Benefits of an Ownership Culture Through A Crisis with Brian Brasch and Erik Hopperstad at PRX Performance
Every business owner I know is under tremendous pressure right now. For some, it is the pressure to keep up with the new demand for their services and products. For many, it is how to navigate through a crisis. If you are like me, you believe there is an opportunity in times like this. Today we are looking at the benefits of an ownership culture through a crisis. My guests are Brian Brasch and Erik Hopperstad at PRX Performance. Their company was ranked #189 in the 2019 Inc 5000 list. We talk about how their business is booming with the demand for in-home gym equipment. We also look at the foundation of their company, which centers on an ownership culture. If your business is not taking off right now, you still have a ton to gain by understanding the power of an ownership culture. Discover how you can engage your team to new levels through a crisis.
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Brian Brasch and Erik Hopperstad: The Transcript
Target Audience: Joe Blewitt is the CEO of Epion Health demonstrating the Smart Screen Health Tablet at Health Tech: Next Generation in San Francisco, CA. Epion Health offers a cloud-based, software as a service patient engagement solution at the point of care – beginning with the patient check-in process. Epion provides a variety of mobile health applications and content.
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Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
Brian Brasch [0:00]
With the empowerment is we encourage people to make mistakes. I always say I probably make twice as many decisions as everyone because I make them fast. And I make like one or two out of those 10 decisions will be a mistake. But that’s okay. Because I got the other eight done much faster. I encourage the team to do the same thing. They don’t need to check with everybody. They just need to do their research, do their best, and make a decision and keep the ball moving.Erik Hopperstad [0:27]
I think at the end of the day, where you know, if you’re not making mistakes, you’re holding yourself back and you’re not going to reach your full potential.
Intro [0:36]
Welcome to Growth Think Tank. This is the one and only place where you will get insight from the founders and the CEOs the fastest-growing privately held companies. I am the host. My name is Gene Hammett. I help leaders and their teams navigate the defining moments of their growth. Are you ready to grow?
Gene Hammett [0:54]
Breeding an ownership culture? What does that mean to you? Well, I can tell you what it isn’t. It doesn’t require wire you to have a financial instrument that backs up this ownership, options, profit sharing. It helps, but it doesn’t require it. So what is the formula for an ownership culture? Well, I’ve seen that some of the key ingredients to this empowerment, inclusion, transparency, trust, a value that is given to the employees, it continues to increase over time, more skills, more experience, they show up not because they’re here to collect a paycheck, they show up because they want to, they don’t do the work just because they have to. They do it because they want when you can inspire an ownership culture as a leader. You have more than just people doing the work. You have a family, you have a tribe, you have people that are connected together and aligned to a common mission. All of those things are true.
Gene Hammett [1:54]
Today, we have a company that lives this and breathes it every day. PRx Performance they create home equipment that is professional grade but also space-saving. They have patents around this really great to see how they’re exploding through the Coronavirus issues that are going on right now. But not every business is able to do that. One reason why they’re able to be that their people are able to see these things come in and make decisions and they’ve given them the power to do that they’ve empowered them. We talked about some of the details and how they do that in their meetings. And it really does help align them together and create this ownership. We have with us the CEO Brian Brasch, and we have president Erik Hopperstad said had a look at my notes here. They grew really fast to the Inc list, and they’re booming because of Coronavirus. You want to tune in this episode because you could learn something from their own culture and allow you to be the leader that your team deserves.
Commercial [2:54]
Thanks for tuning in here to Growth Think Tank. Really excited about sharing this with you and Before you run, I have done so many interviews in the last few weeks, I have such an exciting time to share with you that those interviews have been organized into the 12 core principles of fast-growth companies. So all you have to do to get that is go to genehammett.com/worksheet. So you can get the 12 principles, and I’ve been able to go in there and find which episodes will align with each individual episode. When you subscribe to Growth Think Tank, you will find exactly what you need so that you can move forward. And many of them haven’t been published yet, depending on when you’re hearing this. But you can tune in to the date that means the most you to you. Now here’s Eric and Brian.
Gene Hammett [3:39]
Hi, guys, how are you?
