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Plexus Worldwide Names Jackson, Garza Divisional Presidents

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Plexus Worldwide, a Scottsdale, Arizona-based health and wellness company focused on health and happiness, has expanded its organizational structure by adding Janice Jackson and Christopher Pair Garza to its executive team.

Christopher Pair Garza

Christopher Pair Garza

Jackson will serve as president of sales and marketing, while Garza will be president of operations and international.

“The overall realignment of departments and reporting structures is designed to streamline processes and improve interdepartmental coordination as the company continues its explosive growth and expansion into new markets,” said Tarl Robinson, CEO and founder of Plexus Worldwide. “The new leadership additions and more efficient company structure allows Plexus to fully utilize its talented executive and department leadership.”

Jackson joins as president of sales and marketing and will oversee the marketing Department, sales organization, product research and development, and customer service. She has an extensive background as an executive in the direct selling and consumer products industries, including her role as vice president of global brands at one of the top direct sellers where she honed her wellness and beauty product category skills across 85 markets. Most recently, she was a member of the executive suite at a U.S.-based direct selling company where she was responsible for global product development, brand and marketing, corporate affairs and consumer insights.

Janice Jackson

Janice Jackson

“Plexus’ excellent reputation in the market and within the direct selling industry was a huge attraction in my desire to join Plexus,” Jackson said. “Bringing these departments under the same structure will make the company even stronger and more consistent as it shares its values and top-quality products with customers and Ambassadors.”

Garza joins as president of operations and international. In this role, he will oversee distribution and logistics, finance and accounting, information technology, legal, compliance–quality, project management and international. Garza is a recognized expert in global operations and international expansion, and his career includes more than 15 years at a multibillion-dollar direct selling company where he led the organization’s successful international expansion, eventually taking the role of president and CEO. Plexus retained consulting services from Garza in mid-2016 through the present to help with international planning.

“Having already been part of a billion-dollar company’s growth and helping it expand into new international markets, I’m very excited to bring my experience to Plexus,” said Garza. “What Plexus has achieved in only 10 years is truly impressive and I’m excited to work with this talented team as it enters its second decade.”

Plexus also announced that President Alec Clark will add founder to his title, as he was part of the 2013 corporate restructuring. Robinson also added founder to his title of CEO.

“With the additions of experienced leaders such as Christopher Pair Garza and Janice Jackson, and the unified re-structuring, Plexus is poised to continue on its incredible growth trajectory and further solidify its position as a legacy company for the foreseeable future,” said Clark.

Tupperware Aiding NASA Development of Plant Growing System

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Photo: International Space station orbiting Earth.

According to a recent Forbes report, consumer food container company Tupperware Brands is playing an integral role in helping NASA develop a new plant growing system aboard the International Space Station (ISS).

On April 2, the SpaceX Dragon spacecraft made its 14th resupply to the ISS. One area of scientific research for the mission is furthering research on growing vegetables in space. Since 2015, astronauts have grown crops in space using the Veggie, or Vegetable Production System. The Veggie is a plant growth unit deployed on board that grows vegetables such as lettuce and tomatoes to provide a continuous source of fresh food to the crew. It also helps NASA scientists determine how plants sense, develop and respond to gravity. By growing plants in space, scientists believe they can understand how to improve plant production on Earth as well.

Tupperware’s involvement relates to the plant pillow currently used to grow plants. With the Veggie system, a seed is inserted into a round soft surface—the plant pillow—inside a circular container. Astronauts then inject the plant pillow with a syringe filled with water. Prior Veggie experiments showed that some plants did better than others based on the regularity of the water and oxygen they received. For this current mission, the Veggie experiment uses a new method to deliver nutrients to plants through the Passive Orbital Nutrient Delivery System (PONDS), a new plant growing system designed to generate uniform plant growth through watering and keep the root structures of the plants in place.

NASA Research Scientist Howard Levine designed and created a prototype of PONDS in 2017. The prototype was sent to Techshot to fine-tune PONDS for use on the ISS.

Techshot called in Tupperware Brands to create a new system that would be an alternative to the plant pillows of previous missions.

Tupperware and Techshot developed the new semi-hydroponic system that needs less crew maintenance. PONDS uses absorbent mats, instead of plant pillows, to wick water to seeds and roots through a reservoir system. The reservoir system passively disperses water evenly through each plant cylinder instead of injecting water into the plant pillow with a syringe in the PONDS’ reservoirs. This creates a more consistent supply of water, which is needed to grow seedlings into mature plants and crops.

In a NASA release, Veggie project manager Nicole Dufour said the PONDS units have features designed to mitigate microgravity effects on water distribution, increase oxygen availability and provide sufficient room for root zone growth.

PONDS devices are single-use items and will be discarded after the plants are grown and harvested. This 14th SpaceX resupply mission has seven PONDS devices in orbit. These include four black opaque modules to grow Outredgeous red romaine lettuce, a part of the Open Source Seed Initiative; two modules with clear windows and a removable cover which lets astronauts observe red romaine lettuce root growth and evaluate water distribution in the hydroponic reservoir; and, a clear module that will be used for testing and videography to look at the microgravity hydrodynamics of the reservoir.

Thailand DSA Projects Direct Sales to Grow by 5% in 2018

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According to the Thai Direct Selling Association (TDSA), 2018 will see a slight increase in direct sales over 2017. The TDSA forecasts the direct sales business to expand by 5 percent this year from last year’s figure. 2017 saw 95 billion baht (US$3.05 billion), an increase of 2 percent from the previous year.

The positive growth projection comes in line with the trend of economic recovery and the increasing purchasing power from an aging society and health-conscious consumers. Health products were projected to contribute around 45 percent of total direct sales. Women were now taking the direct selling model as a serious career, not just to earn extra income, the association said.

“Last year Thai direct sales business showed growth of 1.4 per cent compared to 2016,” said Suchada Theeravachirakul, TDSA’s president. “For this year, we expect the growth of 5 percent due to several factors, including the economic recovery and the strategy for building digital platforms to fully engage consumers, including the website, Facebook, Instagram and mobile applications etc. Around 52 percent of e-commerce consumers have bought products via smartphones.”

Thailand’s population is aging, and by 2022 there is projected to be 13 million people over 60 years old, making up 20 percent of the population. The aging population will spend more on health products, boosting that sector, the association predicts.

In addition to the older population, the direct sales business also attracts Generation Y—those born in the 1980s and 1990s—who will play a part in driving the sector’s growth. Generation Yers often prefer entrepreneurship over being salaried employees and regularly see direct sales as a suitable career. Members of Generation Y represent 15 percent of total direct sellers.

Youngevity Closes on Aggregate of $3.6 Million in Series B Convertible Preferred Offering

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Youngevity International Inc., an omni-direct lifestyle company based in Chula Vista, California-based, has completed its previously announced public offering of its Series B Convertible Preferred Stock in which it raised aggregate proceeds of $3,621,143. Youngevity received net proceeds of $3,328,761 in the offering.

Each preferred share was priced at $9.50 and is initially convertible at any time, in whole or in part, at the option of the holders, into two shares of common stock of Youngevity International, NASDAQ, YGYI.

Tripoint Global Equities acted as lead managing selling agent and book runner through its BANQ® platform.

The completion of the offering creates a forced conversion of debt Youngevity sold in its 2017 private placement into 1,577,032 shares of common stock at a conversion price of $4.60 and relieves Youngevity of $7.3 million of existing debt.

Proceeds from the sale of the convertible preferred are expected to be used for working capital in the company’s coffee and direct selling divisions.

