Discussion with Bo Short
I have received countless calls from very kind people asking me about my leaving Quixtar. They have been very sincere regarding their desire to know my rationale for resigning. People have asked why I left, did I actually resign or did I sell my business, what were the particular issues that led me to this decision, etc. I will attempt to address as many of their questions/comments as possible.
Let me first say that most of the time I spent in that business was spent around wonderful people. The overwhelming numbers of IBO's are good, hard-working people. My leaving is in no way a statement about them.
It is also important to point out that I own another company in the same industry. Out of respect to those reading this, I do not want to give its name because I do not want to use this forum for any other reason than the purpose I have stated above. I do believe however, that it is important to disclose this fact.
I am not a fan of many companies within this industry. I see too many people spend too much money only to be disappointed in their results. It is my opinion that many of the companies in the industry share the same flaws: compensation plans that reward the select few, products that are over-priced, a hierarchy of distributors, many which lack basic leadership skills and demand unearned loyalty, and a business of training that is oftentimes the prime moneymaker for the "success stories".
People need value. Not just quality, but value. The average person is looking for a real home-based business that they can build. They want to make more than they spend, move products that are fairly priced, and enjoy the experience. In a recent newspaper release I said, "...not everyone will succeed, but they should not lose either."
I understand the role that focus and passion play in building any business, especially this type. If someone had shared the following information with me during my "running" years I might have dismissed it as well. However, many of these issues were not apparent to me at the time. When I achieved the diamond level there were approximately 57 others that did so the same year. Sometimes success masks problems. It is not my desire to dash anyone's hopes. If you are uncomfortable reading my opinions, then simply do not. I respect your decision.
I believe that it is important to emphasize that I did not sell my business nor simply go inactive and continue to collect the money. Furthermore, I did not resign because I had to. I resigned because I thought it was the only right thing to do. I notified the company in September 2001 not to renew my status as an IBO. I received several communications from them regarding this issue. I spoke with them multiple times in October and November restating my intentions. Below is an excerpt of a letter I faxed to David Kruer, at Quixtar/Amway on November 16th, 2001.
(Excerpt of communication to Quixtar)
"... I previously sent Lynn Knot a notice as to our intention not to renew and subsequently faxed Paul Hodgson a follow-up resignation letter. If you have not received it then please consider this a final notice as to my resigning from Quixtar."
Also on October 12, 2001, I resigned my relationship from the particular support materials group that I was working with. This event occurred because I did not agree with certain decisions involving, what were in my opinion, improper business practices. Additionally, it would serve no purpose to be involved with this group since I was leaving the business itself.
What happened next was not only interesting but also quite sad. Many people were told by their "upline" every possible reason for my departure-except the truth.
The truth is I no longer believed in that business and many of the methods that were being used to build it. Additionally, I found many of the issues related to the business support materials (often referred to as the "training system") to be contrary to my own personal ethics. When I no longer trusted the so-called leaders representing us in the field and at the company, it was time to leave.
Prior to our decision to leave, I tried unsuccessfully to force change in several areas. In fact, during private meetings with the corporation and its representatives it was apparent that they were very aware of the problems that were being raised. In one particular meeting a corporate representative stated, "...The Corporation had been looking for a solution to the BSM (Business Support Materials) challenge for 35 years..." What some people consider a "challenge", I view as a breach of trust. It seems to me that 35 years is an awful long time to look for a solution and not find one.
On multiple occasions I witnessed very distasteful (to say the least) confrontations between those individuals considered to be "leaders". It was my conclusion that many of them proclaimed to want things corrected but were not willing to make the changes necessary because it affected them personally. Then again, it is easy to simply say you want things to change, while doing little to change them.
When attending meetings with the "Corporation", I shared my views quite emphatically. However, their responses were less than satisfactory. I remember telling the president of Quixtar, North America, that I was tired of being "painted with the same brush" as those people whose behavior I found offensive. Having spent a decade of my life, the last 4 -5 years of which seemed full of "promises of change", and having exhausted all of my options, I resigned.
