Over the last decade, we have seen a shift in the corporate leadership in direct selling. For decades, direct selling companies were being owned and managed by proven leaders with relevant experience in and understanding of our channel. However, the management in direct selling has shifted significantly over the last 8-10 years.
From its origins in the mid 1800s, direct selling has always been a people-centric business. Companies and leaders have strived to build strong, loyal and engaged relationships—often referred to as “building critical mass.” Historically, the distributor has been the primary driver of sales. Today, we are seeing a shift toward strategies like omnichannel, affiliate models and compensation plan changes that reduce payouts and shift commissions to distributors selling products and services—and away from those getting overrides on teams they have built over time.
However, as we have also seen a shift toward transactional leadership, we are experiencing a resulting shift toward a traditional business approach to direct selling. At companies across the channel, decisions are being made to transition away from the field being the sole source of company sales. This more transactional, clinical approach ignores the rich history and proven success of an engaged independent sales force working in partnership with a corporate team fully focused on field success.
Transactional leadership tends to devalue distributors and those who champion them in favor of casting a wider net for quick wins. The past contributions of field leaders are minimized and replaced with a transactional mindset that asks “what have you done for me lately?”.
Although the experience and skillsets of transactional leadership provides value to building a company, that value is often compromised by “spreadsheet management,” a philosophy that makes decisions without truly understanding how those decision impact the future success of a direct selling company. Below is a chart comparing the transactional vs. people-centric mindset in direct selling.
Top-Down Culture that Builds Belief
Team building is an essential part of every direct selling company. Successful team building is centered around three key questions:
- Can they do the job?
- Will they do the job?
- Is the relationship a fit for all parties?
Culture is the foundation of any successful direct selling company. The biggest factor in determining the makeup of any culture is the executive that is the ultimate decision maker. If that person embraces transactional leadership, then the culture will likely be managed from that mindset. Consequently, the resulting team will align with the values and principles as well.
Healthy business cultures tend to minimize the culture cancers that are defined by entitlement, division and drama. While these characteristics can be a part any business culture, what defines the culture is the behavior of those leading it.
People-centric cultures tend to be driven by the key connection components of engaged relationships—trust, care and help. Trust has its foundations in two questions. First, does the company have my best interest at heart? Second, do I believe the company can meet my needs? Trust is a byproduct of engagement, and engagement is best defined as the triumph of hope over experiences. The formula only has two variables: hope and experiences.
Many direct sellers believe that hope is the most important variable in driving engagement. However, hope is nothing more than our belief systems about the future, and it is created from the experiences we have with people. Our industry has historically mastered the art of creating hope. But when that hope is not confirmed and reinforced by actual experiences, both hope and engagement inevitably decline.
The Power of Positive Experiences
Many business icons share a core belief that mastering experiences is the best pathway to mastering business. If the focus is on experiences, there are five keys areas to examine and manage effectively.
- Positive Experiences
This is a big part of mastering momentum. If experiences are negative, good people tend to leave as the culture gets more misaligned and transactional in nature. - Meaningful
The emotional component creates connection and elevates the power of any experience. - Creates Hope
Hope is our belief system about the future and is built through experiences and the beliefs we generate from them. - Confirms Hope
As Jim Carrey once noted, “hope is a beggar.” Experiences are required to turn hope into reality. Marketing hope is an important driver of engagement. However, hope that is not confirmed from experiences will increase distrust and lead to lower engagement. - Elevates Hope
Hope can be diminished by enough bad experiences. Think about trust as a currency. During challenging times, companies can utilize this currency.
The Travesty of a Transactional Mindset
If you are part of an aligned servant-based company and operate with a “people-centric” mindset, then you are in the right type of culture. If you are in a transactional culture that manages through spreadsheets rather than focusing on people, the future can be challenging. If the last few years have taught us anything, it is how vital it is to focus on relationships and lead with building an engaged field-first culture.
Direct selling isn’t something you learn in school. Experience matters, so it is important to have an executive team that creates a culture of innovation and growth. Listen and support those that drive growth and give their best to serve those in your culture.
Gordon Hester is a direct selling veteran, lecturer, consultant and author with over three decades of experience in direct selling with an emphasis on strategic development, analysis and sales. He is also Chair of the Florida Direct Selling Coalition.
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