Chapter 16
How to Create a Leadership Factory
How do you recognize potential leaders, nurture them, and then facilitate a process where they can continue that development of leaders—down hundreds or even thousands of levels in your organization?
You won’t accomplish this through strength of personality, training longer, or sharing more motivational quotes in your WhatsApp groups.
You’ve got to create an institutional culture that values leadership, recognizes potential, and rewards results. And throw in a little celebration too. Let’s unpack that process to analyze what good leaders look like, where they come from, and how they’re developed.
Having built teams of more than 200,000 people, I’ve had a great vantage point from which to witness the leadership development process firsthand—starting with a talent pool of potential leaders and tracking the behavior patterns that cause them to develop into actual leaders. And one surprising discovery I’ve noticed is the huge disparity in the various origin stories of leaders in our profession.
There are kids who were raised in wealth and privilege and kids who grew up on the street. Kids who were raised in strong traditional families and kids with no family to speak of. Pampered kids with helicopter parents and kids who were abused.
At the time distributors reach your team, they could be Fortune 500 CEOs, homemakers, or gangbangers. Schoolteachers, serial entrepreneurs, or Uber drivers. There is no template from people’s past that determines their probability of success in our profession. Everyone on your candidate list has the possibility and potential to become your next successful leader.
So what are the commonalities that define those who do succeed at becoming strong, positive leaders?
The primary commonality is they decided to become a leader.
Your background defines you only if you allow it to. You decide whether to stay on the track you’re on or change the course. The people who become successful leaders at some point make the decision to become a leader. They don’t waste time trying to “find” themselves. They decide the kind of person they want to become, and then they create that person.
They decide to learn new skills, work on themselves, and take the actions. They decide to schedule their working hours, prioritize their actions, and conduct the presentations. A huge dynamic is deciding to hold themselves accountable. And, perhaps most importantly, they decide they are worthy of a leadership position.
Once you make that decision, your perspective changes radically. Instead of focusing on how you become more successful yourself, you start migrating toward ways to add value to the team.
If we put leadership under a microscope and break down the DNA, it’s ultimately going to lead us to the essence—adding value. Adding more value to the team than you are taking from the team.
This is bigger than thinking about yourself, your customers, and your team members. To be a leader, you have to understand that you are an organism within a greater ecosystem—which includes not just your team, but also your sponsorship line, the system, the company, and even the other companies in the profession.
If you start drinking your own Kool-Aid, you begin to believe that everything revolves around you. Your overactive ego will suck too much oxygen out of the ecosystem and all the organisms suffer—even and especially you. You may think because you’re the top dog, you’re somehow immune to the laws of physics. You’re not.
Teaching Others How to Think
Let’s return to my definition of leadership, the part about inspiring people to become the highest possible version of themselves.
You can make this possible only when your team increases their belief and esteem as a result of their exposure to you. That means you have done much more than demonstrate leadership skills and qualities to them. You have allowed them to imagine the possibility that they can achieve this same level of development in themselves.
Strong, positive leaders do this by helping those who follow them believe in themselves. And a critical element in this is teaching them not what to think, but how to think.
The old leadership model was to teach people what to think. The belief was that if you simply indoctrinated people as to what to think (and one of those thoughts is to never question authority), they would blindly follow.
The fact is, many people are actively looking to be shown what to think. They search the globe for gurus to follow and movements to join. The strong presence today of gangs, cults, and even organized religion is a manifestation of this.
People watch networks like ESPN and BBC Sport to learn what they should think about their hometown team superstar. They listen to bombastic buffoons on talk-radio stations to know what to think about political issues. And they read the entertainment blogs so they can know who is hip, hot, and trendy.
The education system around the world is not teaching young people to think. It is forcing them to memorize facts to pass tests. The same facts they could look up in six seconds on their smartphone.
Although this environment exists, strong, positive leaders do not exploit it.
They carefully choose the people they lead and select only those who are interested in thinking for themselves. They create a climate in which people develop problem-solving skills, which cultivates thought and builds belief in themselves. (And not incidentally, considerably increases duplication.)