“We structured this offering in a manner that allowed broad participation, so it was more than just a capital raise for us,” said Dave Briskie, president and CFO of Youngevity. “For years we had discussed the possibility of creating an opportunity for our loyal distributors and customers to become shareholders in our company. Utilizing Tripoint’s BANQ platform allowed us to meet this objective as it provided the opportunity for participation at a low minimum investment. Additionally, we realized that by reaching a certain threshold in this raise we had the opportunity to convert $7.3 million of debt into permanent capital, equity, and obviously relieve our balance sheet of that debt. We are extremely pleased that with this closing we have achieved over a $10.5 million improvement to our balance sheet.”

“We are pleased to be a part of the Youngevity offering and provide the seamless conduit utilizing our BANQ platform to all to allow the distributors to become shareholders and help contribute to the future success of the company,” stated Mark Elenowitz, CEO of TriPoint Global Equities.

Amway Recognized for Best Engagement Strategy at Innovation Management Awards

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Amway, the No. 1 direct seller in the world, was recognized as a leading innovator at the 2017 Innovation Management Awards, hosted by IdeaScale, a crowdsourcing and innovation software provider.

Ada, Michigan-based Amway was the winner in the category of Best Engagement Strategy. This competition category recognizes the IdeaScale community that detailed the most creative engagement campaign to generate participation in the IdeaScale community. In this case, not only did Amway exceed all of its engagement goals, the company is pioneering a translation strategy that marries dynamic translation with human verification.

Since launch, 88 percent of Amway markets have registered Amway Business Owners (ABOs) on the site. That means that ABOs from more than 100 countries and territories, speaking over 60 languages, shared ideas and insights that help drive Amway innovation.

“What I find most impressive about Amway was how well their strategy embodies the best practices of open innovation where good ideas can come from anywhere and are most powerful when they can combine with others,” said Rob Hoehn, CEO and co-founder of IdeaScale. “Their program will surely benefit from maximizing the points of connection.”

IdeaScale is the largest cloud-based innovation software platform in the world with more than 35,000 customers and 4.5 million users. The software allows organizations to involve the opinions of public and private communities by collecting their ideas and giving users a platform to vote. IdeaScale’s client roster includes industry leaders such as Citrix, Marriott Vacations Worldwide, NASA, the National Cancer Institute and Princess Cruises.

SeneGence International Welcomes Gregg Beall as Chief Technology Officer

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SeneGence International, an Irvine, California-based global beauty brand, has hired Gregg Beall as its chief technology officer. Beall will be responsible for overseeing all technical aspects of the company and working with the executive team to grow the company’s information technology resources.

“Gregg is a respected leader and we are thrilled to have him join our team,” said Joni Rogers-Kante, Founder and CEO of SeneGence International. “SeneGence is entering a very exciting time in our growth. Gregg’s expertise in the IT sector will help us architect successful projects with enhanced e-commerce, including sales and revenue management solutions.”

A 17-year direct selling veteran, Beall previously served in senior leadership positions including vice president and senior director of IT at successful companies in entertainment, direct selling and software sectors.

SeneGence is best known for its top-selling product, LipSense®. Beyond its line of color cosmetics, the company also offers a line of skincare products containing a proprietary formulation of ingredients called SenePlex Complex.

Best Places To Work In Direct Selling 2018

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Choosing the best places to work in our channel is by no means easy. There’s some stiff competition out there, perhaps even more than you might find in other industries.

That’s because direct selling was founded upon principles of exceptional service, personalization and taking care of one’s own. Those values are usually presented in the context of the relationships that independent distributors hold with their customers. But that’s only half the story. Direct selling companies also strive to apply those principles to their relationships they hold with their employees. The savviest companies realize that, given the incredible growth of this channel over the past several years, it pays to take good care of employees for two primary reasons. First, the obvious one: Turnover is disruptive, from the toll it takes on morale to the time and money it requires to replace employees who take their expertise with them out the door. Second, employees are on the front lines of communication with independent distributors. If employees are happy, distributors are happy. It’s just that simple. And, on a personal level, shouldn’t people enjoy what they spend most of their day doing and feel appreciated for that work?

“The company will only go as far as our employees take us, and they need to feel that they are being supported at all times. An engaged employee is one who believes in the company mission, and they’ll do everything in their power to showcase that to everyone they come across. That engaged employee becomes a company advocate, and dozens of others will follow that positive example.”
—Scott Lewis, Chief Visionary Officer, Jeunesse

Direct Selling News has once again partnered with Quantum Workplace to measure, analyze and, ultimately, honor the channel’s best places to work. We opened nominations Aug. 1, 2017, began surveying Oct. 30 and closed the survey Dec. 20. Thirteen outstanding companies made the cut for our 2018 finalists.

While each has their own distinctive story, these direct selling companies are united around a common theme of employee engagement.

For more than a decade, Quantum Workplace has been conducting in-depth surveys with organizations throughout the world, representing nearly every industry sector, in an effort to measure employee engagement. Higher levels of engagement are linked to better employee retention, higher productivity and more profit. Organizations that know where they stand can make an effort to focus more intensively on the drivers and address the detractors of employee engagement.

For the purposes of our 2018 Best Places to Work in Direct Selling survey, Quantum compared our survey results with all other Best Places to Work survey results, then held them up against the top three overall Best Places to Work results. Finally, Quantum compared the results of this year’s direct selling surveys against last year’s. All of those comparisons reveal some interesting findings worth considering.

“It’s imperative that you’re constantly making sure that employees understand why they’re working there and why their jobs matter. Then they feel more attached and engaged in the business. Our job is that we work for 23,000 people every day. We’re all in this together.”
—Chris Cicchinelli, CEO and President, Pure Romance

Here are some top-line takeaways from the direct selling analysis:

2018 BPTW List

  • Engagement increased slightly for our channel, up from 56.7 percent last year to 57.8 this year. The average national engagement rate was 67.5 percent, and for the top three regions, 74.5 percent. The direct selling channel, then, has an opportunity to increase employee engagement.
    Compared to our previous year’s data, and national data from Best Places to Work companies across the board, benefits and culture are strengths associated with direct selling companies. More direct selling employees report that their employer-provided benefits meet their needs and their families’ needs (82 percent); their employer’s culture supports their health and well-being (83 percent); and that their immediate managers care about them as people (82 percent).
  • Compared with last year’s data, our channel scores increased slightly in three areas: team dynamics (agreement with the statement “My immediate coworkers consistently go the extra mile to achieve great results,” which increased 3 percent); individual needs (“I am paid fairly,” which increased 2 percent); and personal engagement (“I find my job interesting and challenging,” which increased 1 percent).
  • Compared to the Top 3 Regions benchmark and National benchmark, the direct selling channel is behind on employee recognition, understanding why organizations make changes when they do, and employees believing their opinions count at work.
  • Compared to last year, the proportion of Highly Engaged employees increased, yet the proportion of Barely Engaged and Disengaged also slightly increased. This suggests that the direct selling channel may becoming more polarized—that is, the “middle ground” (Moderately Engaged, in this case) was pulled both up (to Highly Engaged) and down (to Dis- and Barely Engaged).
  • Compared to last year, Trust in Leadership seems to have decreased the most. There’s lower favorability toward believing the organization will be successful in the future, trusting senior leadership to lead the organization to future success, and that senior leaders demonstrate integrity. This suggests that trust in leadership is an area of potential concern for our channel, and one that should be addressed before it becomes a larger issue.

Quantum’s 2017 Employee Engagement Trends Report aggregated employee survey responses from more than 500,000 employees at more than 8,700 organizations throughout the United States in 2015, including direct selling companies. The report revealed that employee engagement across all industries increased .7 percent from 2015 to 2016, recouping losses experienced during 2015. Further, the report identified three key challenges that lie ahead for industries across the board: The engagement gap between hourly and salaried employees grows; low engagement threatens retention; and failed change management puts engagement at risk.

