The September 2016 issue of Direct Selling News is available!

Cover Story

Keys to Success part 1: Customer Acquisition

by Andrea Tortora

Of all the misinformation about direct selling, perhaps the most often repeated—even by those who work most closely in the field—is the description of direct selling as an industry. Read more…

Celebrating success is a hallmark of direct selling, and we have two opportunities for you to recognize the great work being done by your corporate teams. Read more…

Like the pink Cadillacs it awards to top sellers, today’s Mary Kay retains a classic feel while embracing innovative thinking and design. Read more…

When husband and wife team Mark and Tracy Jarvis set out to launch their own company, they had listened to numerous suggestions for the name until “zurvita” was proposed and immediately touched and won them over. Read more…

In the year 1855, Reverend J.R. Graves started a mail order company selling books, religious tracts and Bibles. Read more…

It’s another year and you’re gearing up for your convention. Read more…

Over the past decade, rapid developments in technology have fundamentally changed how direct selling organizations operate. Read more…

The speculation started immediately. As soon as the news—Herbalife Settles with FTC—began popping up on mobile alerts and news outlets early Friday morning, July 15, observers inside and outside the direct selling channel began scrambling to understand the bigger picture. Read more…

The U.S. Direct Selling Association held its Annual Meeting in Phoenix, Arizona, June 5 to 7, bringing together direct selling company executives, academics, suppliers and global direct selling leaders for collaboration and conversation about the trends shaping the channel. Read more…

The direct selling industry is at a critical juncture in its long history. Read more…

The role of the U.S. Direct Selling Association (DSA) has never been more clear: to serve as a “listening post,” a place to collect, analyze and address the aspirations and concerns of the direct selling channel. Read more…

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Taking Care of Your People So They Can Take Care of You

by Jere Thompson Jr.

 Photo above: Ambit Energy co-founders Chris Chambless and Jere Thompson Jr.

Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.

When I was a graduate student at The University of Texas, I spent a month in Washington, D.C., learning about the federal government and how it works. A couple of us in the program were given the incredible opportunity to visit the West Wing of the White House. James Baker, a fellow Texan and President Ronald Reagan’s Chief of Staff at the time, was our tour guide. The highlight, of course, was the Oval Office. While telling stories about President Reagan, Mr. Baker walked over to the President’s desk, opened a crystal jar and offered us some of his famous jelly beans. It was unforgettable, and so was a small brass plaque sitting next to the jar. It read, “There is no limit to what a man can do or where he can go if he doesn’t mind who gets the credit.”

To me, President Reagan was emphasizing that success is all about teamwork, about attracting and retaining the best people and giving them the recognition they deserve.

Today, Chris Chambless, my Co-Founder and our CMO; John Burke, our CIO; Laurie Rodriguez, our CFO, and I all have replicas of that brass plaque on our desks. From the very beginning we wanted to build a culture that would enable us to attract and retain the best talent. First, however, we had to decide what we wanted to focus on and what we were willing to say “no” to.  We had to narrowly target our limited startup capital and time. We kept repeating, “The main thing is to keep the main thing the main thing.”

At Ambit, we have three main things: our systems, our people and our standards.


Our entire executive team came from telecom backgrounds. In that industry, we had seen companies with great back offices and systems thrive and prosper while those with poor systems capsized, sank and disappeared forever when the inevitable data tidal wave hit them. We knew that operationally Ambit would be a data processing company. Everything we would do would involve the receipt, processing, storage, sharing, presentation and mining of data.

At first, John thought we would be able to find a vendor to supply our systems. But what we wanted didn’t exist. He told us that we would have to build our own systems because the cost and the delays of modifying off-the-shelf systems would be prohibitive. Chris and I didn’t know what we didn’t know about coding. We just shrugged and with very little empathy said, “Let’s get started.” John turned pale, but the next morning he was loyally at his desk starting to code. John built our IT organization and systems from scratch. He started alone and today has 130 people in his IT department. Our systems have been patented, and we feel they are a key qualitative difference between Ambit and our competitors.

People thought we were crazy to build our own systems. Any time you do something unconventional, you get criticized. The first time I was invited to a telecom industry conference to speak on a panel, I was asked to describe Ambit. I told everyone that we were a data processing company that happened to sell electricity and used direct sales for gathering customers. There were snickers in the room. We heard them and ignored them. We didn’t want to be like them, act like them and have returns like theirs. In fact, we didn’t even want to think like them. We didn’t hire anyone from the utility industry for over four years. Any time we needed to learn about something, we Googled it. This approach had risk, but it succeeded because of talented, curious people.


Companies are collections of people. Their cumulative and collective knowledge multiplied by their focus and passion is what distinguishes one company from another. That’s what culture is all about. The question for us was how to begin creating a culture. There is an old saying, “First, we define our space and then our space defines us.” We set our culture in motion by moving into a 100-year-old warehouse space and tearing out all of the offices. Light immediately cascaded through the many windows onto the beautiful polished hardwood floors and red brick walls. We wanted open spaces so that we could more closely connect to the emotions of our business. We wanted to hear the excitement and concerns in voices to know what to applaud or what to address immediately. We wanted to sit in the open so that we could have hundreds of conversations a day without ever leaving our desks.

Actually, our desks are $19 fold-up tables. They, too, were unconventional, and concerns were voiced that everyone would think we had no money and little chance of success. But we explained that we were going to invest all of our capital in great people and outstanding systems, not in fancy offices and elegant furniture. We told everyone that the smart people would understand this and not to worry about anyone else. Eight years later, we are a $1.5 billion company, and our executive team still sits at those same fold-up tables, next to each other and out in the open.

