Des Walsh was looking for a boost. This boost would not come from one of the products offered by Herbalife Ltd., a 4,500-employee nutritional products company that seeks to help people live more active and healthy lives.
Rather, Walsh was looking to provide a boost to Herbalife’s mediocre sales figures. In the three years prior to Walsh’s arrival as company president in January 2010, net sales had been flat, lingering right around either side of $2.2 billion. In 2009, the company registered $2.3 billion.
“Our founder had a vision for Herbalife to become a $5 billion retail company,” Walsh says of company founder Mark Hughes. “That was a core vision he had laid out many years ago. For this new management team, as we embraced the value and vision of the company’s legacy, we adopted that same challenge. We worked with our leaders to try to figure out, how do we grow the business?”
Walsh had a bunch of places he could look to discover this elusive boost. Herbalife is a global brand that markets and sells its products through a network of more than 1.9 million independent distributors in 70 countries around the world.
The problem was that while some parts of the world were experiencing growth, others were not, and that’s what was causing the growth problem. Walsh needed to find a way to take the good ideas and strategies and share them with the people who could use the help. If it was done effectively, revenue would increase and Herbalife would move closer to meeting the goal that its late founder ran out of time to reach. It was up to Walsh to devise a plan that would get everyone back on track toward achieving that goal.
Look at what’s working
Walsh wanted to get inside the heads of his successful distributors and figure out what it was they were doing so well and why it was so much more effective at generating good results than the strategies that others were following.
“We looked for distributors that were achieving significantly higher levels of success than their peer group in a particular market,” Walsh says. “We looked for two things: increasing sales and increasing movement of our marketing plan.”
The marketing plan would be key to achieving the $5 billion goal. Part of Herbalife’s strategy is to recruit new product distributors at the same time the product itself is being pitched. The company’s belief is that if you can get people so excited about your product that they want to help bring it to others, you’ve done more than just create one sale. You have the possibility of creating an exponentially higher number of sales as more people get more potential distributors excited and so on and so on.
The thought of bringing someone on board as a new distributor is always part of the sales pitch.
“When our distributors begin their Herbalife business, they come in with an entrepreneurial spirit,” Walsh says. “It’s driven with wanting to bring the Herbalife brand to more people. Our distributors are very interested in learning from other distributors and helping them to achieve greater success. It’s a very core part of our culture.”
Unfortunately, this sharing of ideas was not taking place uniformly across the entire organization, leading to the slow pace of sales growth.
Walsh needed to get things moving again. He needed to find the ideas that were worth replicating to the benefit of other Herbalife distributors and then work on breaking down the silos and reopening the lines of communication to spread those ideas across the organization.
The first stage of this process is identifying an idea or strategy and exploring whether it is worth sharing with others.
“What is it that is driving growth in a particular distributorship?” Walsh says. “Is this something which we believe is beneficial and sustainable? Sometimes they aren’t sustainable in the long run. We’re looking for success drivers with long, stable growth and duplication potential.”
You also need to look at external factors and determine if they are playing a role in the idea’s success.
“Sometimes an idea works within a particular distributor’s organization, but it’s not exportable or duplicable,” Walsh says. “That’s why we seek to have another distributor test it. If we find out based on that, it is an idea that can spread across cultures and across markets, we look to do that.”
If the idea still looks good after it is tried in multiple environments with multiple leaders, it’s time to give the originator a chance the share their inspiration with others.
“They show distributors what they’ve come up with and they train on how other distributors can duplicate what they’ve done,” Walsh says. “The last stage is we measure the adoption and track the level of success.”
Closely followed, Walsh was confident this process would generate results. He just needed to find an idea worth replicating and get people talking about it.
Spread the word
It wasn’t just one idea that got Herbalife back on course toward its goal of reaching $5 billion in sales. But one of the best examples of an idea that got the company moving in the right direction, and got people talking to each other again, was a weight-loss challenge conceived by a group of distributors in Michigan.
“It was a 12-week program in which they invited members of the community who wish to lose weight to participate in the program,” Walsh says.
After people met initially and recorded their weights and measurements, a regular meeting schedule was set up to monitor progress. These meetings would also feature discussions on the benefits of good nutrition, through the use of Herbalife products, of course.
“What it creates is a fun, competitive environment,” Walsh says. “People find it challenging and rewarding. This becomes a very supportive environment where people can learn about good nutrition. Most importantly, they achieve extraordinary levels of success.”