They foster growing confidence and esteem in their followers and help those people think independently. This free thinking and newfound confidence causes followers to empower themselves into leadership behaviors of their own. Leaders beget more leaders, the only real test of leadership.
Investing in Leaders
As I was flying home one night, the flight attendant came by my seat to thank me for my loyal business. She noted that I was a three-million-miler and said she didn’t even know how that was humanly possible. (I didn’t have the heart to tell her that I also have almost four million miles on other airlines.) This year I’m at the elite level on three different carriers. You know why I travel so much?
I’m investing in leaders.
Because I know that a well-trained leader in a Leveraged Sales organization is one of the most lucrative investments in the world. Time invested in a potential leader can pay off for decades. The best part is that your investment pays back in many ways other than the astonishing financial return. You will get to see a lot of other interesting places and cultivate wonderful, enriching friendships that add real value to your life.
I am always shocked by how many people in the business fail to invest in leaders. Especially long distance ones. It’s sometimes frustrating how much prodding it takes to convince someone to get on a plane and work with their long distance lines.
So what about you?
Are you investing in your leaders? Grooming the leaders of tomorrow? If you want to create a leadership factory on your team, you’re going to need to invest in discovering, developing, and training those leaders.
It could start with something as simple as giving a copy of this book to a promising new distributor. Sometimes it’s driving four or five hours to work with someone in another town. And often it means getting on an airplane and flying halfway across the country, or around the world, to help develop a new leader.
Think of your business as a leadership conveyor belt. Your job every month is to churn out more leaders. And then teach those leaders how to churn out more of their own.
The great news is that once you do this, you are setting the example that will be duplicated in your group. And once you have really built this culture in your group, that’s where true wealth is created.
Five Foundational Premises
Let me share five foundational premises about leadership in our particular business. I believe these premises qualify as First Principles on which everything else is built. Take a look at the list and then we’ll break them down individually.
- You’re running an all-volunteer army.
- If you ask everyone to lead, no one does.
- Challenge, don’t pander.
- You must work three rungs in the ladder.
- Recruiting leaders produces growth now—grooming leaders produces sustained growth.
Let’s look at the first premise. I struggled mightily in my first tour of duty in the business. The second time around I was able to attract talented people much more easily, and I built much more quickly. Reflecting back on the differences between the two experiences, I believe my eventual success was due to what I had learned working with volunteer organizations in the meantime. (I had been the president of the Chamber of Commerce, my church board, and the Florida Speakers Association.)
Every volunteer organization is an all-volunteer army. There is no conscription and you can’t hire and fire people. You have to fashion an environment where they want to become a willing contributor. And guess what? This is also exactly the case with leading a team of people in Leveraged Sales.
The second premise speaks to a frequent mistake new people make in the business. They assume everyone is a leader and give all of their people leadership metrics to perform. This mistake can kill your group fast.
They make statements to their team like, “Everyone here is a leader. So you have to [make cold calls until your fingers bleed, conduct 20 presentations a week, etc.].”
No, everyone is not a leader. Not everyone even wants to be a leader. In fact, a huge portion of your team will be people who joined explicitly to follow you or other leaders.
So when you make leadership activity a requirement for acceptance, you end up driving away a lot of good people. Some of the people you lose wouldn’t have become leaders but still would be valuable members of your team. And others would have developed into leaders, but the speed you were demanding scared them away prematurely.
Some people who are followers turn out to be capable field generals. They will work relentlessly to implement and maintain systems, events, and policies in the organization. They’re just not going to be helpful to you in designing them.
You need to be aware of your group dynamics—who is who on your team in their roles as:
- Customers
- Retailers
- Casual Builders (Followers)
- Serious Builders (Field generals)
- Leaders
My third premise is about the need to challenge people. People don’t develop into the highest possible version of themselves if they are surrounded by people who give them permission to stay just as they are. (Which is what almost everyone around them is doing now.) They need someone to challenge them to become more.
That someone needs to be you.
Let’s look at the fourth premise and what I mean by working three rungs in the ladder. The activities that drive growth, like training and counseling, are always done across levels in the organization. The Bronze rank distributor is counseling with their up-line Silver rank, and that Silver is counseling with their up-line Gold rank distributor.
