I received this comment from Matt Franks.  Matt is in the leadership development business for many of the Fortune 500 corporations.  He has met and conversed with many of the best leadership speakers in the country.  I thought I would highlight his thinking in its own article because it is so logically organized and transparent.  That seems to be the new buzzword in Amway, so let’s share some transparency.  Enjoy. God Bless, Orrin Woodward

Orrin,

These have definitely been some interesting articles over the past few days. You are displaying some great courage and I am so proud and glad you are bringing these into the spotlight! I have to tell you that many of the numbers, equations, and figures are way over my head, but that shouldn’t surprise anyone:) However, one thing that is not over my head is the continual throwing of punches that have been thrown at you and many of the PC/RT Members. This crap is getting really old! I am really going to try and not to rant and rave, but I have seen way too many people get punished because they know the facts. I am tired of reading some of these comments that have been said about you and other people so I want to throw my hat into the ring to help add to setting the record straight. I have learned a long time ago that you cannot speak the truth, live out good values, and choose your own direction without disappointing some people. Forget the popularity polls. Don’t try to avoid upsetting people; just make sure you are upsetting the right ones. So to all you A/Q fanatics……..BRING IT!

The smoke and mirrors that “Mr. IboFightBack” and other “A/Q droids” seem to always muster out of their brainwashed mind never ceases to astound me of people’s incompetence to face reality. Here is a simple thought for you: If you always do what you have always done, you will always be where you have always been. That might be too complex so let me see if I can even simplify it even more….A plan for the future based on an unrealistic view of the present will lead to disaster! Do you get the drift..? You can change your name all you want, come out with new products all you want, put out “fancy spin” PR releases about earnings all you want, but the brutal fact is that the A/Q business is a sinking ship. It is almost like instead of allowing people to escape on the emergency life rafts so they can live, they want everyone to share in their misery and go down with the sinking ship. I guess it is true that misery does want company……. The bright side is that you can fix these problems if you would just stop denying the brutal facts!

My passion in life is to add value to others so what I would like to offer, because I know many A/Q people are reading this blog on an hourly basis, are issues that must be addressed in order to help you dig yourself out of this mess. My belief is that there are great people involved with the Amway business. Trust me, as a “PROUD for Leaving” former IBO, I know there are great people because I have shaken hands with them. My biggest problem and fear for the good people involved with A/Q is quite simply: INCOMPETENT LEADERSHIP!!! Why? Because everything within an organization stems from leadership. If the leadership is bad, regardless of how many talented people you have or products you provide, the organization is doomed to fail and innocent well intentioned talented people are typically the scape goat.

I know probably many A/Q droids won’t pay any attention to these issues because any teaching outside of “their system” is discarded, but if it helps just one person than it is worth every word I write. Here are some of the issues (not all of the issues because that list is way too long)

1. Confronting Reality

2. Incompetent Leadership (both corporate and field leaders)

3. Constructive Criticism

4. Irrelevant Business Model

5. Business Ownership vs. People Ownership

Confronting Reality:

This is a huge issue in my mind because it is impossible to know how things are going by just knowing how you feel. For some reason, especially incompetent egotistical leaders want to size everyone else up in the world except ourselves. Trust me, I have many things I am not good at, but the difference is for me as a growing leader, I do not deny being bad in those areas. Outside of building relationships, communicating, character, leading, and learning I am proud to admit that I am basically useless. I might be average in other areas, but people don’t want average. That is the reality in my life! The problem with not dealing in terms of reality is that you begin leading people based on assumption. That is terrible because as humans we tend to judge others according to their actions. It’s very black and white. However, we judge ourselves by our intentions. Even if we do the wrong thing, if we believe our motives were good, so we let ourselves off the hook.

Let me explain to you a little bit about what denial means since many of the A/Q managers seem to be professionals at it.

According to John McCallum in his article “Leadership Trap Doors,” “Denial is a psychological device through which people convince themselves that a painful reality really is not. It is a defensive mechanism that enables people to cope with something unpleasant. When we are in denial, we are denying the existence of that which is causing the pain. So as long as we deny, then presto, we feel better. Denial can take many forms including ignoring, minimizing, pretending, rationalizing, and at the extreme, just plain asserting that such and such does not exist at all. People have a remarkable capacity to deny even what stares them directly in the face.”

In the spirit of wanting to add value to people and not sounding like an “Amway Sheep”; let me give you 4 ways to acknowledge the truth without hurting people:

1. Acknowledge the Truth – you have to understand that there is a difference between what you expected and what was delivered. At this point you have a decision to do something about it or keep stashing it under the rug. Remember “The truth shall set you free.”

2. Be honest as to how you got to this point – figuring out the who, what, when, where, and why to a situation is what allows you to fix the problem and move forward with better solution. This is a point of reflection. The more you reflect why you got into a particular situation, the more insight you will gain to fix the issues. However if you just function off the basis of intentions, like we discussed earlier, you are dealing in a fantasy land.

3. Establish a new plan of action (preferably one that does not include suing others!) – plans always change, but visions don’t. Just because a plan that you implement does not work does not mean you can’t change it to make it better. By being honest with what got you into the situation you are in and learning lessons, you will be armed to make decisions to set a new course. That is however if you value feedback…….

4. Allow people that are in the trenches to give you feedback. – it is imperative that you receive the correct feedback from people that have the “sweat on their brow.” Patrick Lencioni said “Human beings do not have an innate way to get their way. They have an innate need to have their way heard and considered. The fact that many of the top A/Q leaders have been complaining about the way the business has been functioning over the past 10 years or so tells me that the A/Q managers aren’t interested in feedback. In other words it seems like more of a dictatorship than a democracy

Incompetent Leadership:

This is the main reason why my wife and I resigned almost one year ago. I have and will always be a student of leadership. I have read and studied many, many (not as much as Orrin) leadership books and every book has basically taught me to do the opposite of what Amway’s leaders have practiced. I can’t and will not surround myself with incompetent people.

Incompetent leaders have unlimited opportunities to be ineffective. The terrible part about being incompetent is that many times incompetent leaders hurt people by not even knowing they are hurting them. Doing things the way they have always been done proves to me that incompetence is alive and well. Because leadership is about not settling for the way things have always been done. Innovation is the only consistent proof we have that a leader or group of leaders are growing in there competence. The problem with A/Q leadership and management is that none of them have ever built the business. They just rode on Daddy’s coat tails and now they are in a position where it is evident they never really took leading themselves seriously.

If a person can lead people without having a position, they'll do very well when they get one. If they can't lead people without a position, giving them a title will not help. The leader makes the position; the position doesn't make the leader. The people at A/Q headquarters are like a bunch of little Sadaams!

Let me give you an example of the A/Q management incompetence so you know what I mean and that I am not personally attacking one person. About 9 months or so ago A/Q put out a press release that stated that they are going to change their North American Business name from Quixtar to Amway. They decided to do this because they said “because of their market research they found that Amway has greater brand recognition than Quixtar.” No you don’t have to sit up in the ivory tower to know that is the case. However it does take common sense to know that the “greater brand recognition” they are speaking about is not a good brand. In fact when I heard the word Amway before I got involved into QUIXTAR I used to cringe! Can I tell you something? So does everyone else in this world! When I used to go out and show the Quixtar plan people used to say to me even before we would get started “If this is Amway you can leave now.”