Brian Brasch [3:40]
Excellent. How are you doing today? Thanks for having us on.
Erik Hopperstad [3:44]
Doing well Gene.
Gene Hammett [3:45]
Excited to have you don’t get a chance to do a three-way kind of interview much but I’m excited to have two founders here that are committed to a bigger mission than just making money. So I want you to tell our audience a little bit about that. PRx Performance?
Brian Brasch [4:02]
You bet. So PRx Performance as an idea around a campfire and beers as probably most ideas start that way. And but it changed the next day. And we actually bought a web domain and, and put it into action. And since then, it’s been an amazing ride. And, you know, grew it to about a $10 million business. But now with this economy, we’re actually on a run rate to hit an about 100 million, you know, annually this year, given the latest pandemic that’s going on. So it’s been a challenging but fun ride.
Gene Hammett [4:41]
I know you guys are probably thinking through this. Some businesses are seeing a boom from the opportunity. You’re, as I understand the products that you have really do fit well with a home gym. Just give us a little bit of an idea of what you’re selling and what you’re offering.
Erik Hopperstad [4:58]
So basically, the corporate product mix we have is space-saving fitness equipment. So we try to develop design and patent products that allow people to essentially have that commercial gym experience in a small space. So in their home in their garage, small commercial space, that’s just kind of our niche and what we focus on and just build around it every day.
Gene Hammett [5:24]
I love it. I think that you know, the Wise leaders are thinking about what the new normal will be. And if you think about individuals, some people will enjoy working out at home or than they enjoyed going to the gym. So maybe this will continue as a pattern for you.
Erik Hopperstad [5:41]
I think we’ll definitely see a bit of a permanent change in consumer behavior after we all get through this.
Gene Hammett [5:49]
Well, I want to dive into this. You guys had a quick ride up to the Inc list and you have about 40 employees said about right?
Brian Brasch [5:59]
More every day, I guess.
Gene Hammett [6:01]
what one of the keys to your growth you had said was a sense of ownership. What do you mean by ownership inside your culture?
Brian Brasch [6:11]
So I was told many years ago by a mentor that the true test of leadership is when you go on vacation, what happens to your business? Does it dwindle? Does it thrive? Are there fire drills? So what we’ve instilled, neither Eric nor I am on-site more than a handful of days per year. So when we went out to hire employees, not only we looked for passion, we look for people who were experts in their area. And we could essentially with just a little amount of training, set them loose and essentially entrust them with the day to day decisions. And that allowed Erik and me to step back and focus on strategy and growth which was necessary, obviously with what we’ve accomplished.
Gene Hammett [7:01]
I love this approach. But you guys started out early. Where did you get that from? I know, you talked about the vacation test. I’ve heard this before. But where did you really learn it and decide that’s what you wanted to base your business on?
Erik Hopperstad [7:13]
I think it probably we were almost forced into it. You know, even though we had this in mind, I think the business got to a point where, you know, neither one of us could do it all. And, you know, then, of course, employee number one comes along, and as things continue to, you know, hockey stick, so to speak, you’re forced to delegate whether you’re comfortable with it or not. And whether you’re comfortable with it, or you’re forced to do it. You learn how powerful that is. So having the right people in the right places is just that much more important.
Gene Hammett [7:48]
Well, I know there’s some real advantages to it. And it’s one of the core big ideas that come out of these conversations, but I’m happy to have it with you guys. I’m sure I’ll learn something new and we’ll take it to a deeper level but I want to start breaking this down, like, have you thought about kind of a formula or framework around the sense of ownership?
Brian Brasch [8:08]
I think when you start looking at people as a whole, I would say 90% of our recruiting has happened at, you know, in CrossFit gyms and boxes now granted, that’s what our product is to, but I don’t think that’s a requirement. If you look at people who wake up at five in the morning and workout, have a huge sense of community. And you know, not only that, but they help their friends and their community become better to that type of person is who you want in your operation, whether they’re in marketing, whether they’re in finance, whether they’re out in the warehouse, those core values, just become the foundation of your culture and the culture is one of the most important things about our business when you walk in the door. You feel the energy, you see the smiles, you see everyone just there to say.
