January 02, 2011
Be the Leader: A Case for Values-Based Leadership
by Truman Hunt, President, CEO, Nu Skin Enterprises
My son recently informed me he is considering applying for admission at one of the U.S. military academies. Not coming from a military family, I wasn’t sure what that desire would require. But because my wife and I try to support our children’s goals, I spent some time researching what an education at a military academy would entail. As I did my research, I was incredibly impressed with the quality of those admitted to military academies. These young men and women are truly the cream of the crop. Not only do they perform well academically, virtually 100 percent of them have excelled at high school athletics, most of them have been team captains, and more than 20 percent of them were elected to student body offices.
What truly captured my attention is the fact that the rigorous academic demands placed on students at military academies are complemented with just as much emphasis on developing leadership skills and characteristics. This makes sense—military leaders need to be able to lead teams through life-endangering situations—certainly scenarios where leadership is critical. This also struck a chord with me, because I have concluded that there is no other industry in the world where leadership is more crucial to results than direct selling.
I sometimes marvel at the number of direct selling startups that come to market with the latest hot product or compensation plan. In many cases, it seems as though the founders of those entities may believe that these elements will be sufficient to attract congregations of salespeople to preach the company’s virtues throughout the world.
At Nu Skin, we invest heavily in innovation and are fiercely proud of our product offerings and distributor compensation plan. But we also strive to remember that, without effective leadership in both our distributor force as well as our corporate offices, innovative products and a compelling compensation plan are of little value.
At West Point, cadets are taught that they must lead as if lives are at stake, because they literally are. While direct selling may not be a matter of life and death, there is still a lot on the line. Hundreds of thousands of families make an investment in direct selling to secure a better future—their lives may not be at stake, but their livelihoods certainly are. Consequently, leadership in a direct selling organization is also critical—we, too, must lead as if our lives depend on it, because, in fact, so many lives do.
Now, if we accept the notion that leadership is critical, we should ask, “What kind of leaders ought we to be?” At West Point, the leadership program is structured around the principles of “BE, KNOW, and DO.” Consistent with the order of this framework, cadets are taught that leadership begins not with what you know or do, but rather with who you are.
Consider for a moment those individuals in your life who you would find to be great leaders. When I reflect on this question, I conclude that technical expertise does not make a great leader. Rather, those who motivate me and those whom I would follow into battle are those whose lives stand for more than their intellectual capabilities or their ability to make sound business decisions. Rather, they are people of moral fiber, people who make decisions based on values and principles more than business cases.
I would think that most direct selling companies want to grow up to be a member of the billion dollar club of direct sellers. Yet there are only a handful of companies of that size in our space. While I do not know all of the founders of each of the companies that have sustained sales greater than a billion dollars, I would venture to guess that, in each case, the founders of these businesses and those who grew the businesses to that level of success are people of significant character. I know this is the case with Nu Skin Enterprises. At many moments, when other companies would have folded, the founders of Nu Skin (of which I am not one) consistently reinvested in the company’s future to preserve the trust of a salesforce that had tied their well-being to corporate decisions.
Being an effective leader is a function of whether our values, our intentions and our actions justify the trust of others. While knowing (a function of competency) and doing (a function of execution) are important, the latter of the two traits is irrelevant if it is performed on a platform void of character. And the real magic happens when a company finds itself in a position to benefit from the value of all three characteristics—values-based leadership combined with high levels of competency and excellence in execution make for a potent attack in the marketplace.
In today’s business environment, the stakes are high, and the landscape is changing quickly. It is very difficult to forecast the future environment, even in the mid-term, with any degree of accuracy or confidence. Direct selling companies and sales organizations need leaders who can motivate and provide trusted direction in the face of circumstances in which followers recognize that their leader’s character, behavior and decision-making ability will significantly influence their well-being.
Whether a longtime direct seller or a new startup, if we want to improve the likelihood of business success for our distributors, employees and shareholders, we need to first develop and attract leaders, both internally and in the field, who can prosper and succeed no matter what the circumstances or environment may be. I suggest that the best, most important strategy is to secure people whose values and moral character enable them to engender the trust and loyalty of those they lead.
Truman Hunt is President & CEO of Nu Skin Enterprises.