Click here to order the November 2013 issue in which this article appeared.
Photo above: Scentsy’s new headquarters in Meridian, Idaho.
About a year ago I had a conversation with the founder of a new direct selling company. We discussed the treacherous road that must be traveled to establish a successful and enduring company in our channel. We discussed the difference between the companies that have grown and died quickly, grown and then faded away, and those that have grown, contracted and grown again. We observed that just as many companies fail because they lose touch with their salesforce as those that lack necessary business acumen.
How often have we seen promising young companies “professionalize” their people and processes only to lose what made them attractive to their distributors? On the other hand, we witness others go out of business because they can’t find financing, control their supply chain, comply with basic regulation or manage the egos of founders and employees. Inside boardrooms and executive teams, forces that promote measured results, efficiency and strong financials compete with ones that promote engagement, passion and strong culture. Too often one is sacrificed for the other: Engagement, passion and culture are difficult for MBAs to measure, and discussing IRR, ROI and EOQ as they relate to giveaways at a distributor event is enough to send the sales team running. MBAs get infrastructure; direct sellers get infraculture. Great companies bring infrastructure and infraculture together.
Great companies bring infrastructure and infraculture together.
Scentsy aspires to be a great company that brings value to the world. Our story is far from finished—and greatness is still an aspiration—but our journey provides insight into the establishment of infrastructure and infraculture.
In 2004, when we launched our direct selling opportunity in an ocean shipping container (our first home office), we had very little infrastructure. We had no money, no credit and no chance of an investor. We had no catalog, no software and no experience. We did have a great product and a few passionate consultants. Little by little, party after party, we made money and could invest in sales materials, software and facilities, but we held firmly to our humble beginning. It allowed us to co-write the Scentsy story with our growing number of consultants and their customers. Collectively, we created the underpinnings of a cultural sense of place, or infraculture. The values of simplicity, authenticity and generosity started to define not only our products and processes but also our people. It was easy for consultants to invite others to join them in their business because they participated in creating the culture in significant ways.
|Heidi and Orville Thompson, Co-Owners of Scentsy Inc.
Early on, Heidi and I did what we could to support them. Rules weren’t very important; fairness wasn’t much of an issue. If someone needed our help, we gave it if we could. If we were traveling, we’d stop in at a team meeting or call people up to go to dinner. We held events and training calls whenever we could. The consultants themselves rallied around each other, supported one another, cooperated wherever possible and tried to live as best they could according to our motto of contribute more than you take. Who wouldn’t want to be a part of that? Recruiting boomed and sales kept pace with recruiting. We had the proverbial tiger by the tail.
But behind the scenes we were struggling to keep up. From the beginning of 2007 through 2012 we hired, on average, one new employee every business day. Our facility needs grew from a 6,000-square-foot, flex-space office/warehouse to nearly 1 million square feet in three states and two countries. Our technology struggled to handle the explosion of data. Our customization requests burdened our vendor’s ability to support other clients. Sales development efforts were met with accusations of favoritism when we couldn’t reach everyone equally.
In late 2009 our weak infrastructure caught up to us. A software deployment went bad, our call center broke down as consultants tried to get answers their websites weren’t providing, and the lack of good data from previous years contributed to shortages of product and massive backorders. Just as our consultants’ hard work was paying off for them, we let them down. Instead of celebrating a successful selling season, we were answering questions about when orders would ship and spending all our efforts supporting home office employees who were working around the clock to make things right. In short, our lack of infrastructure was undermining our hard-won infraculture.
Beginning in 2010 the forces inside our executive team advocating for capacity, efficiency and financial stability began to dominate. We poured massive energy into infrastructure, technology, facilities, systems and programs that expanded the opportunities for our consultants. We launched new countries, new brands and new programs. New facilities were opened on a regular basis, and we were performing as a well-run business. Shipping worked like clockwork, system uptime was extremely high, backorders were virtually nonexistent and call-center metrics were enviable. Orders were up, recruiting was up, costs were down, and all was good.
But somewhere along the way the old stories seemed to lose their luster. The infraculture that held together our early leaders seemed distant to the Facebook generation of direct sellers that were filling our ranks. Cooperation that came easily when everyone was on a personal basis turned to competition as consultants turned each other in for policy violations and leaders tried to outdo each other with bigger team meetings, recognition awards or monthly team incentives. Our story, once told in person in informal situations, was now told by tens of thousands of people we hadn’t yet met. The mechanism of sending an announcement to more than 100,000 consultants in different countries speaking different languages slowed the process and squeezed out the fun and informality we were known for.
|Scentsy wickless candle warmer||Velata fondue||Scentsy Layers bath and body care|
We started to realize that infraculture and infrastructure were a lot like software and hardware. I remember the days when Intel would come out with a new processor that held so much promise. Microsoft would follow with upgrades to Windows and Office. Then graphic and gaming software would soon push the limits of the new hardware. Software waited on better hardware. Better hardware inspired new software. This process repeated itself over and over in the ’90s and 2000s. Underlying it all is the fact that the best software in the world will not work on bad hardware, and powerful hardware is worthless without good software. Both are inextricably linked. The same can be said for the infrastructure and infraculture of a business.
|Grace Adele fashion bags
Infraculture is the underpinnings of a cultural sense of place.
At Scentsy, success took away the luxury of being a small company with an invincible infraculture. At the same time, investments in infrastructure have allowed us to better confront the forces that undermine our infraculture. Better workspace enhances cooperation, better technology improves training, recognition and incentives, and better research and development improves product offerings. A company’s infraculture may be strong, but if it lacks the infrastructure to spread that infraculture, it will not grow. Underlying the enthusiasm of every consultant of a sizable company is the question, “How long will this last?” When the taglines Exclusive Product, Ground-Floor Opportunity, and Fastest-Growing no longer apply, only businesses with a strong infrastructure can compete.
This month we are moving into our newest, and hopefully last, home office. The six-story office tower is the centerpiece of our 80-acre campus, Scentsy Commons. Construction has been a labor of love for Heidi and me. We met weekly with architects and contractors, deciding everything from what pavers to use on the sidewalk to where departments would sit, to what color of tile we should put in the bathroom. In the design and layout we incorporated the values of simplicity, authenticity, and generosity. We worked hard to physically represent the ethos of the Scentsy Family.
We often wondered if this was the best use of our time and money. Before moving in, we used the building to host our SuperStar Director Summit—the annual meeting of our top sales leaders. We heard over and over that they felt like they were coming home. This was their place. Scentsy Commons and the infrastructure it represents is the physical sense of place to match the Scentsy Family cultural sense of place they helped establish. It is a physical representation of our commitment to the aspirations and values that have driven our company since the days of the ocean container. For us, it is the bringing together of infrastructure and infraculture.
A company’s infrastructure allows it to execute functional plans, drive efficiency and measure productivity. A company’s infraculture allows it to inspire greatness, drive passion and enhance satisfaction. Just as hardware and software compete for resources and develop around the weakness of the other—yet are interdependent—infrastructure and infraculture are inseparable. Companies that aspire to be great must develop both.
Orville Thompson is CEO and Co-Owner of Scentsy Inc. Its family of brands includes Scentsy Fragrance, Velata fondue and Grace Adele fashion accessories. He is also Chairman of the U.S. DSA Board of Directors.