If we started over tomorrow, we would do it exactly the same way. Smart, young people want a space with high energy that promotes speed, creativity and collaboration. They want to be surrounded by other smart people. We knew that only assigning IT the task of figuring out what was needed and how it should be designed, coded and then prioritized would lead to disaster. We were determined to enable companywide collaboration, believing that everyone had to be engaged in this process. Our space and open culture made that work.


The very first time Chris and I sat down to map out the kind of company we wanted to build, we talked about our reputations and the reputations of consultants who would one day join us. We knew that consultants would be putting their reputations on the line every time they approached someone about becoming an Ambit customer or Ambit consultant, and we wanted to deliver as promised—not some of the time, but all of the time. So we committed to building the finest and most respected retail energy provider in America. Those were pretty bold words for a company with a couple of customers, but we knew the opportunity was enormous. To be the finest, we had to have great systems and outstanding people. To be the most respected, we could never sacrifice integrity for growth.

Over the past few years in almost every speech I have made, I have emphasized that the only way to attract and retain the best people, whether it is inside an organization or in a consultant downline, is by maintaining high standards. We tell our people to be the finest and most respected, to never sacrifice integrity for growth and to never exaggerate. We explain that exaggeration is like quicksand, and once you slip into it, it is almost impossible to get out of. You cannot build a long-term sustainable business with a foundation built on quicksand. Build your foundation on rock. Build it on truth.

Looking back over the past eight years, we have always tried to work our hardest and do our best. We have always tried to deliver as promised. We have always tried to attract and retain the best people. We have communicated our values repeatedly, and have enforced them when necessary. And along the way, we would like to think that we have built up a certain level of trust with our customers, with our consultants and with our people. That is why we have achieved what we have achieved.

President Reagan was right. Success is all about teamwork, about attracting and retaining the best people and giving them their well-deserved credit. Everyone can do that.

Jere Thompson Jr. is Co-Founder and CEO of Ambit Energy.

Focus, Focus, Focus

by Cindy and Scott Monroe

Click here to order the October 2014 issue in which this article appeared or click here to download it to your mobile device.

Cindy Monroe is Founder, President & CEO, and Scott Monroe is Chief Brand Officer of Thirty-One Gifts.

As our business has grown over the past several years, there has been one challenge that always seems to rear its head: focus. Even as our teachers and parents often reminded us to “focus, focus, focus” when we were children, still today, as business leaders, the ability to maintain focus in the midst of a growing and thriving business is one of the greatest challenges we face.Focus can be tough for entrepreneurs especially. Our creative desire to find bigger and better ideas creates a perfect environment for distraction if not kept in check. We believe that by being purposeful and minimizing distractions, we can maintain focus on the things that make the most impact and keep us on track toward a bright future.

Scott and Cindy Monroe

Scott and Cindy Monroe

Cindy Monroe: Purposeful is such an important word to us at Thirty-One that it is one of our 12 core values. We ask ourselves “why?” often. It seems elementary, but how many times have we all gotten deep into an initiative that’s just not working and found ourselves wondering why we started it to begin with? I’ve found that when I’m purposeful from the beginning and plan and get the right people around the table who work together as a team, we can determine ahead of time whether it’s going to become a distraction or not.

We should also constantly evaluate whether or not what we’re in the middle of is still on purpose. We all have to face it. Sometimes our greatest ideas that seem to start out as winners end up losing focus, losing purpose and ultimately getting off track. We have to be honest with ourselves and learn to let some things go or learn to let others be rebuilt. In the tactical execution it’s so easy to get distracted by all of the very important details and find ourselves quickly off-purpose. If you’re feeling bogged down on something in business or life, I want to encourage you to step back and examine it. Is it still purposeful? Are you focused or is it all cluttered with distractions? Are there lots of good things getting in the way of you doing great things? These are all questions we try to ask ourselves every week, and I think they’re questions we should all ask ourselves and our teams daily. Also, as top executives, it’s easy not to realize the amount of energy that executing an idea or initiative takes. Ask your team many times during the project for the amount of time the idea is taking compared to other initiatives or day-to-day core competencies.

Scott Monroe: In photography, there is the concept of depth of field. Many of the most beautiful photos ever shot have a very narrow depth of field. The subject is close and in perfect focus while everything else in the foreground and background are out of focus. It’s easy for us amateur iPhone photographers to want everything in focus but we find our all-inclusive shots, taken from a safe distance, to be distracting and uninteresting.

Click here to read the rest of the story.


Controlling the Conversation: Balancing Product and Opportunity

by Lori Bush

Click here to order the September 2014 issue in which this article appeared or click here to download it to your mobile device.

At Rodan + Fields, when we made the decision to pivot from our department store marketing channel to direct sales, a great deal of consideration was given to protecting the brand equity that derived from our founders’ legacy in the skincare segment of the beauty industry. As we looked to transform our go-to-market strategy, we wanted an independent business ownership model with low cost of entry that afforded our Independent Consultants the opportunity to compete with other industry players. The key here is what we define as our “industry.” While there are many definitions for the word industry, the most relevant ones read something like this: noun \ˈin-(ˌ)dəs-trē\: a group of businesses that provide a particular product or service. By this definition, Rodan + Fields is in the beauty industry. The business opportunity derives from product leadership coupled with our sales and marketing strategy: The opportunity itself is not our principle product.

Sounds simple enough, right? But gaining buy-in and protecting and advancing this aspect of our brand equity is a challenge that requires rigor in monitoring and compliance, especially when it comes to engaging direct selling veterans as employees or as Independent Consultants. Our investment in product and brand development is materially eroded when a successful business-building Consultant is dismissive or even disparaging to those who want to engage as product ambassadors rather than promoting the business model. The worse-case scenario of this is the proclamation that “it doesn’t matter what you’re selling as long as the compensation plan works.” Not only does this fly in the face of who we are, but it generates ill will and validates the position of those who challenge the legitimacy of our business model.

