Derek was the director of the Southside Athletic Club when the COVID-19 pandemic hit. At the time the club had approximately 800 dues-paying members. The state ordered the club shut down, and the entire staff including Derek was laid off. The club owners gave all the workers two months of severance pay. After that all the workers who did not find employment elsewhere, relied on the generous government unemployment benefits and stimulus payments to get by financially.

Thirteen months later, Southside re-opened, but business was not as usual. Only two-thirds of the staff returned to work. Many had found other jobs, and some other staff members had moved out of the area. The club membership also shrank by 50 percent. Many of the members decided that working out at home or in public parks was just as good or better than being a club member. As a result, they did not renew their membership. Derek recognized that without more club members, the club could not support the two-thirds of the staff that returned.

After surveying the damage, Derek met with Kaitlin, the club director of marketing and membership. Derek said, "We have to rise from the ashes of this fire pretty quickly, otherwise the owners will shut down the club permanently. You are my key person in figuring out what Southside can do to bounce back."

Kaitlin responded, "I already have plans to advertise on several social media sites that we are back in business. I am also going to send text messages to all the members who quit the club, and invite them back."

Derek said, "I like your ideas Kaitlin, and keep me posted about the effectiveness of your campaign. I figure that we have to recapture about one-half of the lost membership to survive. Or, we could recruit new members to replace at least one half of the members who have not returned."

Kaitlin said that she would do her best, but she was not expecting major results from her recruiting campaign. Derek responded that perhaps he and she could ask present staff members if they could invest some time in bringing back former members, or in recruiting new members. As the weeks rolled by, membership enrollment trickled up by only two percent.

Two weeks later, Derek met with Kaitlin on a Saturday morning to say that he had another plan in addition to the existing campaign for increasing enrollment. "We have to think big to revitalize Southside. Maybe we can recast ourselves as an athletic and wellness center. We will offer yoga classes, stress-management activities, seminars on healthy diets, and whatever other fad fits our capabilities."

Kaitlin said, "I like your big thinking, but how do we go about executing?"

In what way is Derek attempting to be a transformational leader?

What do you think of Derek's leadership approach to transforming Southside Athletic Club to a more successful business?

What suggestions can you offer Derek and Kaitlin to increase club membership?