Post Herbalife: It's time to change the channel

Hi, everyone out there. Kevin thompson here, Co founder of thompson burton. Doing this video for a couple of reasons. First, I want to promote jeffrey babner's article. This is the first time in my career. That I've actually shared a competitor's article. But I think so much of jeffrey as an attorney personally. And also, I'm really impressed with this article that he's written. He's written a lot of good articles in the past. This one in particular is very timely. Something that's been on my radar to do. I didn't do it. And his article is just great. So I asked him permission to share it. He gave me permission. And he talks about his assessment. Of the situation in the industry post herbalife. And he and I shared breakfast a month or two ago. At the dsa event. And a lot of the things that we discussed have come to pass. And I agree with him on a lot of his assessments of the current situation. So take your time to read it. In summary of the article. There's a lot of uncertainty following the herbalife settlement. You know, you've got people saying, and it's true, the current law says this. As dictated by case law, as determined by the burn lounge decision. The ftc isn't allowed to remake the law. And the herbalife settlement isn't representative of the state of the law. So you have this interesting mix. You have the law that says one thing. You have an agency, the federal trade commission, that wants to do more to regulate the industry. That's devolved into sort of a bad situation, to put it mildly. The ftc wants to get involved, but they don't really have the bullets to effectively do it. But they can issue guidance. And they can do things. To vector the space in a better direction. What are they going to do? What are they going to say? How are they going to sort of re. Bang out the law in courtrooms? You know, who are they going to sue? Those are all questions that remain unanswered. But there are some very simple things. That companies can do. To minimize their risk. It's pretty clear the ground is shifting. And stay still at your own. Which brings me to my second point of the video. And I'm going to start with sort of an update on tennessee football. I'm a tennessee graduate, ran track and Field about 30 pounds ago, but also follow their football team. In 2015, Tennessee blew two games in the fourth quarter against Oklahoma, where. Which ended up going on to compete in the national championship game. We had him beat by two touchdowns in the fourth quarter. Tennessee Blew it against University of Florida, had him beat by 10 points. I think with five minutes remaining, Tennessee blew it. There are consequences. So Butch Jones, to his credit, he was good friends with the defensive coordinator, but he still made the hard decision to fire the guy. Is it the right decision? Is it the wrong decision? We'll find out in 2016. But the point is there are consequences for poor performance in every other sector except the direct selling industry. And here's where I'm going with this. We have people that have been wrong for decades in this industry and they still have a microphone. So be careful who you're getting advice from. Here's another, I think helpful analogy. Everybody has a cognitive bias. We have cognitive preferences. Look at the Hillary and Trump election cycle as proof, right? People that prefer Trump, they tend to watch programs that support that preference. It's normal, it's human nature. They're watching Fox News. People that support Hillary, left leaning folks tend to watch programs that support that preference. They're watching msnbc, they're watching cnn. Here's my advice to folks inside companies today. And this video is not so much targeted for distributors, although distributors should be informed on these issues. So they should know what to ask of their companies. But here's my advice for people inside companies today. Maybe it's time to change the channel. Because when people giving advice for a very long time have been found to be wrong repeatedly, maybe it's time to change the channel and, and get fresh perspective. Here's another point, the importance of narrative. And my challenge to you is be careful with the narrative that you choose. Be careful with the belief system that you choose because that's the skeleton that holds the whole structure up your belief system. When Burn Lounge goes down, the narrative is, well, they, they're a terrible company. They're not DSA esque. We support law enforcement's ability to root out the bad pyramid schemes. The reality is there's a lot of things about Burn Lounge that reflected traditional network marketing companies that nobody wanted to talk about. And I wrote an article called Self Deception Cancer Killing the Industry, I think is what it was. It was a very strong title, I know, but I address that, that very dangerous belief that Burn Lounge is some sort of anomaly and we shouldn't really learn from it. Fortune, high tech, same thing. Well, it's a bad company. Vemma happens. Vemma caused people to pause. And you know, the folks inside the industry, they talk amongst themselves. And the popular narrative is now that's a personal action towards BK Barako, he just pissed off A lot of people, he should have saw it coming. That's the narrative. And I think that's really irresponsible to hold that belief. The reality is, the industry has devolve into a bad situation. And when you have a problem, it invites intervention. It invites regulation. Herbalife, the narrative is being crafted as we speak. Well, it's bill ackman's fault. It's all because of bill ackman. That reminds me of the old scooby doo TV shows. Where the culprit gets revealed at the end. And the guy says, I would have gotten away with it if it hadn't been for those damn kids. The reality is, the ftc got in there, did what seems like independent studies. They did an independent assessment of the document production Submitted by herbalife. And their conclusion was not flattering for herbalife. So you can't just say it's bill ackman's fault. Attacked by a short seller, the ftc poked in there. They found inventory loading. They found aggressive income claims. They found a lot of problems. Problems that warranted herbalife writing a $200 million check. And fundamentally changing its business. Okay, but the narrative is, well, bill, acknowledge fault. And here's the thing, as the saying goes, if you keep doing what you've been doing, you're going to keep getting what you've been getting. And in my opinion, if people have been sort of leading the discussion for a decade, two decades, three decades from within, inside these companies, Maybe it's time for different leadership. Maybe it's time for different advisors. And this isn't where I'm promoting myself, Although I do have a diverse skill set. To give unique perspectives to companies. I have seen the ground shifting for over a decade. When I first wrote my ebook called Saving the industry by defining the gray. It doesn't have to be me. I've got good competitors out there. Hire a guy like jeffrey babner, or spencer reese, or steve richards, or my partner, kevin grimes. People that have worked with hundreds of companies, Probably a thousand companies. Between all of us, We've all worked with really good companies. We've worked with really bad companies. And it leads to a better trained eye to give good advice. Maybe it's time you listen to people like us. You hire us, and you actually listen. I work with clients all the time, and they don't listen, right? And they'll say, well, over here, they're doing it this way. Over here, they're requiring auto ship. And they haven't been shut down. And they're riding a fine line. My challenge is seek new advisors, change the channel, so to speak. Instead of just watching fox news, instead of just watching cnbc, Instead of looking to the same people, what are you doing? What are you doing? And when you do that, when you stay on the same channel, and when you keep getting advice from the same people, the law of inertia puts pressure on you to do nothing. To just say, well, we're going to wait and see what the ftc does here, and then we're going to make a decision. That sort of mentality did not serve herbalife well, didn't serve vemma well. And it's not going to serve you well if you sit still. So, in closing, be sure you read jeffrey's article, share it. And also, maybe it's time to consider getting fresh perspectives, right? Changing the channel, working with people that have diverse experiences, that have instincts that you might not have, and really positioning your business to get it ahead of the curve. And I think if you can change your business to where it's better positioned to withstand changes in the future, that's good for marketing. Because distributors are really pensive right now. They're nervous. And if you can show people that you've taken steps to protect their businesses long term, that's good for business, right? If you have more disclosures than the legal minimum, and you tell people, you tell the world, look, we're not afraid of anything. We're pushing our retail sales data out today. That would make distributors feel comfortable. It would increase confidence. And an increase in confidence leads to more trust, leads to more sales. So keep that in mind, right? Get some fresh perspectives, change the channel, work with different advisors. Because what's been going on for 10 years, 15 years, 20 years, this idea of working with the same people at the same events, who give the same presentations that are. That are in companies that they really can't control, it's leading to some bad. Or in my opinion, not bad might be the inappropriate word. It's leading to ineffective decisions, and we can do better as an industry. So, with that being said, take care, have a wonderful day.