“When we show we care for our employees’ growth and well-being, we develop and retain a caring team that works together toward growth.”
—Angela Loehr Chrysler, President and CEO, Team National

Employee Engagement Is an Evolutionary Process

Employee engagement isn’t a one-and-done initiative—especially for the direct selling channel, in which so many companies are relatively new and undergoing rapid change. As organizations add staff, their employee engagement philosophies evolve. Sometimes they need to make tweaks.

Scissors

In the early days of growing a company, “all you’re trying to do is keep your head above water,” says Chris Cicchinelli, CEO and president of Pure Romance. “As the business grows and you add employees, some may not have the same drive as you do. Some may not be as attached.” He continues, “We went through periods when we asked, ‘Why aren’t these people getting it?’ We realized we needed to do better job of explaining who they’re helping, who they’re taking care of, and what our company mission is. They’re not just writing code; they’re helping a mom support her family. It’s imperative that you’re constantly making sure that employees understand why they’re working there and why their jobs matter. Then they feel more attached and engaged in the business. Our job is that we work for 23,000 people every day. We’re all in this together.”

As a company adds staff, it also becomes more logistically difficult for leadership to get in front of employees as much as they’d like, our executives say. At Scentsy, regular calls with executives and founders help ensure that the company’s growing employee base has the opportunity to hear directly from leadership. Employee engagement is a continuous process. “We haven’t arrived—we’ll always continue to improve,” says Richard Steel, Scentsy’s chief human resources officer.

“It’s more challenging to keep employees engaged because the online resources available now make it easier for employees to leave for another company if their needs aren’t met at their current jobs,” says Team National President and CEO Angela Loehr Chrysler. “We focus on the personal growth of each employee that feeds into the engagement levels of our company’s people. When we show we care for our employees’ growth and well-being, we develop and retain a caring team that works together toward growth.”

The ability to retain employees is where thoughtful and intentional employee engagement efforts can really pay off. While it may be easier than ever to lose an employee to a better offer, it’s also never been more expensive.

According to research conducted by Quantum Workplace, the average cost to hire an employee is at an all-time high of $4,129, and research shows that 33 percent of new hires will start looking for another job within their first six months at your organization. One in four will leave before they reach their one-year anniversary.

Tape

It should come as no surprise that employees who aren’t engaged are more likely to leave. If you were to take a look around your organization, how could you tell who’s engaged and who isn’t? It may be tempting to categorize your high-performers as your engaged employees and assume that employees who are “just dialing it in” are disengaged. But it’s more complicated than that.

In Gallup News article: “Talent Walks: Why Your Best Employees Are Leaving” (Jan. 25, 2018), reporter Ben Wigert reveals that “in our most recent work with organizations across various industries, we discovered something really interesting and somewhat unsettling: Highly talented employees who are not engaged were among those who had the highest turnover in each organization—on par with low talent, disengaged employees. In other words, when your best employees are not engaged, they are as likely to leave your organization as employees who tend to have performance issues and are unhappy.” And today, they have more choices than ever.

Given that employees are motivated by different factors, flexibility and personalization are important characteristics of any employee engagement initiative.

“You won’t accomplish anything with a one-size-fits-all approach, which means you need to dedicate more time to personalizing your engagement,” says Lewis of Jeunesse. “While that might not sound realistic, it’s critical as more of our workforce is dominated by millennials, who crave positive feedback. And within our companies, there are subcultures, meaning that those in marketing are different than those in IT, and those in sales are different than customer service. You have to know what engages those departments, and tailor your actions accordingly.”

“When we show we care for our employees’ growth and well-being, we develop and retain a caring team that works together toward growth.”
—Angela Loehr Chrysler, President and CEO, Team National

Steve Elder, COO of Xyngular, agrees. “How we connect with employees—how we communicate—happens in different ways,” he says. “We always want to provide clarity about our purpose and vision. We may think we’re communicating, but it may not resonate. Some people may want visuals. That’s our challenge. As we get larger, how to bring that vision as close to our employees as possible.”

High Employee Engagement

Among this year’s Best Places to Work in Direct Selling, we can identify some common contributors to high employee engagement, including:

ONBOARDING. As companies grow and add employees, it becomes more challenging to ensure the maintenance of their core values. That’s why onboarding is key. In less than seven years, the It Works! corporate staff grew from 58 employees to 207. Within the past year, the company established a formal onboarding program, including a mentorship component. Mentors are nominated by their managers and approved by the executive team. “The role of mentors is to teach employees about the It Works! way—our culture, values, expectations,” says Senior Marketing Director Kate Martin Carlson. “Over the years, we’ve had to be much more conscious about incorporating those elements as we’ve grown so quickly.”

STRONG CULTURE. As the Quantum Workplace survey indicates, culture is an area of distinct competitive advantage for the direct selling channel. Culture is defined as the pervasive character and personality of your organization—the sum of its values, behaviors, beliefs and attitudes. The more positive the culture, the stronger the engagement of employees. Steel of Scentsy sums it up perfectly: “When people drive into the parking lot, I want them to be excited.”

“People may think engagement is tied to how many parties or lunches we have, but that’s just window dressing for what our day-to-day culture is,” says Darren Jensen, CEO of LifeVantage. “It’s taking the time to give real thought to what the meaningful things are for your employee base.” As these executives suggest, employees need a “why” for their work, and while some say that’s especially true for younger demographics, having a sense of purpose is a strong motivator for employees of every age and background. That starts at the top. “The leadership of the company has to be crystal clear on vision, message and mission,” says Brant Wallace, senior vice president of resources and strategy at Zurvita. “When they’re interacting with someone—in customer service all the way to the executive vice president level—they have to be able to listen and take time to sow into that relationship. Then, they have to respond not from the standpoint of selling the mission, the vision, the goals, but really from a standpoint of how that goal, mission and vision apply to that employee. When I see that work, it works tremendously. When it doesn’t work, it leads to a misaligned and disengaged workforce that just wants to clock in, clock out and go home. They have to buy in to what leadership is saying, follow and bring others with them.”

SERVICE OPPORTUNITIES. The direct selling channel prides itself on a deep commitment to giving back. Each September, Scentsy holds an annual “Rock a Thon” near its Meridian, Idaho, headquarters to benefit a worthy cause. Last year, employees and members of the surrounding community filled 70 rocking chairs stationed on nearby Eagle Road. Local radio stations promoted the event, which culminated in a fireworks show. After 12 hours of rocking, the event raised $250,000 for a school for pregnant and parenting teens. Sometimes those efforts happen right at home. Approximately eight years ago, Nu Skin employees contributed to a voluntary fund established to help their fellow employees in need. To date, the fund has helped lighten the financial load for between 25 and 30 Nu Skin families facing medical issues. The company also sends a group of employees to Malawi, Africa, each year to work with local families on sustainability initiatives. Zurvita staff recently visited Puerto Rico, where they served meals to more than 3,000 people in one week. Across the board, direct selling companies embrace the opportunity to serve both locally and abroad.

PERSONAL AND PROFESSIONAL DEVELOPMENT. Direct selling is revered for its stories of personal and professional transformation in the field. Savvy companies are implanting similar offerings at home, giving employees exposure to training that develops and strengthens their direct selling knowledge and “softer” skill sets. Traits like resilience, perseverance, listening, empathy and other aspects of emotional intelligence may not be quantifiable. Nevertheless, they’re critical for success. Plexus is currently fine-tuning a series of curricula, which will be rolled out to almost every level within the company, says Mary Ann Luciano, vice president of learning and development. “Our CEO [Tarl Robinson] has said numerous times that he wants us to develop employees so they feel that while they’re at Plexus, they’ve been developed as well as we can possibly develop them. If and when they leave the company, we want them to take that Plexus development with them and know that we cared to provide development for them both as human beings and as potential leaders.”

