Here is Matt Franks - Leadership Consultant and son of former Quixtar diamond Terry Franks - wrapping up his excellent analysis on the Leadership Gap of the Amway managers. Matt's writing style is cogent, passionate and focused on the core issues that are creating dramatic drop in Amway/Quixtar North American sales. Matt has grown up with the Amway business and has seen the drastic changes in the style of leadership from the founders to the second generation. Enjoy the article. God Bless, Orrin Woodward
Orrin Woodward , (Here is Part 2.....It's a long one:)
I must say that I am very humbled that you shared my comments from my previous post to help serve others. For the readers that are consistent to this blog, for the new readers, or even for the A/Q fanatics: the reason I write is to add value to others. That is it! Not to gloat or to sound like the message, but I am merely passing on to the readers the thoughts that have been dwelling in my heart and mind. Why? I have said this before on a different post: I have learned from my mentors in life that God will only give to me what He knows will flow through me. So when I learn something I think might be valuable to others, my responsibility is to pass it on to them. It does me or no one any good to hoard thoughts. If my posts bring clarity to a confusing situation in at least one person’s life than it was worth every amount of time that I have invested to write the message. That is what communicators do. They try and take a complicated subjected and make it simple. Educators take something simple and make it complicated. (That is not a negative comment towards teachers because I have had many great ones!)
There has been a lot of corporate bullying, posturing, fear tactics, and lack of emotional intelligence (almost child-like) portrayed by A/Q over the past year or so (probably longer from what I have been learning) and their actions has made it tough to sift through their noise to find the principles they are violating. Bestselling author Andy Andrews in his book “The Traveler’s Gift” said this about violating principles: “Principles are at work whether you know them or not. Ignorance of a principle does not exempt you from the principle.” Just because someone or an organization’s leaders are incompetent does not mean they or the people following them won’t have to deal with the compounding consequences of consistently violating principles.
In the last article I listed my top 5 reasons why I believe A/Q is in a downward spiral from a sheer leadership perspective. Here they are again for your reference:
1. Confronting Reality
2. Incompetent Leadership (both corporate and field leaders)
3. Constructive Criticism
4. Irrelevant Business Model
5. Business Ownership vs. People Ownership
I was never in the A/Q boardroom, but I have been a serious leadership student for some time and the actions they are choosing is what all companies have practiced before they have fallen. If they don’t start paying attention to the seeds they are sowing, they will reap a harvest that will destroy the previous 50 or 60 years of sacrifice, legacy, and contributions of others.
To recap: we spent a ton of time on first two reasons: A/Q’s inability to confront reality and stated examples of both corporate and field leadership incompetence. There are plenty of additional examples I could give for both groups of “leaders”, but I want to get off the soapbox and get on with the other reasons. No name I mentioned or people I inferred was intended to be a personal attack because like all human beings; we all have our strengths and or weaknesses. The problem A/Q faces, along with all it’s people is that the individuals that are leading the organization both at a corporate level and some field “leaders” are VERY WEAK in leadership competence, which is killing the company and destroying people’s lives! They need to step down and go work on their strengths, because they are proving that leading others is not one of them!
Issue #3 - Constructive Criticism:
Constructive criticism or valuable feedback is an achilles heel to an organization. Bestselling author Ken Blanchard has said “feedback is the breakfast of champions.” Especially the feedback a corporation receives from the top producers within an organization. There are two types of criticism that any organization receives:
1. Criticism that condemns – people criticize you because they are jealous or envious of your position. Many times criticism that hurts normally has very weak factual basis that helps an organization because much the criticism is tied to an emotional feeling, not for logical business benefit.
2. Criticism that counts – people question systems, procedures, and policy’s to ensure the business is competitive. If they are not competitive than it is up to the leaders to make them competitive. Many times the criticism is not what an organization wants to hear, but it is something that requires them to fix. Especially if the criticism comes from people that have a vested interest in the organization succeeding.
Dr. Bruce Weinstein gives us exactly what I mean by “criticism that counts.” Here's how he describes the value of criticism: "The goal of true criticism is to help someone be the best they can be…When criticism is done appropriately, the person who has been criticized will understand what he or she has done wrong and will feel inspired to make a change for the better. Not only should we not avoid being criticized, we should embrace criticism because it is the only way we can continue to grow professionally and personally."
