Before heading off on a three-year mission overseas, Scentsy Co-CEOs Orville and Heidi Thompson share their thoughts on what it takes to create a sustainable company culture, how to plan for earnings dips and hypergrowth, and how to be effective in battling the blind spots.
Orville and Heidi Thompson on…
STATE OF DIRECT SELLING
Q: The pandemic, social injustice, and political polarization have left many people feeling scared and unsafe. In times of crisis, voices of community—voices of unity—have demonstrated the ability to pull groups of people together under a single purpose. How can direct selling companies be bridge-builders and instruments of unity for different groups in today’s world?
A: We are in an increasingly polarized world, but this is nothing new. History tends to repeat itself. The Revolutionary War, Civil War, Great Depression, and WWII were seventy to eighty years apart; 1849, 1929, and 2009 were all years of incredible financial disruption. It isn’t exact, but trends come in cycles, and we are in a cycle where political alliances and social institutions are collapsing, and new alliances are being formed. The institutions that will dominate the next eighty-year cycle will be created by those who can bring people together once the crisis has deepened to the point that the pain of keeping our opinions is greater than the pain of finding common ground. So far, for most people, it is more painful to change one’s mind than it is to live with the consequences of the deepening crisis. That will change in time. As direct sellers, we have the opportunity to create companies that can be more than a means of connecting consumers to products. We build social networks that become communities full of diverse people who share common goals and learn how to put aside personal agendas in the service of that common goal. We would caution against becoming part of the choir that seeks ideological victory. We need to be the place where people who disagree on substantive issues can still share common ground and work for common goals.
Q: How can direct selling leaders be effective in battling the blind spots that led to poor decision-making in the past? How can they use their convening power, influence, money, and communities to make important headway in fixing significant social problems?
A: As direct sellers, we bring value to the world by building communities that allow egalitarian participation in connecting consumers with products. We have developed systems that allow people to change the arc of their family fortune through personal and economic improvement. We give people a seat at the economic development table. Like the Hippocratic Oath doctors live by, direct sellers should adopt a similar position of “first, do no harm.” A corollary we use at Scentsy is “contribute more than you take.” In essence, we don’t have the moral right to extract something from another human being. If we are correct in our relationships with others, we will provide answers, not create problems.
BUILDING A COMPANY CULTURE
Q: One of the things you do at Scentsy is ask the question, “Is it in spite of the fact or because of the fact?” How has that openness to question what is happening allowing you to think broadly enough in answering challenges that have come your way?
A: Solving problems for the first time requires curiosity and humility. We like to call the confluence of curiosity and humility childlike wonder. Only with problems you have once successfully overcome can you apply a tried-and-true solution. In entrepreneurship, one is faced with a constant barrage of new problems. A fixed mindset is a recipe for quick failure. Childlike wonder embodies a sense of adventure—nothing is yet defined; everything is simply data. Childlike wonder leads to optimism, which is contagious. Contagious optimism draws people in, leading to increased connection, love, and kindness. When we feel part of a connected community, we have hope for our future. Hope opens us up to the light, which is the insight to solve problems. Light allows us to maintain childlike wonder. This becomes a self-perpetuating problem-solving model as each step leads to the other in an ever-expanding spiral of capacity and understanding. By staying curious and humble, challenges become puzzles, setbacks become comebacks, criticism becomes instruction, and failure becomes useful data; thus, life becomes a series of sprints of improvement separated only by occasional stumbles forward.
Q: There is a Korean saying that half the journey is the start of it. When a company launches, its culture is being defined. What is the tipping point at which the culture is accepted, and the company starts to grow?
A: When a company launches, it projects aspirations and values. Over time, as people choose to align themselves to these aspirations and values, a characteristic spirit emerges that embodies this group of people. This characteristic spirit is called ethos. A company culture is nothing more than what practices, behaviors, and attitudes the group accepts. A company will reach a “tipping point” when, and only when, people resonate with the ethos and accept the culture enough to share it with others, who also accept it and share it.
Q: Scentsy’s motto is “Contribute more than you take.” How does that motto relate to your relationship with DSA, the direct selling channel, and your consultants? How was it realized when the pandemic hit?