Out of a deliberate exercise to define the soul of our company, a clear set of business values emerged, which we call our “True Colors,” and we constantly assess our people and programs for demonstration of these values.

So what is direct selling to Rodan + Fields if it’s not an industry? We see direct selling as crowdsourcing our marketing and sales initiatives. And with the advantages of social, mobile and web-based tools for customer acquisition, engagement and monetization, it is a highly effective, modern business model that provides individual micro-enterprises the opportunity to participate and capture market share in an important, lucrative and growing consumer products category.

Soul Searching

When we launched our current business program in 2008, we believed we had the opportunity to help shift public perception of direct selling and went as far as to bake this notion into our mission statement: “Our mission is to redefine independent business ownership with brand presence and transformational products and programs that change skin and change lives.” It didn’t take us long to learn that walking the talk requires constant commitment to education and compliance because, when it comes to salesforce behavior and performance, the simple fact that something works doesn’t necessarily make it right.

Another part of our mission statement, the creation of “an enduring legacy for our Consultants and our employees,” led us to take a deep dive into the soul of our company. To truly have a company soul requires a shared understanding by everyone who is involved as to purpose and values. Out of a deliberate exercise to define the soul of our company, a clear set of business values emerged, which we call our “True Colors,” and we constantly assess our people and programs for demonstration of these values. One of these key values is Assurance.

Assurance is about brand and business integrity; it’s the commitment to our Consultants and their customers that what they signed up for is what they get. If we promise a unique brand and uplifting culture one day and they show up to find a generic, hardcore moneymaking scheme the next day, our soul is eroded. “Assuring” that the Rodan + Fields brand and business models continually meet or exceed expectations requires surveillance of how our programs manifest into and through our sales organization.

We have a responsibility to our sales organization, their customers and the direct selling community at large to control the conversation so that it doesn’t become controlled for us.


I recently attended a training conducted by members of our field development team and discovered that some important aspects of our program had drifted away from our original intent in response to preferences of some of our Independent Consultants. Even though these preferences could, arguably, accelerate the rate of growth of a Consultant’s income, they could put the long-term value of the brand and business opportunity at risk. In a nutshell, there was an overemphasis on recruiting and building an organization without a balanced focus on engaging and servicing customers. Both aspects of the business model are important, but the training was heavily biased toward the former without first firmly establishing the brand, product experience and our overall approach to social commerce. We recognized the need to make an adjustment to our approach in order to reinforce key aspects of our value proposition.

Instilling an understanding of the rationale for our vigilance helps our internal team and our Consultant leaders appreciate the importance of governing the execution of our business programs in the marketplace. No matter how carefully we craft our compensation program and articulate our Policies and Procedures, if we promote or turn a blind eye to practices that undermine our brand value proposition, a handful of rogue players can wreak havoc and lead to significant net detractors for our products, our programs and even direct selling in general. We have a responsibility to our sales organization, their customers and the direct selling community at large to control the conversation so that it doesn’t become controlled for us.

A direct selling business model enables us to collaborate with passionate micro-entrepreneurs to market compelling, innovative products and services that might never see the light of day in risk-averse brick-and-mortar retailing models. Our future is dependent on continuous introspection as to how we guide our Independent Consultants to appropriately communicate our brand and business values. The meaningful marketplace value of our opportunity is part and parcel of our compelling product proposition. If we present this the right way, the word pyramid should never enter anybody’s mind, much less the conversation.

Lori Bush

Lori Bush is President and CEO of Rodan + Fields.

Making Direct Selling a Dynamic Force for Good

by Douglas C. Robinson

Click here to order the August 2014 issue in which this article appeared or click here to download it to your mobile device.

The challenge is out there: Make direct selling a Dynamic Force for Good. Truman Hunt, newly seated Chairman for the Direct Selling Association, put forth this mantra when he outlined his vision for the coming year during the 2014 DSA Annual Meeting in Orlando earlier this summer. So, how can we act on that vision and put those visionary words to work? Here are just a few things we could all do to act upon Chairman Hunt’s vision, and in doing so, make a very positive difference, not only in our industry but also in our world.

First, regardless of your roles and responsibilities, and regardless of the company that you work for or represent, personalize this challenge. Ask yourself, “Am I a Dynamic Force for Good? Am I making a difference—for the good? What did I do to make a difference in my company, in my community, and more broadly, in the direct selling industry this past year? What can I do to improve upon that this year? How can I make a bigger difference in my company, my community, and the direct selling industry this coming year?” Formalize your goals—otherwise the year will get away from you, and you likely won’t accomplish all that you set out to do. Include a personal statement with respect to this mantra of transforming yourself into a Dynamic Force for Good.

Let’s look beyond our fantastic products and the incredible opportunity, and connect with our true purpose.

Second, conduct yourself with the highest ethical standards. Again, regardless of where you find yourself within your company, work hard, be honest and be transparent. Go about your everyday routine looking for positive solutions to the challenges you face—look for reasons why you should do something versus focusing on the reasons why you shouldn’t do something. Simply put, when you aspire to make a positive difference, you will. And, in doing so, good things will happen.

Third, connect with your purpose. As involved as we all are within the direct selling industry, it goes without saying that we are all selling something—products as well as the business opportunity itself. But let’s look beyond our fantastic products and the incredible opportunity, and connect with our true purpose. And that purpose will be different for each of us because what drives us to do what we do is different.