At Nu Skin, where employees take advantage of such offerings as financial planning education, “We send a message to employees to spread their wings and fly,” says David Daines, senior vice president of global human resources at Nu Skin. “We’re trying to engage their whole lives, not just the time they spend here. If an employee leaves, we want them to be better than when they came.”

FUN. From theme park visits to sporting events, this year’s Best Places to Work in Direct Selling offer a lineup of events throughout the year for employees to downshift from their work and enjoy themselves. Every other Friday, Pure Romance employees enjoy “Drink Cart Friday.” Work stops at 3 p.m., and one department takes the lead, stocking the drink cart and passing through the building, encouraging employees to get out from behind their computers and connect with one another.

At It Works!, “We want people who are excited to come to work each day,” says CEO Mark Pentecost. “We want to have to ‘kick people out’ each night because they don’t want to go home—because they’re having fun.” The company’s waterfront corporate headquarters, Pentecost says, adds to that atmosphere of fun. “We chose our location to be a driver of the culture and environment we want to cultivate.”

Connection with salesforce. Relationships between employees and distributors are vitally important for several reasons: Distributors need to feel supported in their businesses, and employees need to understand the purpose behind their work. To that end, leading direct selling companies make a concerted effort to bring together employees and distributors in the same room. As members of the same team, they support each other, and everyone wins. Pure Romance, for example, holds periodic “town halls,” in which distributors come to the corporate office and share current challenges and opportunities with staff. Nu Skin offers a leadership program in which employees spend a day with a distributor in order to better understand their business. LifeVantage holds several large events throughout the year, and “we end up taking 60 to 70 percent of our employees with us to interact directly with the field,” Jensen says. In direct selling, companies place so much emphasis on products, promotions and distributors’ professional growth that it can be easy to lose sight of the development of employees. It’s a fine balance. “I don’t think it’s a zero-sum game. It’s not an ‘or’; it’s an ‘and,’ ” Jensen adds. “If you can take care of a distributor force of thousands, you can take care of a few hundred employees.”

HARD NUMBERS. Many direct selling companies, including several of this year’s Best Places to Work, are conducting employee engagement surveys to determine where they can improve. Results may be broken down by department so that specific groups can examine their results and analyze year-over-year changes. For the best results, the Society for Human Resource Management (SHRM) recommends that organizations reach beyond surveys and facilitate conversations with staff, asking questions such as “What does it take to be successful here?” and “If there is one roadblock between the organization’s ideal culture and the way it really is, what is it?”

It’s clear that employee engagement is about much more than great salaries or benefits packages; it’s about quality of life. “This goes beyond financial reward and gain,” says Daines of Nu Skin. “In the general workforce, roughly one-third of employees do just enough not to get fired. At Nu Skin, engagement matters because we’re trying to change the world. How can we change the world if we have employees who aren’t giving everything they have?”

Quantum Workplace Logo

Methodology

Since 2010, Quantum has surveyed more than 8,000 organizations annually representing numerous industry sectors through the Best Places to Work Program. This year marks the third year that Quantum has surveyed the direct selling industry. The Best Places to Work Program survey utilizes the same 30 questions across six categories for all participants, regardless of industry. No single question is weighted more heavily than the others, although certain topics may be covered more frequently than others.

Six of the 30 questions on the survey are designed to quantify discretionary effort, intent to stay and advocacy for company. The other 24 questions measure workplace culture, identifying, for example, the kind of conditions under which employees are more likely to advocate for their employers.

The questions may be standard, but the results are highly individual. They shed light on what each company can do to retain their valued employees. And, as we examine the direct selling channel, those results suggest some patterns within our broader industry that merit discussion.

Room for Improvement

Returning to the direct selling channel’s areas of opportunity—including trust in leadership, employee recognition, understanding the rationale for organizational change, and employees believing their opinions count—here are some suggestions from Quantum Workplace for how to increase engagement:

Change management

Pick up your April 2018 issue here.


Provide multiple mechanisms for internal communication. Encourage and solicit input from employees throughout the change. Consider issuing “pulse” surveys for a quick and accurate read on engagement amidst organizational change.

Employee recognition
Provide flexible work hours and encourage flexible work locations. Consider unlimited vacation. Ask your employees “When are you at your best?” and “What’s draining your energy, and how can you do less of that?” This conversation can lead you toward opportunities to challenge motivated employees and work more efficiently. Send handwritten letters of gratitude for a job well done. Ask your employees how they like to be recognized. Match employee philanthropy giving.

Trust in leadership
When failure happens, don’t gloss over those moments. Instead, use them as opportunities. A leader who owns up to a bad decision shows vulnerability, which in turn can foster trust among employees. Consider releasing the company at noon the day before a holiday. Create a feedback-safe environment. Conduct quarterly teambuilding offsite. Ask employees for advice.

Click here to view the Honorees of the Best Places To Work In Direct Selling 2018

 

Pruvit: Building Blue Oceans

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When Brian Underwood saw how his high school basketball coach utilized his platform to create a second stream of income as a distributor for a direct selling company that was many times his coaching salary, that was it; he was hooked.

PRÜVIT
Founded: 2015
Headquarters: Melissa, Texas
Top Executive: Brian Underwood, Founder and CEO
Products: Health and Wellness
Brian Underwood

Brian Underwood

At the age of 20 he became a distributor himself and has been part of the channel ever since. “There are a lot of similarities to athletics and business, and knowing that my coach could be successful in this industry I knew I could, too,” Underwood says.

Fast-forward 25 years, and Underwood, the founder and CEO of Prüvit, has now had the opportunity to play every role in the channel. And like every entrepreneur, he has had his share of ups, downs and defining moments that helped him realize the direct selling channel can represent a lot more than creating product transactions and financial success.

Prior to founding Prüvit in 2015, Underwood says he spent the previous 10 years on a quest to create an inspiring brand where people wouldn’t have a negative association based on past experience. And the only way to do that, he says, was to innovate.

Biohacking and Ketones

When Underwood looked at the supplement industry, he saw a lot of the same products vying for the same customers. For him to get behind and endorse a consumable product, it had to be different. For his own health, Underwood started looking into some new innovations like biohacking, the process of hacking into your own biochemistry to help it become more efficient and optimized.

With each search he conducted on biohacking, Underwood noticed the word ketones coming up. He started seeking out podcasts and blogs to learn more about ketones, not from a ketogenic diet or ketosis weight-loss perspective, but regarding their overall effect on the body. What he found got him excited.

If you can educate people and make them aware of technology that can have a positive effect on their health, you don’t have to sell them anything.
—Brian Underwood, Founder and CEO, PRÜVIT

Scientists and health care experts have previously recognized nutrients derived from carbohydrates, proteins and fats as the body’s source of energy. They also have discovered the body can produce its own super-efficient energy source—and that powerful source is called ketones. When carbs are not available, the liver converts fat into fatty acids and ketones, which can be used as energy. This is the process of ketosis. “Pioneering researchers are now taking this knowledge to the next level, exploring ways to increase ketone levels to turn the body into a high-energy, fat-burning machine,” Underwood says. And that’s the conversation he wanted to explore.

“Prüvit was formed out of the ideology of creating something that can transcend the norm,” Underwood says, explaining why the company jumped at the chance to introduce the relatively unknown ketone technology to the marketplace. “We wanted to take a completely different path. Our focus was to create a transcending brand.”

