly about their innovations. “We want to see a path to a billion-dollar baby,” Leman said.

When Forgey went to Baylor with his project, Leman put together a team of students from different backgrounds to evaluate the concept for market potential. The students helped Forgey flesh out his ideas for embedded-light technology, and Leman encouraged Forgey to think about different ways to apply embedded light to produce value.

“The process gives people like Chris a very efficient way to look at things from all angles, and a path to get them where they want to go in a speedy way. Chris did not succeed because of us, but we touched him,” Leman said.

The Baylor professor provided tremendous leadership, Forgey said, and the result of his work was a lighted shirt for athletes. Although wearable technology already exists, Light Bohrd’s shirt differs in that it has embedded lights, and the shirts are machine-washable.

In 2013, Forgey entered his creation in Under Armour’s Future Show Innovation Challenge, an annual contest the fitness apparel company sponsors to find ‘the next big thing’ to develop. More than 4,000 entrants were pared to a dozen finalists, Light Bohrd among them. Forgey demonstrated how the shirt works at Under Armour’s Baltimore headquarters by jogging in front of a panel of judges.

The invention won the grand prize of $25,000 and an opportunity to work with Under Armour to produce the shirt for the market. Although the money is vital, the judges’ approval gave Light Bohrd something more.

“The biggest part of the deal was the validation around the concept and the opportunity for the technology,” Forgey said.

He was one of several entrepreneurs who wrote a letter in support of establishing the LAUNCH program, which hosted its first workshop dedicated to Baylor-based inventors this year. “That’s the kind of classic role of a university-based incubator – turning research into products,” Leman said. “But we don’t have a background of inventions, so we started with an external focus and now we are having an internal impact. We’ve attracted global attention.”

Combine Baylor’s emphasis on entrepreneurship with its ethical approach to capitalism, and there are no other players of Baylor’s size who can fill the same role with credibility. “Put entrepreneurship and ethics together, and Baylor is at the top,” Leman added. The LAUNCH program creates an access point for entrepreneurs by giving them “a much easier handle to grab,” he said. “If you are an entrepreneur and have good ideas and don’t have time to devote energy to them, there are ways to get help from Baylor in shaping and advancing those ideas, cost effectively.”

After finalizing the designs for Under Armour, Forgey will continue developing ideas.

“We see tremendous applications in other areas, but a proposal needs to be 90 percent ready for the market when we put it out there. We are raising capital, so that we can pursue these projects with more vigor. That takes time and effort; a lot of times we don’t know what we don’t know until we test a product and find the weakness that we need to fix.”

Light Bohrd’s next bright idea? Embedding lights into safety apparel.

Baylor Business Review, Fall 2014

Leadership Perspective: Thinking Outside the Big Box

Fall 2014: The Business of Being Healthy

By Jack I. Tompkins
Chairman, CEO, Fit Athletic Club
Houston, Texas

A fitness club should be more than a sweat box. This belief guided the planning of Fit Athletic Club in downtown Houston, and this philosophy continues to inspire its direction today. Thousands of professional men and women have voted with their time and wallets to let us know they agree.

Unlike “big box” gyms, our athletic club does not compete on price, but rather on service, the quality of our facility (which includes having the cleanest dressing rooms in the industry), the caliber of people we hire and train, and ambience. We decided these attributes meet an unfulfilled need in the marketplace.

This philosophy is working. Fit Athletic Club just celebrated its 10th anniversary and is financially successful. Most importantly, Fit has helped thousands of people improve their health, and it is exciting to be in such a business. Members can work out in a social setting with personal trainers and like-minded people around to keep them motivated. Additionally, we have been able to provide dozens of jobs for the Houston area.

One of Fit’s goals is to make a member’s workout the best hour of their day. We want people to look forward to working out, not dread it. We also want a strong sense of community, not just a “big box” where people run inside and sweat. So we built a café, complete with juice and smoothie bar, where people can gather before and after their workout, meet their business contacts, eat healthy food and watch sporting events on a big screen television. The spectacular view of the downtown Houston skyline serves to enhance the gym’s atmosphere.