A good friend of mine from Austin, Texas, Roy Spence Jr., focused on this concept perfectly in his book, It’s Not What You Sell, It’s What You Stand For. We all sell something. So, what differentiates those who are truly working toward being a Dynamic Force for Good from those who are not? Roy would suggest it is those who are driven by purpose, and I would wholeheartedly agree. Connect with your purpose and allow yourself to be driven by it. In doing so, you will absolutely be a Dynamic Force for Good.

I love the industry of direct selling. Done properly, it changes lives for the better. I’ve only been a part of this incredible industry for nearly five years. I spent the first 25 years of my career in health care—namely within strategic consulting to the Fortune 100. I was first introduced to the direct selling industry when I was asked to join the Board of Directors of LifeVantage in the fall of 2009, just a few months after the company began selling its products in the network marketing channel. Previously, the company sold its flagship dietary supplement product, Protandim, in the retail channel. About 18 months later, after an extensive search for a new president and CEO, I was honored to be asked to assume that role for LifeVantage. And over the course of these last three and a half years, I believe we’ve touched many people’s lives for the better by going about our business, realizing that we can and should be a Dynamic Force for Good.

I believe we’ve touched many people’s lives for the better by going about our business, realizing that we can and should be a Dynamic Force for Good.

LifeVantage will be a steward for all that Chairman Hunt is espousing, not only in the communities and countries where we currently conduct our business, but also in all those countries where we are laying the groundwork for expansion in the months and years ahead. Our employees and independent distributors connect with tens of thousands of people every day. They can and should be doing so with the mantra of being a Dynamic Force for Good.

It’s a great time to be in this industry. Years from now, I am confident that we will look back upon these times and see less of the challenges and attacks against our great industry and more of the difference we made in millions of people’s lives by connecting them with great products and business opportunities that profoundly improved their lives and their health.

Douglas C. RobinsonDouglas C. Robinson, President and CEO of LifeVantage Corp. (LFVN—NASDAQ), was recently elected to the Board of Directors for the Direct Selling Association (DSA). His term began on June 2, 2014, and will last three years.

Robinson’s nomination expands his involvement with the DSA, where he has served as a member of the World Federation of Direct Selling Associations’ CEO Council since 2013.

We Don’t Need to Change Or Do We?

by John Parker

We’ve all heard that it’s lonely at the top, or that leadership is the other side of the coin of loneliness. Many have embraced this notion, but I would invite them to closely study—and experience—how direct selling really works. It just might change their minds.

Entrepreneurship in our industry is far from a lonely proposition. In fact, it’s just the opposite. As insiders, we know that. But when a well-respected business professor and author on global entrepreneurship recently asked me about it, I realized we still have a lot of work to do to prove it. She said, “I spend every day with students, both in the U.S. and abroad. If there is one thing they seem to have in common, it is a desire for work that is meaningful above and beyond what it pays them. They want their careers to leave a positive impact on society. How is your industry changing to prepare for them?”

My first thought was: Changing? But we don’t need to.

Direct selling companies are unique in how we create an environment where communities naturally form. If we were a sport, we would be a team, not an individual sport.

But here’s what I think is tough for us to grasp as industry executives: Lasting communities form around causes or values—not products or brands. In fact, some of the most successful organizations at Amway have discovered that what identifies them as a team is not the dietary supplements or anti-aging creams they offer. It’s about a shared value system and the “something bigger—achieved together” the professor was asking about.

In 2013, two legendary Amway leaders passed away. As we mourned, we also reflected on this very concept. We focused on the legacies they left in the world, not as entrepreneurs, but as people. Their legacies were about helping others, whether it was building orphanages together, ensuring no one who needed a wheelchair in one country went without, eradicating hunger in a rural school system, or raising millions of dollars for Easter Seals families.

They are two reflections of the many real and powerful stories that prove what direct selling—communities with a common purpose—can do. These stories have little to do with product or compensation plans.

Lasting communities form around causes or values—not products or brands.

The opportunity we have as leaders in this industry is to respond to and state our support for the desire that people—especially young people—have to leave a mark on the world. It’s an opportunity to meet their needs as a community without attempting to define and manage them at every turn.

We have the ability to do that. We can talk to prospects about their aspirations to leave a legacy, and about the platform direct selling gives them to do it. We can teach them to find others with similar passions. We can give people an opportunity to dip their toes in the water of entrepreneurship and economic freedom—all while building lasting relationships, developing others, and providing hope and change on a very large scale.

What better foundation than direct selling is there to make a lasting difference like this in the world?

The opportunity we have as leaders in this industry is to respond to and state our support for the desire that people—especially young people—have to leave a mark on the world.

The more I think about it, the more I realize this might make us uncomfortable because, as corporate employees, we exist outside of these naturally formed communities. We help them via our unique products, compensation plans, and support, but they live and breathe for each other, not for us. We’re not shy when it comes to talking to the media, or other influencers, about the unique “product + people + plan” equation that makes direct selling tick, but have we done our job describing our communities—and their passions—as fully as possible?

I believe the answer is “no.” Otherwise, questions like the one I was asked by that professor, and those by other outsiders, wouldn’t come our way.

We can start by reminding ourselves that “people” and “social networks” are not the same thing as “community.” Much like teams in sports, communities have a goal in mind and will not rest until it’s met. People are still individuals. Social networks allow people to communicate, but they don’t always inspire people to act on a common purpose or passion.

Communities share a common belief. Our industry community exists with the shared belief that individuals can control their futures and that raising up entrepreneurs is an important contribution to society. So we are a community, and we provide community. Great, but how do we help our next generation of independent representatives understand and embrace this?

Maybe it starts with less focus on independence. Perhaps our message should be: If you’re looking for a community in which you can make a difference, direct selling is already here! We allow and support you to make your mark on the world.

