May 01, 2017
Mannatech’s Path to a New Compensation Plan
While Mannatech has made some changes to its compensation plan for Associates through the years, the company is now instituting an entirely new comp plan. President and CEO Al Bala shares some of the most important elements he is focusing on for the successful launch of this strategic investment.
DSN: What does implementing a new comp plan mean for Mannatech?
Al Bala: We decided that in order for our comp plan to match the high quality of our products, it needed to be improved. Our new comp plan will make sure those who are building their businesses are suitably rewarded. I believe that it will be a catalyst for momentum in 2017 and beyond.
We expect that this new plan will enlarge our base of Associates who could potentially earn income. We hope to see quite an increase in participation in our plan because of the opportunities that will be more readily available, especially for those starting out.
DSN: Launching a new compensation plan can be difficult. Why did you decide to initiate this undertaking?
AB: We felt we needed to create a comp plan that was attractive and competitive in today’s social, mobile and global economy. But first and foremost, the new plan is designed for incentivizing growth. Our old compensation plan had become outdated and unwieldy due to the many changes we applied throughout the years.
Government regulation has also created a different environment in our channel, and I felt we needed to respond in a proactive way. Our goal is to have a program that is easy to work with and makes clear how to be successful with Mannatech. We also want to stay ahead of industry trends and stay compliant with government regulations. This will enable our Associates to build safe, secure, long-term business anywhere in the world.
DSN: What has your approach been to launching the new comp plan to your Associates?
AB: From the very beginning, we committed to a long-term process. After 24 years in business, we didn’t want to try a quick fix. We wanted to develop a comp plan that would last another 24 years. There are a number of ways to develop and introduce a new plan. We decided to take the long-process approach to make sure we got the new plan right. As a result, we’ve been working on it for a couple of years now, and have been sharing the vision for what we plan to deliver with our Associates during that time. We’ve been transparent with our field to help ensure they understand what we are doing and why.
For months, I have worked very closely alongside our field leaders, and I have circled the globe meeting with them to share the new compensation plan ideas and receive their feedback. I’ve traveled to just about every continent in the past few months to make sure we are communicating and being transparent with our field, because we believe that is the best way to ensure an enthusiastic transition.
DSN: What is the desired outcome you would like to achieve in rolling out your new comp plan?
AB: Because growth is the overall goal for the comp plan, we wanted to make sure that our field is energized and excited, which can turn into momentum and fuel growth. We want to make sure that during the rollout all of our Associates know that the new plan will be a benefit to them and enhance their business. I know that the field can get very nervous about comp plan changes, but that is why we have worked so hard to stay transparent and get in front of our Associates with the new plan as soon as we could.
We want our Associates to feel like the new plan is simple and clear. It is intended to be easy to understand and easy to share with others. To that point, it will have a straight line connecting effort, volume, rank and rewards. The more someone produces, the more rewards they will receive. The plan puts a strong emphasis on customers and retail, and has generous incentives for developing leaders and for long-term income.
The new comp plan makes it very clear how Associates can earn and what it takes to achieve success. The primary principle the new plan will deliver is that those who put in the right kind of effort consistently can do well financially with Mannatech.
DSN: What has been the most difficult part of developing and implementing a new comp plan, and how did you overcome these challenges?
AB: The hardest part was crafting a plan that addresses the diverse needs of our global Associate base while making sure it was simple in its value proposition. This is why we decided to take our time with this. As often quoted, “I would rather measure twice and cut once.” We included so much of our field in this process to extract the best global ideas as possible. We brought in two experts on comp plans to consult on this to make sure we were on the right track. We closely evaluated other plans as well.
We also ran countless simulations and went through a multitude of iterations of the plan until we found the sweet spot we were looking for.
We describe the effort as a top-down co-creation built from the bottom up. It required a commitment from our Board of Directors all the way down the executive chain and throughout the field. The final product needed to ensure success for our Associates, so we spent the time, energy and resources to make sure we could achieve our goal of creating a simple comp plan that shows a clear benefit to our field sales teams.
DSN: What advice would you give to another company seeking to develop a new comp plan?
AB: I would suggest adopting timeless guiding principles, be clear on the goals you want to achieve with a new plan, stay transparent and communicate widely with your sales field—and simulate, simulate, simulate the plan to get it right.
We settled on eight unmovable principles to guide us in developing the new comp plan, and those were:
- Focus on growth.
- Advancement comes from lifting others.
- Make the dream and the opportunity real.
- Success comes from building and keeping leaders.
- Reward those leading by example.
- Develop clear customer and distributor roles.
- Have clear, achievable goals in the first 90 days.
- Create many opportunities for recognition.
These principles helped us to stay on track and create a comp plan that we believe will provide a path to a duplicable and long-term sustainable business.
We would not have been able to reach our goal for the new comp plan without being open and collaborative with our salesforce. To me this was truly a co-creation effort, and for that reason, it is being very well received. We had passionate dialogues with global field leaders, but in the end, our willingness to listen and adapt has made the new compensation plan much stronger than if we had not partnered with our global base of Associates.