The goal says Underwood wasn’t about selling diet or health products or to change the health industry. It has always been to create lasting change that would make the world a better place. “The whole vision and mission of the company is to challenge the status quo and to inspire people to be the best version of themselves,” Underwood says. “One of the ways we do it is we set our goals and then we go forward accomplishing them with inspired action.”

Community-Based Marketing

Prüvit references the term community-based marketing, which inspires the company’s distributors, called Prüvers, to achieve great things. The first priority within the framework of community-based marketing is about bringing value, and that value starts with education. Rather than promoting products, Prüvers focus on educating others about how the body works, and how to optimize both the metabolism and mental function through the process of ketosis. This opens the door to deeper conversations about the results they have achieved with Prüvit products, like KETO//OS® drink mix, which the company says delivers ketones directly into the bloodstream to trigger ketosis in less than 60 minutes.

Over the past two years, Prüvit has seen incredible growth, posting 400 percent year-over-year growth since inception. It also has expanded into asia, Canada and Australia.

“If you can educate people and make them aware of technology that can have a positive effect on their health, you don’t have to sell them anything,” Underwood says of the company’s approach to reaching a wider consumer audience. “Education has become our core philosophy.”

Staying Nimble in the Cloud

Prüvit is a cloud-based company with its marketing team located in Louisville, Kentucky, and its manufacturing and core operational support in Melissa, Texas. From the beginning, Underwood didn’t see the need for a 300,000-square-foot campus, opting to redirect those profits back into research and development and philanthropic endeavors. He says he feels this decision has served his team well over the two years they have been in business, because it has helped them stay nimble in an unpredictable marketplace. “The more nimble we can be, the better we can anticipate and adapt to the changing patterns in the marketplace and stay in the blue oceans of opportunity.”

Over the past two years, Prüvit has seen incredible growth, posting 400 percent year-over-year growth since inception. It also has expanded into Asia, Canada and Australia, and the company has plans to enter other markets when executives feel the infrastructure is there to support it.

“Prüvit was formed out of the ideology of creating something that can transcend the norm. We wanted to take a completely different path. Our focus was to create a transcending brand.”
—Brian Underwood

When asked what has been responsible for Prüvit’s impressive start, Underwood says it hasn’t been any one thing, but the company’s focus on education has been an integral part of its growth strategy. “The seed of all innovation is education. We lead with education and provide support through relationships and through community,” he says. “Secondly, we are a customer-centric company, and we average 10 customers per Prüver.”

Underwood’s belief has always been that if you bring enough value to enough people you’re going to get rewarded directly or indirectly. “When you focus on value first, and in our case that value has come in the form of education, it creates an ecosystem of support that pays dividends,” he says.

Events and Learning for Everyone

Those at Prüvit understand every person has a different modality when it comes to learning. For this reason, the company has what executives call a layered learning program, which allows Prüvers different environments and events from which to choose, depending on their knowledge and comfort level.

For the company’s KETOKADEMY® event, they bring in thought leaders and researchers from leading universities—individuals who don’t endorse any of their products—who come to the event solely to add to the ketone conversation. “To me, that’s the most valuable type of education, because it’s a non-biased approach to helping people understand this conversation is much bigger than just selling our products,” Underwood says. “With this comes a great responsibility as an organization, of being respectful stewards to the tens of millions of dollars of research and time that has gone into ketone science.”

Prüvit has other events focused on personal growth and development. “If you can become more, you can do more and can contribute more,” Underwood says. These events focus not only on tactical skill sets of learning, but also mindset—really diving into what Prüvit calls the three-pillar foundation that constantly must be reinforced: the company, the industry (the channel), and yourself. “If you’re not constantly reinforcing and building those pillars up, they will fall,” he says.

For those who qualify, the company also provides experiential trips that are all about creating magical life moments, such as Prüvit’s peer group trip called Fly Experience. Recently, the company took a group to Dubai, United Arab Emirates, where Prüvers played camel polo, sky dived and even tried their hand at sandboarding down sand dunes. The company also flew in Michael Schwartz, one of the top financial minds in the world to talk with attendees. “This kind of event gave our people an opportunity not only to enjoy once-in-a-lifetime experiences, but to also stretch their financial brain as well. We really focus on a lot of different environments for our field to experience.”

Prüvit Founder and CEO Brian Underwood speaks with Dominic D’Agostino, an assistant professor of molecular pharmacology and physiology at the University of South Florida. He is well known for his work with nutritional and metabolic therapies that use ketogenic principles.

Acts of Kindness, Funding Research

The company has a program called Prüvit Forward where they are constantly looking for stories of inspiration or acts of kindness, whether it is helping contribute to families in need within the Prüvit family and outside, or funding research with major universities like Ohio State University and the University of South Florida, as well as other major institutions such as the Charlie Foundation for Ketogenic Therapies.

From a growth perspective, Underwood says Prüvit will stay focused on keeping the main thing the main thing. “We want to keep focused on developing our community and optimizing our technology,” he says. “We don’t want to stop or be satisfied with where our technology is at the moment. We want to push the boundaries of its effectiveness first and foremost, even before sales.”

Looking for More Blue Oceans

Prüvit executives are not worried about finding the next big “aha” product. It’s about building its technology and science, which will allow the company to stay in the “blue ocean of opportunity” (a term based on the book Blue Ocean Strategy by Chan Kim and Renee Mauborgne). “The blue ocean is all about going where people haven’t gone yet, continuing to inspire people to become the best versions of themselves.”

Underwood cautions that the direct selling channel should stay clear of “red ocean” thinking, where everyone is bloodying up the waters by thinking they are in competition with one another. “We don’t have to compete with each other. Instead, let’s all innovate in ways that are important to all of us and let’s do it with inspired action and make it happen.”

Pruvit Logo

Pick up the April 2018 issue here in which this article appeared.

What’s in a Name: Prüvit

A lot of people talk a good game, but very few actually prove it. Brian Underwood, founder and CEO of Prüvit, says the name for the company came naturally by challenging others to back up their words. “You say you want to be a good dad. Well, prove it,” says Underwood. “You want to run a marathon? Great, prove it. You say you want to lose 20 pounds? Great, prove it.”

Given his competitive athletic background, the name resonated with him and stuck. “Everyone has an ‘it,’ ” he says. “The “it” could represent your goal, dream or desire. If you break down the word prove, it means “to give demonstration by action.”

Immunotec: A Celebration of Science and Happiness

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Immunotec has quite a compelling story to tell. Its 20-year history is rooted in groundbreaking scientific research and product innovation, which began 40 years ago in Canada.

Immunotec
Founded: 1996
Headquarters: Vaudreuil-Dorion, Canada
Top Executive: CEO, Mauricio Domenzain
2017 Revenue: $101.5 Million
Products: Immune-Boosting Supplements

But the story isn’t over—by a longshot, according to new CEO Mauricio Domenzain. A big dose of personality and focus on culture is setting the company up for its next chapter of success.

Immunotec was actually founded as Immunotec Research in 1996. It was born out of the work of medical researcher Dr. Gustavo Bounous. In 1978, Bounous initiated a novel program in conjunction with colleagues from the McGill University Faculty of Medicine in Montreal, including Dr. Patricia Kongshavn, to search for a dietary protein source that would boost the immune system. The process took 15 years, but it led to the development of a high-quality, bioactive material given the name Immunocal, which helped to sustain normal glutathione (antioxidant) levels.

By the mid-1990s, the scientists had teamed up with veteran network marketing entrepreneurs to found the company now known to the world as Immunotec.