We need to use our time, treasure and talent to talk about the common-purpose communities that live within our businesses. Yes, it’s a little scary because those are the very communities we don’t always directly control. But it proves to others that direct selling is one very exciting, very doable, very legitimate route to working with others to achieve that “something bigger.”

In 2014, I challenge all of us to find the communities of direct sellers within our businesses making an impact that resonates with the next generation of entrepreneurs—to show prospects that we’re businesses that don’t exist for selfish reasons, but who work to solve the problems of one person, or one community, or one country.

Speak out about how direct selling communities are a unique way to pay it forward, and how direct selling embodies optimism, which is the first thing a person needs to change the world.

Modify the conversation about direct selling. Focus on how we have and how we will serve and better entire communities.

Show people that direct selling will help them make a difference in ways they can’t even imagine because of the sheer number of people they would be able to meet and energize around any cause they choose.

In other words, modify the conversation about direct selling. Focus on how wehave and how we will serve and better entire communities. Use a new communications formula that every time includes product + people + plan, just as before, but adds “passionate purpose.”

Let’s prove that no one understands people’s desires to start socially conscious businesses better than we do, and let’s remind everyone that with a career in direct selling it’s never lonely at the top—or in any position along the way.

Before we know it, smart people won’t be asking us if we’re doing anything to prepare for a new wave of worker. They’ll be asking how they can follow in direct selling’s footsteps.

John Parker is Chief Sales Officer at Amway.John Parker is Chief Sales Officer at Amway.

The Science of Business

by Robert A. Sinnott

Click here to order the January 2014 issue in which this article appeared or click here to download it to your mobile device.

What can science possibly teach us about business? I believe that a healthy dose of the scientific method is good for business. The scientific method requires thinking through the challenges or opportunities that are yet unrealized then applying focus, careful planning and execution to push forward the frontiers of knowledge.

According to Peter Drucker—who was considered by many to be the creator of modern management—two of the most important roles of the CEO are to constantly think through the business and set clear objectives and metrics to guide the business forward. This is analogous to designing a good series of science experiments. It requires having a firm grasp of the present situation, making sure that the variables are changed in a controlled manner, and ensuring that the results of each project build on each other in a logical fashion.

There are many scientific concepts such as entropy, specialization, natural selection, synergy, innovation and validation that apply clearly to our direct selling and network marketing business model. For example, many of the principles of money flow in economics are similar to how energy flows in thermodynamics. The person designing a compensation plan must understand that the bulk of energy will eventually find the path of least resistance. It is as inevitable as gravity and quite perilous to ignore. A related thermodynamic principle of entropy clearly applies to our business structures. We know that if energy is not continually put into an organization there will be inevitable decay to nothingness. Entropy applies to individuals as well as departments, business units and whole organizations. Personal development and continual training overcomes the effects of entropy, which is why so many successful direct selling companies have strong personal development cultures. They are effectively inputting energy to promote continual growth and prevent decay of the structure.

Also, it is not coincidental that today’s most efficient business organizations are comprised of highly specialized and compartmentalized functional areas, like the organelles within a cell. Specialized structures allow a cell to do things very efficiently, such as maximize energy output, shorten supply chains and recycle waste. Businesses are always seeking to improve in these areas as well. It’s not by chance that structures from small, simple cells to multinational corporations are composed of scalable units. Recognizing this gives useful insight when diagnosing a problem or designing improvements to capitalize on new opportunities to grow your business.

There are many scientific concepts such as entropy, specialization, natural selection, synergy, innovation and validation that apply clearly to our direct selling and network marketing business model.

There are many scientific concepts such as entropy, specialization, natural selection, synergy, innovation and validation that apply clearly to our direct selling and network marketing business model.

Some of the same models and formulas that describe behavior in complex ecosystems can be applied to highly networked business organizations, such as our independent distributor organizations. There are complex psychological and environmental factors at play similar to those that govern natural selection in the wild. Understanding these underlying natural laws helps us craft strategies for maximizing growth during good times and ensuring survival when the environment turns rough, which it periodically does. How do we redirect our resources during a periodic economic downturn? How do we get back out of hibernation mode and back to full productivity when the conditions turn favorable again? What are the signs of the changing seasons that we need to be paying attention to? We can learn a lot by observing how nature handles these same challenges.

Another scientific concept that is widely touted in business today is synergy. Synergy occurs when two or more forces join together to provide an effect that is stronger, sometimes much stronger, than simple addition would predict. The scientific concept of synergy underlies the notion that in business there can be win-win situations. Synergy is well proven in the laboratory, notably in physics and chemistry. The concept has also been applied as a way to create additional value for both a business and its customer. In the case of synergy, science teaches us that sustainable win-win-win situations are completely possible where the business, the customers and society as a whole can benefit through properly structured relationships.

A relatively new type of business model called social entrepreneurship restructures corporate philanthropy to be more tightly interwoven with the core business. It replaces charitable handouts with a share of the top-line sales revenue to create a durable win-win-win situation. Mannatech is currently operating our Mission 5 Million (M5M) social entrepreneurship program globally to great satisfaction for our customers and the company. The really cool thing is that according to science, the number of “winners” that can be structured into a relationship is infinite. It is limited only by creativeness of the structure. Wherever there are mutual interests, there is the potential of creating synergy. Direct selling and network marketing business models are particularly rich with potential synergies just waiting to be tapped. Successful companies in our industry often break new ground or power through to the next stage on their growth curve by tapping into new business synergies.

