Ep 13: Direct Approach Podcast with Wayne Moorehead and Prasad Gankanda

Hey Wayne, thank you.

Thank you and I should be honored. I'm honored you know, you asking me. You're a legend in the industry and you're asking me to come and be part of this segment. So thank you, thanks for making me part of it.

Sure, yeah. So Young Living, we go back 27 years. We are the pioneer essential oils company. The founder Gary Young started the company sometime in 1993, together with Mary Young. So very much focused on essential oils and of course we do supplements and some of the other key products. So I'll give you by the numbers, we call it Young Living by the numbers. So we are in 33 global markets. Then we also have an NFR shipping platform where we ship to over 90 countries around the world from the USA. We have about 24 corporate owned and partner farms around the world, and we pride in that, having Young Living own farms. We have about 29 corporate offices around the world as well.

That's a great question. It's an amazing company, Wayne. I started in 2015, and I always say I feel like I found my home away from home. It's just such an amazing company, amazing people I work with. Mary Young has been an amazing mentor for me and she gave me the chance, she took a chance on a young kid from Sri Lanka, so I'll always honor that.

Sure, sure. I know you love talking about yourself, so no no thank you. Well, when you know my story. I was born in Sri Lanka. For those of you who don't know where Sri Lanka is, it's a very small island in the Indian Ocean. When I was five years old my mom and dad dropped me into a private boarding school, and I had to do things on my own. I lived with 133 kids same age, we grew up together. So I graduated from high school and I wanted to become a pilot. So I went to a Sri Lankan flying school where I got my private license. And one day I thought I'll take my mom and dad on a flight, which I was so looking forward to. So I take my mom and dad on a flight one day. And it was probably one of my best days. I land the plane all safe and I take my dad to the school I will study. And sure enough he meets the chief flying officer at that time, who happens to be a good friend of my dad, and he says to my dad, 'Prasad, any monkey can fly.' And I think that was it, that's when my dad said you know what, you're gonna go get an education. So that was a very pivotal point in my life. And I could have sat in Sri Lanka and taken my dad's business, or done everything on my own so I chose the latter part. Well you know my dad asked me to go get an education so I had to search colleges around the world. I said well Aerospace would be a good program. So long story short, I'm in a plane and I landed in Logan, Utah going to Utah State University, getting my aerospace engineering degree. So I traded tropical sunshine for down confidence and long winters. So that's my beginning as a kid, 18 years old, packed up two suitcases not knowing what the future is going to be. I came here to study. But then in 2009 I graduated from the program, the times were off, no one was hiring. I remember applying for maybe 500 job applications, and sadly no one returned my calls. I had to find out why. So sure enough I graduated from Aerospace, at the time most of the jobs were military-based, so you had to be a permanent resident or born citizen. I was neither, I was just a student from Sri Lanka trying to get my hands in the country. I was on my F1 visa, which allows you to study and be in the country for the time period, and once you graduate you get three months to find a job or go back to Sri Lanka. So I was hunting for a job. I applied for a job at a company in Utah, a direct selling company. I remember that day, I went to the interview and met with this amazing person. I talked to him about how much I need a job, and he said okay, why don't you come and meet the team. The next day I met about 15 people and I remember all of them asking me questions. Honestly I felt like the dumbest guy in the world because I didn't know what to answer. Later on I stand up and leave the room and I thought I'll never be able to work there. So I walk over to the elevator and I thought to myself: I could either pack my bags and go home or I could fight and build my dream here. So I walked back to the hiring manager's office and I said, 'If you give me this job, what would you lose?' He said, 'I'll have to pay you, and there are lots of experienced engineers willing to start at a lower salary point.' And I said, 'Don't pay me. I'll work for free. Give me three months. If I'm not the person you want to hire, ask me to pack my bags and leave and I'll always respect that.' So that's how I started in the industry.