Now to be fair to the management at A/Q, although that was a pretty incompetent action, they are not the only ones to blame for incompetent leadership. Many of the so-called “leaders” in the A/Q organization prove they are just as incompetent as the people at HQ. I am not saying all leaders are this way, but unfortunately many are. I have been to tons of seminars and conventions that quite frankly wouldn’t hold any wait to the outside world. I understand there are certain business specific techniques you need to learn, but 99.9% of what you learn has to deal with listening to others babel on about either one of two things: either how much money they make or having a dream. I am all for making money, lots of it for the right reasons, and I am a proponent of having dreams and a vision for your life because without it you have no idea what you are shooting for. However, if all you have is a dream and nothing else, without learning and developing the right habits it will very quickly turn into a nightmare. Look at the following equation below:

A Big Dream + Bad Habits = Frustration and Disappointment

A Big Dream + Good Habits = Fulfillment and Success

I can’t tell you how many seminar and FED functions I went to and all they talked about was things they did, instead of things they are doing. In fact I even heard one of the biggest leaders say “I don’t read books, I write books.” Common man, you might be good but trust me you ain’t that good! It was quite obvious that my association with Internet Services was a joke except for when they brought in outside speakers like Lou Holtz, Les Brown, or Bruce Wilkinson. As far as I was concerned I could have left right after they were done speaking because many of the other “leaders” they had speak were as dry as corked boots.

I learned a few principles that have helped me in my leadership walk from my dealings with Internet Services Corporation, but it wasn’t until I started attending Team meetings did I ever feel a sense of fulfillment in what I was investing my money into learn. TEAM has a special way about them. The leaders are there to serve not to be served. They understand that as leaders we cannot give something to others that we first don’t possess ourselves, so their leaders and group were always learning. In fact I would describe that people on the TEAM have an appetite to learn, grow, change, and relate. It is very evident in their teachings because I always come away from a CD or seminar with good nuggets of information.

I am sorry to say this but until people like Dexter Yager, Bill Britt, Jody Victor, and some of the old leaders start handing over the reins to younger more active people they will keep burning people out because their teachings are so unrelateable, boring, and I would say unvaluable. Times change and it is obvious their time has run out because it was their choice to make their applauses greater than their continued performance! Part of having leadership competence is knowing what your strengths and weaknesses are and I must say it is obvious the old leaders in the A/Q business don’t realize that. When the audience is sleeping when you are on stage it should tell you something! Trust me, if you are that good everyone will want to stay awake and here you! Try coming down off your mountain and relating to what people want to hear.

Remember this: When people follow you they ask themselves 3 very simple questions:

a. Do you care for me?

b. Can you help me? - Why would they follow you if things would get worse

c. Can I trust you?

I can honestly say my answers to these 3 questions are as follows:

a. It might be possible, but doubtful

b. Absolutely not

c. NO

I want to make sure I cover my last 3 points: Constructive criticism, Irrelevant Business Model, and Business Ownership vs. People Ownership, but I will save it for a later post. I have already gone on for a while so I wanted everyone to have a chance to digest the first two because they are big ones. Stay tuned…..

Orrin thank you for being a leader of leaders!!! It is because of examples like you I continue to grow, learn, and stretch myself every day. I know you have been under fire for the past year or so, but you and Laurie have grown your leadership to levels to new heights because of the challenges you have faced and beaten. I appreciate you and I am so thankful for your influence in my life!

God Bless,

Matt

The 2007 sales in the North American (English speaking as a first language) market have plummeted 60% in adjusted real dollars when compared to the 1980 North American sales!  How long will the free fall continue before there are major changes in Amway North America?

Today, I am going to teach on the importance of confronting the brutal reality in any business venture.  This article is an attempt to help Amway/Quixtar North America confront the brutal reality to help the remaining IBOs have a competitive chance in the marketplace.  Amway needs leaders willing to confront the brutal facts and make the necessary changes to get their business competitive in today’s information age.  There is too much information available today for poor practices to be overlooked or hidden.  I provide this leadership lesson free of charge to help the struggling managers improve their performances.

In 1980 Amway North America was just under $1 billion in sales (approximately 856 million).  According to sources close to the company, Amway reported their sales at this time in retail dollars and not wholesale dollars.  Since 1999, Amway/Alticor/Quixtar has reported their sales in wholesale dollar amounts. I welcome any corrections to the following analysis as I am seeking the truth and to teach how to confront reality.

$856 million in sales retail is $856/1.32 = $648 million in sales wholesale.  This is calculated by dividing out the 32% markup (1.32).  This is the average percent difference from the whole sale price to the retail price.

A business that was doing $648 million in sales in 1980 dollars is the same as a business doing $1.630 billion in 2007 dollars according to the inflation index.

Quixtar announced sales in 2007 that amounted to $1.072 billion.  This amounts to a $558 million dollar loss in equivalent 2007 dollars!  This is a shocking 34% decline since 1980 in real volume.  I am not even factoring in the new Caribbean markets that Amway/Quixtar has opened since 1980, which would make the numbers worse.

The other factor to consider is that the multi-cultural business was minimal in the North American market in 1980 and accounts for approximately 40% today according to Ken McDonald former managing director of Quixtar.  This would mean the English speaking as a first language business has reduced from $1.630 billion (inflation adjusted dollars) in 1980 to 60%*($1.072 billion) = $987 million loss of the 1980 volume adjusted for inflation in the English speaking first language market in America.  This is over a 60% decline in sales and explains why the vast majority of diamonds did not requalify or are not even in the business today.  When people invest 5, 10, 20, 30+ years of their life into a business project – it is a unconscionable to see so many of them ground up through a declining business. 

This is where leadership as described in Chris Brady and my book, Launching a Leadership Revolution is so important.  It does not take 27 years to determine that Amway sales losses are systemic in the North American business.   Quixtar was launched in 1999 to stem the tide of losses, but has been an abject failure and now the company is changing back to the Amway name - a clear admission that the Quixtar model has all the same inherent faults in North America as Amway did previously. 

Now you know why I sat down with the Amway managers on August 9th.  I finally came to the conclusion that Amway managers were not willing to confront the brutal reality and the only people being brutalized by their inactions were the distributors businesses.  Why are people being sued for jumping off a ship that has been sinking for 27 years?  If anyone should be sued, shouldn’t it be the managers who sunk the ship in the first place?  These are leadership questions that are of the utmost importance.  When a company will not accept responsibility for their failing model, they will gladly invest time and money to search for scapegoats.  This allows them to remain oblivious to the answers for the systemic problems inherent in their struggling business.  This behavior only sentences the remaining Amway distributors to more pain and more lost sales as the real issues are not being addressed. 

Here is my free advice for the Amway managers:

1.       Admit the model is not working and accept responsibility to change it.  Until you accept responsibility for the problem – it will be blamed on outside forces instead of poor internal strategies.

2.       Allow people to leave your company if they are not happy.  Forcing people to stay against their will is against everything your founders of the company believed.

3.       Apologize to all former distributors for their years of wasted efforts to build a business that was in a near free fall.

4.       Create products with true value propositions and get your compensation plan out of the 1960’s and into the 21^st century.

I speak to thousands of people around the country on the basic principles of business ownership and leadership.  I recommend that Doug and Steve start the Amway managers on a personal development program of books and CD’s.  There are some great leadership development seminars available also that would improve the emotional intelligence and business strategies of the Amway managers.  As John Maxwell states, “Everything rises and falls on leadership.”  Judging by the sales of Amway North America, I believe that the Amway managers are receiving poor grades on their leadership competence.  If Dick Devos believes he has the ability to run the state of Michigan as Governor, then I would recommend that he prove it on his beloved Amway business first.  It would make Dick’s message more palatable to the Michigan voters.  The Amway managers are welcome in advance for this free advice.  God Bless, Orrin Woodward

Orrin Woodward Team Video

I have received many comments from both sides of the aisle discussing the performance of the Amway business.  Some stating it is a great opportunity and all you need to do is work the business hard.  Some stating that the business is past its sell date and that building Amway is a poor use of a person’s time.  I have a unique perspective in this discussion.  Laurie and I built a large Quixtar business which I was told near the end was only Amway in North America.  I was also the number 2 fastest growing EDC and above in North America my last full year with Quixtar, so I am not a negative person whose group had collapsed.  None of the following is intended to attack the company or any individuals in the company.  I love doing the analysis of businesses and did this in my benchmarking consulting days before building the Quixtar business.  I am only interested in the truth, since I know that two totally divergent facts cannot both be true.  Here is the question for the day – Is Amway growing or shrinking in their existing market places?  No more opinions, but let’s study the numbers together.  We will need to interpolate some points since Amway does not release the official sales data from each market.  Amway does say things like – we increased sales by 10% in this market.  By taking all the statements and working some formulas - I used to be an engineer and finished half my MBA at University of Michigan before building my own business – we can get pretty close to the total sales in each market. 