Well-managed science can power innovation, help a company secure market share, and help protect a company from regulatory risks. Two extremely important areas these days for many of us are scientific validation and creation of intellectual property. Mannatech has been a pioneer and innovator in the dietary supplement industry for almost 20 years and counting. To date, we have amassed a global patent portfolio of over 90 issued patents, with many more pending. This decision to invest in a robust intellectual property (IP) portfolio has given us protected space in several key areas of human nutrition. It has protected us from having to claw it out with commodity-priced products that most retailers offer.

Well-managed science can power innovation, help a company secure market share, and help protect a company from regulatory risks.

Particularly in the direct selling and network marketing industry, where companies come and go regularly, the lifespan of  a venture can be cut considerably short by a competitor moving in and selling an uncomfortably similar product at Costco or Wal-Mart. This has led to the quick decline and death of several industry ventures. Neither the company nor the independent sales associates benefit from having their business undercut and collapsed this way. Companies that plan on staying around a while need to invest in meaningful IP development at an early stage. At Mannatech we have benefitted from the issued patents on our flagship products and have been able to shut down illegal competitors in court when necessary. The protected area around our flagship products gives us some nice blue ocean space in which to operate and grow. Finally, having well-developed IP also protects us from critics attacking our products as “commodity items,” which has unfortunately become an increasingly common accusation in our industry this past year.

Ideally, good business leaders and good scientists both possess creativity, intuition, innovation and the ability to analyze data and spot trends.

So what makes a scientist a good candidate for leading a business? Ideally, good business leaders and good scientists both possess creativity, intuition, innovation and the ability to analyze data and spot trends. They have “prepared minds” that can spot opportunity for increased efficiency within complex structures. As it turns out, the origins of a company’s CEO can tell a lot about the organization’s underlying structure and priorities. Our company, Mannatech, is engaged in the business of science so it is fitting that a scientist, with requisite experience across functional areas, could follow a path to end up as CEO. Mannatech has done very well working the fertile ground where science and business converge. It has certainly helped that the person at the helm knows the feeling of accomplishment that comes from taking a new product all the way from the laboratory, through prototyping and commercialization, through manufacturing and marketing, to place it in the hands of a new customer.

It is also important that the CEO know that not every opportunity is as sexy as a new product launch. Financial discipline and organizational efficiency aren’t sexy topics, but they are required for sustainable growth. Also, particularly in our industry, sustaining the unique culture of the organization is irreplaceable. At Mannatech we have challenged ourselves to look at our business from a fresh and scientifically objective viewpoint. It has been deliberate and effective.

Robert SinnotRobert A. Sinnott, Ph.D., is CEO and Chief Science Officer at Mannatech Inc.

Lead by Serving Others

by Mona Ameli, USA General Manager of Belcorp USA

Click here to order the December 2013 issue in which this article appeared or click here to download it to your mobile device.

When I was asked to contribute to this DSN edition, I felt honored, as I certainly don’t have the amazing leadership tenure that many other contributors before me have had for this segment. So I decided to share with you my leadership perspective as the “work-in-progress” that it is, as I certainly believe I am still learning, every day.

Growing up as the daughter of a highly ranked civil servant leader in the pre-revolutionary Iranian government, I first heard about servant leadership from my father, whose mentor and leader, the ex-Prime Minister Dr. Mohammad Mossadegh, had led the country to nationalizing its oil in 1951, one of the most important events in the history of Iran, the Middle East and the world. My dad had detected in me at a very early age the possible premise of a future manager and leader and was the one encouraging me to follow in his footsteps—but in the private sector. He had an enormous influence on my perception of what the priority and focus of a true leader should be: to serve others first and make an impact on a larger community.

My dad had an enormous influence on my perception of what the priority and focus of a true leader should be: to serve others first and make an impact on a larger community.

With both the personal influence of this leadership philosophy and its natural relevance in this great industry that is direct selling—which I have had the privilege to be part of and fully embrace for the past 15 years—servant leadership has become an essential foundation of what my “work-in-progress” is. In no other industry can you truly experience servant leadership more than in ours; it is a true people-centric business where relationships shape the essence of our being and all that we do is focused and centered on our independent distributors—and through them, our communities.

Servant leadership is an ancient philosophy, but in its modern form it was coined by Robert Greenleaf in 1970. While there are many books, trainings and seminars about servant leadership, below I have outlined the seven key principles that, for me, can have the highest relevance, importance and impact:

1. Remember who you work for—at all times.

While many of the corporate leaders in our industry, from an organizational perspective, report to boards of directors, shareholders, executive committees and so on, we all—every single one of us from the top CEO to the receptionist—work for our independent distributors and through them for the end-customer. I know this is no revelation for any of you, but integrating this, applying it in every aspect of the business and making sure that everyone in the organization embraces it fully every day is essential.

At Belcorp, every meeting, every conference call and every training is a reminder not only to the sales and marketing people at the forefront of the scene working directly and closely with the field, but to all other behind-the-scenes support functions, such as IT, operations and finance. We want them to work every day knowing that their job will impact the lives of our distributors. The empowerment and the responsibility gained from this are invaluable and very visible to our field. They not only see but feel that we all care about them and work for them.

2. Lead and inspire by example.

As leaders, we often forget where we have once been. It is important to remember and, most importantly, to value it in order to create a bond that inspires all for a more loyal and productive team.

Leading by example does not only mean to lead with savvy business strategies, decisions and actions, but, most importantly to lead and inspire others by having an exemplary behavior focused on listening, respecting, showing empathy and relating. I’ve found that, more than impressive résumés, degrees from top world universities and years of experience, what creates a real bond, inspires and empowers is when the leader is able to relate to the team. When leading the U.S. unit of a Latin American company with a predominantly diverse employee and distributor base, what connects me the most to all of them is sharing how I had once been where they are now and how, as a first-generation immigrant with limited English skills and no driving ability, I restarted life at the bottom of the food chain as an adult and worked very hard to build myself up. I share how I never gave up and kept on believing until I made it to where I am today. As leaders, we often forget where we have once been. It is important to remember and, most importantly, to value it in order to create a bond that inspires all for a more loyal and productive team.