A: Contribute more than you take simply means to never take from someone more than what you have given them. In any healthy relationship, when one party feels a cosmic debt, they feel obligated to reciprocate. The more one tries to even the score, the more contribute more than you take requires additional contribution. Following this process, greater effort goes to relationships that reciprocate. This creates an upward spiral of mutual improvement. Contribute more than you take with everyone primes the pump. This invites everyone with whom you interact to reciprocate. When they do, your energies can be focused on those relationships that build mutual benefit.
We were not wise enough on our own to successfully guide Scentsy on its incredible journey. Decades of refined learning have been distilled into the collective understanding of the members and staff of the Direct Selling Association. Scentsy’s success is impossible without the battles fought by member companies long before we were born, let alone started the company. We have always felt a “cosmic debt” to the DSA community and have felt obliged to reciprocate. This is why we have always taken the position that we should share our experience at DSA meetings and with DSA member companies. As we benefit from those who came before us, we want to improve conditions for those who come after us.
By staying curious and humble, challenges become puzzles, setbacks become comebacks, criticism becomes instruction, and failure becomes useful data."
When a crisis hits, like it did in 2020, people look for communities of safety. Because we demonstrated a commitment to contribute more than you take long before the crisis came, customers, consultants, and employees felt safe associating with Scentsy because they had confidence we would “do the right thing.” All three groups participated in an upward spiral lift as each felt compelled to contribute and invigorated by participating in a significant success story in the midst of a crisis.
COMPANY GROWTH
Q: You have said that hype is an irrational view of a future state, and that when companies are going through hyper-growth there becomes an irrational view of what that future is going to be. Were you personally subject to such hype and overinflated expectation that others have experienced?
A: All social things are subject to hype, and we are not immune. To be clear, hype is not the result of a company doing anything wrong, it is a natural consequence of success in the context of a social experience, and direct selling is very much a social experience. The key is understanding hype, so it doesn’t become a perceived reality. We managed Scentsy well when we focused on achieving real potential, and we failed when we tried to live up to the hype.
We have tried desperately to create a cohesion culture where hearts are knit together, where we value effort, embrace challenge, accept others for who they are, but never accept that where we are is the best we’ll ever be."
Q: During a dip in growth, company culture is typically challenged. During such times, many companies will abandon their practices. You believe that losing the consultants who have irrational exuberance and who are going to cause compliance issues is the best thing for the business. What is your advice for anybody going through the dip?
A: Dips are healthy if a company uses them to reinforce practices that establish cultural cohesion. A dip is a perfect time to stop doing those things beneath the company’s culture. A culture audit is an excellent exercise. List the aspirations, values, and any word traditionally associated with your company. Then give your company a grade—A through F. Then calculate your cultural GPA. C’s may get degrees but emerging from the dip requires a 4.0. If you can’t get an A, quit doing it.
Q: You have identified two types of culture in business: the competition culture and the cohesion culture. What is the difference between the two? To which culture does the Scentsy mission align, and why? Can you provide examples of each, and explain which one has an advantage in times like these to attract people to them?
A: A competition culture is the dominant culture of business and politics. It views the world as an arrangement of individuals in competition with each other in a zero-sum game, where your gain can only come from my loss, where only one of us can be the fittest in a Darwinian struggle for survival. It fails to see the interconnected nature of our existence. Focused on the individual’s independent struggle to succeed, a competition culture divides the world into segments, where competitive advantages are identified and exploited. Other people threaten to diminish what is there for the strong to capture, so we are taught how to be strong and to go get ours before someone takes it from us. Winning is valued, and victory is rewarded.
We have tried desperately to create a cohesion culture where hearts are knit together, where we value effort, embrace challenge, accept others for who they are, but never accept that where we are is the best we’ll ever be. We cooperate to achieve together instead of competing to determine who is best. We set lofty goals and invite all to work toward them; and invite those who have reached high levels of achievement to reach down and help others match their accomplishments rather than set up systems where the masses simply support the pedestal we use to prop up our winners. A cohesion culture looks like a healthy family where love, support, a shared sense of purpose and destiny, and a spirit of cooperation permeate every interaction. Where we are only as strong as the weakest among us, sure, it is ideal. It is the ideal of Christianity, where Jesus says, “By this shall all men know, ye are my disciples, if you have love one to another!”
