How Joseph Fortunato pumped up an out-of-shape General Nutrition Centers

Grow your core business
When Fortunato took over, he put his sights on the present and ignored anything that wasn’t in the immediate future.
“At that point and time, I put off looking at strategies three, four, five years out,” he says. “What I said was, for the next two years, our focus was going to be on getting our core businesses shored up, playing to our strengths of brand, market penetration, vendor relations, product innovation, and revitalizing and taking advantage of those core category strengths we had, which were vitamin and sports.”
To get everyone focused on accentuating the core positives of thecompany, Fortunato had to simplify things across the board.
“When I started talking to everybody and getting people together, we basically had meetings every morning with the senior management team, and we talked about each area of the business and what needed to be focused on in each area of the business,” he says.
The company also had to simplify things for stores across thecountry by going to a one-pricing scheme.
“At that time, we were zone pricing, so we had about 25 or 30 different pricing schemes throughout the country,” he says. “One of the key things we did back then was we went to one pricing plan. Then, we were able to take advantage of our scale and market penetration and store base by advertising nationally, which we hadn’t been doing much of because the pricing strategy was different all over the country. That was a significant change in strategy that I think really was getting the business on the upswing again.”
You then have to drive that message of simplification from the top all the way down, which Fortunato did through business reviews once a month with every business unit in the company.
“So, people were not getting caught up in … what I call the details and complexities of the business, but really digging down deep and understanding what was driving their businesses and what they needed to focus their attention on,” he says. “That has to come from the top.”
Fortunato also used the business reviews to monitor if the message was getting through.
“We would have very clear, concise direction as to where we wanted to take those businesses,” he says. “Every month, the leaders of those businesses had to come back with the progress they were making on the focus, on those core components of their business, and then we would do another review and try to keep that momentum moving along. The momentum is what is important. You’ll run into problem situations that you have to resolve as you move through those processes. But, staying very hands on at that point and time, although it’s not what you want to do as a CEO for the long term, is very important to coming through those more difficult times.”
When you are trying to focus back on fundamentals, it can be a challenge because employees naturally want to look at bigger and better things for their department. While that type of thought process is needed when growing a company, the opposite is required when focusing on the core strategies. You have to keep an eye out for employees looking at other opportunities within their department and get them focused back on the core drivers of the organization.
“People have a tendency to get scattered in their thoughts and scattered in their approaches to their business and trying to take too many things on at one time and nothing gets done right,” he says. “So, when you focus back on the core business and you set that thought process from the top that says, ‘Here is what I want you to focus on in your business for the next year. This is all you should bethinking about.’ That’s how you do it. You just take everything else off the table.”
While it may be easy to recognize this, oftentimes it’s hard to implement because you get into meetings and thoughts just start scattering before you know what’s happening.
“You have to keep reining it back in, because people’s normal mentality is, ‘Well, here’s an opportunity we should be looking at,’ and that’s great at the right time. ‘Here’s something we should be doing, and let’s try to do this and let’s try to take on this additional component for the business,’” he says.
To be successful, you have to continually reinforce that you want employees to focus on the core.
“You have to keep reining them back in and say, ‘No, here’s what you need to be focused on for the next 24 months, and that takes you away from a strategic approach at that time,’” he says. “The strategy becomes the core business, and you get more away from a visionary approach as, ‘OK, how do we grow the business three, four, five years out? The focus has to be, ‘If we’re going to get this business healthy and really get a foundation we can build upon, this is all we need to be focusing on for the next 24 months.’”
When facing a situation like Fortunato was, it’s important to start from scratch and communicate that everyone needs to focus on the core.
“We had to get a turnaround in the business, and we had to get back to fundamentals, which we did,” he says. “We had to change our marketing approach. We had to get product development kind of kicked in the behind, and that’s from our
vendors and internally. We had to grow that core business to replace that diet business that had fallen off dramatically. That, to me, was the turning point with the company.”