“Speaking of Amway, what are YOUR thoughts on…?”

“Trust is the lubrication that makes organizations work.” — WARREN G. BENNIS

“When a train goes through a dark tunnel and it gets dark, you don’t throw away the ticket and jump off.  You sit still and trust the engineer.” – CORRIE TEN BOOM

“Trust your own instinct.  Your mistakes might as well be your own, instead of someone else’s.” – BILLY WILDER

When I originally created this blog this past April my primary motivation was to encourage candid dialogue among IBOs about topics and issues that concerned me in the business.  The company was in the early months of a global business transformation and I hoped that open discussion of challenges that I and others perceived in the business would potentially lead to real world solutions and change.  I was also hopeful that Amway and Quixtar’s executives would listen in on our discussions — and even participate in our discussions when appropriate — and that has happened from time to time.  From day one this blog was intended to be a collaborative effort, open to original posts by other IBOs, and not centered around one IBO’s point of view or a particular business direction or outcome.  That intention has been realized with frequent posts by “rdknyvr” and post-like comments by “Big Apple,” “IBOFightback,” and others.

My approach to posting about our business was different than anything that I had seen online to that time.  Posts were theme- and issue-based; and initiated dialogue on numerous topics rather than only responding to issues after a problem had emerged publicly, or simply reporting business news.  The approach has been highly effective, has led to hundreds of comments on many topics, and was eventually copied by other sites.

But you might ask, why was creating this blog so important to me?  And that’s a good question.  So if you don’t mind, allow me to answer it.

It was important simply because in my heart of hearts I didn’t believe in the business anymore.  I didn’t believe I personally could honestly promote our business model to potential prospects in its state at the end of 2007 — as much as I wanted to.  (As an aside, allow me to add that my challenges with the business had little to do with the issues that the TEAM debacle raised.  In fact, I thought the TEAM approach was a big part of the problem.)  Even though the company was in the first months of its global business transformation, I had heard the promise of “change” in the business before, and had been disappointed each time, so I had little real hope it would follow through.  In short, I knew that if I was ever going to be able to confidently and honestly build the business there would have to be substantial changes in the business at a foundational level — the company would have to come through and prove to me it was serious about real, lasting change.  I knew it was going to take a lot to bring me back into the fold, and in all candor, I held little hope it would happen.  A lot had transpired over the years to undermine my belief in the company, its leadership, and the IBO leadership.  There was a lot to overcome.

What were the challenges that disturbed me the most?  What were the issues that would have to change for me to be able to honestly and confidently pursue building the business?  They primarily fell into three areas:

The first area of concern was the lack of balance in the business in relation to the tool systems.  I believed the tool systems had become the tail that wagged the dog.  It is interesting to note that Orrin Woodward recently revealed that he never made more than $750,000 in Quixtar at the Executive Diamond level, yet Forbes.com stated a month ago that Orrin told it that he was on schedule to make $4 to $5 million this year alone from the tool support side of his MonaVie business, and that’s after lowering the price of his system tools when he joined MonaVie!  So which business was he really in when he was in Quixtar?!  Quixtar, or tools?  It appears Quixtar was little more than a receptive host that the parasitic TEAM used to feed itself.  And by the way, TEAM was not alone.  Many tool systems had evolved far beyond their original purpose and now ruled the roost, particularly in terms of income, and often treated the company like a second class citizen.  Rest assured, not all tool systems were equally culpable, but all were culpable on some level.

The second area of concern was the mismanagement of the Amway/Quixtar businesses by corporate leadership and the effect its mismanagement had had on its IBOs, its business opportunity, and its product lines.  I held the company leadership personally responsible for allowing the tool systems to usurp so much business territory and to hijack the business far off its original course, often for reasons that allowed the company to be lazy in the marketplace and to serve its own interests.  In all honesty, I’m still disappointed the company leadership has not apologized for its failure in this area.  The company’s failure at this point was more than a “mistake” in my opinion (as they’ve often called it).  One simple example (there are many others) was the retail customer price of most products in 2007 and the company’s retail customer sales volume.  The figures revealed during the TEAM court case revealed that only 3.5% of the company’s U.S. volume was retail customer volume.  But why should the company care?  It was getting its billion dollar plus sales revenue from the IBOs and that was all that mattered.  Otherwise wouldn’t they would have taken steps to initiate change in this area well before mid-2007?  And why should the system leaders care?  They were deriving a substantial portion of their income from the IBOs participating in their systems and that was what mattered most.  Besides it was far easier to generate income from business support materials and functions than to earn income from developing business sales volume with downline IBOs.

The critical role of tool income to IBO leaders in the business was driven home to me in the summer of 2007 when numerous business leaders quickly left the business as soon as it became clear their substantial tool incomes were being threatened.  They saw the writing on the wall.  Knowing it was far easier to generate substantial tool income quickly than business income, they just weren’t willing to get back to having to truly build the business they said they were building all along.  I sometimes think tool purchases by new IBOs are just the tool systems’ back door version of product front loading, but with tools the only ones who benefit are the tool system leaders.  Interestingly, the word on the street from Amway/Quixtar corporate insiders is that the corporation has been shocked to see how resistant the tool systems have been to having their role in the business reevaluated and somewhat diminished, and I’m sure much of that resistance has been due to the tool income issue.  But recent events in the UK and the US have made it clear to Amway Global that the tool system dynamic and the retail customer dynamic had to change — dramatically and soon.  As the Alticor Media Blog put it, “Never Again!”  I agree.