During my last conversation with a company representative I stated the following, "In my opinion, what you have demonstrated to me is that your volume is more important than who you say you are. What I am demonstrating to you is that my word, my name, and the relationships I have built are more important than your paycheck."
There is nothing wrong with training. Having spent 14 years playing football I am a firm believer in training. In fact, in the course of writing my books I have spent countless hours with great leaders in all areas (sports, politics, business) that are as adamant about preparation and training as I. However, I believe there is something wrong with a training program that does not seem to produce results.
Remember, three questions:
If you are only attracted to the social aspect of your business then the answers do not matter. However, if your rationale is business-driven then your answers mean a great deal.
I hear entirely too many people saying, "Well, we learned a lot even though we did not make any money." At what price did you learn it? How many missed birthdays, nights away from home, etc. I would remind you to revisit why you started in the first place. Are your results consistent with your initial intentions or are you finding yourself consistently spending more than you make? At what point does someone cap his or her expenditures?
Look around the room at your next convention. How many new diamonds do you see being recognized? Where are all the new diamonds? Why are the same faces on stage while the ones in the audience seem to change periodically? As an independent businessperson, do you ever think in these terms? If the system was working so well, then one would assume there should be a steady flow of diamonds convention after convention, year after year. If there is not a stream of diamonds after this many years of training then, in my opinion, the training is not only inefficient but possibly even improper.
What I am referring to by using the term "improper" is based on my observations and experiences. If it is true that the "larger pins" receive 50%-90% of their income from the training system then I would contend that it might be working quite well-for them. When you go to a convention you want to know how to move products and build a team; however, what is often taught is how to "get to the next meeting".
Have you heard this before?
1.Where were you 5 years ago?
2.Where are you now?
3.If you keep doing what you've been doing you will have the same results.
I would suggest many of you ask these three questions about your own current situation as it relates to whichever training system you use.
It is also important to point out that simply disclosing the fact that there is compensation in training materials is not sufficient. In many instances, publishing a BSM compensation plan does not give an accurate account as to its magnitude either. I have seen instances where there is no mention of the income derived from conventions, seminars, and monthly book sales; even though they can be an enormous moneymaker.
Maybe the training system is relatively unchanged because-certain people are getting the results "they" want. In my opinion the army is feeding its generals... and the army is starving to death...they just do not know it. While I understand the role that association plays in building a business, a real leader does not starve his/her team-they feed them, even at their own expense.
When I launched my business in 1991 I was hopeful regarding the teaching put forth that "if you take 2-5 years and apply yourself you can be free for a lifetime." I did just that. I went emerald in approximately 2 years and diamond in 4.5 years. I calculated one time that I showed more than 1300 plans to attain the level of diamond. I would estimate that our business had distributors in approximately 20 countries.
However, what I found when I went diamond was inconsistent with the teaching. Most of the diamonds I knew were as busy at diamond as they were in their previous careers. With the exception of a "very small" handful of more-tenured "larger pins", I would contend that diamond is not freedom. Many people are taught that if you stop working your business at the diamond level, it keeps on working without you. I would caution you that this is not true either. I would estimate that more than 90% of the diamonds must keep working their businesses in order to maintain them. It takes an immense amount of work to do just that. Now, your diamond may say that my statements are not true. Monitor their schedule. Judge for yourself.
I do not believe that this illusive 2-5 year mark is even based on sound business principles. I would also state that I witnessed numerous ambitious people work well beyond this 5-year target and not attain diamond. I would suggest that the average diamond took longer than 2-5 years to attain that level as well.
I have heard numbers of diamonds state the following, " If we had pursued our careers we would be making more money doing less work than this."
I believe that one of the ideas put forth to the average IBO is that you can do anything for 2-5 years. This time frame passes so quickly. However, very few people analyze their expenditures vs. results. They simply look at the time frame. One year passes into the next. Before you know it you have put years of your life into something with no tangible results. Once it is underway you are made to feel that quitting is out of the question. Many people feel as though they will be seen as "losers" if they quit. Well, if the results are not evident, go find another way to get them. That is called making a "smart business decision."
