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John Addison spent 35 years in the corporate offices of one of the world’s largest direct selling companies, Primerica Inc., most recently serving as Co-CEO. Since his retirement, he wrote the best-selling book Real Leadership: 9 Simple Practices for Leading and Living with Purpose, and he now serves as Leadership Editor for SUCCESS magazine and President and CEO of Addison Leadership Group. He regularly offers his leadership insights to Direct Selling News readers, and has answered some of your questions below. If you have a question you’d like John to answer in a future issue, email firstname.lastname@example.org.
After a strong start when we launched the business, we’ve never really been able to get into momentum. How do we figure out what’s holding us back?
Building a direct sales business is really more about building a movement than building a business. No matter what technology develops, no matter what social media trend develops, direct sales will always remain the people business. Additionally, you are moving and building with large numbers of people, so managing momentum can be tricky. You may reach a point where you are building and maintaining momentum for a long time, but the reality is there are ebbs and flows. There are going to be times when things are going absolutely great, and then there are going to be times when you question whether you know what you’re doing. Managing through the ebbs and flows is the challenge.
When you are in a downtime, I think it is very important to step back and look at each aspect of the recruiting and sales process, because a recruiting surge is the way you gain sales and regain momentum. What happens is that, over time, you will have added this incentive, that contest, this tweak to the compensation system, and it is very easy to get to a point where you have a confusing hodgepodge of stuff that doesn’t aim at a single goal. What you want is to keep it simple. Step back and look at your incentives, look at your compensation plan and look at what you are talking about with the salesforce and make sure everything stays focused on the main thing, which is growing the size of the distribution system. Many times companies will start slinging various things at the problem, which can make things worse. It is very important to get focused and to make sure what you’re doing is simple, can be communicated and leads toward distribution growth.
What is the best way to evaluate a potential product line expansion?
You have to be very careful with product line extensions, as they can be tricky. You’ve got to make sure the new items truly fit with your message, your mission and your vision for the business. There is a temptation when you have a large number of distributors to decide “we can sell anything!” It’s very easy to become a flea market, selling all sorts of unrelated items. Additionally, you have to make sure that any new product is not going to cannibalize existing sales or, worse, replace high-margin products with low-margin products.
That said, you do have to be constantly stretching the vision. The salesforce does like “new and improved” and will lose interest if they feel that your product offering remains the same old thing. Just make sure that your product extensions are implemented strategically, ideally as part of your five-year plan. For example, you might set a plan that says, “When we hit $100 million in sales, our next logical product extension is this.” Don’t get trapped by the next shiny object; make sure your product extensions are logical and mapped out in a way that fits with your culture, message and mission.
What new techniques are you seeing companies use to effectively onboard new distributors?
To me, the biggest breakthrough in onboarding is clearly technology. At some companies today, almost 100 percent of recruits come into the business electronically, through an app on a smartphone. This type of technology implementation clearly makes it easier to join the business and, most important, to get started working the business quickly.
The quicker you can get people started, the better. Buyer’s remorse is common and perfectly natural for someone who is stepping outside his or her comfort zone for the first time into the world of entrepreneurship. It’s the energy of your business that attracts people to your organization, and the minute they are away from that energy, people tend to hesitate. So when you can use technology to instantly welcome them to the business with a personalized text followed up with a couple of great videos delivered to their inbox, you are immediately affirming their decision to join and guiding them in what to do next.
People want to feel connected to a community; that’s why social media is so huge. This makes infusing your technology with a personal touch and personal messaging so critical. Personalized instruction is equally important so that new distributors always know what their next step is and they don’t just drift off, and you never hear from them again.
We’re looking to step up our compliance training at our events. What do you recommend?
First of all, it’s crucial to check your core values and understand that you must have a compliance message for your field. And that message starts at the top. It is very important for every company to step back and ask the executive team: What are our core values and how are we training and communicating those core values? True business ethics and establishing a culture of doing things right is critical in order to avoid being caught short on a compliance issue.
Then, the best way to train for that is to have that message sprinkled all throughout an event. Compliance can’t be that boring section that everyone sighs about and has to sit through, waiting for the next video and onto something else. Compliance and ethics need to be woven throughout every event and throughout all of the corporate messaging. Also, whether you do it at your big annual event or at regional events, it’s also important to bring your field leadership—the members of your salesforce who are really doing the business and creating the culture—in for a separate compliance meeting. You need to really get in a room and tell them, “To be in business, we have to protect the company.” Share with them the issues that you’re wrestling with, explain what you’ve learned from recent regulatory actions, and help them understand the importance and equip them to go out and train their teams.
When and how should a founder-led company begin the process of succession planning?
Forget founder for a second, let’s just talk about succession. When you are the leader, there is no success unless there are successors. I always wanted to make sure I handed off the baton when we were running, and that when people looked back on my tenure, they would say, “Wow, what a great job he did. Look at how he positioned us. I’m doing great, and God bless him.” Not, “That idiot. Look at where he left us.”
Culture is probably one of the strongest elements this industry has. There are unique cultures in direct selling companies, and culture is much more important than strategy. Because of that, I believe you need to develop your future leaders from within. In an ideal world, you should always have a bunch of bright 30-somethings in your junior executive team. Over time, you can observe and see who rises to the top, and 15 years later one of them becomes the CEO. That’s much better than having to go to a headhunter to select an unknown and pop them into your corporate culture, not knowing whether it will work out.
It’s also very important that you prepare the field and the home office for what’s happening. You’re dealing with people’s lives; they’re building their independent business with you. You need to prepare them for that transition so they see it coming a mile away. This way, when it happens, it’s no big deal.
The founder thing is tricky, because founders are usually linked so tightly to the sales field. But I think it is incumbent on a founder to go through the same succession planning process. They need to think long and hard about what their timeline is and when they want to become the elder statesman instead of running day-to-day operations. In college sports in particular, you often can see coaches that stay too long. The smart thing is to look beyond the horizon and admit you’re not going to do this forever. Plan and prepare and then call your own shots.