Co-founders Orville and Heidi Thompson participate in Scentsy’s Give-Back Days at a Habitat for Humanity project (pre-COVID-19).
We believe that while businesses may do well in a competitive environment, truly great businesses try to rise above the competition and create a cohesion culture. For example, Apple transitioned from “Mac beats PC” to appeal to globally shared emotional aspirations—privacy, lifestyle, creativity, imagination, and innovation. Take, for another example, Coke versus Pepsi. Pepsi seeks to beat Coke. The Pepsi Challenge and Pepsi Generation campaigns are examples of competition culture—a zero-sum play for market share. Meanwhile, “Share a Coke and a Smile” sends clear signals Coke is not content to beat Pepsi—it exists to change the world.
People seek opportunity during times of safety because when it is safe, it is easy to believe “ground floor opportunities are where the money is made!” But the opposite happens, too. People seek safety during times of crisis because it is easy to believe “most new businesses never survive the first five years!” You can win in the short run by gaining market share, but you change the world by creating a cohesion culture.
LOOKING AHEAD
Q: The growth Scentsy experienced in 2020 can be partly related to your two main competitors—Bath & Body Works and Yankee Candle— shutting down. Are you confident the company will remain stable upon their return, or do you believe the momentum from 2020 will continue a growth pattern?
A: Our success being attributed to the closure of our competitors was a hypothesis that didn’t turn out to be true. When L-brands reported 2020 results, it showed Bath & Body Works had significant growth in 2020 as well. Scentsy’s success was more likely part of “a rising tide that lifted all boats,” selling products that helped people stuck at home improve their nests. In spite of, or because of, am I right?
Our current assessment is that we experienced a fundamental shift in 2020 that will continue to play itself out over the foreseeable future. We are staying true to our pattern of approaching the future with childlike wonder and a commitment to Scentsy Culture. We’ll see what the future holds as it unfolds.
Q: As you head off on your three-year mission, do you have a message to share with your industry peers?
A: When we truly bless the lives of others, without guile and motivated by love, God will help us because we are aligned with His purpose of blessing His children. Alternatively, we can spend our lives in the pursuit of personal promotion; in this, we are on our own. Nothing is more efficient, and nothing brings more joy than living a life aligned with the purposes of the creator of us all. Our association with friends and mentors in the DSA has been truly joy filled. We have learned to love and appreciate the goodness among direct sellers and have hope that goodness will win the day. Thank you all for years of kindness, support, and friendship. We look forward to the day when we can once again spend time together. Until then, you will be in our prayers, and you can count on Scentsy to be an ally.
Q: You have been married for more than thirty years and have been co-owners and co-CEOs of Scentsy since its inception. So many startup party plan direct selling companies started by co-founders have not lasted. How have you made this work and sustainable?
The problem with too many couples and entrepreneurs is they are not very practiced at being motivated by love."
The key to longevity in marriage and business is selflessness. Our motivations can be boiled down to three main categories: fear, greed, and love. Most newlyweds and entrepreneurs’ motivations are dominated by first, the fear of failure— setting your future back, disappointing those you love, reinforcing self-doubt and personal demons, or embarrassment—and second, the desire for a better life—nicer things, indulgent experiences, a secure future, more prestige, or personal validation. Of course, we are all motivated, to an extent, by love—to do our duty, to bless others, or to honor God. The problem with too many couples and entrepreneurs is they are not very practiced at being motivated by love. When financial success comes, and the fear that once dominated their thoughts subsides, they are overcome by greed. Greed turns everything into a zero-sum game—your gain is my loss. When there are winners and losers, there is enmity, and enmity breeds contempt. Contempt is the one emotion no partnership can survive. Love must go both ways but, unfortunately, in a partnership one or both can choose to be selfish. No amount of selflessness can overcome the selfishness of a partner. We are fortunate, as a couple, to put each other first. As company founders, we have managed to see ourselves as stewards of a great blessing rather than creators of a money machine. As a result, we are able to keep greed at bay and stay motivated by love, connection, and kindness, which fills us with hope that brings us light. This is how we maintain our sense of childlike wonder and our contagious optimism that no challenge will arise that can’t be overcome.