Commercial [9:06]
Hold on for a second. They just said culture was important. How important Have you made culture inside your business? Are you more focused on the strategy of execution? Are you more focused on the metrics coming out of it? Or have you taken the time to be intentional about the culture you want to create? Have you created the time to really think about how that unity and loyalty happens across the company? The rituals that you have, either support your culture, or take energy away from it. Your job as a leader is to tune into that culture, to shape it, and to create a place that people love to come to work. I wanted to add this in here because it’s just such an important piece. A lot of people forget when they’re focused on strategy, metrics, and even that bottom line, I know it’s important, it’s why we’re here. But you want to create a place where people love to come to work so that they give their heart and soul to it, create that space for them to grow. That’s a strong call. Back to them.
Gene Hammett [10:07]
So hiring is important for sure. And I know there’s probably some other pieces behind it, but I want to go beyond hiring when you are bringing someone on. One of the elements I’ve seen is such an important to inspire ownership is empowering them. And you guys just mentioned earlier, you know, hire an expert, and set them loose with a little bit of training, but you also want them to make decisions. Tell me just a little bit about this sense of empowerment that you guys look for.
Brian Brasch [10:42]
So with the empowerment is we encourage people to make mistakes. I always say I probably make twice as many decisions as everyone because I make them fast. And I make you know like one or two out of those 10 decisions will be a mistake, but that’s okay because I got the other eight done. Much faster. I encourage the team to do the same thing. They don’t need to check with everybody, they just need to do their research, do their best, and make a decision and keep the ball moving. Now, if you make a mistake, no problem, just learn from it. So next time you have that same situation, hopefully, we don’t make a mistake next time, but it’ll allow us to grow faster and move the ball down the field significantly faster than most other companies.
Erik Hopperstad [11:27]
I think at the end of the day, we’re you know, if you’re not making mistakes, you’re holding yourself back and you’re not going to reach your full potential.
Commercial [11:37]
One more second here, encouraging fast decisions, well, that starts at the top, you must lead by example if you are struggling to create the kind of decisions that are necessary for the company to move forward, whether they be small or large. People will take that cue from you. So you want to make sure you are making those decisions fast that you are being decisive when need to be I’m not saying that you’ve got to make every decision at the flip of a coin, but you’ve got to be decisive. You want your employees to be decisive, then you can’t him and hot, you can’t know, let’s take some time and kick the can down the road, you’ve got to be able to make decisions. Maybe you’ve come up with a decision to test something, maybe you come up with a decision, and how we can move forward with the next step is, but you make decisions. If you want your employees to make decisions fast, you’ve got to make your own decisions fast. Hopefully, this is helpful. I want to shine a light on this because I see this is a big issue across many leaders that aren’t really making the decisions as fast as they want to, and it comes down to trust. They don’t trust themselves. If you don’t have trust inside your own leadership, your team can feel it.
Gene Hammett [12:45]
Let’s look at that at a deeper level because I want to make sure the audience really understands what you mean by this. Do you put some boundaries around this? Do you give them you know, some level of state stay in between these lines or do you go, you can do whatever you want to do right here.
Erik Hopperstad [13:02]
We don’t really have any boundaries. Brian, I would say, I think with that said, though, you know, they all know when the good time is to maybe give us a call or if they want to run something by us. And we encourage that too. But for the most part, you know, we want them to run.
Brian Brasch [13:19]
You know, when Erik and I started the company, we agreed that if there was any expenditure over $200, we would have a discussion about it. I was in the office three, four months ago, and a document came across my controller’s desk, and she said, Do you know about this, and I looked in, one of my executives signed a $75,000 contract. I was like, I trust her. I mean, it’s just going for it just make sense. I trust them.
Erik Hopperstad [13:48]
It might even have been 100 bucks, Brian.
Gene Hammett [13:53]
It’s amazing how things start out, in the beginning, is like, Oh, these are really good ideas. And then now you are comfortable and you really trust your team. And that does say a lot about ownership. Now, you’ve got 40 employees, a lot of people think it’s hard to create ownership across that many employees. I want to make sure I mean, I don’t know the answer to this are you using like, options or any kind of Aesop or profit-sharing with them so that they have a financial stake in ownership.