Amway mixes all their sales totals together which confuses the analysis attempting to determine the health of their existing markets.  The key questions would be answered if Amway would report sales per country in US dollars.  An analysis could then be made on how the existing markets are doing in relationship to the new countries being opened.  By gathering all the relevant facts that are listed below – I will come close to answering these questions on our ongoing dialogue to help the Amway management team.  My thesis is that if your business model is not working then opening up new markets to enhance your sales, while hurting your distributors in existing markets is a poor leadership plan.  I believe that Amway has a responsibility to ensure a workable business plan with measurable results in a reasonable time in existing markets or opening up new markets is only a cover for poor existing sales.

Here are the facts we know to start the analysis.

Fact – In 1997 Amway World Wide Sales were $7 billion in 43 different markets.

Fact – Markets in 1997 - U.S., Canada, Australia, United Kingdom, Hong Kong, Germany, France, Netherlands Japan, Belgium, Switzerland, Taiwan, Austria, Italy, New Zealand, Panama, Malaysia, Spain, Guatemala, Thailand, Mexico, Brazil, Hungary, Korea, Brunei, Indonesia, Poland, Portugal, Argentina, Czech Republic, Slovakia, Turkey, Chile, El Salvador, Slovenia, Uruguay, China, Honduras, Costa Rica, Columbia, Greece, Phillipines, South Africa, Romania

Fact – In 2007 Amway World Wide Sales were $7.1 billion in 55 different markets.

Fact – Markets in 2007 - USA, Canada, Caribbean Islands, Argentina Brazil Chile Colombia Costa Rica Dominican Republic El Salvador Guatemala Honduras Mexico Panama Uruguay Venezuela, Austria Belgium Croatia Czech Republic Denmark Finland France Germany Greece Hungary Italy Netherlands Norway Poland Portugal Romania Russia Slovak Republic Slovenia Spain Sweden Switzerland Turkey Ukraine United Kingdom, Australia Brunei, China India Indonesia Malaysia New Zealand Philippines Singapore South Africa Thailand Vietnam

Fact – Amway Asia accounts for nearly 2/3’s of Amway’s World Wide Sales.

Fact – Amway North America (Quixtar) in 2007 was $1.072 billion in Sales.

Fact – Amway is broken up into 4 major sales markets – North America, Amway Latin, Amway Europe, and Amway Asia.

Fact – China alone is nearly $2 billion in Amway Sales.

Fact – Russia and the Ukraine combine together for the fastest growth in Europe and have helped Amway Europe rival sales in the US.   It is estimated that the new markets in Europe since 1997 account for over 50% of the total Amway Europe Sales.

Calculations: If 2007 total sales were $7.1 billion and 2/3 is Amway Asia then $4.686 billion were Amway Asia Sales.  Subtracting $4.686 billion from $7.1 billion and you have $2.414 billion remaining for all other markets.

Calculations: $2.414 billion in sales minus North American sales of $1.072 billion leaves $1.342 billion left for Amway Europe and Amway Latin America.

Calculations: We know that Amway Europe is close to North American sales.  If we estimate Amway Europe sales at $1 billion in sales that leaves $342 million for Amway Latin America.

Calculations: $7 billion in 1997 with 43 countries and 7.1 billion with 55 countries equates to only a $100 million gain in sales with 12 new markets.  But we know that China, India, Ukraine, and Russia are 4 of the new markets since 1997 and we know that they are serious growth markets. 

Best Interpolation of Amway Actual Sales - If anyone has better data please provide, but this is in the ballpark and maybe even generous to Amway.  I will subtract out the estimated sales in Amway’s new markets since 1997 to determine how the Amway markets that have existed since 1997 have fared in the last 11 years. 

2007 $7.1 billion minus ($2 billion in China) minus (.6 billion in Ukraine, Russia and other new markets in Europe) minus (1 billion for India and other remaining new markets ) since 1997. 

This means that the Amway pre-existing markets that had produced $7 billion in total sales in 1997 are now producing an estimated $3.5 billion in sales in 2007, if my figures are accurate! 

UpdateIII: Let's do the most conservative scenario.  If China had existing volume of $200 million in 1997 and say volume has dropped to $1.7 billion in China from over $2 billion then we would only subtract $1.5 billion.  Russia plus Ukraine plus other new Europe markets may be more than $.6 billion, but we will keep that number.  India and all the remaining new markets on the conservative side will add only $.5 billion.  Even with the most conservative of calculations it is $7.1 billion minus $1.5 billion minus $.6 billion minus $.5 billion which equals $4.5 billion.  This is a $2.6 billion drop or over a 36% decrease in sales over 11 years. 

Based upon the previously released market information from Amway and subtracting the estimated new market volumes we have a major die back going on!  The 43 markets that had produced $7 billion in sales now produce approximately $3.5 billion in sales.  This is a 50% reduction in sales over the 11 year period. 

An MLM that does not grow in 11 years would be considered a poor business opportunity for a new distributor, especially when other MLM’s are having high double digit growth every year.  But an MLM that is dying back nearly 50% is an unacceptable performance level for any business claiming to be an MLM opportunity.  If the data presented was off by an order of magnitude – it would still be a 25% reduction in 11 years!  No growth is the death knell for MLM opportunities.  Die back is the funeral in my opinion.  I have not calculated the rate of inflation over the last 11 years, but this would make the results even worse!  This is hardly the results worth advertising which is why I presume that Amway does not present their sales results in total sales per country market.  It would reveal too much information.

Amway claims to be the business opportunity company, but after studying their results -  I am confused by what they mean by “Business Opportunity.”  I welcome anyone to crunch the numbers and come up with their own estimated sales.  With the major growth markets like Ukraine, Russia, India, China and others entering the Amway world after 1997 – your calculations will display the same dismal performances in the existing markets.  In order to make an intelligent rational choice on whether to invest time and money into a business – you will need to gather all the relevant facts on the business results.  One of the major facts is the growth opportunities available in the market where you will be doing business.  Every business should be a win-win venture or no deal according to Stephen Covey.   This means the company wins when the distributors win in any proper MLM.  In this case, Amway still receives their profit margins from the new markets, while the existing distributor leaders lose their market share and confidence.  Please study the numbers and help me in my analysis.  I believe we all want the same thing and that is the truth. 

I never help a company confront reality without also offering my opinions to fix the brutal reality.  I believe Amway must double their compensation plan across the board and reduce their retail pricing by no less than 25% to create the right value story.  If they would do these two moves - they might be able to compete in the market place again.  Amway must stop camouflaging poor business results by opening up new markets.  Instead, Amway must learn to compete in their existing markets for the sake of IBO's across the world.  Ray Kroc said that a business must prove its model works and then expand to new markets - not expand to new markets to keep people from proving your business model doesn't work!  What do you think Amway will do with their business model?  God Bless, Orrin Woodward

Update I:  A commenter gave the inflation rate over those 11 years at just over 33%!  A $7 billion dollar business in 1997 would have to be over a $9 billion to stay up with inflation.  This means the in 2007 real dollars a drop from over $9 billion to $3.5 billion in the pre-existing 1997 countries.  An unbelievable $5.5 billion dollar drop (over 61% decrease) and the corresponding IBO communities ruined - all layed at the hands of the Amway managers.  This is a disgrace to leadership in my opinion and should be rectified by doing something to help the existing markets - not just opening up new ones!  But to open up new countries for Amway's profitability while placing non-competes in existing countries to keep people in an unprofitable business that is not working is sheer madness!  Isn't Dick DeVos running for governor of Michigan on a campaign of proclaimed business success for Michigan's needs?  Dick DeVos was the driver for Amway's international focus from what I understand.  If managing a failing business model, forcing people to stay in Michigan against their wills, and running to the newest country when the going gets tought is Dick's plan for Michigan's government - then I say thanks, but no thanks.

