February 01, 2012
Orenda International: Lifting People with Every Purchase
by Jeremy Gregg
Click here to order the Direct Selling News issue in which this article appeared.
- Founded: 2002
- Headquarters: San Francisco
- Founders: Bob Hall, CEO, and George Hall, VP of Sales
- Products: Natural health
When Bob Hall and his brother George began building their business plan for Orenda International, they were determined to build it differently from any company where they had previously worked.
“George and I had put together business plans for four different companies over the past 20 years,” says Bob Hall, now CEO of Orenda International. “Every one of those plans included a key element about how to treat people, about loving people.”
The Halls founded Orenda International in March 2002 in direct response to what they had witnessed during their childhood as well as during their careers. Their father had spent his entire life in sales, and the brothers felt that he had worked for companies that treated him with “complete disrespect.”
“We believe you should use things and love people, not vice versa,” says Bob Hall. That belief has shaped not only how they formed Orenda International, but how the company has structured its corporate philanthropy program. The company’s signature initiative is an ongoing donation of 0.5 percent of the retail value of its products to charitable causes through the Heart of Orenda Fund. This has resulted in a total contribution of 8 to 10 percent of Orenda’s overall profits each year since its inception, totaling hundreds of thousands of dollars donated over the past decade.
Creating a Legacy
Both brothers had been highly successful before they started Orenda, which in the Iroquois language means “the spiritual force that flows through all things and by which all human accomplishment is attained.” Bob Hall had spent a career working with Fortune 500 companies, and George Hall had amassed over three decades of experience in the network marketing industry. They were determined to build a company that did more than simply provide great products and a great business opportunity.
“We started Orenda when we could have retired. We wanted to build something that had an influence beyond the distributors and customers,” explains Bob Hall. “We were very intentional in how we branded the company to express that. For example, the Orenda logo is a hexagon. Each of the six sides represents one of the company’s key stakeholders: the partners, the founders, the employees, the vendors, the customers and the community. We want all six stakeholders to win through Orenda, and we consider all of them with each decision that we make for the company.”
“We started Orenda when we could have retired. We wanted to build something that had an influence beyond the distributors and customers.” —Bob Hall, CEO
By considering the needs of these six stakeholders, the leadership at Orenda International has adopted a three-part goal to guide their company. First, they seek to provide the absolute best products in the natural health arena; while this can come at the cost of margin, Bob Hall believes that it is the only way to build the company’s long-term success. This is not a decision that could have been made without factoring in all six stakeholders, he explains.
The second goal is to offer the absolute best business opportunity to individuals involved in network marketing. For the Hall brothers, this meant putting themselves on a compensation plan, not on a salary. “If you want to work hard to make six or seven figures, this is where you can do it. We have people in our system who are making more money than me—I love that,” says Bob Hall.
Third, Orenda International is focused on creating a business model that is an example of how to run a great business. Despite the continuing recession, Doug Sandstedt, Orenda’s Vice President of Operations, is boldly confident about the organization’s future: “We have a strong belief that with our executive team, with the leadership of our field leaders and with the opportunity and products we offer, we will double retail value of sales in 2012.”
“We have a strong belief that with our executive team, with the leadership of our field leaders and with the opportunity and products we offer, we will double retail value of sales in 2012.” —Doug Sandstedt, Vice President of Operations
One of the critical ways that Orenda distinguishes itself, Sandstedt believes, is through integrating philanthropy within its daily operations. For Orenda, corporate giving is not simply an add-on to its business or something that is done casually at the end of the year; philanthropy is an integral part of the Orenda business model. Charity is as central a component of every transaction as the products the company sells, since the two are intimately tied to each other.
Giving from the Beginning
Top products from the Orenda line.
Orenda International’s policy of donating 0.5 percent of the retail value of its products is nearly unparalleled among its peers, particularly considering the challenging nature of the current economy. Despite being warned by some of their closest advisors that they would be “broke in six months” if they implemented this policy, the Hall brothers have never wavered in their commitment to donate based on sales instead of profits.
“The way you start tends to be the way you finish,” says Bob Hall. “So, we decided to start from the very beginning: with the very first order. We measure our success against retail, so we wanted the charitable benefit to be based on that as well.” For the Hall brothers, integrating philanthropy into their company’s daily operations was the best way to implement such a program with integrity while also contributing to the company’s overall mission of building a better business model.
The Heart of Orenda Fund is a daily presence that keeps everyone aligned around the true goals of the company. Bob Hall explains that this creates a culture that removes the need for a formal policies and procedures manual, while also keeping employees extremely committed and happy in their jobs.
Orenda International’s generous spirit is not just seen in its corporate philanthropy program. It is modeled daily in the way its employees treat each other, how they are rewarded and how the company measures its own success. Bob Hall explains: “When I was at a Fortune 100 company and giving reviews to employees, I’d always ask people what they needed in order to grow. We need to backfill so much to ensure that the next generation is stronger than we are. I have never done anything as satisfying as watching someone achieve their dreams.”
Top Partner Anne Herrick Dienel receives an award on stage with Bob and George Hall.
Bob Hall and Dr. Ilene Rubinstein take a break during Orenda’s quarterly Gold School.
Building a Better Business Model
Bob Hall is not your typical CEO. When asked about his corporate goals, he does not respond with financial targets. Rather, he quotes the work of author and business guru Jim Collins by saying that he wants to turn Orenda International into a “Stage 5 company.” He cares far more about supporting the company’s ability to operate with integrity and in alignment with its six stakeholders than with its ability to maximize profits. “We have people making millions, but we do not want to emphasize profits because it de-emphasizes service.”
In fact, when asked about the number of distributors in the field, he responds: “I couldn’t even quote the number of people working for us. It’s not as important to me as ensuring that we maintain our core focus on our business model. If you do the right things in terms of producing great products and creating great opportunities for people, the numbers will take care of themselves.”