Business owners know that a well-run organization happens because of the people who manage the business. This is not magic, but an executive who finds the right people to do the right thing at the right time will discover that management is so easy, he feels as if he’s not working. Our club is managed by those kinds of top-notch professionals. This greatly lessens the amount of time I have to devote to the business, which allows me to pursue my other business and non-profit activities.

My professional life started in the public accounting and corporate world and brought me into the entrepreneurial world via a most interesting path, but I have learned that several basic principles serve a person well in any type of organization, as long as a person remembers to stay true to himself and what he believes.

Here are the core tenets of that philosophy:

The right people. Recruit, hire and train the right people to do the right thing, and the business succeeds with a lot less effort than would be expected.

Servant leadership lights the way. This principle is about modeling the behavior you want to see. Employees will do what they see the boss do. If you want a particular behavior, show that trait to the employees, and they will show it to clients. This includes politeness, respect and forgiveness. Simply put, lead by example.

Persistence wins the race. The words “be persistent” roll out easily, but actually pursuing a challenge while facing obstacles can be difficult. However, persistence can be a competitive advantage. When times are difficult, push forward into the fray. Figure out how to go over, around or through the roadblock. In doing so, you develop perseverance for the next challenge to come.

Listen more than you talk. Did an employee bring you a problem? Listen to what that employee and other workers say about it. Chances are one of your employees has the solution. Offer employees the opportunity to be heard. If you spend all your time talking, you will miss out on the answers around you.

Establish an accountability system. Goals and objectives are important for the company as a whole and for each employee. Team members are happier if they know they are being held accountable. Accountability allows employees to grade themselves, and it lets them know whether they won or lost when they go home at the end of each day.

Never stop learning. Early in my life I developed a passion for learning new things every day. The skills sets we have now will be obsolete in five years. If we continue doing business without making necessary changes, we too will become obsolete. All of us should keep on learning. For me, that included becoming involved in entrepreneurial ventures. Making changes has been a blessing for me because change allows me to grow.

Mentor other people. Certain men did that for me and made a huge difference in my life. Anyone blessed with wisdom, talent or insight and has been knocked around a little has an obligation to advise others. That covers almost everyone.

Watch the cash. Business has many variables, but if you have a firm grasp on cash flow, you will know whether your business is healthy and if the business is performing as it should. Monitoring cash flow tells you whether you are hitting your most important goals. Look at what’s in the bank and what was in the forecast. If you see negative variances, immediately investigate to determine what is keeping you from achieving your targets.

Study the competition. Find out what your competitors are doing, but do not automatically assume the competition knows what it is doing. Your model may be superior. Adopt best practices.

Practice forgiveness in your personal and business life. Grudges and bitterness block our ability to achieve our personal best. Letting go of anger by forgiving others allows us to see a brand new world. Doctors say practicing forgiveness lowers blood pressure and lengthens lives. Christ said forgiving others is necessary in order for us to be forgiven.

Avoid anger. Whoever loses his temper first, loses. Anger wastes time and creates dysfunction.
Laugh often, and don’t take yourself too seriously.

Finally, passions aside from work are essential to a well-rounded life. A well-rounded life allows us to achieve our personal best spiritually, mentally, physically and socially. One of my passions is pursuing the Christian lifestyle. I’m also passionate about my relationship with my wife and family, extended family and friends. Baylor is another passion of mine. Another is Star of Hope, a mission organization that provides the homeless with the Gospel, food, clothing and shelter. The Bible tells us to take care of the needy. Attacking a problem such as homelessness on my own would be insurmountable, but uniting with like-minded believers has allowed me to assist others in a way I never dreamed possible. Through my faith in Christ’s teachings, I have discovered that a true core passion of mine is helping those in need.

I believe that having numerous passions is important because they add meaning to what we do each day. They allow us to pursue something bigger than ourselves.

Baylor Business Review, Fall 2014