Picture this: for the past few years 8 of the top 1% of income earners within your organization have been stating problems and issues that need to be addressed in order to stay competitive in the market, but those issues for whatever reason have fallen on deaf ears. In fact, the issues and problems brought to the table were not self-serving propaganda, but rather serving responsibilities with win-win results for everyone associated with the company as the motive.
So how would an organization know if they were receiving “Criticism that Counts” instead of “Criticism that Condemns”? According to bestselling author John Maxwell you have to put criticism to the “acid test.”
“The acid test of criticism is made up of three questions:
1. Does the criticism have basis in fact?
2. Is the criticism offered constructively (in an effort to help)?
3. Does the critic have the insight and perspective to speak credibly?
When all three questions can be answered, "yes," then a leader should take the criticism seriously and weigh its meaning.” When leaders pay any cost to ward off constructive criticism, they sacrifice their best thoughts.
In the case of A/Q let’s answer each of the three questions shall we?
Does the criticism have basis in fact? – One of the criticisms the IBOAI board brought to the attention of the A/Q leadership was the price of products. Anyone that has been affiliated with A/Q for any amount of time probably has experienced the “sticker shock” of 90 percent of their products when they log on to their website or see their catalog. I did not say 100% because I am giving them the benefit of the doubt that not all partner store products are over-priced.
For purposes of an example let’s just examine one of A/Q’s product lines for men called Tolsom. Tolsom is a men’s skin care system. Let’s just compare their shaving crème and face wash with a well respected-high end brand like the Nivea for Men line. I am not comparing Tolsom with a basic product like Edge Shave Gel because Tolsom, in my mind, is better quality than Edge. However I would compare Nivea and Tolsom side by side any day of the week; let’s compare Quality with Quality!!
Price of Nivea for Men shave Gel is $6.92 (according to Amazon.com)
Price of Tolsom shave Gel is $12.45 (according to Quixtar.com)
Price for Nivea for Men face wash (pack of 4 bottles) is $20.57 (according to Amazon.com)
Price for Tolsom Face Wash (1 bottle) is $20.62 (according to Quixtar.com)
Now let’s let the readers decide………Does anyone think the 8 IBOAI leaders that were terminated for bringing up these issues had factual information for their criticism? I would venture to say yes. I am sure each one of you would agree with them as well.
Is the criticism offered constructively (in an effort to help)?- Based on the IBOAI’s suggestion of changing the price of products; do you think changing the prices of products would have made the product more attractive to purchase? In the A/Q business the more volume that is done, the more money the distributor makes. The more competitive the prices are, the more easier it is to sell the product. If the prices were priced more competitively do you think more volume would be done? Sure you would agree with that. If more volume is done do you think people would have a better opportunity to make money? Sure they would have a better chance to make money. Do you think raising this criticism was raised to help others, which would have provided a win-win result for all distributors? YES In fact you can read a memo that Orrin Woodward wrote to Doug Devos (Founder’s Son and President), in an effort to help spearhead the turnaround. Read the article online and you decide if the tone it was written in was.
So the “Question Behind the Question” as author John Miller would say: Why wouldn’t a company want to do that? Let that question simmer a while in your brain and I will address it when I get to the issue of “Irrelevant Business Opportunity” or you might already have your answer because of the issue regarding Incompetent Leadership.
Does the critic have the insight and perspective to speak credibly? - you would think that 8 people which represent some of the largest organizations in the entire A/Q business would give you credibility wouldn’t you. I mean, do you think the Chicago Bulls valued the insight of Michael Jordan when addressing what the team needed in order to build a championship caliber team? The people in the front office don’t play in the games with Jordan. So of course they wanted his perspective and most of the time implemented his criticisms and suggestions.
A/Q works the same way. You have your leaders and you have your managers. The leaders are the people that are getting the most results in the field. A/Q management is not in the field, so wouldn’t you think that it would be hard for them to have any idea what is going on? The closest any of the Devos or VanAndel kids got to the field was asking their Dad how their day at work was coming off their sail boat.
Orrin and Laurie Woodward had the fastest growing North American A/Q business from 2000 until they were terminated in 2007. They helped many people go diamond and emerald without many of them having an Amway foundation. I am not sure of their exact figures, but you can read about them in an article on Orrin’s blog. He knows his own numbers better than I do. All I know is that the numbers were way more than practically any other A/Q group in North America. So wouldn’t you think that he along with the other 7 IBOAI board members that were terminated had credibility to raise these issues? Of course they did!