3. Embrace and integrate diversity.

We often tend to gather around us and within our leadership teams people who have more similarities than differences from us. What we miss in doing so is the ability to see the perspectives that others could bring, providing a more complete and comprehensive view. Bringing and integrating diversity into our organizations helps us have a wider reach to our field and customers in the areas we cannot or do not know how to relate to.

Diversity is as “diverse” as age, gender, race, socio-economic level, education or religion. Diversity enriches our culture, strengthens our “field play” and enables us to bridge the gaps with a stronger approach. While many companies may see diversity as having different genders, races or ethnicities represented in the images of our collaterals/videos/social media, embracing and integrating diversity is not an afterthought; it becomes a key value of our companies that makes a true difference in our bottom line. Some key direct selling statistics can reveal the importance of diversity in our industry and its relevance in our corporate leadership. By far the largest percent of Belcorp distributors are women (82 percent), and 60 percent are Hispanic, not to mention many may only have a high school diploma. It is important to remember this.

4. Humility is your biggest asset.

It becomes a daily reminder to keep oneself grounded and be reminded that humility—real and heartfelt—is one of the greatest assets of a leader to stay close and connected to our teams.

Often it becomes challenging to stay humble when you are a jet-setting executive, meeting-hopping and shareholder briefing. You’re a key decision maker, the one who always has the last word with the teams and on whom all eyes and ears are directed to take the right road to success. But it is so critical to remember that we are not always the one who knows it all. That’s why we hire people better than us and why we surround ourselves with the very best—and it is so important for our teams to hear and know this. I personally am learning every day, from every interaction with my employees or our field members. Especially in an industry where recognition is such an important element and often comes with some sort of elitism, it becomes a daily reminder to keep oneself grounded and be reminded that humility—real and heartfelt—is one of the greatest assets of a leader to stay close and connected to our teams.

5. Lead with passion.

Passion is one of the most contagious emotions that a leader can nurture and spread throughout the organization. It is essential during good times to keep up the momentum, and it is vital in not-so-good times to keep the team united, focused and motivated. A clear vision without passion is hard to hold on to. I was so lucky in my early years in this industry to work for someone who personified passion: Mark Hughes, Founder of Herbalife. I am still blessed to work for a man whose unstoppable passion transformed the path of Latin American women: Belcorp CEO and Founder Eduardo Belmont. Genuine, authentic passion is the strongest power a leader has to ignite the world around him or her!

6. Commit to growing and developing others.

Meeting goals and achieving success, for me, means having provided an opportunity and a forum for others to learn, to grow and to become better, more fulfilled and well-rounded individuals. Often, as leaders, we are measured by our financial KPI achievements. If those achievements did not come with the lessons for us and our teams, then we have only accomplished 50 percent of the goal.

7. Build a community while you are impacting the world.

As leaders in this industry, the impact we can have goes beyond the reach of just our employees or our distributors. Being able to leverage that ensures what we do is not seen just as our day-to-day jobs and duties but a real task to shape the future—and a much longer-term and higher-impact mission. This provides everyone in our company with a real-life mission that can shape lives and thus inspire and motivate an entire community, who together can feel they can change the world! We are going to launch in January 2014 a new employee community-based program with two floating holidays as time off for our Belcorp USA employees, so they can take time off from their jobs and do community and volunteer work. This is part of the DNA of the company and a core value of our why in the industry. As leaders, let’s make sure we make it not only a vision, but everyone’s mission.

Mona AmeliMona Ameli is USA General Manager at Belcorp USA.

The Inseparable Nature of Infrastructure and Infraculture

by Orville Thompson

Click here to order the November 2013 issue in which this article appeared or click here to download it to your mobile device.

Photo above: Scentsy’s new headquarters in Meridian, Idaho.

About a year ago I had a conversation with the founder of a new direct selling company. We discussed the treacherous road that must be traveled to establish a successful and enduring company in our channel. We discussed the difference between the companies that have grown and died quickly, grown and then faded away, and those that have grown, contracted and grown again. We observed that just as many companies fail because they lose touch with their salesforce as those that lack necessary business acumen.

How often have we seen promising young companies “professionalize” their people and processes only to lose what made them attractive to their distributors? On the other hand, we witness others go out of business because they can’t find financing, control their supply chain, comply with basic regulation or manage the egos of founders and employees. Inside boardrooms and executive teams, forces that promote measured results, efficiency and strong financials compete with ones that promote engagement, passion and strong culture. Too often one is sacrificed for the other: Engagement, passion and culture are difficult for MBAs to measure, and discussing IRR, ROI and EOQ as they relate to giveaways at a distributor event is enough to send the sales team running. MBAs get infrastructure; direct sellers get infraculture. Great companies bring infrastructure and infraculture together.

Great companies bring infrastructure and infraculture together.

Scentsy aspires to be a great company that brings value to the world. Our story is far from finished—and greatness is still an aspiration—but our journey provides insight into the establishment of infrastructure and infraculture.

In 2004, when we launched our direct selling opportunity in an ocean shipping container (our first home office), we had very little infrastructure. We had no money, no credit and no chance of an investor. We had no catalog, no software and no experience. We did have a great product and a few passionate consultants. Little by little, party after party, we made money and could invest in sales materials, software and facilities, but we held firmly to our humble beginning. It allowed us to co-write the Scentsy story with our growing number of consultants and their customers. Collectively, we created the underpinnings of a cultural sense of place, or infraculture. The values of simplicity, authenticity and generosity started to define not only our products and processes but also our people. It was easy for consultants to invite others to join them in their business because they participated in creating the culture in significant ways.

