President's Message - Guarding the Truth December 2001

Sixteen years ago, when Melaleuca was just getting started, multi-level gurus used to approach us with promises of joining us and switching thousands in their "downlines" to Melaleuca if we would just give them some sort of "special deal." I was never tempted to enter into negotiations with these people. I anticipated that they were lacking in both loyalty and integrity. If they were willing to tear down the company they had been working with for several years, they would also be willing to do the same to Melaleuca some day if someone would just offer them the right price. I saw them as scoundrels and pirates willing to eat their own young if someone would just pay them to do it.

Over the years, we have been approached with hundreds of such offers. Some of these folks have had tremendous credentials. Several years ago, I learned of a situation in Salt Lake City where a group of leaders from Rexall were making a move to Melaleuca. They had been offered a "special deal" by one of our top Executive Directors who had found a spot where a roll-up of a few hundred customers was about to occur. The Rexall group had been promised to be placed in a strategic position in the organization so they would receive the roll-up when it occurred-starting them off with several hundred customers in their first three months with Melaleuca. Upon learning of this situation I flew to Salt Lake with some of my staff to meet with these folks, and I told them that we could not allow this deal to go through. I informed them of our attitude towards special deals and explained that it would be greatly to their own disadvantage if they did not enter the business under the same parameters as everyone else. We explained that in order to have others have confidence in them and in the company they needed to be able to say, "If I can do it, you can do it." You can't say, "I needed a special deal to do it, but you won't need a special deal." How can we lead if we take a different, easier route than what we expect our people to take?

I am proud to say that after sixteen years, we have never offered anyone a "special deal" to come on board with Melaleuca. We know that in multi-level companies special deals are commonplace. I guess that's one more reason we are not multi-level. We all know of Natural World that was founded a few years ago by a fellow who Forbes Magazine listed as one of the 400 wealthiest people in the world. They felt that they had enough money to "buy" people into their business, and their primary target was Melaleuca Executive Directors! They hired one of our Regional Managers, made him their Vice President of Sales, and went after our people with offers of tens of thousands of dollars (and in a few cases hundreds of thousands of dollars) if they would just switch companies and bring large amounts of people with them. Dozens of our leaders were enticed away with promises of instant success and offers of an "infinity bonus." But their people refused to follow them. Buying people into a business never works. It is not duplicatable. Companies that allow it always self-destruct. Three years later, Natural World went out of business.

Recently, I received an email that buying people into Melaleuca was becoming common place among some of our top people. Sometimes I hear rumors that, based on their source, I know it's best to ignore, but this came from someone who I respect a great deal. It concerned me, so I asked Jeff Hill if he had heard anything about this. He told me that he had heard the exact same rumor that week. It occurred to us that, although it had always been an internal policy not to allow special deals, this policy had never actually been formalized in writing. I guess we had always figured that it was the company that would be approached and not our Marketing Executives. Now with Marketing Executives making hundreds of thousands per year, and a few making in excess of a million per year, it occurred to us that Marketing Executives are now financially in position to offer substantial deals themselves.

We were concerned and felt that we should put an immediate stop to this practice. We brought it up the following week with the Executive Director Council and then with the Executive Leadership Council in Scottsdale. We formalized a policy that in general states that the only enticements a Marketing Executive may use in recruiting efforts are:
     1) The Melaleuca product line;
     2) The Melaleuca compensation plan as it exists;
     3) Your commitment to work your heart out to help them build their business.
In other words, No Special Deals!

But the story does not stop there! The spontaneous applause when we announced the new policy to the ELC indicated to us that the stories of people buying people into the business were widespread. In fact, almost everyone we talked to had heard about it. None had any first-hand knowledge, but almost all had heard something from somebody. In fact some were saying buying people was how several organizations were creating growth. That concerned me a great deal. If those stories were true, we needed to get the practice stopped.

With a little effort, rumors can always be traced back to their sources. I commissioned a few members of my management team to work on this project and determine who had bought who. What we found was amazing! No one had any first-hand information! But everyone was willing to tell us what they had heard and who they heard it from. It was like the game of telephone-the story changed a little bit every time it was passed on. And even though dozens had heard the stories, each time they traced back to the same individual. The story was started by an individual, and was about an individual. Over time it expanded through embellishment to include many people, and had been passed on by many people.

Rumors are so powerful! They can destroy reputations. They can destroy lives! They can destroy faith. And they can destroy the people that pass them on.

In this case, here are the facts: A few years ago, one of our leaders signed up a leader from another company. Since the new recruit was walking away from a substantial income, and it would take some time to build a Melaleuca business, he was offered a loan of ten thousand dollars to be paid back later. It was a loan-not a gift-and was indeed paid back on schedule. I would have preferred that it had not happened, but there was no policy against it at the time. Another Marketing Executive embellished the story a bit, perhaps through jealousy, or perhaps innocently passed it on, not to one person but to several. The story grew from being a loan to being a payment, and then from ten thousand dollars to tens of thousands. And then from a single instance to dozens of instances. Years later, the story grew to create an impression: "The reason for this Marketing Executive's success is because he is buying a lot of leaders into his business." And then later it became: "That's how all the big Executive Directors are growing-they are buying people."

I have watched the success process in several companies throughout my entire business career. Some who are less successful tend to make up stories about those who are more successful. Using rumor and innuendo to destroy reputations of those who should be our heroes is a terribly destructive process. In the past, this horrible custom has avoided Melaleuca. Now, with many making hundreds of thousands of dollars, the temptation for some might be too great.

We at Melaleuca remain committed to keeping a level playing field for all who join us. We invite you to protect this great opportunity by challenging rumors where they start, and by standing up for those who lead us. Thanks for all you do to enhance the lives of others.

Sincerely,

Frank L. VanderSloot

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