Today we are going to finish talking about the “secondary business” of motivational systems.
The motivational systems of MLM companies started with good intent, but by the 1990s critics are charging that the secondary business and revenue generated from these systems are causing more harm than good. Still, the participants and promoters of “The Systems” point to the continued success that the systems generate.
By the late 90s, there exists in Amway, groups of Diamonds that know no other techniques to building an Amway business, other than the “motivational systems.” Testimonies, and objects of wealth are displayed by these Diamonds as clear evidence that the Amway Sales and Marketing Plan is the ultimate opportunity for becoming wealthy. But, there profits from “the System” goes largely undisclosed.
And yet, the majority of wealth is coming not from the sale of Amway products and services, but from the sale of motivational books, tapes, and motivational rallies with adoring distributors hanging on to each motivational tidbit coming from the speaker’s mouths.
Reports in the media compare the frenzy to everything from a rock concert to
an “old-fashion evangelical tent meeting”.
“The System”, although still relying on Amway to provide quality products, services, and support; distance themselves from even mentioning the Amway name, and when they do, they do it almost apologetically, referring to Amway as “just one of our suppliers”.
Amway had been monitoring some of the rhetoric being spoken at the meetings and on tape since the mid-1980s and had instituted certain rules on the content of presenting the Amway Sales and Marketing Plan, but had little control over what was being said from these “motivational speeches”.
The debate on the Internet rages even today, as to what could have been done to prevent ex-distributors from leaving the business, after tiring of these meetings and the expenses of the motivational tools.
But, the fact remains that by 1997, Amway’s meteoric rise to the top of the MLM Industry with annual sales of over $7 Billion dollars had reach its plateau. Sales plummeted to under $5 Billion dollars worldwide. Forbes Magazine in their annual Forbes 400 reports a loss of around $4 billion in the net worth of Amway’s co-founders.
So, in 1999 a new company, a new business model is formed. Amway becomes 5 separate companies with other divisions as well. The new MLM company formed for North America is named Quixtar, and it’s formation will depend on the Internet. This is the same Internet that had been criticizing Amway and the motivational systems for more than 5 years.
I believe the formation of Quixtar was done for several reasons. The one most cited is the tarnished name of Amway, due in no small part to the “The Systems”. A new name and a new model might steer the negativity away from the ethical distributors, (now called Independent Business Owners or IBOs) that were still operating by selling products and services, NOT motivational materials.
“The System” IBOs saw the change as a chance to promote a “NEW” company, that was “definitely not Amway”. After all, they had been distancing themselves from “that name” for years.
But my main belief is that the DeVos and Van Andel families envisioned a company that would give the newest IBO a chance to directly connect with the corporation, apart from any system of motivation.
The hope is/was (in my opinion) that the Quixtar model will give rise to the entrepreneur again. This is what I believe they were thinking.
But, the problems of “The Systems” still exist in Quixtar today. Even with the direct access to the website, “The Systems” still entrenched the new IBO into a system that is now antiquated. They are still trying to gain control over the newest IBOs with training tapes, and private “websites for sale”, and antiquated voice mail systems to deliver their messages of hope and hype at a premium cost.
This “good idea gone bad” still needs change. And there is hope that changes are on the horizon. Small groups of non-System IBOs are gaining favor, IBOs that insist on ethical behavior, product sales, and minimal expenses. IBOs that favor inspiring leadership and action rather than a “good feelings pitch”
“The Systems” series will continue on Monday April 18, 2005. Next week we will discuss the content and topics covered in a “System” meeting, my thoughts on inspiration versus motivation, and what I believe needs to happen in designing a NEW System.