Update II: Another commenter was kind enough to point out that Amway changed the way it reported its sales from the retail price until 1999 to the wholesale price starting in 2000.  This is a 32% difference in a negative direction which is almost exactly the inflation rate (33% in the positive direction) during the same 11 year period.  In summary, the original data with a 35-50% reduction is accurate and the inflation increase and retail to wholesale pricing decrease cancel each other out.  Now that we have this clarified - what will Amway do with their 35-50% actual reduction in sales in their existing markets in the last 11 years or does this not concern the Amway managers?

Here is an excellent article and required reading in our post-modern world.  We must stand for truth or we will fall for destructive lies.  Enjoy this article by David Grossman - we need more people with the courage to stand for truth like him.  God Bless, Orrin Woodward

By LTC (RET) Dave Grossman, author of "On Killing."

Honor never grows old, and honor rejoices the heart of age. It does so because honor is, finally, about defending those noble and worthy things that deserve defending, even if it comes at a high cost. In our time, that may mean social disapproval, public scorn, hardship, persecution, or as always,even death itself. The question remains: What is worth defending? What is worth dying for? What is worth living for? - William J. Bennett - in a lecture to the United States Naval Academy November 24, 1997

One Vietnam veteran, an old retired colonel, once said this to me:

"Most of the people in our society are sheep. They are kind, gentle, productive creatures who can only hurt one another by accident." This is true. Remember, the murder rate is six per 100,000 per year, and the aggravated assault rate is four per 1,000 per year. What this means is that the vast majority of Americans are not inclined to hurt one another. Some estimates say that two million Americans are victims of violent crimes every year, a tragic, staggering number, perhaps an all-time record rate of violent crime. But there are almost 300 million Americans, which means that the odds of being a victim of violent crime is considerably less than one in a hundred on any given year. Furthermore, since many violent crimes are committed by repeat offenders, the actual number of violent citizens is considerably less than two million.

Thus there is a paradox, and we must grasp both ends of the situation: We may well be in the most violent times in history, but violence is still remarkably rare. This is because most citizens are kind, decent people who are not capable of hurting each other, except by accident or under extreme provocation. They are sheep.

I mean nothing negative by calling them sheep. To me it is like the pretty, blue robin's egg. Inside it is soft and gooey but someday it will grow into something wonderful. But the egg cannot survive without its hard blue shell. Police officers, soldiers, and other warriors are like that shell, and someday the civilization they protect will grow into something wonderful.? For now, though, they need warriors to protect them from the predators.

"Then there are the wolves," the old war veteran said, "and the wolves feed on the sheep without mercy." Do you believe there are wolves out there who will feed on the flock without mercy? You better believe it. There are evil men in this world and they are capable of evil deeds. The moment you forget that or pretend it is not so, you become a sheep. There is no safety in denial.

"Then there are sheepdogs," he went on, "and I'm a sheepdog. I live to protect the flock and confront the wolf."

If you have no capacity for violence then you are a healthy productive citizen, a sheep. If you have a capacity for violence and no empathy for your fellow citizens, then you have defined an aggressive sociopath, a wolf. But what if you have a capacity for violence, and a deep love for your fellow citizens? What do you have then? A sheepdog, a warrior, someone who is walking the hero's path. Someone who can walk into the heart of darkness, into the universal human phobia, and walk out unscathed

Let me expand on this old soldier's excellent model of the sheep, wolves, and sheepdogs. We know that the sheep live in denial, that is what makes them sheep. They do not want to believe that there is evil in the world. They can accept the fact that fires can happen, which is why they want fire extinguishers, fire sprinklers, fire alarms and fire exits throughout their kids' schools.

But many of them are outraged at the idea of putting an armed police officer in their kid's school. Our children are thousands of times more likely to be killed or seriously injured by school violence than fire, but the sheep's only response to the possibility of violence is denial. The idea of someone coming to kill or harm their child is just too hard, and so they chose the path of denial.

The sheep generally do not like the sheepdog. He looks a lot like the wolf. He has fangs and the capacity for violence. The difference, though, is that the sheepdog must not, can not and will not ever harm the sheep. Any sheep dog who intentionally harms the lowliest little lamb will be punished and removed. The world cannot work any other way, at least not in a representative democracy or a republic such as ours.

Still, the sheepdog disturbs the sheep. He is a constant reminder that there are wolves in the land. They would prefer that he didn't tell them where to go, or give them traffic tickets, or stand at the ready in our airports in camouflage fatigues holding an M-16. The sheep would much rather have the sheepdog cash in his fangs, spray paint himself white, and go, "Baa."

Until the wolf shows up. Then the entire flock tries desperately to hide behind one lonely sheepdog.

The students, the victims, at Columbine High School were big, tough high school students, and under ordinary circumstances they would not have had the time of day for a police officer. They were not bad kids; they just had nothing to say to a cop. When the school was under attack, however, and SWAT teams were clearing the rooms and hallways, the officers had to physically peel those clinging, sobbing kids off of them. This is how the little lambs feel about their sheepdog when the wolf is at the door.

Look at what happened after September 11, 2001 when the wolf pounded hard on the door. Remember how America, more than ever before, felt differently about their law enforcement officers and military personnel? Remember how many times you heard the word hero?

Understand that there is nothing morally superior about being a sheepdog; it is just what you choose to be. Also understand that a sheepdog is a funny critter: He is always sniffing around out on the perimeter, checking the breeze, barking at things that go bump in the night, and yearning for a righteous battle. That is, the young sheepdogs yearn for a righteous battle. The old sheepdogs are a little older and wiser, but they move to the sound of the guns when needed right along with the young ones.

Here is how the sheep and the sheepdog think differently. The sheep pretend the wolf will never come, but the sheepdog lives for that day. After the attacks on September 11, 2001, most of the sheep, that is, most citizens in America said, "Thank God I wasn't on one of those planes." The sheepdogs, the warriors, said, "Dear God, I wish I could have been on one of those planes. Maybe I could have made a difference." When you are truly transformed into a warrior and have truly invested yourself into warriorhood, you want to be there. You want to be able to make a difference.

There is nothing morally superior about the sheepdog, the warrior, but he does have one real advantage. Only one. And that is that he is able to survive and thrive in an environment that destroys 98 percent of the population. There was research conducted a few years ago with individuals convicted of violent crimes. These cons were in prison for serious, predatory crimes of violence: assaults, murders and killing law enforcement officers. The vast majority said that they specifically targeted victims by body language: slumped walk, passive behavior and lack of awareness. They chose their victims like big cats do in Africa, when they select one out of the herd that is least able to protect itself.

Some people may be destined to be sheep and others might be genetically primed to be wolves or sheepdogs. But I believe that most people can choose which one they want to be, and I'm proud to say that more and more Americans are choosing to become sheepdogs.

Seven months after the attack on September 11, 2001, Todd Beamer was honored in his hometown of Cranbury, New Jersey. Todd, as you recall, was the man on Flight 93 over Pennsylvania who called on his cell phone to alert an operator from United Airlines about the hijacking. When he learned of the other three passenger planes that had been used as weapons, Todd dropped his phone and uttered the words, "Let's roll," which authorities believe was a signal to the other passengers to confront the terrorist hijackers. In one hour, a transformation occurred among the passengers - athletes, business people and parents. -- from sheep to sheepdogs and together they fought the wolves, ultimately saving an unknown number of lives on the ground.

There is no safety for honest men except by believing all possible evil of evil men. - Edmund Burke

Here is the point I like to emphasize, especially to the thousands of police officers and soldiers I speak to each year. In nature the sheep, real sheep, are born as sheep. Sheepdogs are born that way, and so are wolves. They didn't have a choice. But you are not a critter. As a human being, you can be whatever you want to be. It is a conscious, moral decision.