The third area of concern was the IBOs themselves.  I believed that many IBOs, myself included, had acted irrationally, irresponsibly, and immaturely by allowing the tool systems to sell us a bill of goods on their so-called “proven” systems; and the company to sell us overpriced products with limited customer potential.  If an airline had a proven safety record comparable to the tool systems’ proven success record in developing profitable IBOs, it would have been shut down long, long ago.  And the company’s retail customer development with its products and retail pricing was no better.  The attitude of many IBOs, often encouraged by system leadership’s “Are you a team player?” mantra, appeared to be “Question nothing, believe everything.”  I’m convinced a far better approach for IBOs would have been to “Trust, but verify.”  No one should blindly follow anyone anywhere.  By the way, if you only read a couple of books a year (hopefully more), this year I’d recommend making one of those books Predictably Irrational:  The Hidden Forces That Shape Our Decisions by Dan Ariely.  It will convince you of the importance of “trust, but verify.”  All IBOs would be well-served to read it at the earliest opportunity.

Another new book offers some interesting insights along similar lines to Predictably Irrational.  Ori and Rom Brafman, in their new release Sway:  The Irresistable Pull of Irrational Behavior, make a number of intriguing points.  For example, why would a seasoned pilot, the head of KLM’s safety program, ignore his co-pilot and attempt a takeoff in dense fog with 55 tons of fuel (far more than the allowable limit for his intended flight) at an unfamiliar airport, Tenerife — causing the worst air disaster in history?  And why would the co-pilot, who had followed procedure exactly when he reminded his captain that the flight had not been cleared for takeoff, fail to repeat his warning when the pilot pressed ahead anyway?  The collision at Tenarife airport cost the lives of 583 people. Using that accident as their starting point, the Brafman brothers explore the psychological forces that cause people to take large risks to avoid small losses, to judge people and situations by first impressions despite subsequent inconsistent evidence, and to ignore objections from dissenters.

One of the most interesting aspects of the book is the most reassuring in regard to the purposes of this blog.  Research reveals that groups often make better decisions when there’s a “blocker” or “dissenter” present — even if that person dissents for the wrong reasons.  The authors describe a classic experiment in which test subjects are led to believe they are being tested for their visual skills:  three lines of different lengths are to be matched to a fourth line.  The differences in line length are clearly obvious, so there is plainly only one correct answer.  However, if you put the real test subject in a room with several actors who pretend to be test subjects, but actually have been instructed to give an obviously wrong answer, most subjects in the experiment will behave in a completely irrational manner and agree with the other test “subjects” that lines that are clearly different in length are exactly the same.  But if an actor playing “blocker” is added to the mix and points out that the group is wrong, the subject then feels free to disagree and usually makes the right choice.  Interestingly, this is true even if the “blocker” makes a different “wrong” choice by picking two other lines of plainly different lengths.  What this experiment says to the business and political world is that organizations that allow no dissent, or demean dissenters, are likely to perform about as well as that ill-fated flight at Tenerife.  It also implies that the mass mind is often intimidating, a good reason for strong checks and balances in this business.  As an aside, pilots at Southwest and other airlines are now trained to avoid the disaster that happened at Tenerife.  Pilots are taught to listen to objections from other crew members, and crew members are trained to communicate those objections in a way that enables the pilot to respond quickly and correctly.

But back to my three areas of concern.  Obviously, there was plenty of blame to go around in mid-2007, and it wasn’t limited to one part of the business or any one group of people or IBOs.  Everyone, and I mean everyone, myself included, was culpable.  Fortunately, last summer the company promised that big changes were coming and a complete business transformation was in the works.  Having heard that unfulfilled promise before, I began to shape my vision for a blog like this one, an online “coffeehouse” to discuss my perception of what shape IBOs like me might want that business transformation to take if in fact the company was truly serious this time.

So where do I stand today in relation to my 2007 concerns?

Today I am convinced that the company is serious about taking its business back and creating a more appropriate balance between the corporation and the tool systems (although I would not be surprised if somewhere down the road the systems’ role is limited to motivation only — or they no longer exist at all).  As I stated earlier, the UK and US issues (and those in other countries) have made it clear that the status quo was unworkable.  Where that unworkability takes us all long-term remains to be seen.  However, there is absolutely nothing going on in the corporate training arena for product knowledge and retailing (Quixtar University and related) that is not easily transferable by the corporation to the training arena for building a network of IBOs — and it could likely be offered at far less cost to IBOs.  Important factors such as “identification and association” would still be best served by upline IBOs, but would not require the costs associated with them in the current system approach.  Years ago when the company offered business training materials they were dramatically less expensive than system produced BSMs, over 50% less.  I look forward to a return to those days and enhanced new IBO profitability.  The current state of the business in the tool system and business support materials area generates confidence in me that things are going to be positively different in the months and years to come.

Today the focus on new product offerings in health and wellness — for example, Simply Nutrilite — and the pricing that goes with them are all customer driven.  The new Gensona offerings are leading edge and can be expected to be even more diverse over time.  The Ribbon Gift program is nothing less than terrific.  The above-mentioned Quixtar University puts a foundation under every product offering the company has.  In addition, the continued sponsorship of top-notch professional athletes will lead to even greater awareness of our company and our products in the public at-large.

Today the public “coming out party” of Amway Global in print and media ads and other venues has convinced me the company is serious about building, maintaining, and monitoring its public and internet image and reputation — and this will serve the needs of IBOs increasingly well.  Everything the company is doing in this arena is first rate and bodes well for the future of all IBOs.  But it is important for IBOs, and myself in particular, not to waste the opportunity Amway Global is giving us in this area today.  This is a real opportunity for all of us, not just a pig in a pretty dress.