This does not mean that he forgoes success in the classic sense. Orenda’s year-over-year growth is indicative of that, as Bob Hall explains: “We employ a hedgehog concept here—we want to create the most profitable distributors in the network marketing industry. That is why the owners are on a compensation plan just like the distributors. We consider ourselves stewards, not owners. We stand shoulder to shoulder with people internally as well as outside.”
Orenda International is not unique in this regard. The network marketing industry is fortunate to be filled with companies whose owners consider themselves peers with their distributors, and whose primary focus is on building the “flywheel” that Collins has dedicated his career to studying and describing in books such as Good to Great and Built to Last. What sets Orenda International apart is the way that its owners have deeply integrated their commitment to a nearly industry-leading level of corporate philanthropy alongside their goals of building a highly profitable enterprise. And yet, as Bob Hall sees it: “It’s a bit of a ballet, but there is never a tension between these goals.”
With over 40,000 distributors in the field, Orenda operates with a staff of only eight employees. Managing such a vast enterprise with a very lean internal structure can be a challenge for other companies, but Orenda has managed to deliver consistent growth for nearly 10 years. Bob Hall credits the company’s focus on its six stakeholders with being one of the primary drivers of this success: “It’s about leadership versus management. There’s a lot more involved in success than just making sales and profit goals. Our real purpose is to help people achieve their dreams.”
“[The founders of Orenda] have created a company where a shared set of values, integrity and honesty are valued and where ‘people lift people.’ ” —Doug Sandstedt
For Sandstedt, who had worked with Bob Hall at a previous company before joining Orenda, these other factors are what drew him to the company and have provided him with what he describes as the best nine years of his career: “When I met with Bob and George in 2001, they shared how their experiences with being treated as disposable in the past made them want to create a different kind of company. One where a shared set of values, integrity and honesty are valued and where ‘people lift people,’ which has become one of our mantras. I couldn’t see myself anywhere else.”
For Orenda, the goal is not simply to give people a source of income. As Bob Hall says, “We want people to belong. We want people to feel like they’ve found their tribe.”
That same sense of loyalty guides Orenda’s charitable endeavors through the Heart of Orenda Fund, which maintains long-term commitments to its beneficiaries.
Still Smiling After 10 Years
Looking back over the past decade, Bob Hall proudly recalls a number of people who warned him that the company was going to struggle to survive while maintaining its core values and its commitment to philanthropy. Despite their predictions, he says Orenda International has been consistently ranked as one of the best opportunities for people involved in network marketing. The company has also been listed twice on Inc.’s list of the 5,000 fastest growing companies in the United States. Bob Hall says, “The hand that gives, gathers. We have been in the top tier for eight years. We want to be in the top 100 soon.”
This increasing level of profitably will mean great things for the beneficiaries of the Heart of Orenda Fund, including the international Smile Train organization.
“It is incredibly important for Smile Train to have such a committed corporate donor like Orenda International that can give year after year as we receive no government funding and very little corporate funding. The majority of our funding is from individual donors,” says Brian Dearth, Senior Vice President and Chief Marketing Officer for Smile Train.
Smile Train is the largest recipient of donations from the Heart of Orenda Fund. Founded in 1999, this nonprofit organization provides free cleft lip and palate surgery to children from poor families in over 80 developing countries around the world. It is now ranked among the Forbes Top 200 Charities, and is the world’s largest cleft charity. The organization has provided over 700,000 cleft surgeries in more than 1,100 partner hospitals. The organization describes the impact of donations from groups like Orenda International as “giving a child not just a new smile, but also a chance at a new life.”
The Heart of Orenda Fund has also donated to Child Health USA, Doctors Without Borders, Vitamin Angels, and the Boys & Girls Clubs of America. However, as Bob Hall explains, “We really like to put money into Smile Train because a fairly small amount of money can transform a child’s life forever. There just aren’t that many opportunities to make that direct and measurable impact on a person’s life.”
While Orenda International has considered donating its products, and has even considered creating a line of donated products specifically aimed at the needs of the Third World, it has maintained its focus on cash donations because of the impact that it has seen through the reports provided by its beneficiaries such as Smile Train. As Sandstedt explains, “We share the information we receive from charities with our staff and our distributors so they can see the impact our donations make. As you can imagine, this is very fulfilling and also reminds us of the part we each share in it.”
As his company’s charitable efforts are bringing new smiles to children across the world, Bob Hall cannot help but smile as he describes the future of his company: “We appear to be approaching an inflection point, a hockey stick. The field is strengthening, and new programs are rolling out that should increase growth. There are an increasing number of opportunities in other countries overseas, as we consider expansion outside of our current markets in the United States and the United Kingdom.”
The opportunities have not been overlooked by the market. In recent years, hardly a week goes by that Bob Hall doesn’t receive a call from an outside investor or venture capital firm seeking to put their money into Orenda International. “We’ve turned down significant outside investments and venture money because we want to maintain the integrity of our model,” he says. “We have a big vision for the company; as we grow, it becomes more important for us to focus on maintaining our values internally. That becomes a challenge once you accept outside funding.”
“We have a big vision for the company; as we grow, it becomes more important for us to focus on maintaining our values internally.” —Bob Hall
Orenda International is still wholly owned by the founders. This is not expected to change in the near future. As Bob Hall explains, “After 10 years, people see we’re serious about this business model. Giving and receiving are two edges of the same sword: You cannot have one without the other.”
With its continued growth, the only smiles bigger than those on the executive team of Orenda International will be the smiles of the hundreds of children affected through Orenda’s donations. As Smile Train’s Dearth says, “We think that is quite a return on investment, and we know the children think so!”