If you want to be a sheep, then you can be a sheep and that is okay, but you must understand the price you pay. When the wolf comes, you and your loved ones are going to die if there is not a sheepdog there to protect you. If you want to be a wolf, you can be one, but the sheepdogs are going to hunt you down and you will never have rest, safety, trust or love. But if you want to be a sheepdog and walk the warrior's path, then you must make a conscious and moral decision every day to dedicate, equip and prepare yourself to thrive in that toxic, corrosive moment when the wolf comes knocking at the door.

For example, many officers carry their weapons in church.? They are well concealed in ankle holsters, shoulder holsters or inside-the-belt holsters tucked into the small of their backs.? Anytime you go to some form of religious service, there is a very good chance that a police officer in your congregation is carrying. You will never know if there is such an individual in your place of worship, until the wolf appears to massacre you and your loved ones.

I was training a group of police officers in Texas, and during the break, one officer asked his friend if he carried his weapon in church. The other cop replied, "I will never be caught without my gun in church." I asked why he felt so strongly about this, and he told me about a cop he knew who was at a church massacre in Ft. Worth, Texas in 1999. In that incident, a mentally deranged individual came into the church and opened fire, gunning down fourteen people. He said that officer believed he could have saved every life that day if he had been carrying his gun. His own son was shot, and all he could do was throw himself on the boy's body and wait to die. That cop looked me in the eye and said, "Do you have any idea how hard it would be to live with yourself after that?"

Some individuals would be horrified if they knew this police officer was carrying a weapon in church. They might call him paranoid and would probably scorn him. Yet these same individuals would be enraged and would call for "heads to roll" if they found out that the airbags in their cars were defective, or that the fire extinguisher and fire sprinklers in their kids' school did not work. They can accept the fact that fires and traffic accidents can happen and that there must be safeguards against them.

Their only response to the wolf, though, is denial, and all too often their response to the sheepdog is scorn and disdain. But the sheepdog quietly asks himself, "Do you have and idea how hard it would be to live with yourself if your loved ones attacked and killed, and you had to stand there helplessly because you were unprepared for that day?"

It is denial that turns people into sheep. Sheep are psychologically destroyed by combat because their only defense is denial, which is counterproductive and destructive, resulting in fear, helplessness and horror when the wolf shows up.

Denial kills you twice. It kills you once, at your moment of truth when you are not physically prepared: you didn't bring your gun, you didn't train. Your only defense was wishful thinking. Hope is not a strategy. Denial kills you a second time because even if you do physically survive, you are psychologically shattered by your fear helplessness and horror at your moment of truth.

Gavin de Becker puts it like this in Fear Less, his superb post-9/11 book, which should be required reading for anyone trying to come to terms with our current world situation: "...denial can be seductive, but it has an insidious side effect. For all the peace of mind deniers think they get by saying it isn't so, the fall they take when faced with new violence is all the more unsettling."

Denial is a save-now-pay-later scheme, a contract written entirely in small print, for in the long run, the denying person knows the truth on some level.

And so the warrior must strive to confront denial in all aspects of his life, and prepare himself for the day when evil comes. If you are warrior who is legally authorized to carry a weapon and you step outside without that weapon, then you become a sheep, pretending that the bad man will not come today. No one can be "on" 24/7, for a lifetime. Everyone needs down time. But if you are authorized to carry a weapon, and you walk outside without it, just take a deep breath, and say this to yourself...

"Baa."

This business of being a sheep or a sheep dog is not a yes-no dichotomy. It is not an all-or-nothing, either-or choice. It is a matter of degrees, a continuum. On one end is an abject, head-in-the-sand-sheep and on the other end is the ultimate warrior. Few people exist completely on one end or the other. Most of us live somewhere in between. Since 9-11 almost everyone in America took a step up that continuum, away from denial. The sheep took a few steps toward accepting and appreciating their warriors, and the warriors started taking their job more seriously. The degree to which you move up that continuum, away from sheephood and denial, is the degree to which you and your loved ones will survive, physically and psychologically at your moment of truth.

I posted an Update at the bottom of this article.

Here is another anonymous post from an Amway business owner in Australia.  If the following comments are true - it looks like some of the issues that the 40% of the IBOAI board had in America were also systemic in Australia.  Can anyone please confirm or deny any of the information in this post?  I am looking for the truth and strongly believe that the Truth will set you free.  I am going to give you my opinions and thoughts based upon what I know from my experiences.  I know that in North America the percentage of Quixtar diamonds that did not repeat was extremely high.  Laurie and I were at Diamond Club consistently and saw the vast majority of Diamond pins who never repeated and the fall back in numbers every year.  Team approach had made our Team have the best in repeat performance of any organization in Quixtar.  If Amway/Quixtar is growing, then shouldn’t they be proud to release the statistics on new diamonds and how many repeated in all their countries?  I don’t foresee this information being released any time soon. 

Why doesn’t Amway fix their business in existing countries vs. continuing to open new countries while allowing their business to flounder in their current markets?  The new countries continue to make Amway profitable, but the current leaders in existing markets go backwards.  This is not win-win and probably why you can sense the repressed anger in so many leaders in the Amway business.  To continue to make billions of dollars and not provide a reasonable business model for the Amway faithful is very disappointing to the many leaders in the field that I met over the years in Amway/Quixtar.  Amway can fix this by reducing prices and putting more money in their plan.  This would improve retail sales and improve retention, but Amway would have to give up their coveted 30% margins.  Nearly 10 times the margins that Walmart thrives with!  That is some simple and free advice from a former top leader in your business.  As a best-selling leadership author, I believe every leader has a responsibility to provide opportunities for the people following them.  If the data presented here is true, then I believe there is a leadership challenge at Amway that must be fixed to help all the distributors in the field.   Here is the comment that was posted on the Amway Australia Depressing News.  Please help me separate the fact from fiction in this post.  Just my thoughts.  God Bless, Orrin Woodward

Hi Orrin. This an Australian Amway IBO (quickly on my way out) who has just read the post at : A critic visits the IBOAI. It is by Walter Bass' Grandaughter & her visit with Jody Victor. I am very interested in bringing up a few points about the content of her post & her meeting with Jody Victor about Amway. I think an Australian perspective on this might help some people see the plain truth - rather than the outright lies we have experienced in Australia.

1. She talks of the "horror stories that IBOs had to endure at the hands of their upline" & that Jody has heard these stories, that make him "cringe". Does that include the story where Bo Short, another former Amway Diamond - details the attitude of Jody Victor behind closed doors. Short outlines the how Jody Victor acted like royalty when a host picked up Victor from the airport and had music playing on the radio. Victor was reported to have said to Short "how come he wasn't told that we don't have music on in the car - doesn't he know who we are? - I am going to call Dexter and let him know that this sort of treatment is not on". If Short is to be believed (of course many current Amway faithful will disparage Short as a fake Diamond - who bought his 6th leg - of course Short was coached to do this by his system leaders & he fell for it - the REALITY is that 95% of those who have managed to reach Diamond once, never again reach that level of 6 Platinum IBOs. -

Oh & if this not true, then lets have Amway Australia publish all current/qualified Diamonds for 2008, 2007, 2006,2005, 2004, 2003, 2002, 2001, 2000, 1999, 1998 - Just that ten year history in Australia would be an embarassment. Names that have appeared once as a qualified Diamond on our shores - never to have made the list again. Go back futher to when systems first began like Network 21 & IDA. Let’s see how many people went Diamond from the mid 1980's in Australia, through the 1990s. If Amway are looking to be transparent - that is their famous catch cry here in the land of OZ - then let’s see how many names are repeated more than once? They have the information - Why not release it, to see what success people have had at the highest levels in Amway. Now that would be a challenge I would like to see them meet.