Mauricio Domenzain

Mauricio Domenzain

Helping People Live Better through Science

The company’s two flagship products, Immunocal and Immunocal Platinum, have been widely used by many for more than two decades, and the company can boast that its flagship product is backed by an ever-increasing number of clinical studies. It’s even listed in the prestigious Physician’s Desk Reference, the comprehensive drug reference book used by doctors, nurses and pharmacists.

Scientific credibility and superior quality are fundamental to the company’s brand DNA and are reflected in the tagline: The Science of Living Better. According to Mimi Cohen, vice president of marketing, “This tagline also speaks to our exceptional business opportunity that is designed to help people live better. Immunotec’s powerful combination of scientifically proven products and generous compensation plan is our unique selling proposition.”

Immunotec currently operates in six markets worldwide: Canada, Mexico, United States, Dominican Republic, Ireland and the United Kingdom. Two other markets in Latin America will open in 2018, with Guatemala this month. “Increasing our footprint in the Americas and beyond is perfectly in line with our ultimate mission encompassing 40 years of research, to educate people in the Science of Living Better,” says President of Immunotec USA Meredith Berkich. “The incredibly strong connection between the Consultants in different countries creates a high level of enthusiasm and engagement, which is behind the more than 50 percent increases in sponsorship month over month, double-digit growth year over year, and what drove sales beyond the $100 million annual revenue mark in 2017 for the first time in the company’s 20-year history.”

Meet Mauricio, Immunotec’s New CEO

Another milestone was when the company was acquired in May 2017 by Immuno Holding, a company led by Mauricio Domenzain, who was a former top executive of a prominent global direct selling company, with relevant expertise in the Mexican and U.S. markets and a passion for the network marketing channel.

“I am passionate about quality, and part of ensuring you have quality products, operations and customer service is to question everything. There are no sacred cows.”
—Mauricio Domenzain, CEO, Immunotec

His interest in Immunotec was immediate, because of its solid foundation and years of commitment to scientific discovery. “There aren’t very many companies that can say they have 40 years of experience in research and development,” says Domenzain. “I was looking for a company that aligns with my values, culture and vision, and saw huge potential in Immunotec. In addition, what I mainly fell in love with was the amazing leadership. They are the best I’ve ever seen.”

Berkich, who Domenzain hired to help develop the North American market, says the company is equally enamored with Domenzain. “As people have described Mauricio’s entrance to me from both the field and corporate side they refer to him as a breath of fresh air,” she says. “All of a sudden it wasn’t just about the science, which can be an intimidating topic to talk about, and he has really brought a profoundly human element to the company that everybody can feel, and everyone is excited about.”

Berkich says consultants who have been working the business for the past 10 to 20 years—some who have been dormant for years—have been inspired not only with his leadership style, but more importantly the cheerful enthusiasm he is bringing to the company and emphasis on choosing to be happy. “A lot of the reason why people aren’t happy is because they’re so overwhelmed with fear and worry,” says Berkich. “And we all know that network marketing is the place where freedom can happen if you apply yourself and work hard.”

Domenzain says his first focus is establishing a culture, which he feels the corporate office and field are welcoming with open arms. “It can sound a little bit cheesy I know, but I truly believe that if you are happy you can perform to your best ability.”

Immunotec’s Mauricio Domenzain (left) and Meredith Berkich recognize consultants during the company’s recent awards and convention.

The seeds of his cheery optimism comes from his father, who he says never showed any resentment or negativity, even when he was diagnosed with a brain tumor, which took his life when Domenzain was just 26. “He was always enthusiastic, and people loved to be around him,” he says. “He would always say to me, ‘keep smiling, life is good, so celebrate with me.’ I’m trying to share this culture of happiness and celebration, but with results driven by action.”

It’s Domenzain’s focus on creating an emotional connection and a true partnership with the field that guides Immunotec. “We have incredibly talented and inspiring individuals on our corporate team who care about each other and our consultants,” he says. “It is vitally important we treat our people with the highest level of respect so they know how much we appreciate them.”

It’s a Celebration, Not Just Recognition

The new culture was on full display at Immunotec’s recent annual convention this February, appropriately themed Be Spectacular. Domenzain told the corporate team he has great plans for such events with not only recognition of people onstage for their accomplishments, but everyone celebrating those accomplishments right along with them as a family.

With the science engine and research division driving development from Montreal, the company is opening a new call center in Mexico and committing major resources into expanding the U.S. market.

According to Domenzain, attendance for this recent event exceeded everyone’s wildest expectations, reaching a total of 4,500. Veteran consultants who hadn’t been to an event in a long time, as well as field leaders and new consultants alike, said it was the best convention they have ever attended. “That’s not just me saying that,” Domenzain says. “I’m using their words.” Other feedback he received from the field was that consultants loved the tone of the event and that there was a firm action plan in place.

One of the actions was to bring an experienced direct selling executive like Berkich onboard. “Meredith brings a lot of experience in the industry, a lot of wisdom and passion for network marketing, and it has made a big impact so far. The field is very happy she is with us,” he says. “We are committed, not only to quality products but to bringing quality people to the table.”

Question Everything

Part of this commitment included making it very clear he and the executive team would be going through every area of the business, department by department, asking tough questions like “will this activity help us accomplish our mission?” “does it tie into our culture?” and “does it lead us to a place of happiness, contribution and results-driven activity?”

“I am passionate about quality, and part of ensuring you have quality products, operations and customer service is to question everything. There are no sacred cows,” Domenzain says.
As Immunotec executives look at the competitive landscape of how people work and how they are competing with the likes of Uber and the continuation of the shared economy, they understand the need for a robust technology platform. This exercise has already paid dividends, says Berkich. “In phase one, we are finding that some of our technology needs updating in order for us to support where we need to be in the future, and to keep up with the trends we are experiencing in the industry.”

Expanding the North American Market

Although Immunotec was birthed in Canada, executives are making the necessary moves to become more present on a global scale. With the science engine and research division driving development from Montreal, the company is opening a new call center in Mexico and committing major resources into expanding the U.S. market. This is evidenced by the construction of a new facility in Houston, Texas, which is breaking ground this spring and will become the center of the company’s customer and consultant experience.

“Our new office in The Woodlands (Houston) will be a showcase for the celebration of the entrepreneurial spirit and the quest for happiness,” says Berkich. “We look forward to having a lot of blue carpet events where visitors can experience how much we value this industry that we are so proud to be a part of.”

Simplified Tools, Tied to Their Daily Activity

New Immunotec consultants enjoy top-level support from the corporate office in the form of a personalized e-commerce website, as well as professional sales tools to help them share the message of their products and opportunity.

This is another area of the business the Immunotec sales and marketing teams are reviewing with the field leadership, looking to streamline current tools into a more simplified system—something that ties into a consultant’s daily activity, especially that new consultant who is eager to get started. “We want to maximize those precious first 30 days of a new consultant joining the business,” says Cohen. “We want the tools to become a natural part of their daily life, an extension of their daily activities, not asking them to do anything that makes it feel awkward or strange.”

Company executives also are planning a tool summit later this year where they will invite field leaders to help them in assessing every single consultant tool to ensure the field is getting the results they are looking for. Executives are eager for feedback as well, so they can meet other needs and wants of consultants.

Immunotec executives stand on the event stage to honor consultants and guests.

Cultivating Learning and a Love of Science

Immunotec has a long and inspiring history of helping those in need, including their Immunotec Children’s Fund, the company’s philanthropic flagship, which was established to continue Dr. Gustavo Bounous’ dream of improving the lives of underserved and underprivileged children. In the last year the company gave $100,000 to two children’s causes and helped with disaster relief in Puerto Rico, Houston and Mexico City. “We are also taking a step back and looking at our philanthropic focus,” says Berkich. “Not only in our design will we continue to give to the causes that we have supported in the past, but we are looking at launching in the fall a new initiative that will align our company’s unique history.”