I’ve said all that to say this:  Today I  believe I could honestly promote our business to prospects without any serious reservations — and I intend to do just that. There are still a few areas where I’d like to see some changes implemented, but they are not deal breakers for me.  Thus, in the coming months and years I intend to work diligently to build a Diamond level business outside of a system context.  At the same time I intend to keep the company’s hand to the fire from time to time regarding those few critical issues that I still consider important and worth reevaluating.  Those issues still critical to me are:

1.  The curiosity approach (or as some call it in other variations, the Professional Business Approach).  I personally believe the curiosity approach should be banned outright.  It creates far more issues than it solves — and none of them are positive.  Lack of trust, the potential for deceit, misrepresentation, half-truths, and worse, all come into play with the curiosity approach, and the general public hates it.  It is time to do away with it once and for all.  Amway needs a clear and upfront image and reputation, not one based on how much information we can hide from a prospect while we dance away in doublespeak.  I have no problem with explaining the business in full at an appropriate time when it can be explained properly, but I have a big problem with an opaque response to a direct question.  In his recent autobiography/success tome Get In The Game, highly respected baseball Hall of Famer and former Baltimore Oriole Cal Ripken, Jr. wrote:

“Both my parents were as honest as the day is long.  My mother just wouldn’t tolerate dishonesty of any sort.  Dad [Note: Cal Ripken, Sr. was a former manager of the Baltimore Orioles] was also as straight a shooter as they come.  If you asked him a question, you got a direct answer.  He had a strong sense of right versus wrong.  And if he thought something was wrong, believe me, you heard about it.  Dad also tended not to mince words.  Nor would he stay quiet just to avoid telling you bad news.

So, just as with the values of hard work and excellence, my parents raised me to be honest and to have integrity.  Because of them, I believe I grew up to be a sincere and serious-minded adult.  But how do honesty and integrity help a person persevere?  Personally, I think it has something to do with trust.

Honesty breeds trust in others.  Straight shooters get more work, are appreciated more, and are almost always respected.  On the other hand, dishonest people almost never garner universal respect.  As with honesty, integrity also breeds trust.  If people believe you have strong principles, are sound in mind and body, and are incorruptible, they’ll choose to work with you over others.

You cannot persevere in any organization without the trust of others.  If an executive doesn’t trust you, you can be out of a job in the blink of an eye.  If coworkers don’t trust you, they’ll complain about you behind your back.  And too much of that can also lead to a loss job.  It’s far better to be trusted by the people with whom you work and associate.  But, as the adage goes, trust has to be earned.  Only over a sustained period can people come to count on you.  You have to demonstrate your honesty and integrity over and over.  And you can’t slip up — not even once.  If you do, you’ll have to start all over again.  In that case, it’s doubly difficult to regain a person’s respect and esteem.  Therefore, it always wise to start out being straight with people from day one.  Let them know right from the start that you can be counted on…“

2.  Selective openness, honesty, and transparency.  When Steve Lieberman announced the global business transformation he stated the company was committed to “openness, honesty, and transparency.”   Yet certain outcomes since his announcement have led me to believe Steve should have said “selective” openness, honesty, and transparency.  I’ve posted numerous posts on this topic in the past so I won’t rehash them here, but let it suffice for me to state the company could do a better job in the areas of openness and transparency.  When Amway Global gets these areas right I honestly believe it will be on the doorstep of getting everything right.

3.  The arbitration clause.  I believe in the arbitration clause.  It can benefit both sides in a dispute, but not if its a one-sided arbitration process in which the company holds all the cards.  A one-sided arbitration process is just what the several courts have said it is:  unconscionable.  Amway Global’s owners are Christian men who hold to Christian principles of fair and equitable dealing.  They should know better.  Fix it guys. Now.  Enough said.

4.  The non-compete clause.  I understand and accept some of the solid reasons for the non-compete clause, and can see its value in protecting the integrity of our businesses, particularly in relation to IBOs at a certain level in the business, say Platinum and above.  But in its current form it is nothing less than overkill, and it creates a lot of ill will.  Reevaluate it and apply only it to those who really have something at stake in the business, as I said, perhaps IBOs at Platinum and above.  And like the arbitration clause issue above, do it now.  I’m not particularly excited about asking my new IBO to sign an IBO agreement with these two clauses in their current form.  So fix it and ask all IBOs to sign a new contract.  The sooner the better.

5.  The pricing of core line products.   The company clearly needs to reset the price of some of its existing core line products to a more competitive retail market price.  Current pricing assumes IBOs are the paying customer and real target market.  Yes, incomes might drop as the BV drops.  However, with the increased emphasis on retailing in the business, and the increase in retailing that should occur with reasonable price adjustments, over both the short term and intermediate term, incomes should actually rise — particularly for those actively building balanced businesses that include a strong customer component.  Quality, overpriced products don’t create any buzz in the market; but quality, competitively priced products do.

6.  The pricing of logo clothing and other items used to promote the business.  While this is not nearly as important as the other issues as a general matter, it is an important philosophical issue for me.  If the company wants the tool systems to reduce the price of tools (and it does), the company should also reduce the price of clothing using the company name or logo, and other items and literature used to promote the business to customers and prospects.  As a philosophical matter I do not believe materials or items used to promote the business should be a high margin profit center.  If an IBO can only earn income through the personal and downline sale of products, the company should make the same commitment.  IBOs are the company’s partners and its wholesale customers.  We should not be treated as retail customers on any level, particularly when we are purchasing clothing with the Nutrilite or Artistry logos to promote and personally advertise our business and its products, for which Amway Global benefits as well.  I don’t believe an IBO should have to pay a premium to purchase a company hat, shirt, or jacket to promote his or her involvement with the business.  In the most recent “Achieve” magazine Steve Van Andel and Doug DeVos asked IBOs to make their friends and acquaintances aware of their involvement in the business.  To that end the company should be going out of its way to offer clothing and literature that allows us to do just that as inexpensively as possible.  Brochures that IBOs use to present the business and promote the products should not be retail priced items.  The Quixtar Business Opportunity Brochure is priced very well.  But the price of most of the Nutrilite logo clothing is not.  (XS Energy’s clothing is full retail as well.)  In Steve Van Andel’s recent talk at Diamond Club he stated that the company recognizes that it is really our “upline.”  That should mean that the company and IBOs make money the same way, the “old-fashioned way,” moving products to customers.  Let’s keep it that way.