Of course they & the supporters will have a "valid" (sic) reason as to why they can't. Again, the reality is this: releasing this information would blow the cover on how weak their compensation plan is, how terrible their turnover is in Australia. The past 8 years alone has seen the Amway Australia market become a joke. All the Amway initiatives, all the new products like Emma Page Fashion Jewelry & XS Energy drinks - have seen the Amway sales in Australia be less in 2008 than it was in 1990!

Please, for those of you are building an Amway business in Australia - ask yourself this question - how can Amway Australia sales be so less than 18 years ago? If the plan worked, you should at least be able to maintain ground or grow at least a little bit. I have not even taken into account what the dollar value was in 1990 compared to 2008? Anyone help me out? Does this mean Amway Australia has declined even further than a direct comparison of $ for $?

I you were signing up in Amway in 2008, would it not be "transparent" to show the new person the "real" history of the Amway business in Australia? Specifically the sales volume, the number of people who qualified at Diamond & then requalified (some people might be in for a shock if they knew certain "leaders" had not requalified ever - after a long Amway career) & the percentage of turnover of IBOs each year? - Transparent? yes! - likely - no way. Why?

Because if you knew this data up front, then you would be a complete idiot. You would show yourself to have no business sense at all. Why start something that simply is not sustainable & can be proven to be not sustainable. Oh it can be sustainable, only if you have have a massive turnover rate each year.

What does this say about those who still persist in building a their Amway business after many, many years. Are they happy to just keep the turnover rate going - knowing full well that Amway Australia is currently in a shocking position nationally - are they just going to sit there & keep asking the next groups of 20s & 30s to join them - knowing that if these people do succeed at any point on there journey - that in 10 or 20 years - long term history proves that their business growth will be either non - existent or less than when they started. Honestly, shame on the business leaders in Amway who know the facts (the transparent ones) & are willing to encourage people to go out & sign up more in the coming years.

If what I say is not true - then publish the "transparent facts" Amway Australia. The ones I have mentioned already.

The second portion of the post from Walter Bass' grandaughter is this:

"Despite claims to the contrary by certain disgruntled ex-IBOs, changes to the Rules of Conduct are laboriously hashed out; then announced to the general population of IBOs for MONTHS before they are enacted."

In Australia the above statement is an outright lie.

Emeralds & Diamonds were removed from a Luxury cruise trip in May 2008 based based on a "rumour" that they or their children or extended family were involved in Monavie. A $10,000 trip that they earned was taken from them - based on a rumour, that was not investigated or substantiated.

Who does this Walter Bass' Grandughter think she is kidding with her quote above. The legal department of Amway Australia can remove your bonuses, your earned trips your business - based on a rumour. If that is in the rules of conduct then those people who are currently building an Amway business in Australia - need to be given smelling salts. Why would you want anyone to sign up in a business where Amway legal can dictate the money you earn?

Take a long hard look at this information. Don't believe me about Amway's lack or success. Go get it from Amway Australia - get my questions answered. When you do (if) - check it out - present those facts at the next meeting you do in a one on one, in home group or public forum - see how many sign up or stay in?

Get the Facts:

1. How many people who qualified Diamond in Amway Australia 1985-2007 have requalified more than once? How many Emeralds? How many Saphires? How many Rubies?

2. What is the year by year sales data for the same period in real dollar comparisons?

3. What is the percentage turnover rate of IBO's for the same period?

After you have the facts - have long think about what you are doing building Amway.

Update: There are some great comments posted about this article.  Some thinking that I should expose the truth and some thinking I should let the issue go.  Here are my thoughts:  A business will stand or fall on truth - just like a country stands or falls on truths.  Ronald Reagan attacked the doctrine of the "evil empire" Soviet Union and gave hope to many people who were without hope.  Reagan was criticized by many who were more into peace and affluence than justice.  They told Reagan to not attack communism and get along with the evil regime.  Reagan said to do nothing was equivalent to accepting the behaviors of the communist.   I side with Reagan in this debate! 

Amway must change and provide a true opportunity to the many great people that are left in their business.  I received hundreds of calls over the years from former diamonds who had fallen back to sapphire and platinum.  It is ruining people's lives and for me to sit back and do nothing is sheer cowardice.  If you don't want the truth then don't come to the site.  When I learn facts that can help the Amway company change then I will provide my advice free of charge.  Amway must want me focused on their business since they are in litigation with me in multiple courts for attempting to leave their business peacefully.   Read the following quotes from the founders of Amway:

A person who is not free to pick his job or occupation or to go into business for himself is not free. - Jay VanAndel

The man who becomes a great leader usually has a respect for his followers which is as deep and real as their respect for him. - Rich DeVos

The only alternative to free enterprise is to government ownership, whether you call it socialism or communism or any other name. - Jay VanAndel

The actions of the second generation and managers of Amway are rank hypocrisy to the founders message of free enterprise!  I refused to stand by idly and watch the business collapse while I was inside of their company and joined the Board to promote positive change.  I stood for truth and was fired by their managers.  Either these statements from the founders were always untrue or the company has changed.  If the founders do not know the truth then the only thing to do is to expose the truth and see if the families will correct this poor reflection on their legacy.  I am not on a smear campaign, but I am on a truth campaign.  There is no peace without justice.  God Bless, Orrin Woodward

Here is a powerful video of Dallin Larsen speaking at the MonaVie Orlando Regional.  It is leadership like this that has catapulted MonaVie to nearly a billion dollar business in the US alone in less than four years.  Dallin is a man of character who shares his convictions forthrightly.  I love his points on the right of the distributors to come or go as they please.  The distributors are not employees and Dallin refuses to hold people hostage against their will.  If only all MLM companies believed in free enterprise like Dallin does.  Maybe Dallin Larsen can come out with a CD called “Selling America for the 2^nd Generation” to teach kids how their parent’s earned their money.  In a free enterprise system, you are not handed money by your last name, but must earn it through your willingness to serve.   I thank you Dallin, for your willingness to serve your communities.  Dallin will be at the MonaVie Team majors in Columbus, Minneapolis, and Phoenix!  God Bless, Orrin Woodward

My few months in MonaVie have been an incredible leadership journey already!  One of the key factors in any successful Relationship Networking company is the compensation plan for the leaders who will build the communities.  There is a rule of leadership that states, “5% of your people will do 95% of the work.”  In my 15 years in Relationship Networking, I must second that statement.  MonaVie is the first company that I have worked with that justly compensates the leaders in the field.  I give the credit to Dallin Larsen for the incredible MonaVie compensation plan.  Dallin understands that you must reward leadership at all levels of your company - from the new Star all the way up to the new Crown.  There were three new Presidential Black Diamond’s or above recognized in Orlando at MonaVie’s Super Regional.  Brig and Lita Hart were recognized as new Crowns in MonaVie.  Steve and Gina Merritt were recognized as new Imperials in MonaVie and Laurie and I were recognized as new Presidential Black Diamonds.  The weekly incomes for the Presidential level is just under $70,000 per week and this does not include bonuses from MonaVie!

I witnessed first hand Dallin giving a 1 million dollar bonus plus a new Lamborghini to Brig Hart!  I witnessed Dallin giving a $600,000 bonus to Steve and Gina Merritt.  Laurie and I received $400,000 in extra bonuses the same day - $100,000 for Royal Black Diamond and $300,000 for Presidential Black Diamond.  MonaVie also rewards these levels with a minimum of $300,000 credit for jet miles.  This is over $700,000 in compensation that MonaVie paid us in bonuses in one day!  The bonuses alone (not including the generous weekly totals) that the Hart’s, Merritt’s, and we received were more than Laurie and I were ever paid in compensation from Amway or Quixtar business for an entire year.  Bill Hawkin's the current Amway IBOAI Charman said, "Last year the Board was able to assist in the creation of the largest compensation increase in the history of this business, and we now have the best compensation plan in this industry."  Does anybody at the Board check these statements before they are released?  Bill, I don't think you did enough research on your competitors compensation plans before making this humorous statement.   Any one of the Black Diamonds in MonaVie will gladly compare their weekly checks with Bill Hawkin's monthly checks from Amway.   Laurie and I have been involved with MonaVie since March 31, 2008 and in just over 2 months to be rewarded so generously by MonaVie is humbling and exciting at the same time! 