Brian Brasch [14:22]
So we did start the business with an option pool. So there are about 16 people that helped us get off the ground and we offered to pay him cash or give them options. Everybody took options. A few of those people cashed out early, but over half are still with us. And they’re seeing now more than a 10 x return on their money, and I expect that to continue to go up. But for the day to day people, which I think is even more important. What we’ve committed to them is a profit-sharing number. So twice a year. We take the profit, and we pay them based on their hours worked and their total salary. So this year, everyone’s going to get a very nice check-in June. And we also make sure we get to December for the holidays. And that I think really motivates them. And I’ll say one thing even more important than profit sharing is, you know, people talk about community or family. One thing we do every Monday morning is all 40 people, you know, until COVID started, we gather around our conference room and it gets pretty full. Now we’re run out of space. Again, we all say one thing about our weekend, our favorite thing or highlight of the weekend, and then we say one important thing that we’re doing that week with the business that people should be aware of. And this meeting still only takes a half an hour, but you hear who’s having a kid, you know, who did something special who got engaged. There are all these amazing stories, and it really creates a family atmosphere. And I wouldn’t trade that for anything.
Gene Hammett [16:07]
You know, a lot of people shy away from the personal elements, but you actually have brought it into a ritual that you do every Monday. What have you seen as the way that relates to people binding together,
Erik Hopperstad [16:21]
I think you can just tell by the interaction of everybody on a daily basis, you know, whether that’s in group messaging, or you know, in the actual workplace, they just interact differently. They treat each other, more like a family member as opposed to, you know, a quote-unquote, co-worker or colleague, it’s just a, it’s a totally different animal.
Gene Hammett [16:44]
Any other rituals that you can share with us that bind gets together people around this the sense of ownership?
Brian Brasch [16:51]
So you want your customers to have that same feeling of having something special, I mean, they’re coming to us for a premium product and a premium experience. So not only after people order they get special emails and messages and understanding the whole experience. When their package shows up, they actually have a handwritten note on the box, you know, something like, you know, go get those gains thanks for your order PRx, something simple, but we have a rule that if we can get one more shipment out that day, at the expense of not writing out a box, we hold that shipment back we make sure every box has that handwritten note. And that’s what makes us special. And then when you open the box, there’s another little gift inside of it that they didn’t order paid for and it’s amazing. Social media. Half of the people. Half of the post on PRs is a picture of the box with handwriting on it. People love it and they just want to feel special. And it’s a great way to kick off their new fitness journey.
Gene Hammett [17:56]
I love little details like that. I have said For years from the stage and do this show that you don’t have to give a financial reward to get someone to take ownership. And actually, ownership is best described as an internal drive an internal feeling. One of those is empowerment. Another one is I’ve seen his inclusion when you think about including people into, you know, some decisions are being made and letting the team bat around and brainstorm that stuff is that, uh, have you seen that to be a part of your own formula?
Erik Hopperstad [18:31]
Yeah, I would say without a doubt. I mean, you know, Brian and I both make a lot of decisions for the business. But I don’t know that there are very many decisions that we make, that may or may not impact them that we don’t get feedback from them on. We always value any of their input. You know, we want to hear any concerns. We want to, we want to hear what we might be missing in a case like that.
Gene Hammett [18:56]
And I also find that a part of that is the ability to be trained. parent, I, when you set out to lead this team into, you know, higher sales and really reaching the mission you have. Do you include transparency as a part of that? Like, are they free to talk about what’s really going on? And so that you can hear it. And vice versa? Are they able to accept that level of transparency when you have to give them feedback?
Brian Brasch [19:23]
Yeah, like even today? I think we’re very transparent. Yesterday was a hard day for us. Everyone’s very stressed, they’re working just crazy hours. You know, I think a lot of times when people are, are sheltered at home with their families, our team is grinding so hard. So I heard that there was a lot of people are scared, they’re nervous. They’re stressed few mental breakdowns. So we got together like how do we fix this and we decided that We’re shutting off our website this week, and we’re not taking any sales because more and more And then profits and sales is making sure that our people are happy. So we’re giving everyone you know, it’s, you know, Easter weekend, don’t even think of coming into work.