Heidi and Orville Thompson, Co-Owners of Scentsy Inc.

Heidi and Orville Thompson, Co-Owners of Scentsy Inc.

Early on, Heidi and I did what we could to support them. Rules weren’t very important; fairness wasn’t much of an issue. If someone needed our help, we gave it if we could. If we were traveling, we’d stop in at a team meeting or call people up to go to dinner. We held events and training calls whenever we could. The consultants themselves rallied around each other, supported one another, cooperated wherever possible and tried to live as best they could according to our motto of contribute more than you take. Who wouldn’t want to be a part of that? Recruiting boomed and sales kept pace with recruiting. We had the proverbial tiger by the tail.

But behind the scenes we were struggling to keep up. From the beginning of 2007 through 2012 we hired, on average, one new employee every business day. Our facility needs grew from a 6,000-square-foot, flex-space office/warehouse to nearly 1 million square feet in three states and two countries. Our technology struggled to handle the explosion of data. Our customization requests burdened our vendor’s ability to support other clients. Sales development efforts were met with accusations of favoritism when we couldn’t reach everyone equally.

In late 2009 our weak infrastructure caught up to us. A software deployment went bad, our call center broke down as consultants tried to get answers their websites weren’t providing, and the lack of good data from previous years contributed to shortages of product and massive backorders. Just as our consultants’ hard work was paying off for them, we let them down. Instead of celebrating a successful selling season, we were answering questions about when orders would ship and spending all our efforts supporting home office employees who were working around the clock to make things right. In short, our lack of infrastructure was undermining our hard-won infraculture.

Beginning in 2010 the forces inside our executive team advocating for capacity, efficiency and financial stability began to dominate. We poured massive energy into infrastructure, technology, facilities, systems and programs that expanded the opportunities for our consultants. We launched new countries, new brands and new programs. New facilities were opened on a regular basis, and we were performing as a well-run business. Shipping worked like clockwork, system uptime was extremely high, backorders were virtually nonexistent and call-center metrics were enviable. Orders were up, recruiting was up, costs were down, and all was good.

But somewhere along the way the old stories seemed to lose their luster. The infraculture that held together our early leaders seemed distant to the Facebook generation of direct sellers that were filling our ranks. Cooperation that came easily when everyone was on a personal basis turned to competition as consultants turned each other in for policy violations and leaders tried to outdo each other with bigger team meetings, recognition awards or monthly team incentives. Our story, once told in person in informal situations, was now told by tens of thousands of people we hadn’t yet met. The mechanism of sending an announcement to more than 100,000 consultants in different countries speaking different languages slowed the process and squeezed out the fun and informality we were known for.

Scentsy wickless candle warmerScentsy wickless candle warmer Velata fondueVelata fondue Scentsy Layers bath and body careScentsy Layers bath and body care

We started to realize that infraculture and infrastructure were a lot like software and hardware. I remember the days when Intel would come out with a new processor that held so much promise. Microsoft would follow with upgrades to Windows and Office. Then graphic and gaming software would soon push the limits of the new hardware. Software waited on better hardware. Better hardware inspired new software. This process repeated itself over and over in the ’90s and 2000s. Underlying it all is the fact that the best software in the world will not work on bad hardware, and powerful hardware is worthless without good software. Both are inextricably linked. The same can be said for the infrastructure and infraculture of a business.

Grace Adele fashion bags

Grace Adele fashion bags

Infraculture is the underpinnings of a cultural sense of place.

At Scentsy, success took away the luxury of being a small company with an invincible infraculture. At the same time, investments in infrastructure have allowed us to better confront the forces that undermine our infraculture. Better workspace enhances cooperation, better technology improves training, recognition and incentives, and better research and development improves product offerings. A company’s infraculture may be strong, but if it lacks the infrastructure to spread that infraculture, it will not grow. Underlying the enthusiasm of every consultant of a sizable company is the question, “How long will this last?” When the taglines Exclusive Product, Ground-Floor Opportunity, and Fastest-Growing no longer apply, only businesses with a strong infrastructure can compete.

This month we are moving into our newest, and hopefully last, home office. The six-story office tower is the centerpiece of our 80-acre campus, Scentsy Commons. Construction has been a labor of love for Heidi and me. We met weekly with architects and contractors, deciding everything from what pavers to use on the sidewalk to where departments would sit, to what color of tile we should put in the bathroom. In the design and layout we incorporated the values of simplicity, authenticity, and generosity. We worked hard to physically represent the ethos of the Scentsy Family.

We often wondered if this was the best use of our time and money. Before moving in, we used the building to host our SuperStar Director Summit—the annual meeting of our top sales leaders. We heard over and over that they felt like they were coming home. This was their place. Scentsy Commons and the infrastructure it represents is the physical sense of place to match the Scentsy Family cultural sense of place they helped establish. It is a physical representation of our commitment to the aspirations and values that have driven our company since the days of the ocean container. For us, it is the bringing together of infrastructure and infraculture.

A company’s infrastructure allows it to execute functional plans, drive efficiency and measure productivity. A company’s infraculture allows it to inspire greatness, drive passion and enhance satisfaction. Just as hardware and software compete for resources and develop around the weakness of the other—yet are interdependent—infrastructure and infraculture are inseparable. Companies that aspire to be great must develop both.

Orville ThompsonOrville Thompson is CEO and Co-Owner of Scentsy Inc. Its family of brands includes Scentsy Fragrance, Velata fondue and Grace Adele fashion accessories. He is also Chairman of the U.S. DSA Board of Directors.