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September 02, 2008

New Perspectives

Gas Prices and Other Economic Woes

by Professors Larry Chonko and Buddy LaForge


The headlines all seem negative. We have been living in a very turbulent global economy for quite some time. Business rules seem to have changed. Recently, consumer confidence has fallen. Weakening job conditions have fostered pessimism for the future. People cannot afford to drive, reducing travel and eliminating vacations. The same people are complaining that their disposable income is gone due to the high price of gas. They are going out less for meals. They are searching for more discounts closer to home. People are taking fewer shopping trips. More people are shopping sales. More are using coupons. The price of a gallon of gasoline has, no doubt, affected the economy. So what can direct sellers do about this?

First, take the weight off. Remember Archimedes of Syracuse and his principle of buoyancy—a body in a fluid is lighter in weight by an amount equal to the weight of the fluid it displaces. In other words, objects that float seem to be lighter than they really are. They have some weight seemingly taken off. This is sound advice for direct sellers in tough economic times.

In the movie Monty Python and the Holy Grail, the image of King Arthur traveling through the countryside while banging coconuts together to simulate the sound of a horse’s hooves is one of the more memorable. It also became reality because there was no budget for real horses. They lessened the weight of the scarce budget by realizing that creativity can occur in times of scarce resources. Gas is not scarce, yet. The economy is poor, but economic activity is still occurring. Traditional shopping behaviors (e.g., the drive to the mall) that people engaged in seem to be more scarce. Enter direct seller creativity to lessen the weight of economic hard times.

Some think that creativity is reserved for artists, writers or composers. But creativity is just as essential for business. Direct sellers must innovate if they want to grow. Creativity extends work effort and resources. Creativity is an expression of mind power—the capacity to produce new ideas.
In the December 2007 issue of Direct Selling News, we described how creativity is enhanced by being cognitively fit—engaging in a variety of activities, experiences and interactions with one’s business environment on a regular business. What can fuel creativity? First, in business, creativity must be recognized for what it is—often a variation of an existing idea or a combination of existing ideas. Second, those variations and combinations must be based on observed human behavior. For example, how many of you have a wooden staircase in your home that includes storage drawers rather than wood slats as the upright components of a staircase? People climb stairs and have a need to store things. The combination of drawers in the stairs provides for both needs and provides the extra value of saving space. A critical lessen is to observe—what really has changed? Have the needs and wants of customers changed? Or have the ways they choose to satisfy those needs and wants changed? Have they sacrificed some needs and wants? And, if so, for what reasons? How can customers be enticed to re-satisfy their needs?

Creativity depends on a number of things: experience, including knowledge and technical skills; talent; an ability to think in new ways; and the capacity to push through uncreative dry spells. Intrinsic motivation—people who are inspired by their work often work creatively—is especially critical. A second critical lesson is to learn to take circumstances and look at them differently.

Creativity is a core competency for direct sellers and one of the best ways to set their companies apart from the competition. Creativity is characterized by the ability to perceive the world in new ways, to find hidden patterns, to make connections between seemingly unrelated phenomena and to generate solutions. Generating fresh solutions to problems, and the ability to create new products, processes or services for a changing market, are part of the intellectual capital that give a company a competitive edge.

Consider reframing problems and situations encountered. How fast can you add the following numbers without the aid of pencil and paper or calculator: 488, 496, 508, 511, 502? Now, reframe the problem. How fast can you find the solution to the addition problem by reframing the numbers: 5×500 = 2,500-12 (500-488)-4+8+11+2. In other words, 2+11+8-4-12 = 5, so that the answer is easily found. The total is 2,505. How can direct sellers creatively reframe their worlds in ways that provide improved value to customers?

People often assert they are most creative when they are working under severe pressures, such as a deadline. Not so. People are the least creative when they are fighting the clock. And, there is time-pressure hangover—creativity declines can lag over several days. Time pressure stifles creativity, because people can’t engage deeply with the problem. Creativity requires a percolation period; people need time to soak in a problem and let the ideas bubble up. Another critical lesson is that creativity is positively associated with joy and love, and negatively associated with anger, fear and anxiety.

The most creative people are those who have the confidence to share and debate ideas. Every innovator taps into others’ knowledge and contributes in return by developing new ideas. Let’s explore how direct sellers can build creative confidence by having a purposeful innovation strategy, as we discussed in the March 2008 issue of Direct Selling News.

Be Prepared
You have probably heard the adage, “Luck is what happens when preparation meets opportunity.” Reframe your thoughts. The key in this adage is preparation, not luck. Prepared people see more, know more and can more easily assimilate new data into old. This is the stage at which the creative direct seller becomes immersed in the problem. It’s an information-gathering stage, a learning stage, an observation stage. When preparation effort is a collective one (e.g., when a direct seller is with customers), it involves role recognition (e.g., idea generator, idea synthesizer, Devil’s advocate), areas of individual interest and coordination. Avoid becoming frustrated if the creative process seems to stall at this stage, especially when it seems that lots of possibilities yield no immediate “aha!”

Creative ideas can arise from reading; conversations with others; attendance at professional meetings and workshops; and a general collection, analysis and retention of information relative to the problem or issue under study. Additional investigation in both related and unrelated fields is sometimes involved. For example, when contacting customers, are you focused on selling products or on creating an environment that stimulates shopping innovation? Direct sellers must ask questions like: “What changes in consumer behavior have occurred as a result of the increase in gasoline prices?” Then they must follow up answers with questions, such as: “How can I make what I do accommodate their changed behaviors?” Needs, wants and preferences for products may not have changed, but how customers go about satisfying them has changed. Such inquiry provides the individual with a variety of perspectives on the problem, and this is of particular importance to the direct seller, who needs a basic understanding of how customers shop for products and services or sources of those.