Gene Hammett [20:11]
I am going to ask you for a big key question. I don’t, I don’t ask this as much anymore. But I’ve asked hundreds of founders, and I never know what’s gonna happen, because you could say anything you want to hear. But I find that fast-growth companies react to this question differently. And it’s a very, it’s almost the impossible question as a leader. And so there’s two of you here. But as a leader, what’s more, important to your customers or employees?
Brian Brasch [20:36]
Oh, I was gonna let out Eric answer first, but I’ll take it. It’s definitely the employees because if you take care of your employees, they will take care of the customers. It’s, it’s very simple. And I think we’ve only had like, two people quit our company in seven years. Because there’s this And and you know that those two are amicable. There’s one gentleman we still have over at our annual holiday party, we all go out to the lake and we spend a day a weekday just surfing and being together. And but you have to take care of your people. That’s your family and they do that transfers on to your customers.
Gene Hammett [21:20]
That’s what I’ve seen. And I’ll give you the data behind it. 94% of the people ask that question that are in the Inc 5000 will say its employees. Now outside of that slow-growing companies, big companies, like really huge corporate companies will say its customers. I get that its an impossible question, but we’ve seen it with this whole COVID-19 we’ve seen a huge resurgence of companies that are taking care of themselves, and those that are taking care of their employees. And I know it’s a hard decision. If you’ve got to conserve cash, you want the business to be safe and be here beyond this. Right. There are some people that I’ve talked to some people that have lost 80% of the business, you guys are booming inside of this. But I really appreciate you guys sharing your insights around ownership. I want to give you one last kind of question. Is there anything that I should have asked you about ownership that I have we haven’t covered today.
Brian Brasch [22:17]
You know, there’s probably another thing that we could throw in on the ownership thing that’s just kind of happened within our organization. You know, empowering people thinking outside the box. We have a number of patents now, and quite a few in the pipeline. And I think I’m not sure when this is going to happen, Brian, but we have a product in r&d right now. And for the first time, we’re going to have one of our employee’s names on that path. And that is super cool.
Gene Hammett [22:47]
Yeah, I see your smile on that, Brian. It’s got to be pretty rewarding to know that they’ve shared ideas and you let them run with it and others see that too. And it adds to our Feeling that that sense of ownership around the company?
Erik Hopperstad [23:04]
Yeah, it’s, I would say, I’ve talked to over 100 inventors over the last few years, and they come to me with ideas. And in all honesty, I’ve only liked two of the ideas. And when my employee came up with this idea, it was a no brainer. And I’m like, what resources you need? Let’s get an engineer on it. Let’s do this. Let’s do that. And I think I’m gonna be more proud of that patent than the other dozen that we’ve already been issued. It’s an amazing feeling.
Brian Brasch [23:35]
I would agree. 100%
Gene Hammett [23:37]
Well, I appreciate you guys being here being a part of the Growth Think Tank team and sharing your wisdom.
Brian Brasch [23:43]
Thanks a lot, Gene. Appreciate it.
Erik Hopperstad [23:45]
I appreciate your time.
Gene Hammett [23:48]
Fantastic interview. I love talking to people about the sense of ownership. I love how it binds people together. Yes, they do have some options and they have profit sharing. But you can probably realize you don’t have those things you can actually engineer them with intention, you can make it important for employees to make decisions to make a failure, okay? to include them in the strategies moving forward. And even to give them a chance to create their own products with their own paths. Love when leaders are willing to give credit to others, it lit them up when they talked about giving the chance to employee to have a patent.
Gene Hammett [24:25]
All this I share with you because I know you as a leader want to continue growing and evolving. I work with leaders in the defining moments of their leadership, to challenge them to keep them really clear about how they’ve got to move forward. What do they need to let go up? How do they need to show up the next stage of their own leadership? That’s my work. I’d love to work with you. I love to get to know you. So make sure you reach out to me [email protected]. As always, lead with encouraging we’ll see you next time.
Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
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