I am in no way criticizing the work required to attain the level of diamond. I did it. However, I believe that many professions offer similar (and greater) rewards if one is willing to place forth the same effort required to achieve it.
When I enrolled more than 12 years ago I believed in the premise that this was "it" in the industry. My personality may be similar to yours: if I am going to work at something I am going to succeed. In doing so, I never looked around to see what else was out there. In fact, that behavior was greatly frowned upon in the "teaching" I received. I complied, and worked diligently. However, upon leaving that business I began to study the industry itself. I recognized flaws that would have been apparent had I only acknowledged my own concerns early on.
I used to say, as many of you still do, "we pay as deep as we go in depth". What I could never understand was, if it was so good why did so few make any real money. I heard people say countless times, "We made $250 last month!" What many of them did not say is that they spent $500 in books, tapes and seminars that same month. This is a net loss of $250.
It may be very simple for some of you to tell me that in the early stages of a business one is expected to spend more than they make. I would agree. However, I would remind you that I am talking about people that had spent years pursuing their business.
People like me were used as the examples of how it could be done. Because of our early successes, we stood on stages and repeated the same things we were taught. Yet, over time I saw fewer and fewer people achieving any significant levels of income. (It was then that I began sharing my concerns and was told it would change. This feedback came from my "upline" as well as the "corporation".) Additionally, those I saw generating the larger incomes were doing so as a result of the business support materials income
Regarding this notion of paying as "deep as you go." I would ask you to rethink the benefit of that statement. Remember, a dollar is just a dollar. The "further you go" the more diluted it becomes. Some companies say they pay 20, 30 levels deep or even infinitely.
How many levels deep are you? Not how deep do you want to be, but how many levels deep are you? How long has it taken to get there? Be honest with yourself. I would encourage you to call the corporation and ask them this: how many people does the average IBO sponsor? The answer might surprise you. You might be told by your "upline" not to worry about the average person. Be the "above" average person, you are told. Fair enough, who are they? How many of them are there? How do you identify them? How many do they sponsor? How many new platinums or emeralds have your own diamonds "broken" lately? Most people never gain depth. Additionally, who is the beneficiary of depth? From my experiences, it is once again a small few.
The point here is this: it does not matter just how it looks or sounds, but how it works. I witnessed people more ambitious than myself fail to build any real depth. These were not lazy people. They were good, hard-working people. Many left being made to feel as though they were failures or quitters. They were neither.
On this topic of depth I would encourage you to ask your corporation the following question: "If I have $1,000,000 of volume in leg A, and 2500 to 7500+ PV of volume on the side, do I receive 4% of the $1,000,000?" Many people think so. However, that is not true even though many of us were told this when seeing "the plan". The compensation plan can be very confusing to most people, in or out of that business. It is therefore easy to gloss over issues that are critical to developing a solid personal business plan.
Most of the diamonds I knew could not explain the intricate "workings" of the plan. That is one reason you may hear the following cursory answer to many thoughtful questions: "You need to worry about that when you start making the money."
Think for yourself for a moment: would you take a job if you did not know the specifics of how you were going to make money?
It is my opinion, that these topics are important to the culture of many "groups" in that business because they develop and maintain conformity and control. You may not agree.
For the most part, I think that many of the so-called leaders in that business are very insecure in their positions. That does not mean that many of them are not likeable people. Many do not deal well with conflict because they were never taught how to do so during the course of building their businesses. Many of them heard from their "upline" the same rhetoric you hear from them: "Just trust me"... "Because I said so"... "The further you go the more you'll agree." I do believe, however, that there is a very small contingent of "more-tenured pins" that understand how these 3 principles protect their "apparent positions". Remember, the good and bad are duplicated.
How all of these issues are handled is critical in leadership development. Poor leadership insists upon total control, is not accepting of new ideas, and demands (not necessarily earns) unquestioned loyalty and commitment. The nature of some "training systems" promotes the growth of this type of leadership. If this is the environment you find yourself in, I would suggest you get out of it. Remember, healthy leadership advocates honest interaction and discussion.