Amway once bragged to their field leaders in an official email, “And, we should note that no IBO has left Amway or Quixtar and successfully launched a competing business.”  I remember reading this statement and thinking of the Biblical admonition that pride comes before the fall.   What kind of company would be proud of the fact that no one has ever left them and succeeded?  Have they not heard of the word legacy before?  I hope that there are many people who will learn principle’s from the MonaVie family that will go on to succeed at whatever enterprises they choose to commit to.  I love receiving letters from people who tell me they have built successful businesses from the principles they learned from the Team.  Shouldn’t we celebrate each others success regardless of the business we succeed in? We need more leaders with abundance mentality and not the scarcity mentality so prevalent in managers. 

Why did I bring up the Amway statement?  Because both the Hart’s and Merritt’s were in Amway, which means that the top 3 recognized leaders were all former Amway leaders that now are reaching top levels in MonaVie.  I believe the Hart’s were double diamonds and the Merritt’s were emeralds in Amway.  They both were paid more in one day, on June 7th by MonaVie, than any year in Amway.  The three couples have something else in common also – we all have been sued in Amway’s confidential arbitration process.  Perhaps what Amway meant to say is, “No one will stay successful outside of Amway after we are through suing them”?  The leadership guru Peter Senge once said, “The only sustainable competitive advantage is your organization’s ability to learn faster than the competition.”  I think that Amway Legal has turned the statement into, “The only competitive advantage is your organization’s ability to out sue anyone going to the competition.”   Amway really ought to evaluate the motives and strategy behind their current policies.  I believe that they are ruining a free enterprise legacy by allowing arrogance, bitterness and resentment to enter into their decision making processes.  Like the old saying goes, “Bitterness and resentment is like drinking poison expecting someone else to die.”  How much more poison will Amway/Quixtar drink before they come to their senses?

I thank Dallin Larsen for proving that there is success outside of Amway.  Dallin has built a Networking business that rewards the field leaders for their hard work and achievements.  The Networking field is alive and well and my prayer is that Amway will wake up and compete in free enterprise (there is enough people for all of us) - instead of hiring more lawyers to punish any achievement outside of their business walls.  God Bless, Orrin Woodward

Chris Brady and my book Launching a Leadership Revolution is still selling briskly.  Hachette Books has decided to release a paperback version of our book in the coming months.  The hardcover versions will be discontinued, so time is running out on getting a hardcover edition.  We appreciate the support and encouragement from so many people.  All Grace Outreach has been able to support many deserving charities by your buying and promoting the book.  If you have not read our book, it is available at Amazon, Barnes & Nobles, and the Team.  It is time to Launch a Leadership Revolution around the world!  God Bless, Orrin Woodward

I received more depressing news on the dismal results of Amway Australia.   An anonymous commenter who must be an insider reported more disappointing behavior from Amway management.  If anyone can confirm or deny these statements - I would appreciate it.  It seems that the same issues plaguing Amway in North America and England are also systemic in Australia.  Perhaps these issues are systemic in all countries that Amway enters?

Systemic - Relating to or affecting the entire body or an entire organism.

Tony Greig is the Amway lawyer for Australia. He has sent letters to numerous Diamonds, Emeralds, Platinums (most of which are no longer qualified at the pin level they once had). The letters are the first step in the termination process. Michael Coldwell is the current CEO of Amway Australia, he sent a letter to the Platinums stating that Monavie will blow past shortly & it will only be a small group of Australian leaders who have chosen to be involved. I predict that the Amway turnover in Australia - which has sunk to an all time low of about $120 million (a high of $290 million in 1993 (David Steadson an Amway supporter says the figure is under $150 million for 1993) - gee the Amway model has lost just a little bit of ground since 1992) - will now plummet to below $60million in the next 12 months - as people who stay in Amway Australia continue to struggle with an antiquated compensation plan.

It has been a massive struggle for people to reach 21% in the past 8 years. Only those who focused on product sales have achieved anything. Of course theses sales orientated groups have had a slide backwards - as their sales team grew tired. No Diamonds from 2004 (there were 6 of them) have requalified at Diamond since. There are some Diamonds (like Roland & Jenny McGready) who qualified back in 1990 - that are no longer even qualified at the Saphire level.

Why would anyone want to be part of a business model where everyone they hear on the CDs & everyone that Amway promotes does not currently achieve the level that they are reported to be at. If you visit Amway headquaters in Australia - there are about 50 Diamonds on the wall pictured - less than 10 are currently Qualified (after 36 years of operation in Australia) and less than 5 are Q12 Diamonds. Why do the work that it takes to get there when with one letter, Tony Greig - Amway legal guy can turn the money tap off?

I know for a fact that one of the Diamonds on the Amway wall in Australia has been building another MLM for the past 4 years - undetected by Amway legal - now this Diamond sucks down money from Amway as well as the new venture. Well done to them for having the courage to break away.

The new Amway renewal letter to all IBOs has a picture with people holding signs that say "retain your rights" - "Earn your freedom", "sack your boss" - PLEASE WAKE UP! AMWAY IS PAST ITS USE BY DATE IN AUSTRALIA. PROSPECTS KEEP AKSING - PLEASE DON'T TELL ME YOUR OPPORTUNITY HAS ANYTHING TO DO WITH AMWAY - THEN WHEN YOU SAY YES - OFF THEY GO. The answer to this problem - according to Amway Australia management is - change the reputation of Amway - so people will respect you when you say its Amway. We don't have enough lifetime to change the opinion of the public.

Now we know the truth over the past month. Amway will terminate business leaders of 20+ years experience with Amway at the drop of the hat. Leaving their groups without a leader who knows how to build it.

Is the whole Amway organism affected with the dismal results reported in the USA, Canada, England, Australia and others?  Are the only countries where Amway is growing the Asian market or third world countries where door to door sales is still necessary due to lack of country infrastructure?

Are these just rhetorical questions?  In Jagdish Sheth’s book, The Self Destructive Habits of Good Companies, there is a couple of paragraphs of the strategies of both Avon and Amway.  Let me quotes portions of Jadish’s book:

“By the mid-1970’s, being an “Avon lady” was losing its appeal.  Younger women were going to college and pursuing “real” careers, and in increasing numbers housewives, too, were returning to school.  Moreover, as the middle-aged woman was changing her image, the target market for Avon’s products began to shrink.  Consequently, over the next 10 years Avon’s core business—selling cosmetics door to door—declined steadily and took the stock price with it.  From a high of $140 in the early 1970’s, the stock had plummeted to $20 by 1985. . . . . . What Avon realized, even then, was that its selling platform would never recover—in America—but that women in other countries would be demographically similar to American women of the 1950’s and 1960’s.  In other words, Avon could keep right on “calling”—overseas. . . . . . Through the early 1990’s, US sales continued to decline, but steady growth in the international business had returned the company to profitability by 1993.”

“Direct seller Amway has followed Avon’s example, pushing its Artistry cosmetics and Nutrilite vitamin lines in markets around the world. . . . . . Today, most of the company’s sales come from outside North America, and two-thirds of those foreign sales are in Asia.  The company is doing great business in Japan, Korea, and Thailand, but China is where the real action is. . . . . China is now Amway’s biggest single market.  In 2004 alone, sales there topped $2 billion.” 