Both your progress as a leader—and your ability to nurture other leaders—are based on this dynamic. Make sure you are reaching down a level to help those below you. And also reaching up a level to receive assistance yourself. These leaders up-line are your best source of help. When you create partnerships with them, you are better equipped to guide and support those below you. And you are modeling the leadership traits that will develop more leaders in your group. (As they will duplicate the same process down the group.)
Let’s dig deeper into the last premise. Too many people are chasing after leaders in other programs, trying to entice them jump ship. That can give you a quick volume boost. But to create viable long-term volume and duplication, you need to be grooming your leaders from within.
If you are intrigued by the idea of these five foundational premises, be sure to read my book Lead Your Team. It contains 21 leadership lessons for Direct Selling and really captures my philosophy on the topic. Now let’s explore…
The Leadership Development Path in Leveraged Sales
- Decide
-
Become proficient at the four basic skillsets
(Meeting people, working a candidate list, inviting, followup) - Lead people who choose to follow (using the study, do, and teach simultaneously approach)
-
Become proficient at leadership skillsets
(Presenting, people skills, leadership skills) - Identify and reach out to potential leaders
- Train those aspiring leaders on the leadership skillsets
- Train those aspiring leaders how to lead their followers
- Lead the leaders (inspiration, vision, purpose)
- Fire yourself
What I described above is how I would map out the path you take as you develop your skills in both the business and leadership. This subject is too important for a superficial overview or fluffy platitudes. So let’s look in greater detail at some of the day-to-day activities being a leader in our business entails.
Follow the System
Great leaders know there is also a time to follow. Because leaders are strong-minded, this can sometimes be an issue. But following the system must remain sacred with you as a leader. If you change the system, even only slightly, you will send a message to the organization that it’s okay to change the system. Then the next level does it too, and by four levels down, the system no longer exists.
Of course, from time to time, market conditions will dictate that the system needs to be modified. Let me give you an idea of how you might go about making a change if you need to do so…
Let’s say you have reached the top-rank pin level in your company, you have five top-rank pin levels on your front line, and you’re thinking about changing something in your system. Suppose you want to remove a book that you’re using at a certain point of the sponsoring process and substitute another. (Like this one! 
)
You place it on the agenda at your annual leadership conference or at another event that your top leaders attend. (In my case, the event was a Diamond Retreat—a weekend where each qualified Diamond Director paid their own way to attend. It was not an official company event, just a chance for the team Diamonds to plan long-term team strategy.) Next, you send everyone a copy of the new resource you’re proposing prior to the event, so they can review it ahead of time. Then at the event, you discuss and reach a consensus.
The system should be changed only from the inside as an entire organization. When you make a change in this way, it protects the integrity of the system. Then the system protects the integrity of your residual income.
Monthly Counseling
This is the monthly process you perform with the people you enroll in your organization to keep them growing on a consistent basis. (I realize that many of you are probably in a weekly pay plan. But I think counseling becomes unmanageable if attempted weekly and works best if done once a month, regardless of pay frequency.)
Here’s how counseling works.
Let’s say you’re a Bronze Director with your company and the next rank up is Silver Director. You would counsel with the first Silver Director in your sponsorship line. Now, once you become a Silver Director, if your sponsor is still a Silver Director, you would no longer counsel with her. Instead, you would go to her sponsor, who is a Gold Director.
You always counsel with the next up-line person who is qualified at the rank above yours. (If you want to know how to be a Gold Director, you have to talk to somebody who has already reached that level. If you want to be a Diamond Director, you need to be counseled by a Diamond Director.)
This ensures that everyone has someone to counsel with, and also that the top ranks don’t have thousands of people looking to them for counseling. Just like the sponsorship lines work, you work with your front-line leaders, who work with their front-line leaders, who work with their front-line leaders. In the event you’re in a sponsorship line with a person or two at the same rank as you—go up the organization to find someone who will be willing to work with you.
It should be noted that just because your sponsor is the same rank as you does not mean that they are a bad leader or don’t know the business.
