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March 01, 2011

Company Spotlight

Nature’s Sunshine: Building Brilliant Businesses and Brilliant Bodies

by Barbara Seale

Nature’s Sunshine has helped people achieve brilliant bodies for almost 40 years with its supplements and encapsulated herbs. Now there’s a broader focus—creating brilliant businesses for its distributors.

Heroic Efforts

The mission of Nature’s Sunshine to create health and prosperity extends into some of the poorest countries in the world. That became truer than ever three years ago, when the company became the founding sponsor of the Little Heroes Foundation.

As the founding sponsor, Nature’s Sunshine has aided Little Heroes in the renovation of baby hospitals in Russia, the construction of schools in Mali and the distribution of health supplements throughout Ghana. Little Heroes has also supported other organizations, including the Boys and Girls Clubs of Utah County and HopeKids.

In conjunction with the Little Heroes Foundation and Mali Rising, Nature’s Sunshine helped establish the Little Heroes Academy in Mana, Mali, during 2009. Mali is one of the 25 poorest countries in the world, and its people have severely limited educational opportunities. The Little Heroes Academy, which features three classrooms and two administrative offices, helps up to 200 children each year to get an education.
Part of the sale of every bottle of the company’s Sunshine Heroes products, which support children’s health, goes to the Little Heroes Foundation to further their cause. Additionally, the support of Nature’s Sunshine makes it possible for every donor dollar to go directly to support project expenses.

Craig Dalley“We love the focus on children,” says Craig Dalley, Vice President of U.S. Sales and Marketing. “They’re our leaders for tomorrow. Improving their lives is like improving your health. We want to offer the opportunity for distributors to be involved in helping improve the lives of children around the world.”

He explains that the Little Heroes Foundation offers grants to a variety of different organizations, allowing the company to be flexible in the way it can help people. Distributors can sign up to participate and can have a donation deducted from their commission check. The company also provides direct donation opportunities at its salesforce events.
“We have distributors who have heart. They care,” Dalley says. “Nature’s Sunshine is all about sharing and caring. There are countless stories of members who give products away simply because they want to help people get well. Little Heroes takes it to a new level.”

The company plans to launch the initiative it calls Brilliant Body, Brilliant Business at its convention this month. It is intended to accelerate its historically steady growth, transforming from a respectable $350 million company into the rock star it knows it can be: a billion-dollar enterprise.

Executives, employees and distributors—called members or, at higher levels, managers—view the company’s work as a mission to help people improve their health. The focus on growth will accomplish two things. More people will learn about the health-promoting products of Nature’s Sunshine, and more of them will take advantage of the company’s unique business opportunity to improve their finances. The mission is now about to kick into high gear.

Building on Strength

Michael DeanMichael Dean was named President and CEO of Nature’s Sunshine in July 2010 after serving on its board of directors for just over a year. He noticed that the company’s “hardcore focus” on products and expertise was unique.

“It is clear that we have amazing fundamentals in the company, but we have a great brand that far too few people know about,” he says. “Given how great this company is and how great the products and people are, why aren’t we gigantic? The answer was that we were so focused on our niche of expertise. We needed to focus on broadening the brand to elevate the opportunity.”

But shifting into overdrive meant that company executives needed to overcome two problems that were also advantages. First, the product portfolio includes approximately 600 items. And second, seasoned distributors have gained tremendous product expertise and have developed consulting skills that let them recommend useful products to clients, creating long-term relationships. As admirable as that kind of expertise is, it’s daunting to duplicate. But when you’re on a mission, you take on big jobs.

“How do you translate these killer ingredients into competitive advantage and dramatic growth?” Dean asks. “Our plan is to launch a whole new approach to selling and recruiting that greatly helps existing managers and broadens the market to almost everyone.”

The overriding job: simplify.

Keep It Simple

Nature’s Sunshine has organized its products into four key categories—core health, weight management, energy and fitness and body systems. Within each category are two jump-start products. The simplified groupings allow a new recruit to focus on just a few products, learn about them and share them quickly. Over time, new members can gain knowledge about additional products in each category. The streamlined product focus dramatically reduces a new recruit’s learning curve.

Efrain Villalobos“A challenge has been that people who want to have a Nature’s Sunshine business have a hard time duplicating what experienced managers have been doing for a long time,” explains Efrain Villalobos, Executive Vice President, Nature’s Sunshine Products, U.S. “Now it’s very easy to talk about products and sell them. Everybody can do it.

“As the conversation gets deeper into health, customers can take the Health Analysis, a questionnaire that reveals which body system is the weakest,” says Villalobos. “The person helping them can then suggest what products they can start with. We’ve created 10 unique packs that simplify helping people without having to have deep knowledge about herbs and health.”

First challenge solved. But what about amping up recruiting itself? Reorganizing products helped, but Nature’s Sunshine didn’t stop there. The company has created a new process that members use to build their businesses, taking a tip from party plan companies.

“We have always done meetings, but we have created a system, tools and collateral that our managers need to be able to do home parties successfully,” Villalobos says. “The in-home party program also will have a new compensation element that will drive the party program. It’s an overlay on top of our legacy compensation plan that allows them to be successful with parties.”

At its March convention, the company will challenge its members to begin hosting home parties at the rate of two a week. Fueled by the product reorganization and the home party focus, Nature’s Sunshine intends to show major growth by the end of 2011.

A Strong Foundation on Steroids

Executives explain that the new tools will take member businesses to a new level and make company revenues even healthier.