Why is it that independent business people, some with excellent business skills, are reprimanded for discussing business-related issues with their peers? Even if they have not been reprimanded they are made to feel guilty if they do so. I understand why this is taught, but I would offer a different point of view. You hear things like, "Why would you ask advice of someone that is not your upline and working your business?" or "If you want what I have then listen to me, not someone else." Both of these are logical statements but don't paint the entire picture. I would suggest that the control of information and behavior are powerful tools in developing a compliant participant.
In my opinion, if you are an adult independent business owner, and are following the code of ethics in your business, you have the right to get advice or discuss any issue with your peers. Next time you are discussing your business with your "cross-line", and someone in your "upline" approaches, gauge how they react and how it makes you feel and- think...is that normal?
This is a word used to squelch a great deal of creativity and genuine concern that many people have. There is a great deal of unspoken "fear" that voicing concerns will put you out-of-favor. In my opinion, those fears are well founded. Now, if that is indeed the case, why would one subject oneself to this form of treatment? Think for yourself. If your instincts tell you something is wrong, it may very well be. Trust your own instincts.
I believe that this is one of the most misused and misunderstood terms bantered about so easily in that business. I have heard it said repeatedly, "Be loyal to your upline not your downline." This is simply a bad leadership principle. In a private discussion one afternoon with Admiral Thomas Moorer, former chairman of the Joint Chiefs of Staff, he stated the following to me, "Leadership is won when you serve your troops. By focusing on their needs and being loyal to them you are automatically serving your superiors and country."
If you place too much trust in someone that is always asking you to spend money, you may be trusting in the wrong people. My advice: Serve your team; focus on their needs, and do it honorably.
This is a statement I made for a number of years. When "the plan" is shown and someone has that look in their eye as if to say, "I would never do anything like this" it is very easy to say, "they just don't see what we see." What I have learned is that you are right, they don't.
I would contend they see the following:
Looking at that business from a different perspective, it is my opinion that what they see might in fact be the truth.
What one sees who is building that business is something I can relate to as well. What you see is what you hope it is. I understand those emotions. Most over-achievers, by their nature, are optimistic people. One reason they succeed is because of that characteristic. I would offer the following as something to think about; maybe it is not what you hope it is. The conclusion that I personally came to was-that it was not.
Okay, how is it working for you? What was your last bonus check? Please remember, it does not matter how large the company is, how old it is, or how many products it offers if it is not producing results for your family.
I believe there is a huge disconnect between being one of the oldest and biggest and simply being admired. Remember, Enron was big. In fact it was the biggest. But no matter how big it was improper behavior destroyed it. All I am saying is that age and volume is not the only criteria in determining success and marketplace acceptability. Maybe there is a reason that much of the public reacts the way they do. William Reed said, "Character strikes the last blow in any battle."
The vast number of products is another issue. Because I understand this industry I would offer that 15-30 products is the ideal number. Why? The whole idea is to make a business work. I assume you launched your business on that premise. Therefore, you need enough to make it work, not overwork. A game of football requires only one ball to be in play at any given time. Why not three? It's simple-more does not make it better. In fact, more would add confusion. I believe that one of the recurring promotions you hear from Quixtar is related to, what is called the "Sweet 16."-sixteen products.
Beyond confusion, I found it quite disquieting and offensive that people felt guilty for shopping at an actual store. Most people, if they were being very honest, would say that they did not want their "upline" or "downline" to see them in a Wal-Mart. With all due respect, that is quite sad...but true. Think for a moment-can this type of influence be healthy if it is instilling these types of emotions in people.
Lastly, I believe that an important point needs to be made. A business such as this is dependent upon customers, not just distributors. There are legal statutes that dictate this. What is very disturbing is that, as a general rule, this was not even discussed while I was building that business. In fact, I remember attending my Direct Distributor seminar in ADA, MI when one of the corporate representatives called the 10 Customer Rule...the 10 Customer "Suggestion". Now, having an in-depth knowledge of the industry I know that statement is totally inappropriate.