It simply means that they have helped you achieve fast growth. As quite often happens, your sponsor brought people up to their own rank slightly before they moved up a rank themselves. So don’t judge them negatively or hold that against them. Celebrate the fact that they helped you get this far and counsel with the appropriate person in your sponsorship line.
Learn from their experience. They will already have made the same mistakes you are headed toward, which means they can cut many years off your learning curve. Be open-minded and coachable, because they have a vested interest in your success.
One other note on this: In new organizations, particularly fast-growing ones, these lines are going to get blurred sometimes. You might have 60, 80, even 100 new members join your team that month, and none of them have really had any time to solidify their rank and learn how to coach those below them. Trust me, this is a great problem to have. You deal with it by having higher rank leaders do more group counseling. It’s a little messy, but it still works and will crystallize better as your team matures.
A counseling session can help you only if it is based in reality. The person you are counseling with needs accurate information to work with. Don’t draw out 12 lines if you really have only five active lines. Don’t tell them you invited 15 people to the presentation when you really invited only three. Otherwise, the counseling is based on faulty premises and the advice you receive won’t really help you.
In terms of the actual counseling, the foundation is tracking the key metrics each session. Here are the ones I think are the most important (your sponsorship line may have others):
- Rank
- Personal volume
- Number of distributors in the team
- Total team volume
- Average volume per distributor
- Number of retail customers
- Average customer volume
- Number of new enrollments
- Number of personal active lines
- Number of personal lines with a leader
- Total leaders in the team
It should be self-explanatory why these particular metrics are important. You always want to know if they’re moving in the right direction. By analyzing them you can predict where someone’s check is going to be three months from now with a shocking degree of accuracy. (Once you know how to assess the metrics.)
Early on, the most important metrics are the amount of customers, average customer volume, and new enrollments. As a team starts to develop, the lines with a leader and total number of leaders in the team will gain in importance. Because these metrics determine the future growth. We know that a line can have 20 people in it, but if none of them are leaders—within three months it will probably be greatly reduced or gone entirely.
We can have another line with only two people in it, but if they’re both leaders, that line may have 40 or 50 people a month later. Leaders produce leaders. So pay more attention to the leadership metrics as your people’s teams grow.
It’s important that every month you counsel with your people, collect and aggregate the data, then send it to the person you will counsel with.
Dealing with Mistakes from On High
I hate to break this news to you, but there will be times when your company or sponsorship line is going to mess up. Not because they’re necessarily bad people, but because all companies and sponsorship lines make mistakes at some point. Get used to it.
The company may launch with a bad comp plan or change the plan and it doesn’t perform as projected. The distributors struggle, lose faith, and quit.
Or the sponsorship line acts out of integrity by taking some action that harms the team. Members of the team feel betrayed, lose faith, and quit.
That’s the superficial assessment. But here’s what really happens in those cases…
Yes the company or sponsorship line screwed up and caused the problem. But the distributors didn’t quit because they lost faith in the company or sponsorship line. They quit because they lost faith in themselves.
Whether your people lose faith or stay confident will be mostly affected by how the leadership responds when these challenges occur. The sacred rule of our business is that negativity never, never, never goes down the group. Any time something bad happens and you want to complain about it, call the company or someone up the sponsorship line. But never commiserate with your team about it unless you want to drive them away.
Sometimes the situation becomes severe. The company or leadership is continually making serious mistakes, not learning from those mistakes, or showing bad faith. You reach an untenable state where you feel you can no longer maintain a positive face with your team. In that case, you have no alternative but to resign and look for another company where you can build while maintaining your integrity.
Structuring Events
Your event structure is a powerful ally in developing new generations of leaders. Think of the event levels as a farm system, similar to what major sports do. Baseball has the minor leagues, American basketball has a development league, and most national soccer teams have youth divisions that they draw their talent from. Utilize your event structure the same way.
People begin with doing a 30-second testimonial at a local meeting or broadcast. Then they might graduate to giving a five-minute presentation. Later they are doing keynotes or training sessions at regional events. And ultimately, they may be on the stage at a national convention or worldwide webcast. As they develop their presentation skills and continue to rank advance, their visibility should increase.
