The Missing Partnership?

Promises to Keep: The Amway Phenomenon and How It WorksThe following text is from a chapter headed The Other Partnership in Charles Paul Conn’s 1985 book Promises to Keep: The Amway Phenomenon and How It Works. It will probably get me shot by the copyright police, but I think it’s worthwhile reading to provide some context for some of the challenges facing Amway and Quixtar around the world. I think the words speak for themselves.

When the word "partnership" is used to describe Amway, one thinks of the personal partnership of Van Andel and DeVos.

There is another partnership at work in the Amway phenomenon which is just as much a part of the story as the teamwork of the two co-founders. That second partnership is the one between the corporation in Ada and the distributor force which spreads around the world.

These two parts of the "world of Amway" are inseparable and interdependent. Each is impressive on it’s own, but neither amounts to very much without the other. The corporation makes the products and provides the support base; the distributor force sells the products, recruits new people, and provides the cash flow.

It is conceivable that Amway Corporation could find other ways to market its products without its distributor force, just as it is conceivable that the distributors could find another product line to take the place of Amway. But in either case, to imagine one seeking to operate without the other is a wildly hypothetical conjecture. They are two separare structures, but too inextricably linked to one another to think of surviving apart.

The connective tissue joining Amway Corporation and the Amway distributor force is, of course, DeVos and Van Andel themselves. They fit into both sides of the equation. They own and lead the corporation, and at the same time are distributors – the original distributors, in fact. In the one role, they are chief executive officers of a manufacturing company. In the other role, they are the distributorship from which every other distributorship in Amway can be directly traced.

It is the structure which is unusual – perhaps even unique – in the direct-sales industry, and more than any other single element it may account for the soundness and resilience of Amway in good times and bad.

It is conventional wisdom in economic theory to speak of the inherent contract between the corporate mentality and the entrepreneurial mentality. Good entrepreneurs do not necessarily make good corporate officials, and vice versa. For a company like Amway to operate well, both types of talent are needed. The problem is often that the two do not always understand each other’s mind-set; the juncture between the two is often ragged and disjointed.

At Amway, Van Andel and DeVos provide the link between the corporate and entrepreneurial sides of the business. In them there is a fusion of the two "mentalities" which gives great strength to the whole operation. Of all the things they do, none is more important than this: to nurture the partnership between Amway Corporation and its distributors.

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