Customers want to know two important things. Are they quality products, and are they affordable? Most potential customers I came into contact with did not buy based on usage or concentration. Chances are you did not either. I believe that Amway produces high quality products. I used many of them for 10 years. However, there is a big difference in quality and value. What I believe is lacking in the industry today is value- high quality products at a fair price.
When you participate with a company in this industry you have just stepped into what I refer to as a "closed market"-you purchase goods provided by the "state" (figuratively speaking). While you are participating in a free enterprise business you have opted out of the "open market". The rationale is simple; how can you expect someone to use products you do not use yourself? Therefore, many of you use them as well. I believe that companies have a responsibility to offer truly competitive pricing because of this exact situation. They have a captured audience, so to speak. Most companies that I am familiar with have products that are not price competitive with retail stores. They charge prices that the average person will not pay. It is my opinion that companies in this industry have an ethical obligation to charge fairly. Unfortunately, many do not.
Do you have to pretend to have customers to get paid? I am not referring to you as your own customer either. Do you have other customers? Why not? The answer is probably based on the same reasoning many of you struggle with when purchasing your own volume. If there is a challenge I do not believe it is quality-related. Most companies in this industry offer high quality products. How much is a month supply of your Double-X? How much does the similar quality product cost at the local GNC?
This is untrue. However, this is what I was told as well. It is important to point out that the FTC does not approve companies in this industry. It regulates them. In fact, the 1979 decision basically stated that Amway was not illegal if it provided (among others) the following:
The '70 percent rule' provides that '[every] distributor must sell at wholesale and/or retail at least 70% of the total amount of products he bought during a given month in order to receive the Performance Bonus due on all products bought . . ..' This rule prevents the accumulation of inventory at any level.
The '10 customer' rule states that '[i]n order to obtain the right to earn Performance Bonuses on the volume of products sold by him to his sponsored distributors during a given month, a sponsoring distributor must make not less than one sale at retail to each of ten different customers that month and produce proof of such sales to his sponsor and Direct Distributor.' This rule makes retail selling an essential part of being a distributor.
More complete information can be found in the following:
IN THE MATTER OF
Final Order, May 8, 1979
Having achieved the diamond level in 4.5 years; traveling around the world speaking for other organizations, being the very first IBO to place an order from Quixtar, interfacing with the "corporation" as the liaison for a group of diamonds, experiencing Peter Island, numerous visits aboard the Amway yacht, and many of the related fringe benefits provided by the "corporation", no one was more disappointed than I was, to find that what I was told success in that business would be -it was not. If it were, why would I have resigned? The principles on which I was raised taught me that no amount of apparent glamour is worth "selling" one's own ethics. I believe that there is an attempt to take advantage of one's core values-faith, family and love of country-by a very small group of people with a great deal of power. I refuse to be a part of something that I believe has been corrupted.
Let me conclude by saying that I wish you the best of luck in whatever direction you go. I hope my experiences assist you in making an informed decision. I believe in the concept of network marketing. I think it can offer people a great opportunity. However, I do believe that many organizations in this industry misuse the very trust given to them so freely by their distributors.
I also think that some companies and/or distributor groups in this industry prey on people's hopes and dreams. I would also suggest that a company should have a fiduciary as well as moral obligation to its participants to ensure that their business be represented properly. I think that rules should be applied equally to all of a company's distributors, regardless of their tenure.
Lastly, I do not pretend to think that my views will go without criticism. I respect that we may differ in our opinions. I have learned that the cause for so much angst when discussing these issues runs much deeper than simple business considerations. I believe that these issues raise doubts and force one to question their "belief system". (When I use the term "belief system" I am not referring to your faith or family, I am discussing this in terms of trust issues within the framework of your IBO business.)
I think that the greatest sadness I have seen has been watching individuals have their belief systems shattered. Many people have worked for years only to find out that much of what they were told is not true.
I also believe that is why many people are oftentimes close-minded to the possibility that what I am saying may be true. That is for you to decide. I wish you nothing but the best.
Please note: It is important to point out that the preceding responses/comments are based on my experiences and opinions. I am only sharing this as a way to answer the many calls I receive.
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