It’s very important that you vet people for these roles carefully…
The most sacred position in your organization is being on the platform in front of your team. By “platform” I mean on the stage at physical events, appearing on conference calls or webcasts, and being featured in marketing materials. There is an implied endorsement of people you allow on the platform, so it is important to consider these people mindfully.
The first requirement for platform consideration should be that the person is someone who has already built a successful business or is moving quickly in the process of building a big business.
It’s also important that the person be a team player and following the system. If you have someone up on the platform teaching strategies that are off-system—that will negatively influence your group and hinder your leadership development.
Loyalty and consistency are important traits. You don’t want to edify someone onstage at the March meeting, only to have people hear that they quit and joined another opportunity in April. If you believe someone is a flight risk, keep them off the platform.
Another issue has developed in the last two decades you should be aware of: the cottage industry of parasites that feed off of our profession. Every motivational speaker, seminar leader, consultant, coach, and guru sees the huge crowds of enthusiastic people at our conventions and begins salivating at the idea of selling to us.
Some of these people are well meaning and helpful. As I mentioned, I’ve brought in etiquette and fashion consultants to work with my elite leaders in the past. I also hired a brilliant branding consultant to work with us on developing our message for use in marketing materials. It’s essential that, when designing a compensation plan, every company engage a competent professional compensation consultant. Just as important is to keep a law firm on retainer that specializes in Direct Selling.
Bringing in a powerful motivational speaker to conduct an inspirational opening or closing keynote can provide astonishing value to your convention or major event. But you must be mindful and work with them on their content to ensure their message is empowering and doesn’t create conflict with your system.
Some of these people are well meaning—yet NOT helpful. There are legions of sales trainers, NLP coaches, and marketing consultants who do not understand the unique dynamics of our business. If you bring them in, they can teach techniques and strategies that instead of increasing duplication actually kill it.
Some of these people are NOT well meaning—and, surprise, NOT helpful. Simply put, they’re only on a money grab. They are often distributors from other companies who want access to your people so they can steal them away. Or they might be someone who bought a successful distributorship, or inherited it from their parents, and they haven’t got a clue about how to build a business themselves. Most often they are distributors who have washed out of the business and now support themselves selling crap to your team.
Have a Defined Leadership Track
To truly create a leadership factory, your people need to know what the pathway for becoming a leader with the team looks like. If you’re a new recruit in the Navy and your dream is to become an Admiral, you have an idea of what all the ranks leading up to the Admiralty are and what the responsibilities of each are. Your team needs to create a similar scenario. Your new recruits need to know what ranks, behaviors, and team activities put them on the path of becoming a leader with the team. (You’ll see an excellent example of this in the levels of leadership described below.)
Impose the Death Penalty Where Appropriate
If your company reaches critical mass and starts experiencing exponential growth, you’re going to witness the next zombie apocalypse. At any given moment, there are thousands of MLM Zombies desperately looking for a new hot deal, because the last money game or “under the table” deal they had collapsed.
Unfortunately, in this group, there are at least 30 or 40 people who have done such a deceitful job promoting themselves, they are actually thought of as veteran leaders by some. They often maintain a strong presence on social media, consult to gullible start-up companies, or conduct generic seminars in the space.
They will come into your company and make a big splash with all the rollover zombies they bring with them. But once they stall out or someone offers them a deal somewhere else, they’ll bolt and try to take as many of your people with them as they can.
Likewise, you have to be alert for “terrorists,” the people who act illegally, steal recruits, or flout the policies and procedures. This unethical behavior destroys the culture in your organization and can even threaten the viability of the company.
Above all else, you must protect your organization. So when people reveal that they are zombies or terrorists, impose the death penalty: immediate termination. Do this swiftly and publicly, so people understand what is and isn’t accepted in your culture.
One of the best practices that intrigues me comes from companies in other industries: the “panic button.” Often this really is a big red physical button, other times it’s just a process to follow. In either case, any member of the team is authorized to push the button at any time without negative consequences.