Education, learning and discovery are all pieces that make up the core of Immunotec, which makes focusing on future generations so important, says Berkich. That’s why Immunotec wants to extend its humanitarian support to provide resources that encourage children to pursue higher learning.

Commitment to Research and Development

Pick up the April 2018 issue here in which this article appeared.

One thing that will always continue at Immunotec is its commitment to innovation and development. “This was a research company before it was a network marketing company,” says Patrick Montpetit, chief financial officer. “With Mauricio’s leadership, we will continue to invest millions of dollars in research to help fulfill our promise of science helping people live better lives.”

The goal, says Domenzain, is not being the biggest company in relation to sales, but to be the gold standard when it comes to high-quality products as well as developing a culture of happiness and celebration throughout the company. “We will also continue the vision of Dr. Gustavo Bounous to have a box of Immunocal in every household in the world,” he says. “I know that’s a big dream, but if you don’t dream big you don’t succeed.”

A Community Honored

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Direct selling prides itself on outstanding service, personalization and extensive support when it concerns the relationship between independent salespeople and their customers.

We’re in the people business of course. But who makes up the backbone of this channel when it comes to engaging the sales field, fulfilling orders, planning events, manufacturing products and all of those other essential direct selling duties? It’s the corporate staff. And Direct Selling News would like to take this moment to celebrate the important role companies and their employees play in bringing out the very best in people.

In this month’s issue of the magazine, we honor 13 companies as the Best Places to Work in Direct Selling. For this project, we once again partnered with Quantum Workplace, an HR technology company that has been collecting Best Places to Work data for more than a decade.

DSN launched the Best Places to Work in Direct Selling program in 2016 to recognize those employers setting the bar for establishing and nurturing great work experiences and environments. This year’s group continues to do just that by offering strong benefits programs, structured onboarding for new team members, consistent and constructive feedback, professional development and a commitment to work-life balance.

“There is a reason employees refer to themselves as part of the ‘Nu Skin family,’ ” says Dave Daines, senior vice president of global human resources at Nu Skin, a Best Places honoree. “The company continually pushes the boundaries in its efforts to enrich the lives of its employees.”

To learn more about the Best Places to Work honorees’ approach to workplace engagement, our Cover Story begins on Page 18. Company profiles also can be found in the special award supplement that came with this issue.

Of course, celebrating the enrichment of this channel would be incomplete without recognizing the achievements of top companies through the signature ranking for the direct selling channel: the Direct Selling News Global 100. In its ninth year, this ambitious research project continues to provide better understanding of what it means to be a part of this community. We’d like to thank you once again for your enthusiasm and support, as well as your generosity in participating.

Our final list will be revealed at a Celebration event at the Renaissance Dallas at Plano Legacy West Hotel in Plano, Texas, on May 2, and we hope that you will consider joining us for this special evening. We are pleased to welcome SeneGence Founder and CEO Joni Rogers-Kante as keynote speaker and look forward to announcing this year’s Bravo Award winners. And, of course, we’ll be counting down the list of the 100 largest direct selling companies in the world. Ticket and sponsorship information is available at DSNGlobal100.com.

What is your company celebrating? Whether it is recent accomplishments, international market openings, philanthropic efforts and other key milestones, we’d love to hear from you!

All our best,
The DSN Staff

‘One team, one dream’

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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 president and CEO of Addison Leadership Group. He regularly offers his leadership insights to Direct Selling News readers and recently sat down with the DSN staff to discuss workplace engagement. If you have a question you’d like John to answer in a future issue, email editor@directsellingnews.com.

This month, we are announcing our third-annual Best Places to Work in Direct Selling honorees. What do you think makes a direct selling company a great place to work?

Direct sales companies are usually very focused on personal development and positive thinking, which helps make them fun places to work—as long as you like people. It’s not like you’re making auto parts; you are building a business that impacts the lives of other people.

The thing that I always enjoyed when I was growing up in the business—way before I was CEO—was building relationships with people in the field. Many of those relationships have lasted for years, and it’s fun.

How do you advise executives to approach employee engagement?

My approach was always to talk about the three pillars of business. The first is the salesforce. This is the most important, because your salesforce is your distribution system. The second pillar is your clients and customers. You must make sure the products that you sell are the right products for the company, are of high quality, at a fair price and bring real value. The third pillar is the stake holders, your employees and shareholders.

“I’ve watched Dr. Jekyll turn into Mr. Hyde before because they are in charge of something now and they think, ‘I’ve got to prove to everybody that I’m large and in charge.’”
—John Addison

My view is the business has to be “one team, one dream,” with everyone on the corporate staff and salesforce pulling together. It’s important to communicate, talk to, motivate and inspire both your employee base and the members of your distribution force. Whoever is on the phone dealing with the salesforce needs to know the core values, the strategy and the approach that the company is taking. It’s not good enough for the CEO to give a flowery speech, if the employee base hasn’t bought into it. People need to have a common vision and a common purpose.

What is the optimal way for a company to position the HR function within the leadership structure?

John Addison

Advice from the Front Line of Leadership with John Addison.

I think the HR function has to be a critical part of the management team. A company’s human resources leader needs to understand the direction of the company as well as when things are doing great and when things are challenging. The job of human resources isn’t just to put people in seats, it is to put the right people in the right seats. In order to do that, HR has to be very plugged in to the core values, strategy, vision and inner workings of what’s happening in the company.

Do you have a recommendation about where that HR function should fit within the C-suite? Should there be a Chief Human Resource Officer?

I think it varies. I’ve never been a servant to an organizational chart. It depends on the strengths and the weaknesses that you have within the company. I will say that the position of leading human resources shouldn’t be buried down in the organization structure, it needs to have a prominent place.

If a company determines that it needs to shift its corporate culture, how would you advise the company to approach that challenge?

My No. 1 advice is you better move slowly, unless the company is a complete disaster. When a company is on life support, then you’d better change everything. But in most cases, when you see a problem or you see something and decide you need to make a change, you can’t throw the baby out with the bath water.

Change is change, and even positive change is incredibly disruptive. I believe that when you are running a mature direct sales company that has been around awhile, you’re driving a battleship, not a speed boat. When you make changes, if you see you have got to change your course, you don’t just start yanking the wheel on a big giant battleship, you aim and adjust. You also have to plan ahead; you have to start turning it now if you want to move it three miles further into the ocean.

Cultures are very ingrained. You have to think and make intelligent decisions. It also is much better to talk positively about what you are doing when you’re making changes, versus negatively saying how screwed up everything is. I’ve watched a lot of CEOs come into companies, and the first thing they do is spend six months talking about what a disaster they inherited. Well, maybe what was done before wasn’t good, but the guy or the gal that ran it before, they’re not running it anymore, so talking about how bad they were is irrelevant. Instead, take positive steps to move in the direction you want to go.

Does the corporate culture influence the culture within the salesforce, or is it the other way around?

Does the corporate culture influence the culture within the salesforce, absolutely! I don’t think it’s yin and yang, but I don’t think you can have one completely different than the other; I think that sets you up for a disaster. There has to be a congruence between the corporate goals and the field’s goals.

Corporate people and employees are different than the field. When you do a rally of your employees, it is never going to be as exciting or crazy as a rally for your salesforce. But, I think it is incredibly important to make sure that both of those are on the same page, and moving in the same direction.

Pick up the April 2018 issue here in which this article appeared.

What common mistakes do you see new managers make?

