How do they measure "Success" in Quixtar?

Towards the end of the book Mr. Welch repeated a story where one of GE's business groups had just completed a record breaking sales campaign but everyone was stunned that the group's profits had not increased.

Mr. Welch mentioned that the marketing group tasked for the sales campaign only was measured on sales.   So the marketing group drummed up sales by offering discounts to their customers so they could meet their new sales challenge.   Of course the real reason for any sales campaign would be to increase profits, but since the marketing people were not tasked with obtaining sales with a minimum gross profit margin, the sales campaign was all for nothing.  I got a good chuckle from this story as I had a similar one of my own at GE. 

Mr. Welch went on to point out that business measurements have to measure the right things so that the final goal is achieved.  In this case the measurement (sales) was not aligned with the ultimate goal of profitability.  This got me thinking about all the various business measurements used in the Amway/Quixtar business and how misaligned they are from the ultimate goal of an IBO making a profit.  

If IBOs were to really think about the various targets and measures placed before them by their upline, they might too realize that these measures are severely skewed from the end target of IBO profitability.  The goals IBOs accept from their upline might make sense from the upline's profitability standpoint, but from the individuals IBOs standpoint most miss the mark.

Let's take for instance Quixtar PV goals and how they impact profitability.  There is personal PV and then group PV.

Personal PV.  Having a high personal PV does not ensure their will be a profit for the IBO.   Since many IBOs are encouraged to stretch and buy their PV so that they can be recognized for their next pin level.  In this case their PV goal was reached but it probably cost the IBO several hundred dollars buying products they did not need.

Group PV. Group PV is in no way correlated to IBO profitability.  There can be numerous ways in which an IBO's business can structured in width and depth to achieve the same PV.  For example, an IBO in a stacked group has the illusion of having a big business but the IBO is also making very little money.  An IBO with lots of width will be much more profitable for the same PV.

Similar to the GE example, the measurements of PV misses the end target of profitability by a long shot.  In fact measuring PV is a very poor way to measure a distributor's success, if profitability is the definition of success.  A better way to measure an IBO's success would be instead to measure their actual profit.  I would first suggest a pin system based upon the size of their Quixtar bonus check or better yet, a pin for the net profit reported on taxes.   We could call each dollar of a "Quixtar check a "SP" or success point.  The SP's could them be given out on increments similar to the PV pins.  

Let's look at the goal of "Eagle" and "Double Eagle".   These are special recognition from lines of affiliation for personal PV, group size and number people in your group buying the system tools.  The Eagle program goes a bit further and specifies a minimum number of legs for the distributor to have but also adds the requirement that the IBO spend money on the upline's system and have 4 out six legs under him also spending money on the system.  It is highly probable that the system expenditures of the group exceed the bonuses earned by the group.  As with measuring PV, the Eagle programs miss the mark of actually measuring IBO profitability (success).

Many other lines of sponsorship has measures for the sales of function tickets and the number of people on system. 

I have yet to find one lines of sponsorship that measures IBO net profit or the net profit of a group.  It is no wonder that the majority of IBOs are losing money since the majority of their business measures and goals are focused on the increasing expenditures on the system and personal product purchases rather on increasing retail sales and minimizing business expenses.

back to the home page