Did you read that correctly?  Basically, Amway and Avon are admitting that their models do not work in Western Civilization so they are going to the Asian markets to cash in and boost their sagging sales in existing markets.  All of this is free enterprise and perfectly acceptable until you start putting non-competes, non-solicitations, and family loyalty oaths to fence people into the Amway business that is not working.  Amway's own international strategy is an admission that your existing markets are not working!  How can you say you care for your distributors when you lock them into your existing markets, while you are free to enter new markets anytime you wish?  In my opinion, something is inherently unfair with this strategy and someone needs to be held accountable.  I refused to be locked into a failing business with no plan to fix it - against my will.  I absolutely refused to promote this “opportunity” to others against my will!  How many former leaders will Amway attack through litigation, blogs, press releases, newspapers, etc. before the whole truth comes out?  That is the question for the day.  God Bless, Orrin Woodward

Here is an informative Wall Street Journal article by Richard Gibson that speaks directly to Amway/Quixtar’s mandatory and confidential arbitration process.  When I joined the IBOAI board, I did not know any of the legal arguments on arbitration.  But something in my gut told me that mandatory and confidential arbitration did not seem to be a fair process to both parties.  The big companies have the money to litigate hundreds of arbitrations at the same time.  The big companies can have their lawyers involved in every case, but the little guys cannot talk to one another to compare notes or decisions.  This is against the whole theory of case law – where the next court decision builds upon the precedence of the preceding court decisions.  In arbitration, there is no precedence and everything is kept confidential.  This favors the side with the most money not the side with the most facts!

The more I asked questions about Amway’s confidential arbitration - the more I got the run around.   Amway finally decided that it was best to shoot the messenger vs. fix the problem.  I love what Senator Feingold had to say in the article, "that mandatory arbitration clauses are slowly eroding the legal protections that should be available to all Americans."  American citizens must today pay the price of eternal vigilance for our constitutional rights or by our apathy - our sons and daughters will pay the price with their blood.   Let me quote A. W. Tozer, “In the old cemetery near historic Plymouth Rock, where sleep the Pilgrim Fathers, there is a stone into which has been carved these solemn words: ‘That which our fathers at such a great price secured, let us not lightly cast away.”  Enjoy the article.  God Bless, Orrin Woodward

Wall Street Journal

Pressure Grows to Rethink the Use Of Mandatory-Arbitration Clauses

Monday June 2, 9:58 pm ET

By Richard Gibson

What is the best way for franchisers and franchisees to settle their disputes?

Most franchise contracts once called for mandatory arbitration of issues, rather than going to court. But these days there is growing pressure -- from franchisees, judges, Congress and even some franchisers -- to rethink that longstanding arrangement.

"The trend toward arbitration has pretty much ended," says, a franchisees' attorney in San Rafael, Calif.

Among the concerns is that there is no guaranteed right of appeal. "You have to take what the arbitrator decides," says, an in-house counsel for fast-food franchiser Kahala Corp. For that reason, he says, Kahala, whose brands include Blimpie submarine sandwiches and Taco Time, favors resolving issues with franchisees in court.

Another concern is cost. Arbitration can involve three arbitrators, each of whom may charge $300 to $600 an hour. Some critics say there is little incentive for arbitrators to speed things up since they are paid by the hour. Some proceedings can cost upward of $100,000, depending on how complex the issues are and how long it takes both sides to testify. So these days, arbitration isn't always cheaper than going to court.

One complaint from franchisees: Because arbitration typically occurs in the home state of the franchiser, the individual involved must travel to that venue and secure temporary housing and legal counsel, and bear those expenses.

Even Congress has gotten into the fray. Last fall, from Wisconsin and of Georgia, both Democrats, introduced what they called the Arbitration Fairness Act of 2007. Part of their concern, says Sen. Feingold, is "that mandatory arbitration clauses are slowly eroding the legal protections that should be available to all Americans." Their bill would apply not only to franchising but also to consumers and employees.

The proposed legislation, which is being reviewed by the Senate Judiciary Committee, wouldn't prohibit arbitrating a dispute, but it would prevent one party with greater bargaining power -- typically the franchiser -- from contractually forcing individuals into arbitration.

The International Franchise Association, a trade group representing franchisers, opposes the legislation, contending it would make existing binding-arbitration clauses in franchise contracts unenforceable. But several consumer and employment-rights groups support the measure.

Here is the latest news in the management odyssey of Amway Global.  If the report is true - I am astonished that an allegedly free enterprise opportunity would now threaten and intimidate top leaders and THEIR ENTIRE FAMILIES from participating in any other opportunities!  I have grown accustomed to Amway’s threats against distributors, but never on the distributor’s family members.  Update: The IBOAI states that in Amway Australia a distributor is free to join other MLM's, but not free to have their children or them in another MLM and qualify for incentive trips.  I wonder why Australian distributors have more freedom than their USA brothers and sisters who have a 6 month non-compete clause?   Here is an excerpt from the latest report by David Steadson an Amway supporter from IBO Fightback site.

"It may be autumn down under, but Amway's spring cleanout of Diamonds continues. Last week a source told me that qualifiers for Amway Australia & New Zealand's Emerald Plus cruise of the Mediterranean were asked to sign statutory declarations that neither they, nor their spouses, nor children, were to join any other MLM companies.

Three Diamonds reportedly refused to sign the declaration and will thus not be on the cruise. Amway apparently made the move after learning that several Diamonds’ already had family members involved in a competitor, namely Mona Vie, the juice MLM that attracted former Quixtar Executive Diamond Orrin Woodward and his TEAM associates."

Is this even legal in contract law?  Can a mother or father sign a contract that is binding on the children without their consent?  Is this what Rich Devos had in mind when he gave the Selling America talk decades ago?  The Selling America talk was read into the Congressional record to capture the free enterprise principles Rich espoused for posterity.  Someone please tell me this is a bad joke!  It saddens me to think that free enterprise legends like Dexter Yager, Bill Britt, Jim Dornan, Joe Markiewicz, John Crowe, Dave Dussault and others would permit this behavior.  I believe the ‘free’ in free enterprise means that people should be free to choose which enterprise they associate with?  Certainly there children should be free to choose their own path!  Right?  Would Uncle’s and Aunt’s fall into this contract also?  Where does this end?  Perhaps the Amway led PR machines can explain this behavior to the field of IBO’s who thought they owned their own businesses.  What kind of company has the right to tell independent contractors what their children can do for a living?  The Amway story becomes more Orwellian (1984 like) every day.  Rich Devos, please for the sake of your legacy - stop your company’s confusing behavior.  You cannot preach free enterprise out of one side of your mouth and use the other side to issue threats to the families of “independent” business owners. 

Why are so many top leaders leaving Amway?  Quite simply, it is a question of economics.  Diamonds in Amway make between 180k & 250k per year.  In competitive MLM’s the same size leaders make well over a million dollars per year, every year.  The leaders also spend less money on product, less money on the training systems and deal with less negative by not having the Amway stigma.  With all these critical economic factors against Amway – something had to give.  I and others will gladly compare our weekly checks from MonaVie with any of the Amway/Quixtar Crown Ambassador’s monthly checks.  It would be embarrassing for the Crown Ambassador, but gratifying to the many leaders who stuck their necks out for the truth.  In my opinion, Amway/Quixtar should have listened to their Board and fixed the business by cutting prices, increase by multiple factors their compensation plan, and fire their poor management team.  Instead, they hired more lawyers, opened up multiple new arbitrations, sued competitors, libeled top leaders, and spun the whole story.  Is this really a way to run a respectable company?  

In the Information Age, the facts will come to light and you cannot hide your business behind secret deals, secret arbitrations, and massive spin of the facts.  You cannot turn every poor business result into a confidential issue to protect your image against reality.  This only denies the relevant data from prospective distributors who are attempting to make a rational decision on whether to participate in your ‘opportunity’.  How can prospects make rational choices about your business if all the business details are confidential and only shared with the ‘enlightened’ minority on the Board?  Free enterprise teaches - either fix your business or reap the consequences of your mismanagement.  This is not your father’s MLM, so come into the 21^st century.  Change or suffer the consequences like all free enterprise companies.  (Just ask GM or Ford)  I truly hope Amway changes for the sake of the good individuals left in their business who are suffering from the mismanagement of the company.  Only time will tell what the DeVos and VanAndel second generation families will do.  Stay tuned.  God Bless, Orrin Woodward