Thinking they’ve got to establish their authority. I’ve watched Dr. Jekyll turn into Mr. Hyde before because they are in charge of something now and they think, “I’ve got to prove to everybody that I’m large and in charge.” A lot of people that you would have thought were going to be great managers because they were really good at the job they were doing, get into management and they become a challenge.

You have to earn the respect of your people; you can’t demand the respect of your people. My biggest advice to those who are becoming a manager for the first time is to stay humble and realize that you are depending on the other people on the team, it’s not just you anymore. You’ve got to build a team, and that starts with you having some humility.

Public Direct Sellers End 2017 on a Strong Note

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Douglas M. Lane, CFA, is a securities analyst with more than 20 years of experience covering companies that employ the direct selling business model. He leads a boutique equity research firm, Lane Research, focusing on those companies. His website is www.laneres.com, and he can be reached at doug@laneres.com.

The six publicly traded direct selling companies we follow and whose stocks are listed in the United States, Herbalife (HLF), Medifast (MED), Nu Skin (NUS), Tupperware (TUP), USANA (USNA) and London-based Avon Products (AVP), on balance ended the year on a strong note.

Organic sales growth on average increased by 10 percent in the fourth quarter 2017, which is an acceleration from the low- to mid-single digit growth rates on average in the four previous quarters. The companies focused more on nutrition and healthy living did particularly well, while the more traditional companies, Avon and Tupperware, showed some softening in the fourth quarter.

OPTAVIA, Medifast’s direct selling company, led the way with very strong growth. In fact, the direct selling channel has become so dominant that Medifast management stated it would no longer report separate segment information, and that the company was moving its Medifast Direct customers over to the OPTAVIA health coaches. We view Medifast as an interesting laboratory for go-to-market strategies of weight-loss and nutrition companies, as its direct selling channel went from less than half of the business 10 years ago to now virtually taking over the company.

OPTAVIA ended the year with a strong 32 percent organic growth, much better than expected due to continued momentum coming out of the recent convention in Dallas, Texas. After introducing the OPTAVIA product line to its health coaches in 2016—which was very well received—it was at the company’s convention in July 2017 that Take Shape For Life was rebranded altogether to OPTAVIA, a name, in our view, more suited for international markets. OPTAVIA announced in March that it would open its first international markets, Hong Kong and Singapore, in early 2019.

Therefore, with momentum building domestically coupled with international expansion on the horizon, the future seems bright for Medifast, which did not go unnoticed by the markets as its stock soared on the earnings release.

Nu Skin also posted strong double-digit organic growth rates in the fourth quarter, driven by the limited-time offer (LTO) of its AgeLOC LumiSpa treatment and cleansing device, introduced at its Salt Lake City convention held in October. Importantly for future growth, the number of sales leaders in the fourth quarter was much higher than we expected at 81,900 versus our forecast of 68,800. It appears that the LumiSpa LTO generated an increase in product sales and leadership activity, so the key now is to see how that translates into growth in 2018 as LumiSpa is rolled out globally. Management also noted that its focus on utilizing social selling programs to increase outreach and expand its customer acquisition contributed to an 8 percent increase in its customer base. Clearly the company is on much stronger footing coming out of 2017 than it was a year ago, which is reflected in the nearly 50 percent appreciation in the stock over the past 14 months.

USANA and Herbalife round out the direct sellers posting accelerating organic growth trends in the fourth quarter. In the latter part of 2017, USANA appears to have reversed several quarters of decelerating growth, benefiting from successful new product and promotional activity. The prelaunch of its new Celavive skincare line created some excitement among leadership and USANA was able to execute on a successful promotion in China that drove 12 percent organic growth in that important market for the company. Total organic sales growth was up 5.1 percent in the fourth quarter after being up 3.0 percent in the third quarter and up 2.3 percent in the second quarter. These improving trends have also been recognized by the market after some of the 2016 product and promotional efforts didn’t live up to expectations. Overall, USANA is up 25 percent over the past 14 months and 33 percent since the first quarter 2017.

For Herbalife, after several quarters of negative growth as a result of sharp declines in the U.S. due to its leadership being more focused on FTC compliance in conjunction with its July 2016 settlement—as well as softness in China—organic sales increased 3 percent in the fourth quarter. This was the first positive note for that metric in five previous quarters. Organic sales in North America were down 5 percent after being down double digits in the second and third quarters, and organic sales growth in China turned positive for Herbalife for the first time in several quarters. Therefore, with these two markets heading in the right direction, a combined accounting for more than one-third of total company sales, the stage appears set for a sustained return to positive organic sales growth later in 2018. Despite the recent fundamental soft patch, Herbalife’s stock has almost doubled over the past 14 months as it became apparent that it would be able to successfully navigate through the FTC settlement in the U.S. Short seller Pershing Square Capital Management exited its position, which it held for five years, in the first quarter 2018.

Conversely, Avon’s organic sales declined 2 percent and Tupperware’s were reportedly down 4 percent, a deceleration from flat and up 2 percent in the third quarter respectively. However, for Tupperware, if you adjust for the vagaries of the calendar and for the recent BeautiControl divestiture, organic sales were actually up 3 percent, which was a modest sequential improvement from Q3. Brazil, which surpassed $300 million in sales for Tupperware in 2017, and China were the biggest contributors to growth. However, this sequential improvement was still below expectations as Indonesia, Italy, Malaysia/Singapore and Tupperware South Africa were softer than expected. We reduced our estimates, and the stock has been soft since the quarter was announced. In fact, Tupperware has shown opposite trends from other direct selling companies in that a year ago it was coming into 2017 with some momentum, but appears to have stalled coming out of 2017—and so consequently its stock price today isn’t much different than it was 14 months ago.

Organic sales growth at Avon continues to soften, and missed our forecast for the fourth quarter. However, investors’ attention was on the new CEO, Jan Zijderveld, and his commentary, which was apparently well received by the markets since Avon’s stock has risen over 20 percent since earnings were reported despite what we would characterize as soft top-line results. However, even with that bounce Avon’s stock is still about half the price it was a year ago as business fundamentals continue to be challenged.

In looking at the performance of direct selling stocks overall since the end of 2016, our Lane Research Index, which is comprised of U.S.-listed stocks over $1 billion in market capitalization, has modestly lagged the market as represented by the S&P 500. Outperformance in the first half of 2017, the fourth quarter and so far in Q1 2018 has not been enough to offset the underperformance in the third, which was driven primarily by Avon’s 40 percent stock drop after a poor second quarter earnings report and the announced departure of its CEO. Tupperware’s stock also declined double digits in Q3 as it became apparent that top-line momentum had stalled.

However, we note that Medifast, which is not in our index since it had not reached the $1 billion market capitalization threshold, saw momentum build as 2017 progressed, and its stock has more than doubled since the end of 2016. If it holds these levels, we anticipate it will be added to our index in the not too distant future.

Lastly, after several years of rebranding to Herbalife Nutrition, Herbalife is taking the next logical step and renaming the whole company Herbalife Nutrition Ltd. Can anybody say OPTAVIA Inc.

Disclosures: Financial Interests

The analyst, Douglas M. Lane, and members of his household own equity and/or equity derivative securities in Herbalife Ltd., which had previously been publicly disclosed in a Direct Selling News article originally published in January 2013.

Other than mentioned above, neither I, Douglas M. Lane, nor a member of my household, owns any security(ies) which is/are the subject of this article. Neither I, nor a member of my household is an officer, director, or advisory board member of the issuer(s) or has another significant affiliation with the issuer(s) that is/are the subject of this research report. I do not know or have reason to know at the time of this publication of any other material conflict of interest.