“We’re providing greatly enhanced tools, resources and incentives that create a more lucrative and robust business opportunity,” Dean says. “We’re rethinking everything in a way that doesn’t change who we are. We’re just putting it on steroids.”

Those foundational products and knowledge have been a priority for Nature’s Sunshine ever since the company was founded in 1972 by Gene Hughes, a Utah schoolteacher. When Hughes developed a nagging stomach condition, a neighbor suggested that he treat his stomach with something surprising—cayenne pepper. It worked! But swallowing a spoonful of cayenne pepper was awful. That’s when his wife Kristine suggested putting it into easy-to-swallow gelatin capsules. Problem solved. Her brainstorm led Nature’s Sunshine to become the first company to encapsulate herbs. Gene and Kristine soon enlisted the support of family—Dick and Pauline Hughes and Jay and Arva Hughes—to begin a small family business that sold encapsulated cayenne and other herbs and supplements to health food stores.

But the little business soon became a mission as the family realized that they wanted to touch more lives with their products. They found the perfect vehicle to make it happen: direct selling. The model allowed them to educate consumers about the vitamin supplement products and provided their salesforce an opportunity to share in the success of the company. Today, Nature’s Sunshine Products operates in 45 countries and has more than 600,000 distributors.

Quality, Quality, Quality

Still fueling the opportunity is the company’s broad product line of personal-care products, including tablets and encapsulated herbs, high-quality natural vitamins, food supplements, skin care and home cleaning products. The company manufactures most of its products in its 270,000-square-foot facility in Spanish Fork, Utah, where it also conducts its ever-expanding research and development programs. Manufacturing its own products lets Nature’s Sunshine nimbly respond to competition, but more importantly, it allows the company to ensure quality.

“No question about it, quality is our hallmark. It’s what we’re built on, and we stand behind it,” says Vice President Craig Dalley. “We spend millions of dollars every year to be sure that we have the best quality out there. We have such strict standards that we still reject about 3 percent of the raw ingredients that come into our plant.”

Nature’s Sunshine runs more than 600 quality control tests to ensure potency, accuracy of herbal content and cleanliness. Its manufacturing facility, complete with climate-controlled warehouse and cutting-edge laboratory equipment, received the NSF Good Manufacturing Certification from NSF International, a nonprofit, nongovernmental organization and world leader in standards development and product certification. To achieve the certification, the manufacturing facility passed an extensive audit by NSF staff, including an examination of production equipment and a thorough evaluation of Nature’s Sunshine policies, procedures and manufacturing processes.

The company is so proud of its manufacturing facilities that each year it brings its field managers into the plant so they can see for themselves how everything works.

“They get to see the different tests our raw ingredients and products go through and to view the manufacturing process,” Villalobos says. “When they leave, they feel very secure in talking about the quality of our products.”

Average Isn’t Good Enough

On-site manufacturing allows NSP to control product quality.

On-site manufacturing allows NSP to control product quality.

The high-quality products are typically the first attraction for the company’s distributors, who tend to be health conscious. Often they have had health challenges that the products have helped them address. The very fact that the products work so well has been one of the reasons the company evolved to be so product oriented. Company President and CEO Dean sums it up: “You can’t change people’s lives with average products.”

As Nature’s Sunshine moves forward with its revamped product presentations and recruiting processes, it expects to become an even more robust company.

“We have a very competitive compensation structure that has evolved over the life of our company,” Dean says. “It allows people to build a business for the long term, not just get rich quick. We have the lowest distributor turnover of any company in the business, I believe. And we’ve relaunched in a fresh, new way that gives us a phenomenal, perfect balance between the business opportunity and the products. It’s a real advantage when the compensation plan is aggressive and backed up with the highest-quality products in the industry to sell.”

Dean notes that the new tools and processes that Nature’s Sunshine will introduce at its convention will set the company on course for fast growth.

“We’re focused on the vision that you can’t over-resource your salesforce,” he explains. “Any dollar I spend that’s not on sales-supporting resources is not the right place to be spending. If you can help them sell, everybody wins.”

New President at the Helm

When Michael Dean became President and CEO of Nature’s Sunshine last July, he immediately fell in love with the company.

Dean is the former CEO of Mediaur Technologies, had held executive positions for ABC Cable Networks and the Walt Disney Co., and was a strategy consultant with Bain & Co. He holds an MBA from Harvard Business School. Even though he had no experience in the direct selling industry, he immediately felt comfortable that his broad experience, skills and business acumen were matched by the deep network marketing and product expertise of the employees, who he describes as “some of the longest-tenured employees of any company I’ve ever seen.” Moreover, he was impressed by their passion.

“When you’ve worked in so many businesses, you think you’ve seen everything, but coming here was such a pleasant surprise,” he says. “Everybody is so proud of what we do. For a living, you change people’s lives for the better, both from a health and financial perspective.”

He says that he “got it” when he went on his first trip for the company’s top achievers.

“I wanted to get to know our field because they drive the business,” he says. “I met a woman from Ecuador and asked her about her story and how she became part of our family.”

The distributor’s reaction surprised him. Her eyes began to fill with tears. But she collected herself and explained that she grew up working in the fields alongside her parents to support their impoverished family. She expected to work in those fields throughout her life. But as a young woman she was introduced to Nature’s Sunshine products and the opportunity they provided. She saw her future, launched into action and was quickly able to rescue her family from a grueling, painful life. She was just as proud that she can now give back to her community, and even build a school with her income. Her life had completely changed, thanks to Nature’s Sunshine.

Dean says, “Coming from a traditional corporate background, when you join a company like this, you realize that not only is it a different animal from a business standpoint, but you genuinely improve people’s lives.”