As I look back at it, that’s a pretty short list of issues.  That tells me the company has come a long way since mid-2007.  It also tells me that it’s time to get to work.

When I first heard Steve Lieberman’s promise of a global Amway business tranformation in the summer of 2007 my first thought was that I had heard all this before — and it was always an empty promise.  But today it has become clear that Steve Van Andel, Doug DeVos, and Steve Lieberman really meant it this time, that the promises of 2007 are real.  Recently the company began a series of print and media ads around the “Now You Know” theme, geared toward creating awareness of our brand, products, and our business in the mind of the public.  For IBOs like me though the company had to go much further than brand awareness, for as I stated at the start of this post, I personally can’t promote a business model that I honestly don’t believe in.  Thankfully, the promises of real change that the company has continued to keep over the past year have begun to restore my belief in the company, its leadership, and its future.  I am beginning to believe the company is going to follow through and create a business we can all be publicly proud of and place our trust in.  And that leads me to my final thought.

Amway Global:  “Now I Know.”  I not only know what the company is doing today, I also have a better sense of why the company is doing it and how the company is going about it.  More importantly, today I believe more deeply in the company and can more readily embrace it and its goals.

So folks, it’s time for me to get to work.  You’ll be hearing from me.

Speaking of Amway, how have the recent changes in Quixtar North America and Amway Global affected your belief in the business and your future in it?

written by Chuck Lia \\ tags: Amway Global, arbitration clause, Business Transformation, Cal Ripken Jr., core line products, curiosity approach, Doug DeVos, Gensona, Get In The Game, logo clothing, non-compete clause, Nutrilite, Predictably Irrational, Quixtar, Quixtar Business Opportunity Brochure, Quixtar University, Ribbon Gift, Ronaldinho, Steve Lieberman, Steve Van Andel, TEAM, tool income, tool systems, Transparency, XS Energy

“It just seems to me you aren’t going to be credible if all you talk about is your successes.” — JAMES CANALES, President and CEO of The James Irvine Foundation, one of California’s ten largest foundations

“A real leader learns ways to promote and reward truth-telling, demands honesty from his or her crew, and never punishes messengers with bad news.” — C. MICHAEL ABRASHOFF, former Commander of the “Best Damn Ship in the Navy, the U.S.S. Benfold,” and the author of three New York Times bestsellers on leadership, including It’s Your Ship

Amway is currently in the first year of a major business transformation.  It goes almost without saying that all businessmen understand that turning a company like Amway North America around is no easy task and takes tremendous skill and expertise.  Well, Steve Miller is affectionately nicknamed “U.S. Industry’s Mr. Fix It” by America’s business leaders for his unparalleled success in turning around failing companies.  In 2002 the Wall Street Journal asked Miller if he would share with the Journal’s subscribers his thoughts on the most important aspects of turning a company around.  That request resulted in an article in the WSJ by Miller that same year titled “Tips From A Turnaround Specialist.“  Allow me to note that Steve Miller is the former CEO of Delphi Corporation and the author of the recent book release The Turnaround Kid:  What I Learned Rescuing America’s Most Troubled Companies.  As Amway Global is in the midst of its transformation today, its turnaround if you will, I thought after reading Miller’s book that looking at Amway’s North American business transformation today in light of Miller’s seven tips might be a worthwhile online exercise.  Below is a list of Miller’s seven tips with my comments added after each tip.  I would be interested in hearing your comments about these seven tips as well.

TIPS FROM A TURNAROUND SPECIALIST by Steve Miller

1.  Tell everyone the truth, especially if the truth hurts.

This is the one issue I find most disappointing about Amway’s public image.  As James Canales says in the quote leading off this post, only bringing up the positive undermines your credibility.  Publicly owning up to challenges adds credibility to the positive things a company says.  A few weeks ago, Microsoft lost a court case.  Within hours their media and PR folks (are you listening Amway/Alticor Media Blog?) released a statement saying “we still believe in our position and expect to appeal.”  So, even when a current outcome isn’t positive Microsoft at least publicly acknowledges the current state of affairs.  Every time Amway fails to acknowledge or comment on a recent negative court ruling or public event (as has been the case multiple times this year alone) it loses a little more credibility with me and others, and it will continue to lose credibility until its actions in this area become more transparent — or I and others no longer care about Amway enough to be concerned about its failure to be fully forthcoming.  In my opinion, Amway’s failure to openly discuss negative news and outcomes shows weakness and frailty, not strength and resolve — and I believe the company is stronger and more resilient than that.  It’s well past time to demonstrate it when it comes to truth telling.

2.  Don’t study things to death.  Most of the choices you need to make are clear, and decisiveness breeds confidence.

Would anyone say Amway has been clear and decisive over the last twenty-five years?  While sometimes Tex can annoy people, one point that Tex makes is not refutable:  Amway has had more than enough time to deal with several critical issues, some of which were clearly delineated by Rich DeVos over twenty-five years ago.  The perception that Amway has failed to act decisively on those issues in the past has bred a lack of confidence in the company among many IBOs, and a general lack of credibility in the public at large.  Regardless of what Amway is doing today, it is accountable for failing to act in the past.

Please understand, I am not saying that Amway is not dealing with these issues in several meaningful ways today, but it is important for Amway corporate to remember how long some of these issues have been on the table.  It’s definitely time for Amway corporate to be very clear and very concise about where the company is headed.  I do get a sense that some real changes are being implemented and that the corporation is taking serious steps to turn things around, but clarity and ongoing communication about those changes and steps are critical.  The new national ad campaign is a meaningful step in the right direction on a public level, but there is much more that can be done on the IBO level.  The North America Spotlight Tour is an important step in that direction, clearly demonstrating the change and innovation coming from the company today.  This weekend the Tour stopped in Chicago, and bloggers Big Apple and Bridgett were both in attendance [as were AJ Gannon and bernsber!].  I’m looking forward to hearing from them online when they get home.  The recently announced sponsorship of the Tina Turner Tour by Amway Global is another terrific step in the right direction.  There is much positive to talk about in this area.