Well thank you Wayne. You know I think there was a point that I missed. So when I came here my dad was paying for my college education, so I had a credit card that I was using left and right. But there came a time I woke up one day and I thought something's missing, I can't be living out of my dad's credit card. So me and my wife, we got together and we applied for a credit card that morning. Zion's Bank was nice enough to give me $500 of credit and another $500 for my wife, so we had a thousand dollars to live. I got my first job at the University Inn cleaning hotel rooms. But I remember when I was offered the job at MonaVie later on, paying that thousand dollars of credit card later, and that was such a fulfilling feeling. And that's when you know you did it on your own.

Sure, yeah. And you're right, the industry is changing and it continues to do so. 30 years ago direct selling was 100% done belly to belly, and today it's a completely different environment. So Young Living has always been product centric. You know I was in Mexico a couple of weeks ago and I met with about 30 different diamonds, which are one of the top ranking members in the company. I asked them the question: Why Young Living? Did you start because you love the product or did you start because you wanted to make a living out of it? And guess what, all of them said we started because we believe in the product. So we've always been product centric. And unfortunately our website was not customer friendly. But today, with an amazing team of people and with the CEO and co-founders blessing, we've launched a brand new website that is very much customer focused. I always say to my team, if your website takes time for a customer to come in and navigate through to adding the product they love to the cart and checking out, if that process is not simplified, you're not doing justice to your brand partners out there. At any given month we have between 300,000 to 400,000 brand partners who get a paycheck from Young Living. They are our walking talking billboards, they proudly talk about Young Living, and that drives customers to our website. If that customer conversion and checkout process is not user friendly, you're not justifying those brand partners. So what we've done is simplified our website. If you're a customer who wants to come to Young Living and buy lavender from Young Living, you can simply do that today. You do not have to buy a premium starter kit. You can simply try the product at retail cost, and if you love it you can subscribe and enjoy the 24% discount. So we changed from how we did things in the past to today.

Well, definitely your customers. You don't build a website for your leaders. The back office is for your leaders. But your primary target for the website is customers out there. If you're building a website to support your leaders, I think you're taking the wrong approach.

Exactly. You know, another thing: the COVID-19 pandemic pushed every company. People could go into a store and buy the product, but the pandemic pushed you into your home and you had to shop through a website. So I think the pandemic pushed each company to do things better. What used to be good is not good anymore. Everyone is comparing to Amazon, so if you do not simplify your shopping experience you will be obsolete.

So changing the website started about two years ago for Young Living. We started with looking for the right partner. Picking a partner is very important, you need to do a 360 review because it's a long-term marriage. There was a team that looked for multiple partners, did due diligence, and picked the partner we're working with today. Then we did focus groups with leaders and customers to understand their needs. Then we did alpha and beta testing. We created a website we thought would work, with help from leaders and customers, and rolled it out to our top leaders. We let them try it for six to seven months. That group is smaller, about 500-600 people, so it's easier to navigate issues. We narrowed it down to those leaders, launched it, and worked with them daily to make it better. Then we took a tiered approach, launching to the next level of leaders, then the next, and by the time we launched to all customers in the US, it was tested. Things went wrong, but we had a dedicated team focused on fixing issues quickly. Communication is very important.

Yeah, we took a tiered approach and it was necessary because across the globe we have about 5 million plus customers dependent on the website. Imagine dropping it to everyone overnight, the chance of failure is high.

That's a very good question. Often companies make the mistake of thinking they know what the distributor or brand partner wants. That's a big mistake. So when I first took over sales, which was called Global Sales, I met with the team and asked them to help me understand what they do. The reality is we don't sell anything, it's our brand partners who promote and bring customers. So we defined Global Sales as customer experience and brand partner experience. We created two groups: one focused on brand partner experience, one on customer experience. And we relied heavily on outside members. We created a group of leaders invested in making that experience top-notch. So we bridged the gap.

Absolutely, very important.

I don't know if that's a superpower, but thank you. Change is hard. If I have to answer your question with one word, I'd say communicate, communicate, communicate. Set expectations from the get-go. Creating cross-functional teams is very important. We often love to live in our bubble, but if you step out and look at what's best for the company, the decisions you make in the bubble might not be right. Cross-functional teams played a key role. We brought multiple teams together: operations, customer service, sales, marketing, everyone was involved. We did training every day, every week, ensuring the teams answering phones were well trained. When you launch a website or program, the first thing people do is text or call the call center, so you need to be prepared. We went through a massive training period. So my answer: communicate, over communicate, set expectations, be prepared if things go south. Always have a plan B.