Any competent leader or organization would listen and learn from this valuable criticism and leading the charge to making the necessary wrongs, right. However, that would be the case for a GREAT organization that is called for greatness, not the case for self serving organizations like A/Q. Why did I call A/Q a self-serving organization? Very simple! Bestselling author Ken Blanchard addresses this very issue when he discussed the problem with self-serving organizations and self-serving people. Here is an excerpt from a speech I heard him give about this very topic: “Self Serving organizations and people think they own everything; they own their home, their relationships, their job, and all their life they are trying to protect what they own. How can you tell if you are dealing with a driven person? Give them feedback and they kill the messenger. Why do they kill the messenger? Because they are self serving leaders that want to protect their position, and your feedback is acting like you don’t want them to lead.” Does that sound familiar?!
I don’t know if it is a pride reason, an ego reason, an incompetence reason, or an all of the above reason as to why they don’t listen to the people with the “sweat on their brow” to make the necessary changes. That is one issue that must be addressed. Because a business’s flexibility to change and adapt is directly tied to it’s realistic ability to compete. And as the facts and figures show (without A/Q’s spin) they are losing their ability to compete.
Not only did the corporate “leaders” turn their backs on the group of 8, they decided it would give them a competitive advantage to terminate them! Can you say incompetent!!!!!?
Issue #4 – Irrelevant Business Model
There are 3 parts in my mind that make this business very irrelevant to compete effectively in the 21st century:
1. Compensation Plan
2. Product Prices
3. Image of the Company
1. Compensation Plan
I am not a professional or intelligent MLM compensation plan guru at all so I do not have the credibility to discuss anything about how their pay plan works. However, I do have common sense. The only thing I do know is that many of the top distributors in other of the top MLM companies make a lot more than many of the top achievers in the A/Q business. All system income put aside because in the A/Q business you only make system money if you play the politics in the right way. It has very little to do with your performance. If you are one of the blessed ones then you receive system income. If not, you are stuck with your little PV check.
One of the other parts of A/Q’s compensation plan, and in my mind the most important, that makes it irrelevant is that it is very hard for the new person to make money, reasonable income, not $7 dollar checks. I have seen other MLM opportunities that structure their compensation plan so not only to the performers make money, but the new person can realistically make some pretty significant income in a manageable period of time. I am all for putting in effort and anyone that expects to make money without exerting any effort is ridiculous. I just want a compensation plan that rewards people enough to take an opportunity seriously.
If people have an opportunity to make money quicker, do you think they will be more or less motivated to invest more time, resources, and effort to build towards their vision? They will be more motivated.
Sure A/Q puts out spin that you have to sell products in order to make money quickly. Based on our product price comparison above, no one in their right mind or with a good conscious would sell those products. Maybe if you live amongst the most affluent in the world, but that would disqualify most of the people in their business. Not only do they want you to sell their overpriced products, but they then hamstring you with ridiculous product marketing rules and regulations that restrict your ability to sell. This leads me to my second part of what makes this business irrelevant.
2. Product Prices
You can’t sell products if they are not priced accordingly. You can manipulate others to buy your products though. Especially since the products A/Q wants their people to sell are products that people are already used to paying between 30%-60% less for at their local store of choice. (Walmart, Meijer, Kroger, etc..) I don’t want to spend a lot of time on this issue because I was thorough when I was describing the different prices between Tolsom and Nivea. My challenge for the realistic thinker is to honestly go to A/Q’s website and search for yourself. You will be shocked at what you will find compared with what you are used paying for almost the same products at your local store. How can you be competitive if you are not competitive? You can’t be.
Remember when I asked the question: Why wouldn’t a company want to change this? I bet you thought I was going to forget to bring this up……..Do me a favor and Google “Jay Factor + Amway” and share with me what you learned. It will blow your socks off of your feet. Once you understand what it means, you will know exactly why A/Q doesn’t want to lower their prices. I am not going to explain it because if I get one calculation wrong, I wouldn’t put it pass them to come after me for misrepresentation. Once you read about it and draw your own conclusion, you will further understand what I meant when I called A/Q a self-serving organization.
Listen, I am all for making money, and lots of it for the right reasons, but to make it on the broke backs of others in my belief is terrible. I guess that is the difference between manipulating someone versus motivating someone. When you manipulate others you move them for your own benefit, but when you motivate someone you move them for mutual advantage. After you read about this “Jay Factor” you tell me if A/Q distributors are being manipulated or motivated!