An example would be a manufacturing plant with a conveyor belt. If something happens that could put workers in danger or create a substandard product, any worker can stop production so the situation can be evaluated.
Another great example of this is Cirque du Soleil. Each live show has a stage director in charge of the action. If the director sees any cast member—a trapeze artist, stagehand, or even an usher—cross their arms in front of their chest—the lights come up, the music ends, and the show stops instantly. Those crossed arms are the panic button sign, which could mean a safety mat is out of place, a piece of equipment isn’t anchored right, or a toddler wandered into a dangerous area. Any Cirque employee is empowered to give the sign if they feel anyone is in danger.
I believe every great organization should have this type of panic button process in place. (Think how much sooner the #MeToo movement could have advanced if organizations had this type of system earlier.) It’s important that we police ourselves. So if a distributor is manipulating the back office of someone else in their team, making social media posts claiming cancer cures, front-loading new members, or doing anything that threatens the team or company—people must be encouraged and empowered to speak up without fear of retribution. It will do wonders to keep the terrorists and zombies in check.
The Four Levels of Leadership
You’ve seen what a delineated leadership track looks like and the important behaviors that develop leaders along that track. Now I would like to share something very special with you: My own personal criteria I use to evaluate leaders. These can provide you with powerful insights into creating that conveyor belt of leaders on your team.
Here’s how the levels break down:
Level One Leader
- Solid personal use of the products themselves.
- Has developed a strong customer base.
- Proficient in the four basic skillsets.
- Promotes using third-party tools and system, not personality.
- Attends major events.
- Builds depth with the team.
- Volunteers with team events and projects.
Level Two Leader
- All of the above.
- Is in the ticket-selling business, promoting major events.
- Reached a “threshold” (serious) rank.
- Investing in long distance lines.
- Working the business 15–20 hours a week for transition.
- Starting to appear on the platform locally.
Level Three
- All of the above.
- Active in tap-rooting lines.
- Has built at least six strong long distance lines.
- Full-time in the business.
- Reached an elite rank.
- On the platform for major events.
- Leadership duplication happening on their team.
- A “big kid.” They kill distractions, resolve conflicts, and are self-disciplined.
Level Four
- All of the above.
- A strategic thinker. Someone who can participate in the design and implementation of training curriculum, system development, and culture.
- Understands the big picture. Can be a valuable stakeholder with the company, perhaps serve on the advisory board. Able to recognize the need for policies or processes that may not always be popular with the field but are necessary for the health of the company.
- A maestro who brings out the unique and best talents of each member of the orchestra.
As you can see, this definition of leadership is glaringly different from what most people in our business understand it to be. In a team of 100,000 people, in your first five years, you likely won’t have more than one to four people who would actually qualify as a level four leader.
Here’s the most important thing you must know about these levels: You have to adapt your coaching to interact one level up from the person you are working with.
For example, let’s suppose you are a level four leader, and you’ve just sponsored a new enrollee. You can’t be relating to them from up in the clouds as a level four leader. In their case, you need to serve their needs by acting as a level one leader with them. When they develop into a level one leader, you interact with them as a level two leader. Only with your level three leaders do you interact as a level four leader.
Level four leaders are the equivalent of the Guardians of the Galaxy for the team. They are equal parts mentor, guide, parent, coach, manager, leader, and visionary. Level four leaders are the glue that binds the group together—setting the culture, inspiring the team, and keeping the trains running on time.
When you become a level four leader, you have a job comparable to the CEO of a multimillion-dollar company. You’re making monumental decisions that are impacting tens of thousands of people. But when you enroll Jessie tomorrow—she needs you to interact with her just like you are her normal sponsor. Because that’s what you are.
The actions you must take to qualify at each level are worth some serious contemplation. Be honest and evaluate what level you’re really at and what you need to change in order to reach the next level. Because the single most important thing you will ever do to create a leadership factory in your team—is to be continually evolving as a better leader yourself.
This business doesn’t need more managers. We have plenty of those already.
Managers help people to see themselves as they are. And that is sometimes necessary.
But leaders help people to see who they can become. Which is why we need you to become a leader!