Billy Malkovich: Fit for the Job

When Mountainside Fitness CEO Billy Malkovich graduated high school, he says he hardly celebrated. He attended his college graduation from Arizona State University only because his parents wanted to see it happen. It’s not that Malkovich doesn’t appreciate those milestones in his life, but for him “the chase has always been better than the catch. Once I accomplish something, I want to move on to the next chase.”

This helps explain how Malkovich became CEO of parent company Firebird Investments, as well as CEO of Mountainside Fitness, before he turned 30. It also no doubt has helped that, as he puts it, “I enjoy working.”

In college, he recalls attending classes from 7:40 a.m. to 1:30 p.m., then running to his car to drive to Mountainside Fitness, where he worked as a personal trainer from 2:30 p.m. to 7:30 p.m. Although he says he is a planner by nature, he had no expectation that this would lead to a career.

The company prefers to promote from within, seeing it as a “surer road to success,” according to Malkovich, so he eventually held jobs in sales, operations, real estate development, and as a limited partner. “I had to quit a lot of jobs I liked in the company to take this job,” he says. “Those jobs helped teach me the business in pieces in incremental fashion.”

As CEO, Malkovich was tasked with putting all those pieces together. “That’s when it really got real for me,” he says. “Suddenly, my decisions had a big impact on 700 employees at the time, now 1000 employees.” Those decisions have not always been easy. He was named CEO in 2008, just as the Great Recession was beginning. He steered clear of major layoffs, but, as he puts it, “everyone took a haircut, from raise freezes to pay cuts to restructuring vendor relationships.”

Malkovich works alongside company founder Tom Hatten, whom he characterizes as a passionate, idea-driven entrepreneur, while he considers himself more deliberate and process-driven.

“When I first took the job I promised him I wouldn’t corrupt the dream,” he says. “Some businesses get so concerned with scalability and systems that they lose their soul.” When pressed for an example, he answers directly: “LA Fitness. They are very good at putting up nice buildings and good equipment, but then they move on to the next one and don’t care about what happens there.”

Malkovich says that Mountainside Fitness encourages its people to be available to customers, and even to remember their names at the front desk when they come in.

“No one is going to be loyal to a treadmill,” he says. “So I consider time spent talking to customers to be productive time.” Still, this can be a challenge given that its facilities typically serve about 6,000 members each, with the Peoria location serving almost 8,000. “It’s like managing a small city,” he says.

One of the biggest challenges of Malkovich’s tenure thus far was managing the company’s expansion in to Colorado in 2010, where it opened three properties. “I couldn’t be in both places at once, so I had to learn to trust people more,” he says. He also had to modify his focus. “I’d always been very involved in the tactical side of how things got done. Now I had to let go of that and be more strategic. I always liked to plan out steps one through ten for making something happen. Now I had to leave the steps to other people, and just focus on where we wanted to arrive, step ten.”

Although the company had viewed Denver as a natural fit for expansion, based on its success in Arizona, it found it had over-committed itself at the time. Malkovich made a conscious decision in 2011 to exit those Colorado properties and focus on growth in the company’s home state, and will be applying the lessons learned as Mountainside Fitness seeks to open three new locations in Arizona in the next 12 to 18 months.

Mountainside Fitness Muscles Up

• Total annual revenue: $30 million
• 13 percent increase in total revenue over the past 36 months
• 11 percent increase in total members over the last 36 months
• Total members in the state of Arizona: 42,000
• Total retail space occupied in the state of Arizona: 400,000 sq. ft., making Mountainside Fitness one of the largest locally owned retailers