We launched all of the program changes and the website sometime around end of July to August, and I'll tell you, our call centers got hit. We went from a 15-minute wait time to a good four hours, and it wasn't fun. But you have to be prepared. What we did was we did not listen to some of our leaders out there. Often when call volumes go up, everyone has a solution and says this is what you got to do, but we need to look back at the data. Something I'm very proud of that the team did: they sat down, analyzed every single call that came into the call center, understood why the members were calling and what was the reason behind the call, and then we aligned the company and the fixes behind those call drivers. I'm proud to say the team was doing such an amazing job that a month later we were literally down to zero minute wait times. So communicate, over-communicate, set your expectations from the very beginning, be prepared for the change.

Yeah, you're right. You could take a problem by throwing money at it or bodies at it, but often what we like to do is go back and understand why it's happening, root cause it, and take care of the problem, which is what we did in this particular case.

Sure. Operations play a huge role. If you're not careful, those touch points could hurt your brand. At the same time, if you take time, part, and passion to what you do, operations can elevate the brand. We all know the unboxing experience, right? When a brand new customer comes into any company, if you're eagerly waiting for that shipment to arrive, that unboxing experience in my opinion should be five-star. As a company, we put a lot of heart and soul into that pick and pack operations. You could throw a bunch of items together in a package, or you could take the time to nicely pack it in a way that represents your brand. So operations do play a huge role from pick and pack, getting that product shipped to the customer, the last mile delivery. You might be partnering with companies like FedEx, DHL, UPS, and even that last mile delivery, the driver, how that person delivers the product to the customer, even though we are not in control of it, that does represent the brand. So you have to make sure not just what you have within your control, even what you don't have within your control, you need to make sure you measure them. Feedback is a gift. You need to also make sure you ask that question from the customer: how did the experience go? Was it a five-star delivery experience? Understanding that real-time data is very important. So to your point, I am very passionate when it comes to operations. It could hurt your brand or it could elevate your brand.

Yeah, you're absolutely right. When someone calls the call center, if you don't feel like you're talking to a human on the other side that is part of the family, you're not taking care of your customer. Can I simply not just say, 'Hey, how can I help you?' It's just asking how you're doing. Those little things go a long way. It's that human connection, not just making sure your call gets answered under three minutes and we take care of your problem, but also leaving you with 'wow.' I think that's what matters at the end of the day.

Exactly. Mapping that customer journey and the brand partner journey plays a huge role in this. I'm not trying to get into any details, but I'll tell you a couple of things that we've done with operations. When we mapped our brand partner and customer journey, getting that product shipped on time and accurately was a big part of the puzzle. So what we did was we created a rally cry, a mission to our operations people. When they come to work, they all have one goal: processing a perfect order within 24 hours. We sat down with the key management team, not just the director level, but even with the staff that picks and packs an order, to understand what makes a perfect order. A couple of things we came up with: processing that order within 24 hours, making sure that order gets delivered on time, accurately, damage-free, with the right paperwork, and with an amazing unboxing experience, and also making sure you communicate to the customer accurately. For example, if you came into Young Living and ordered lavender, and you got your order on time, accurately, damage-free, within the time it should have been delivered, but if you did not get the tracking number, that is not a perfect order to me. So we sat down with the team to understand what is a perfect order, what are the key components, and then we started tracking them, measuring them, and constantly every single day we monitor that number to make sure we hit a certain target. So understanding your customer experience at each and every touch point, and translating those touch points to analytics to understand what numbers are going to drive the right experience, and measuring them, monitoring them, holding your team accountable for improving them, is very important.