When you create a program that gets people to not only buy your product but to also be engaged in your product and participate in programs that surround your product, you’ve done more than make a sale.
“But also, in keeping that weight off, it creates permanent customers for Herbalife,” Walsh says. “Plus, many people say, ‘Wow, what a fun thing to do every week,’ and they become an Herbalife distributor. So it not only creates permanent customers, they become Herbalife distributors.”
It’s not always that simple, of course. In the case of people who already are Herbalife distributors, if you have one person who is experiencing success offering their perspective to someone who is not doing as well, the potential exists for egos to be bruised.
“All we can do is highlight success and have other distributors train on how that success can be duplicated,” Walsh says. “Our distributors are not saying, ‘What you are doing today is wrong.’ What you are doing today is great. But what we are showing you could help you even more. We’ve all heard the same thing before where the leader says, ‘I’m here from corporate and I’m here to help.’ But rather than force ideas from one country or one organization to another, it’s a slower path. It may take as much as two or three years, but it achieves a higher level of success.”
If you’ve got someone in your organization, whether they are an independent contractor or an employee, the key to getting them to successfully share an idea with a peer is convincing them to show humility.
“I’m not here to tell you what to do,” Walsh says, of how to open the conversation. “But what I am here to do is share with you my story. If there is something in this that can help you in your business, I encourage you to adopt it. It’s that spirit of humility that can make a big difference.”
It’s the same measured approach that you need to take with customers who you want to turn into distributors if you want a chance at closing the deal.
“The process that I’ve described is not a fast-track process,” Walsh says.
Your humility and desire to help others is important, but you need people who want to learn and want to explore the opportunity you’re presenting. So when you have opportunities out there to bring to other parts of your organization, it’s typically best to seek out volunteers to receive them.
In other words, don’t force ideas on people who aren’t interested.
“You want people to evaluate the concept with an open mind and with a real interest in helping it to be successful,” Walsh says. “If you take your top sales leaders and say, ‘I want you to experiment with this, who is interested in seeing if we can adapt this to your country?’ you will have people who are actively looking for ways to enhance and grow the idea and adopt it successfully.”
Create opportunities for people to share information and find ways to get them talking to each other.
“Have your sales and your corporate team spend as much time out in the field as possible,” Walsh says. “There’s no substitute to hearing and listening to good ideas firsthand.”
But don’t lay all the burden of talking with your people on your management team. Walsh makes trips around the world, and instead of just meeting with regional leaders, he wants to talk to the top performing salespeople.
“I want some personal face-to-face time with our lower-level distributors who are moving rapidly,” Walsh says. “I always have two questions for them. What are you doing that is causing you to have such success? What can we do to support you to achieve even greater success? By having these face-to-face meetings, which are always in the presence of local and regional management, we are constantly looking for the next great idea. We are fostering the culture that everyone is totally focused with helping.”
The Michigan weight loss program turned out to be very translatable to other parts of the world. As more communication took place and ideas moved more freely around the organization, sales began to improve. In 2010, net sales hit $2.7 billion.
“I was just at a Russian extravaganza in Minsk where they just launched an expansion of that program,” Walsh says. “What they found was that many customers in our Russian-speaking market would complete the 12 weeks and ask if they could come back and participate in the program with more topics. It just shows you the desire of people to achieve a weight loss goal in a supportive environment.”
Walsh says great ideas don’t always have to come from the president or CEO.
“No matter how bright somebody is, no matter how experienced we are, we all benefit from hearing ideas from others,” Walsh says. “Those ideas are best when heard from people closest to the customer. Making the time to hear ideas from those people who are in the early stage of their careers when they have a fresh perspective is always time well spent.”
How to reach: Herbalife Ltd., (866) 617-4273 or www.herbalife.com
The Walsh File
Born: Dublin, Ireland
Education: Bachelor of Laws degree, University of London
What was your very first job as a kid and what did it teach you?
My first job was in an insurance broker’s office in Dublin after I finished high school. It taught me that the best way to achieve success was always to be looking for ways to do things better.
Who has had the biggest influence on your life?
My dad, who exemplified the importance of staying calm in every storm, doing the right thing every time and treating everyone with equal respect.
Who is one person that you would like a chance to sit down and talk to?
More on Herbalife: The company’s products include protein shakes, protein snacks, nutrition, energy and fitness supplements, and personal care products. Its mission is “Changing people’s lives.”
Michael O. Johnson joined the company as CEO in April 2003 after 17 years with Walt Disney Corp., most recently as president of Disney International.