  • There are a number of ways to develop a creative mind.
  • Read about a variety of fields; scan magazines, newspapers and journals for articles related to your business and products.
  • Join professional groups and associations; attend professional meetings and seminars.
  • Talk to anyone and everyone about your business.
  • Carry a small notebook or pocket recorder and record useful information.
  • Be curious about everything.

Let Ideas Percolate
At times, a problem may be best placed on the back burner. It may even seem forgotten or neglected. Creative minds never stop working. Reframe. Do not rely exclusively on logic. Instead, invoke the part of the mind that dreams, synthesizes and makes new, unconventional, original connections. Are you focused on how to sell your current product line or how to build a unique buying experience that cannot be copied? For direct sellers, this can mean that the idea may not be revisited for a while, perhaps until the next meeting with customers. But some who participated in the brainstorming session will still be thinking. They may have new ideas occur to them in the shower or in a restaurant, where they write down thoughts on cocktail napkins. As direct sellers maintain contacts with these folks, they will learn that there is new information to combine with the old.
Creative individuals allow their subconscious to mull over the tremendous amounts of information they gather during the preparation phase. This percolation process occurs even while they are engaged in activities totally unrelated to the subject or problem—even when they are sleeping. This explains the oft-heard advice given to a person who is frustrated by what appears to be an unsolvable problem: “Why don’t you sleep on it?” Getting away from a problem and letting the subconscious mind work on it allows creativity to spring forth.
Some helpful suggestions include:

  • Engage in routine, “mindless” activities (such as daydreaming or yardwork).
  • Exercise regularly.
  • Play sports or board games; do puzzles.
  • Sit back and relax on a regular basis.

 Leave on the Idea Lights
Ideas can seem to come from anywhere at any time—the “aha!” or “eureka!” experience. More commonly, there is no immediate “killer insight,” but some new angle that may occur or some sudden, burning, inexplicable need to return to work on the problem. For example, do you concentrate on product features and benefits as you do your homework or are you thinking of ways to organize customers into spheres of creativity? When the creative project has been a team effort, sometimes the only thing needed is to get the original group members together again after a while. Then “whoosh!” the spontaneous exchange among them can bring forth an idea that no one member could articulate alone. When the idea lights are left on, solutions will be discovered.

Again, direct sellers can reframe. Remember, new and innovative ideas will often emerge while the person is busy doing something unrelated to business (e.g., driving on the highway or leafing through a newspaper). While this still sounds like percolation, new information has been combined with old, so more information is now percolating because you left the idea lights on. While an idea may appear spontaneous, in most cases the idea comes to the individual incrementally. Slowly but surely, the person begins to formulate the solution. Because it is often difficult to determine where the percolation process ends and the idea phase begins, many people are unaware of when they move from Phase 2 to Phase 3.

  • In any event, there are ways of leaving on the idea lights.
  • Daydream regularly… we like this activity.
  • Practice your hobbies.
  • Make your work environment comfortable, and change venues once in a while.
  • Put problems on the back burner if you hit a wall, but carry a notebook or digital recorder and record your ideas.
  • Take breaks while working.

Take Action
This stage puts creativity into practice. New ideas require action, persistence and marketing ability. Perhaps more than anything else, taking action requires courage. Since taking action is more about social skill than the technical skill that produced the idea, this is the stage at which the direct seller can be most actively helpful in promoting creative solutions to customers, even during tough economic times.

Successful direct sellers are able to identify those ideas that are workable and that they have the skills to implement. More importantly, they do not give up when they run into temporary obstacles. Often, they will fail several times before they successfully develop their best ideas.
Reframe. When taking action, be open to taking an idea in an entirely different direction or discovering a new and more workable idea while struggling to implement the original one. Another important part of this phase is reworking ideas in a rough form. It needs to be modified or tested achieve its final shape. Remember, we learn from our experiences, and implementing a new idea is definitely an experience.

Some useful suggestions for taking action include:

  • Educate yourself in the business-planning process and all facets of the business.
  • Share your ideas with knowledgeable people and be open to feedback.
  • Follow your intuitive hunches and feelings, but do so objectively.
  • Engage in continuous learning about the selling process.
  • Learn about organizational policies and practices.
  • Seek advice from others (e.g., friends or experts).

When all is said and done, it is people who are creative. Great companies may have innovative products, but they are more likely to have creative people. And they are more often engaging the services of their customers in the co-creation of value, as we discussed in the July 2008 issue of Direct Selling News. IBM grew from a small business to one of the largest organizations in the world because of its salesforce, not its product innovations. Successful companies do not have to be first. Diner’s Club invented the credit card, not American Express. One other thought—Walt Disney is well known as a creative genius. Was his greatest creation Disneyland? Mickey Mouse? We think it was the creative environment he developed that continues to invent ingenious ways to make people happy. Direct sellers should think like Disney and generate creative ways to make their customers happy, particularly in tough economic times.

 Raymond (Buddy) LaForge is the Brown-Forman Professor of Marketing at the University of Louisville.

Larry Chonko is the Thomas McMahon Professor in Business Ethics at the University of Texas at Arlington. E-mail your questions and comments to professors@directsellingnews.com.