Integrity, Ethics, Values – The making or breaking of any business.
I have been struck recently by the number of companies that seem to be content to try and pull the wool over the eyes of their stakeholders;, be they customers, shareholders, distributors, or indeed their own management. Big money brings out the greed in many. Some of it is driven by the fear of loss, some of it driven by a search for power and some of it just because desperation gets in the way.
Ultimately, integrity and ethics are dictated by the values at the heart of an individual, a society, a government, an organisation or a business.
I particularly wanted to comment on this as I have strong views about the values that Network Marketing companies should adhere to, which of course, are driven by my own values such as honesty, integrity, community, and of course, trust.
I come from a marketing and sales background where the customer is King, and as a distributor I expect to be treated as a customer by my company in ways which chime with the values of the company. I don’t expect to find the company compromising them regardless of the issues. There have been some unbelievable examples of this in recent times.
Brands spend Billions getting you to trust them.
The traditional way to build a brand sees huge amounts of money spent on communicating the core values of a business to its target audience. This is mostly subliminal, hidden in the feel of how the brand is presented; designed to appeal to the values of the audience. Over time its acceptability comes from delivering the promise of the product and the trust people place in its ability to give them the benefit they seek.
Trust is hard won and easily destroyed.
Take any well-known brand and think what it means to you. Red Bull, Coca Cola, BMW, each of them raises an instant perception of what they mean, built up over huge amounts of time by exposure to advertising, promotion and careful management of the way they handle their consumers.
Volkswagen, what a great example!
Think of VW and how your view has changed over the last few weeks.
While I’ve been writing this the Volkswagen news has been splattered all over the world, along with its reputation and a nearly halving of their share price. Their corporate cheating, by using software in their engine management system that fools emission measurements, has come back to bite them, HARD. This is corporate fraud at its worst. The irony of this is that VW is the biggest car maker in the world and it goes to show that no industry is above shading the edges of its ethics and in some cases deliberately breaking them.
A level playing field
The part that really irks me is that the self-righteous have the gall to talk about the network marketing industry as widely lacking ethics. Network Marketing companies are open to scrutiny in a way that big corporations like VW simply aren’t, and the values of community and family permeate a lot of them. The cheats quickly get found out and they simply do not prosper. What gets confused is the fact that not everyone succeeds and this is assumed to be a deliberate and integral part of the Network Marketing business method.
The Network Marketing industry facts tell a different story.
- 90 million people distributing products for Network Marketing companies around the world
- Growing year on year at 6%
- $130bn in annual sales around the world
- Changing people‘s lives.
- Innovative products
Networking companies actively encourage the training and coaching of distributors to give them access to the best ways to succeed, people choose to use those teachings and whether to apply them or not.
The VW case shows that unless you follow a set of standards that permeate the organisation there will be cheating. In their case it simply must have been a deliberate development ploy as those who know about the engineering challenges of their action will know
There are other examples of how to quickly destroy your brand such as the massive gaff made by Gerald Ratner of Ratners the retail Jewellery chain, when he referred to the products they sold as “crap”. He expressed this remark at a meeting of the Institute of Directors held at the Albert Hall in London England. His comment took £500million off the value of the company as sales literally plummeted.
A brand is only as valuable as the perception people have of it.
Network Marketing is a unique business model and this presents brand challenges.
Companies who use it suffer from a mix of messages, because they rely to a large extent on the perception created by third parties i.e the distributors. Traditionally networking companies have not spent money on advertising, they have relied on distributors, and the drive of the business owner to present the brand in the most favourable light. And the ethics, values and integrity of the company are set by the owners which percolates to the distributorship. Beware the desperate business owner.
On the one hand, doing business through distributors is a very efficient distribution model, but on the other it can be Ratneresque when distributors, or officers of the company, make outrageous claims about the earning potential or the benefits the product offers. Witness the recent issues with Vemma and the rapid contraction of Visalus.
Too much hype!
I’ve witnessed people claiming their product will cure the incurable, and make the aspiring distributor a millionaire in 10 minutes. The reality is always different and time proves the case.
Actually the earnings claims aren’t necessarily outrageous but they need to be put in perspective.
Cut through the hype! Anyone can succeed at Network Marketing
Let’s face the reality; it takes a little time to develop an organisation and the early period of a distributor’s career often means more work than reward. The principle is simple and if the method is stuck to, anyone can create an income and a career. I promise I’ll cover the base principles of how the numbers work in a future blog.
So why does Network Marketing seem to carry a slightly shady perception?
The hype and the over claims are challenges we all have to face. And something that brings us into potential conflict with regulators. But, and more importantly, the people who use this type of approach to promoting the business continue to support the perception that people have of the pyramid scheme and the get rich quick scammer.
Back to Integrity, Ethics and Values
All too often so called top Distributors are tempted to move to other companies when the one they are with is challenged and growth stalls or drops.
Those distributors tempt their downline and others to new networks with the promise of big rewards, a new business growing fast, and being in on the ground floor.
Sadly, this is an all too familiar tale. And this is where the challenge is to the perceived integrity of our industry.
The cynical in our industry plunder their downline and expect them to remain loyal to them, whilst demonstrating a lack of leadership and disloyalty to their company and downline, that ultimately destroys their credibility. The plundered downline drifts away and then they try again, ultimately resulting in the harming of our industry, their credibility and the people who have put their faith in them as leaders.
They hop from one network to another out of desperation. This action and it alone, simply underlines the perception that Network Marketing has no ethics and values that can change dependent on circumstances. The ethics of these so called leaders and business owners are driven by greed and desperation, not in honesty and the giving of value to their people. Exactly the same as those at VW.
Ultimately, the market decides how any company is run.
In the case of VW, heads have already rolled and the share price has crashed, change is being demanded by the vested interests who get paid dividends. Network Marketing is no different, if the distributors become disillusioned they walk, after all they are a volunteer army. Change is forced on an organisation because it has to happen for it to remain viable, but this is a time of conflict and at the very best any compromise of integrity, values and ethics for a short term fix is self-defeating. The smell of poor decisions, money grabbing and personal self-interest at the expense of others hangs on long after the crisis has gone.
The short term failure of managers, owners and leaders to honour what they know to be right kills businesses, regardless of what business model they use.
But it isn’t all doom even if what I have written may appear so.
Personally I will not compromise my integrity and I have paid for it financially. My wife, Sue, and I have only been with three companies in the 25 years we have been in this business, one of them for 19 years. We reached the top of that company and made a fortune, we stayed when times were tough and backed the owners 100%, but they sold the company and the new ownership essentially milked it for 5 years before selling it again. You may not be surprised to hear these owners were a private equity firm (bankers) whose values did not reflect ours. Ultimately it didn’t work because the promises of change failed to materialise.
We chose to go elsewhere; we walked away from our income and started again from scratch.
It has been interesting, challenging and rewarding. We have rediscovered ourselves and what works, and we are proving that it can be done again, without compromising our values. Is it the harder route? Yes, but I believe the more successful and sustainable one in the longer run and It feels right because it is right.
So, what are your values and how do you choose a company?
- Find out what a company stand for
- Decide if they fit with your values.
- Interview them
- Look at who is involved
- Separate the hype from fact
- Look at the competition
- Are you excited by the possibilities?
- Can you see yourself doing what needs to be done to be successful?
Walk away if it doesn’t feel right to you.
My next blog will be on the selling process and how;
“Selling isn’t about doing something to someone, it is doing something for someone” John Kanary