Recently, I heard an interview with the CEO of a well-known, multi-billion dollar technology company. The reporter asked her to describe, in five words, exactly what her company did. As the CEO’s answered rambled on – complete with buzzwords and typical business jargon – it was clear that this CEO couldn’t do it.

To me it was fascinating, not only because this particular CEO is one of the highest-paid in her field, but also because it demonstrated how telling the five-word test can be for a business. Later that day, the company’s stock dropped by more than 11 per cent (the revelation of an accounting scandal certainly didn’t help).

So why take the five-word test? Consider the following: Simplicity matters. Our lives are complex enough. We don’t have the time or patience for companies who add complications. People have an innate desire to understand what you and your company are all about. Decisions are influenced greatly by what people feel – much more than by what they rationalise. Do your customers ‘get’ you? Do they truly understand why your company exists?

Simple is hard. Apple founder Steve Jobs believed it took tenacity and hard work to really delve into a problem to find an elegant solution. He said: “Simple can be harder than complex: you have to work hard to get your thinking clean to make it simple. But it’s worth it in the end, because once you get there, you can move mountains.”

“Make everything as simple as possible, but not simpler.” I share this Albert Einstein quote to emphasise that no-one wants a dumbed-down version of something. It may not be enough to say that exercise will make people look and feel better. While it’s a true statement, the key is to communicate this fact in a way that resonates with the potential customer you’re trying to engage. Know your customer first. What drives them? What do they really care about? What problem(s) do they have? Only then will you be able to speak directly to their needs in a way that will resonate with them and drive them to act.

Simple is liberating. IHRSA ‘helps clubs be more profitable’. Five words. For everything we do, or consider doing, the answer to the question “does it help our members become more profitable?” must be “yes”. By staying focused, we avoid wasting time and resources on things that stray from our core mission. This frees us up to do what truly matters.

A health club should be able to sum up its purpose in five words. Does yours ‘make society healthier through exercise’, ‘help people reach wellness goals’ or ‘provide fun fitness for families’? I challenge you to go through this exercise with your staff. Come up with five words that best describe who you are and what you do. In the process, you may just discover how liberating a little simplicity can be.