3.  Listen to your customers.  They know more about what’s wrong with your company, and what’s right, than anyone.

Who are Amway’s real customers?  Based on recently revealed data from court cases I think we would have to say it’s Amway’s IBOs.  Retail sales of only 3.5% of total volume can hardly be considered much in the way of true customer retail volume.  So the question morphs into which so-called “customers” is Amway listening to?  Better yet, which of its “customers” should Amway be listening to?  It’s IBOs?  It’s retail customers?  Both?  Neither, but “focus groups” instead?  Often it appears Amway’s so-called “focus groups’ are made up primarily of IBOs.  Think that one out, doing product marketing research with a captive clientele like starry-eyed new Platinums.  What we need instead is marketing research done with our target audience, potential customers with whom we have no leverage.

Just who is Amway doing its market research with?  I’d really like to know the answer to that question so I would have a better feel for the direction Amway is taking.  For what it’s worth, I believe if Amway wants to know what is wrong with these aspects of its business perhaps it should listen to some of the people who have refused to buy our products or decided not to join our business.  Ask them why, and then take their answers seriously.  The bottom line is that products purchased by IBOs are important to our success, but products that retail customers are willing to buy because they find them compelling and attractively priced are even more important to our long-term success.  We do not need or want discounted, low quality products.  Discounted products often say the wrong things about a company and its products.  (If you don’t believe that take a read of Chapter 10 “The Power of Price:  Why a 50-Cent Aspirin Can Do What a Penny Aspirin Can’t” in Dan Ariely’s book Predictably Irrational.)  At the same time, over-engineered (so-to-speak) products, expensively priced for our general clientele, also create serious credibility issues for us (think Tolsom Shaving Gel).  Neither discounted products nor high end, expensively priced products are the right approach.  Beyond that, developing products with the IBO in mind as the primary customer is borderline deceitful in regards to the marketing plan.  Hopefully we have learned something from the past on this issue and are not going to travel further down this road.

As an aside, IBOs are customers of Amway in a different and rather unique way:  We are asked to promote the business to other potential business owners.  So in a very real sense we are “business” customers of Amway.  We have to “buy” into the Amway business, and then effectively “promote” it to others.  We have to believe it has real value, not only to us, but to others as well, if we are going to build profitable IBO business networks that move products to end users.  How do you feel about the value of an Amway business in the marketplace today?  Personally I’d say an individual Amway business is more valuable today than it was a few years ago, and it also has greater potential than ever.  I’d also add however that it has some serious issues it needs to overcome if our company and our business opportunity are going to recapture their places as the industry leaders in North America.

4.  Listen to your people.  Consult everyone, from the boiler room at the plant to the executive suite so you become fully informed.  Invite everyone to send e-mails, and answer them!  (emphasis Miller’s)

My personal experience tells me that Amway does this decently on every level but one.  The Opportunity Zone corporate sponsored blogs have been a terrific new approach and have demonstrated Amway’s willingness to listen to everyone and anyone with virtually no censorship.  They are moderated by talented and interesting people like Robin Luymes and Beth Dornan, and have convinced me the company is open to hearing from us.  However, what these corporate blogs have not done is convince me of Amway’s willingness to allow some of its employees to discuss the truly tough issues.  It appears that when the topics get tough, Amway goes mute, and mutes its staff as well.  On some level, this needs to change.

Another area where Amway falls down in my own limited experience is in responding to inquiries for clarification, particularly if the topic raised or the question asked has a negative connotation.  This kind of goes back to Tip #1, Amway’s apparent unwillingness to speak openly about negative issues.  A few weeks ago I sent an e-mail to Amway’s Rules Department requesting feedback on a specific issue, and was promised by e-mail reply that I would receive a prompt answer.  Since then I’ve heard nothing, and it’s been over a month.  There is tremendous room for improvement in this area. As Miller admonishes, “Answer them!”

5.  Do a wardrobe check.  If people gladly wear caps and shirts with the company logo, morale is good.  If no one wants to be identified as your employee when they go to the mall, you’re in trouble.

This tip is true of IBOs in the field as well, and needs to be directed at both corporate and IBO leaders.  I would say to Steve and Doug and the new Alticor and Amway corporate staff, if you don’t see any of your IBO leaders wanting to be identified publicly as your business owners, you’re in trouble.  You tell me, have you seen any Quixtar or Nutrilite logos on the baseball hats of any Diamonds on the recreation fields of North America lately?  Or on any of the apparel of your corporate staff on a Saturday afternoon?  Have you seen any Nutrilite logo clothing on any Diamonds outside of an Amway sponsored function?  Have you seen any XS Energy logo decals on any Diamond vehicles lately?  (I have one on mine.)  By the way, those XS Energy marketing folks really get it.  They know how to promote their product and their brand.  We should do half as well as they do.

Yes, I know, IBO leaders lead with the business (”Which business?” I might ask, but I digress), that’s why they don’t wear a hat or a polo shirt with Nutrilite’s or Quixtar’s logo on it, and why they don’t have an XS decal on their car.  It’s the curiosity approach, stupid.  Yeah, I get it, that’s the reason.

Sure it is.