3. Image of the company
The image of A/Q as you all know is not very good to say the least. Anytime the word Amway is mentioned, people cringe and walk (if not run) away. How can anybody, in the 21st century, build a business like your and be proud of the image you have created. Common………We are in the information age, not the product –pick – up age! Information is plentiful and trust me there is plenty of information about A/Q all over the web that just adds to their poor image.
Other than having a poor compensation plan, high priced products, and a poor brand image this company is a good opportunity! I hope you see my sarcasm!
Issue #5 – Business Ownership vs. People Ownership
When I used to be in the A/Q business, it was pitched to me as a business that was mine. In fact, they even said I was an Independent Business Owner. After explaining all 5 of my issues with this company, you don’t have to be a genius to know that you are more like a DBO or a “Dependent Business Owner.” You are dependent because an A/Q affiliated field rep is dependent on A/Q’s incompetent decisions, incompetent leadership, irrelevant business model, and high product prices. Think about it: if you were independent, you are free from this debacle!! You set the pace and make the decisions for yourself.
The people ownership side is once you are in; you are their property. Read the court documents and you will find where they called everyday people like you and me “their property.” Let me explain. After I had registered in their business and without me knowing, they added in a clause into my auto-renewal that said I could not go and compete against them for 6 months, use any trade secrets, etc…. Here is the kicker; when you sign up for auto-renewal A/Q just charges your credit card and the only time you know it was done was when you got your credit card statement. Never once did I receive any notification that I was committing myself to be their property.
Let me give you a few of my opinions regarding this non-compete, trade secret junk!:
1. People like Orrin and the rest of team, or for that matter people that leave A/Q, don’t have to compete with you in order to beat you. Your leadership is doing a great job destroying the organization.
2. Trust me A/Q no one wants your trade secret. They are not valuable at all. You are proving that consistently. Think about it: who in their right mind would want anyone’s trade secrets that have been proven to fail year in and year out. Stop taking yourselves too seriously. You might think you’re good, but common, your numbers are dropping faster than you can get your next lawsuit out the door.
3. If I knew I was going to be called someone else’s property, never would have I signed up for this so-called opportunity. News flash to the A/Q managers: this is the USA not the USSR! We are free people to live a life of our priorities and responsibilities!
4. If people were unconscious when they “apparently agreed” to the Non-Compete doesn’t that make it void? Oh that’s right…..you are in the business of manipulation!
5. STOP THE HARRASSMENT AND LAWSUITS!! – how many more people have to be hurt or punished because they want to take their talents elsewhere and apply them to another opportunity or another venue in their life! If I want to lead my life, who has the authority to tell me or my wife that we have to accept our life? Nobody does! Especially two - faced families and gutless two-faced so called “leaders”!!!!!!!!!!!!!
If your opportunity was so good A/Q, people wouldn’t want to leave…..would they? Don’t force people into staying with your opportunity. Les Brown said “A man convinced his will is of the same opinion still!” Force yourselves to make your opportunity better and people won’t want to leave!! The buck has got to stop with you! Take responsibility for your failures and fix them or face the consequences when you are forced to close your doors!! Learn from these 5 issues and FIX WHAT YOU NEED TO FIX! Face the reality, get competent leadership steering the ship, accept constructive criticism, change your business model, and stop viewing people as property!
In Conclusion:
To all TEAM leaders and friends; thanks for meeting the needs of the hour! Orrin and Laurie, Chris and Terri, thank you so much for standing up for what is right and not wavering! All of us are better people because of the example you all set!
My prayer is that this post will land in the hands of someone that can put a stop to all this childish behavior that A/Q is exemplifying. This has been a very difficult post for me to write, not because it is not based on truth (it is 100% the truth), but because I have seen great men and women’s character come under fire from people that, based on the facts I presented to everyone, have no room to label anyone except themselves! I have never seen a company behave or carry itself like this, with the exception of Enron, WorldCom, and the other scandalous companies we have all heard about over the past few years.
God Bless,
Matt
"*The following are approximate percentages of Direct Fulfillment IBOs of record in North America who achieved the illustrated levels of success in the calendar year ending August 31, 2005: Diamond .0120%; Emerald .0320%; Q-12 Platinum .1683%."
Less than 1.000% of active IBOs achieve Q-12 Platinum in Quixtar?!?
Let's math this out... According to Quixtar's site as you pointed out above, there were greater than 370,000 IBOs who received a bonus.
This means there were only the following numbers: