January 09, 2012
Avon Searches for New CEO
by DSN Staff
As Andrea Jung steps into the new role of Executive Chairwoman, searching for a new CEO becomes top priority for Avon. The announcement triggers the beginning of yet another era in the life of the 125-year-old direct selling giant, which exceeds $10 billion in annual revenue. Andrea Jung has been Avon’s longest-tenured CEO, as well as the longest-serving female CEO currently in the Fortune 500. In her years as Chief Executive, Jung oversaw the doubling of Avon’s revenue and salesforce. She also took the company into developing markets like Russia and China, creating a competitive edge for Avon.
The outcomes of the recently made Board decisions will obviously be interesting to observe. As the company searches for a new CEO, it also continues to face the challenges of meeting the needs of a different type of consumer and independent contractor. As the expression goes, “Things are just not what they used to be.” The speed of change incurred in our society over the past five years surpasses that of any period in history, presenting challenges for most business models and certainly for a company that has been around for more than a century.
In a recent release which ranked e-retailers during the 2011 holiday season, Avon ranked #2, behind Amazon, but it was not clear whether the rankings were an assessment of the company efforts or the efforts of probably 100,000 or more independent contractors who now utilize the new tools of technology supported by the company. This would indicate that massive change is taking place at Avon, as the ladies are surely no longer just knocking on doors. The announcement of a new CEO search has grabbed all of the headlines, and a host of different opinions have been expressed as to what is really going on at Avon. Some of us have been witness to so many announcements over the years that we may have taken a different view.
A big concern, from a direct selling point of view, would be focused on the understanding of how the direct selling channel of distribution actually functions and what makes it thrive. Those who placed Avon right behind Amazon in their ranking probably based their findings on the numbers and, hopefully, customer satisfaction. The fact that a direct selling company ranked right behind the giant Amazon serves notice that direct selling companies are to be watched.
While we understand the relevance of Wall Street opinion to the success of a publicly held company, we also know that Avon is not the only company making changes, nor is it the only company facing challenges. When you happen to be the biggest, and are publicly traded, you obviously get the attention. The challenges that all direct selling companies are facing boil down to the company’s ability to attract, nurture and grow a sales force of independent contractors capable of serving a much more sophisticated consumer with excellent products and services in innovative consumer-satisfying ways. Direct selling depends on independent contractors who have to become effective vehicles of commerce, and the process, infrastructure, tools and support needed are far different than even five short years ago. Attracting and retaining salespeople, and developing a segment of them into sales leaders who can duplicate their efforts into others becoming organizational leaders, is the key to not only the future of Avon but the entire direct selling industry.
We have to believe that the announcement to search for a new CEO at Avon is about much more than a CEO search; in fact, we hope it is because the Avon family of consumers and representatives developed over many years deserve to have nothing but the best. The legacy of the company stands for so many positive things—contributions to women’s rights, beliefs and causes have been astronomical. As we look to the future, it is always with a brighter and more vibrant vision for what we can be.