Can you imagine a Nike executive having any problem wearing apparel with the company logo on it?  Any Google exec having a problem with wearing her company’s logo on a sweater?  A Celtic fan?  A Harvard student?  Been to a professional golf or tennis tournament lately?  Seen any corporate logos around?  Heck, as much as it annoys me, I’ve seen dozens of vehicles around Atlanta with large MonaVie logos and contact info on their back window.  Do we want Amway to have a reputation that we can be proud of?  Let’s start by putting ourselves on the line and have everyone go public about their affiliation with the business — and that means corporate staff and IBOs.  Then we’d be forced to truly live up to the reputation we want the company to have. 

I recently made a commitment to wear warm-up jackets, shirts, baseball hats, or something else with the Nutrilite logo on it whenever possible when I give tennis lessons to my students (I am a tennis pro), so I am going to purchase some clothing with company logos on it for myself.  I have also made a commitment to tell anyone who asks me what I do for a living (and also those who don’t ask) that I am a tennis pro who is also building an Amway business, chips fall where they may.  And I know that by doing so over time I will learn how to handle their follow-up questions appropriately, effectively, and winsomely.  I’m not interested in any more “spinmeister” answers to simple questions from prospects and friends, answers that avoid providing transparent, honest, and relevant information.  So far my commitment to candor hasn’t created a single problem for me.  I am convinced one of the best ways to deal with the negative on the internet is to demonstrate the positive aspects of the business publicly on a personal level.  If we can’t do that, then we really do have a problem. As I wrote earlier in this post, the recent national ad campaign by Amway is a great step in the right direction, but it’s time for all IBOs to come out into the open and put themselves on the line too.  Right now Amway is investing huge financial and human resources trying to tell North America the real story of Amway.  An important aspect of making that investment worthwhile to Amway is having IBOs become publicly visible as representatives of the business.  Thus, when people are looking for Amway, they’ll know where they can find it and they’ll have a better feel for the quality of the people in the business.  Clearly revealing our affiliation with Amway is one way to do just that.

6.  Practice calm realism.  The key here is to stay balanced.  Truth telling can be scary, but if you let people know there are solutions for most problems, they’ll be less discouraged.

This goes back a little to my comments in point 1.  Truth telling is scary, but it’s better than hiding the truth, and all of us know that from experience.  In May, in a move unprecendented at a U.S. corporation, the top performing insurance giant, Aflac, decided on its own to give its shareholders the right to weigh in on the issue of executive compensation.  Brian Cadman, an associate professor at Northwestern University’s Kellogg School of Management said, “This is going to be a peer-pressure issue and it’s going to be the better-run firms that are going to start down this path.  Down the road, it’s going to be the type of thing to help Aflac signal that they are doing the right thing by their shareholder.”  Interestingly, Aflac is taking this step while they are not suffering from any public relations nightmares that might have required a face-saving response.  Aflac Chairman and CEO Daniel Amos at first said, “I was nervous [about the say-on-pay proposal].  I didn’t know what we were getting into.”  But the company decided to that it had to allow the shareholder vote on executive compensation to live up to its “corporate philosophy of openness.”

We’re beginning to see a return to respect for the truth from a number of large organizations.  After the Carnegie Foundation’s ill-starred efforts to help Zimbabwe overhaul its constitution and its government, for example, the foundation published a report that began, “This is the anatomy of a grant that failed.”  In addition, the Army has begun a critical self-assessmentof the miscues in Iraq to make sure they will never be repeated.  No company or institution can afford anymore to deceive itself about the truth about itself.  And that includes Amway.

As D. Michael Abrashoff wrote in his new book, It’s Our Ship:  The No-Nonsense Guide to Leadership,

“It is plainly suicidal today for any high stakes leader to reject bad news as is it were a live hand grenade and treat its messenger like a traitor…leaders in place or in training have an overwhelming incentive to encourage truth-telling by themselves and everyone who reports to them.  Sure, honesty can be dangerous, but, in the long run, dishonesty always loses.”

7.  You don’t need all new players to make a team into a winner.  Even at companies in crisis you’ll find lots of people who know their job and do it well.  Try to hold on to them.

I admit, this point falls outside my knowledge of Amway and Quixtar.  I don’t know the corporate staff at Amway all that well.  I’m sure several of you know them far better than I do and can comment on this point more intelligently than I can.  I do know that the people I have worked with at the company regarding specific needs I’ve had in the business (outside of the previously mentioned ones) have been terrific.  Everything I’ve read and heard about the new corporate leadership brought in by Alticor and Amway over the past year has been nothing less than stellar.  I would say this bodes well for the company’s future on all counts.

Obviously, after looking down this list, it appears Amway is doing very well on several of Miller’s tips.  It’s heartening to know that the company could easily rise to the occasion on a couple of the other points having to do with transparency and complete truth-telling.  All it would take is a total commitment to the three dynamics Steve Lieberman recently stated that Amway Global was committed to:  honesty, openness, and transparency.  I hope Amway’s leaders will jump in with both feet and deliver on that promise no matter how scary it might be.  I’m convinced doing so will pay off handsomely in the coming years.

Steve Miller obviously understands company turnaround dynamics far better than I do, so I take him at his word and his expertise that these are seven of the most important tips for turning around a company.  It seems to me to be a reasonable list and one worth contemplating in relation to Amway.  But, without wanting to be arrogant I would add an eighth tip to his list.  Here it is:

8.  If, at any time, you are not sure what to do next, refer back to Tip #1.  Telling the truth is always the best place to start.

Speaking of Amway, particularly in regards to Miller’s seven points, what are YOUR thoughts on what Amway and IBOs could do collaboratively to truly transform our business positively over the next few years?

written by Chuck Lia \\ tags: Alticor, Amway, Business Transformation, Opportunity Zone, Quixtar, Steve Miller, The Turnaround Kid, Transparency

“Let’s look at all this in terms of mixing colors.  If ‘Creative Vision’ is yellow and ‘Practical Application’ is blue — we’re looking for green.  Everybody loves green.  It transcends ethnicity, gender, religion, religion, generation, and class.  An alternative, long-winded title to this book could be ‘If Nothing is Happening in Your Business Right Now, Mix Up Sumpin’ Green!‘” – JOEL A. FREEMAN, author of If Nobody Loves You Create The Demand:  A Powerful Jolt of Entrepreneurial Energy and Wisdom 

Over the weekend, as I had a few minutes to myself and considered the current state of affairs in the business, it occurred to me that this was a critical time in my business.  Perhaps only once or twice in my life has there been a better time to build a Quixtar/Amway business.  If that’s true — and I believe it is — then to waste this time would be the height of foolishness.  Now, whatever my shortcomings in life might be, I’d like to think that foolishness isn’t one of them.  So as I pondered things over the weekend it became increasingly clear to me that this is a prime time for all those who blog on the Quixtar/Amway business to be building their businesses, rather than being on the outside looking in.  Here are my three reasons why:   

1.  PERSONAL CREDIBILITY.  I don’t believe it is easy as some might think to be a thoughtful online commentator (in all honesty, I don’t think “critic” is an accurate portrayal of what I am trying to do online).  However, there is a sense in which only being a commentator on our business issues is easier than putting our own lives on the line to build the business while also working to bring about change in the areas that are important to us.  That’s one of the reasons why I believe the time has come for all Amway/Quixtar bloggers to be heavily invested in building their own businesses.  Theory is one thing, practical experience is quite another.  If we want to be taken seriously over the long-term we must be willing to demonstrate that we truly understand what it takes to build an Amway/Quixtar business, and also that we have the inner drive, character, stick-to-it-iveness, and leadership qualities to get it done — or our words will ring hollow and be worthy of little or no consideration. 

Charles Koch, CEO of Koch Industries, the world’s largest privately owned company, agrees.  In his book The Science of Succcess he stated:

“Chemist and philosopher of science Michael Polanyi argued that we only truly know something — that is, have personal knowledge — when we can apply it to get results.  Riding a bike, playing golf or chess are good examples.  Personal knowledge, or true understanding, involves converting conceptual knowledge into an effective tool for solving problems, handling new subjects and making discoveries.  Developing personal knowledge involves a personal transformation.  It requires learning a new framework and mental models, and then using them to work out concrete problems.  Personal knowledge is the result of integrating theory and practice…The process of discovery begins when we observe, often vaguely, a gap between what is and what could be.  Our intuition tells us something better is just beyond the range of our mind’s eye.  To build a culture of discovery, we must encourage, not discourage, the passionate pursuit of our own and others’ hunches…The genesis of this entire process is the development of personal knowledge that is passionately applied to solve a problem.”

2.  RETURN ON OUR INVESTMENT OF TIME AND ENERGY.  Some of us have said that we don’t want to invest our time and energy building the business until particular issues have been dealt with by the company.  The concern is that the company may be seriously impacted by government regulatory issues (such as in the UK and India), by civilian legal issues (such as in the court case in California), or by continued business issues (tool systems).  While I understand those concerns on one level, I honestly think that perspective is shortsighted on another level.  First, time is already being invested by many of us commenting online.  That time could just as easily end up being wasted, yet that hasn’t stopped any of us from blogging and commenting.  Second, if we are building our businesses in an honorable manner, the business and client relationships we’ve created during this period could easily be transferred to another business endeavor should such an unfortunate turn of events really occur.  It’s important to remember that people want to follow people of integrity and if we have interacted honestly and transparently with our business partners I believe the vast majority would trust us and follow us again if events were to force us to move our business elsewhere.  Thus, to me at least, the perspective that we could be wasting our time building our businesses today doesn’t seem to carry enough weight to overcome the other strong reasons for doing so. By the way, I must add, I think the odds of a business shutdown issue coming into play are incredibly small today.  I truly believe Alticor/Amway/Quixtar of late have been taking and will continue to take whatever steps are necessary (in some of the other areas of concern) to make our business just what they say they want it to be:  “The Business Opportunity Of Choice In North America” (and internationally).

3.  THE BUSINESS TRANSFORMATION.  Quixtar is investing substantial sums of money to recreate the credibility of this business in the marketplace (and also in the mind of the IBO).  Now I know no business is perfect.  But I doubt anyone could honestly say the company is not on the right track here.  If so, this is not the time to be sitting back idly.  It’s the time to be fully engaged with the business so that as the public profile and reputation of the business improves we will all have strong momentum to take advantage of it.  This is just common sense, but as we all know, common sense is not so common as one might think. 

On April 8th I posted “One of Our Best Opportunities Ever?” on this blog and spoke to this issue.  I honestly do believe this is one of the best opportunities we’ve ever had in this business to build a business that will not only be highly prosperous to us in the short-term, but also highly prosperous over the long-term as well — and one that will endure.  Thus, it naturally follows that the sooner get to I work on building my business the sooner I will participate in that short-term prosperity and share in its long-term benefits.  And, while I am working diligently to build my business, I can still express my beliefs and share my ideas online on this blog that I believe are important and critical to the business and appropriate for discourse.  That sounds like a heck of a good plan to me. 

I don’t know about you folks, but I’m getting on with building my business. 

What are YOUR thoughts on whether or not it’s time for all Quixtar/Amway bloggers to get on with building the business? 

written by Chuck Lia \\ tags: Amway, Business Transformation, Charles Koch, Joel Freeman, Quixtar

“Willingness to change is a strength, even if it means plunging part of the company into total confusion for awhile.” – JACK WELCH, renowned former Chairman and CEO of General Electric 

“The internet has been the most fundamental change during my lifetime and for hundreds of years.  Someone the other day said, “It’s the biggest thing since [the] Gutenberg [press],” and then someone else said, “No, it’s the biggest thing since the invention of writing.” – RUPERT MURDOCH, global media icon and owner of the Fox Network

“Doctors of [the 15th century] kept their secrets locked in languages their patients could not read.  To attack this citadel demanded a willingness to defy the canons of respectability, to uproot oneself from the university community and the guild.  Such a venture required as much passion as knowledge, and more daring than prudence.  To open the way, a man needed the knowledge of a professional and yet not to be committed to the profession.  He should be in the physician’s world, but not of it.” – DANIEL BOORSTIN, author of The Discoverers

In 1982, two Australian doctors, Barry Marshall and Robin Warren, discovered there was a bacteria that lived and grew in the stomach.  That bacteria, Helicobacter pylori, commonly called H. pylori for short, is now firmly established as the cause of 90% of duodenal (intestinal) ulcers and 80% of gastric (stomach) ulcers.  Now you would think that their findings would have been great medical news, if not incredible medical news, at the time.  You would think that, but you’d be wrong.  It took Marshall and Warren nearly two decades to get the medical establishment to even consider the results of their research, because the medical establishment was so absolutely sure the cause of ulcers couldn’t possibly be a bacterium.  The common medical wisdom at the time was that stress caused ulcers.  No one would even bother to hear Marshall and Warren out.  No one.  They couldn’t even get their research published in peer reviewed medical journals.  In frustration, and to prove his point, Marshall personally swallowed the Helicobacter pylori bacterium — and became very ill.  His point was made.  Finally a few doctors stepped away from mainstream medical thinking and began to take a serious look at Marshall and Warren’s research.  The end result?  Their research and studies were confirmed.  So well confirmed in fact that in 2005 they were awarded the Nobel Prize for Medicine for their remarkable contribution to medicine and the health of humanity in solving the ulcer problem. 

But here’s the intriguing question.  How many people had their ulcers go untreated, or treated improperly, for almost two decades because the establishment was unwilling to even listen to, let alone consider, another point of view on the problem?  Thousands?  Millions?  Far more?  

In light of Boorstin’s short medical history regarding 15th century medicine that I quoted above, I guess some things never change.  That’s sad, and unfortunate.  (As an aside, Marshall and Warren’s story kind of reminds me of the current intelligent design/evolution debate.  Have any of you seen the new movie by Ben Stein, “Expelled:  No Intelligence Allowed” that opened last weekend?  Very interesting movie, with similar challenges, but forgive me, I digress.)

Why has it been so difficult to initiate change in our business? 

I think one of the reasons is that change creates uncertainty, and uncertainty tends to make us want to remain in the status quo.  Yet, if the status quo shows flat or declining growth, what possible reason would there be for holding on to the status quo?  

One leader has said privately that another reason change is difficult to come by is that some leaders in the business have a conflict of interest.  So much of their income comes from the tool side of the business it is difficult for them to approach anything that may impact the tool side of the business with an unbiased perspective or without a lot at stake financially — and that’s understandable.  Some changes could have dramatic implications for their businesses and income. 

To be fair I have to ask myself, if I had a substantial income coming in from the tool side of the business, would I be able to put integrity first and think about what is best for all IBOs?  I’d like to think so, but I am not faced with that decision today.  I am not above this fray and I certainly don’t want to imply that I have every aspect of life nailed down and don’t have feet of clay.  I don’t believe all system leaders are evil, or remotely close to that, but I do believe some system leaders have allowed the income from systems to play too big of a role in the way things are done in the business.  Thus, I honestly believe system leaders have hampered the pursuit of needed change in the business.

Amway/Quixtar themselves have made change difficult by being unwilling in the past to truly face the realities of the business, particularly online in North America.  I have a sense that the UK issue was a real wake up call on that one though.  They finally realized that they couldn’t let something like the UK issue happen again, so it was time to review operations everywhere.  And it appears that is what they are doing.  I am convinced a lot of progress is being made in this area, but they still don’t seem to get the importance of the internet as a social network and how that network affects the population’s perspective on our business. 

So what is the answer to this problem? 

In my honest opinion, on one level, what we are doing here.  First, being open to candid dialogue and willing to have all of our beliefs and convictions about the business challenged.  Second, understanding the Japanese proverb, “You are not as smart as all of us.”  No one, no one, has all the answers.  Even Warren Buffett says that to be wealthy you only have to be right 51% of the time.  (And I sure like his 51%!)  The mindset in this business from upline leaders has often appeared to be ”when you need to know more, I’ll tell you.”  That is pure nonsense.

Some leaders in the business think that only they have anything worthwhile to bring to the discussion and that if we knew what they knew, we’d think the way they think.  (Kind of like the ulcer issue.)  I’ve heard that more than once.  Again, nonsense.  Heard of Google?  Yahoo?  You Tube?  Second Life?  Facebook?  My Space?  They were all started by people who said, ”We appreciate what you mainstream folks think about things, but we think we’ll trust our instincts on this one.”  I have a sense they’re glad they did.  Just because someone is relatively new to the business, or doesn’t yet have a large business, doesn’t necesarily mean they don’t have anything to bring to the conversation.  Who knows?  They may have a lot to bring to the conversation.  In fact, they might bring an idea or approach to the conversation that positively and dramatically changes the way things are done in the business – and benefits every IBO.

Kind of like Dr. Marshall and Dr. Warren.  

But how will we know if we’re not willing to listen to and consider their point of view, but instead think we have all of the answers?

Simply answered, we won’t.  

What are YOUR thoughts on why it has been so difficult to initiate change in our business in the past?  What do YOU believe we could do differently going forward, particularly in light of the overall business transformation underway today, to make sure we are open to dialogue on all fronts in the coming years?

written by Chuck Lia \\ tags: 2005 Nobel Peace Prize, Amway, Barry Marshall, Ben Stein, Business Transformation, Expelled: No Intelligence Allowed, Quixtar, Robin Warren