I know that's a loaded question, but that's a million-dollar question. You talked about international markets. Let's assume for a second the markets were launched. Do you decentralize the functions or centralize the functions? That's a great question. I don't think there is a right or wrong answer, and here's why. It always starts with the leaders you hire. If you hire the right general manager in a market, you have to first make sure that general manager is not a sales figurehead. Often companies tend to hire leaders in these markets that are very sales-driven, but you need to understand they are a mini-CEO that represents your company in a smaller market. The person you're hiring needs to be invested, passionate for the industry, and very much aligned to your company vision and mission. If you hire the right person, decentralization becomes an easy question. There are certain things you should always centralize: the brand is one of them, finances, legal, core IT systems. Those should always be centralized. But when you're asking me about decentralization, there is so much you can actually empower. I always say hire stallions, trust them, show them the guardrails, and let them run. So it is a hybrid approach. It depends on the company, the market, the maturity of the market. At a certain threshold, certain things could be decentralized, but as the market keeps growing, you could start decentralizing things even further. It always starts with the team you have on the ground in that market. If you don't trust the team, the first thing you do is try to pull everything back to corporate. I think what we should do is ask the question: are we doing that because we don't have the right leader in the market? If that's the case, simply change the leader, and don't change the process to accommodate the wrong leader.

Can I add a couple of things? You talked about a P&L. Very important. When you hire a general manager, you need to make sure they understand the importance of a P&L and also know how to read a balance sheet. And you have to incentivize the right behavior. Don't incentivize your country managers for revenue only. Make sure there is an OI component to it, also looking to the balance sheet. Make sure that inventory to revenue ratio is within the right specs, headcount to revenue ratio is within the right specs. You're investing in the market, but at the same time, the market needs to start paying back, which I call the revenue to debt ratio. So don't bonus your country managers 100% on sales; you're not going to win that. Make sure it covers the P&L side of things as well as the balance sheet. Incentivize the right behavior.

Exactly. At that point, you only need a sales figure in the market. But going back to hiring the right general manager, trust them, show them the guardrails, empower them, don't micromanage them, let them do what's best for the market because they are very closely related to that market's leaders. A mistake we as a corporate organization often do is we sit in an office in the so-called corporate office and always assume we know what the members want in that particular market, and you don't. So hire the right GM, empower them, give them the guardrails, don't micromanage them, hold them accountable to the P&L and the balance sheet.

Yeah, the key here is set up the guardrails up front, and don't be afraid to try things. Don't be afraid to stock out. Don't over-forecast your product launch volume. At the fear of stocking out, it's okay to stock out as long as you have a supply chain that is a line to launch the product right back. Good ideas do come from the markets as well as from corporate, and they all need to sit in that one central place. The stage-gate is very important as well.

Set up the guardrails and empower the regional teams. There is no such thing as a global formula. I don't know if I've seen any. The same product could have multiple different ingredients when you take it into different markets, so you need to start adapting to take care of the needs of the market.

I think you're asking the wrong person, because during my time at Young Living I was asked to launch five markets in one year, which we did. But there are so many things we learned by doing that, things you should not be doing. From my experience, Wayne, when you launch a market, I really think you get one chance to do it right, and you have to do it right. If you fail, not often do you get a second chance to do it right. There are companies that have gone back again and done it, and that second chance can be very expensive, and often even after you spend a lot of money, the chance of failing again is pretty high. I don't know if there's a magic number of markets per year or per every other year, but my advice would be from my learnings: there are two types of markets, a pull market and a push market. A pull market is where leaders pull you into the market, which is what every company wants. So focus on those markets. I would say personally, maybe every two years you plan to do one market right, and your ROI on that would be much better than trying several markets, cramming them down into a single year. Having several markets half-baked, the one that's done right is going to be more successful on average and generate much greater revenue than three or five or seven poorly launched markets that are halfway launched.

A couple of key things I learned by launching in seven, eight, nine, or ten different markets along my journey. I would say your systems are very critical. If your systems are not ready, don't push. Your systems are the co-foundation. Don't take your bad systems from one country to another country. Focus on getting your systems upgraded and fixing it once. Once it's done, then replicate it. Number two, don't rush because you will regret and you will pay for it later. Take the time, understand the need, understand what markets you need to be in, and do it very methodically. Number three, make sure you have brand partners in the country invested. If you don't, why are you trying to push into that market when you don't have brand partners that are vested and aligned and supporting the company to be there? Hiring your staff is very important. You have to make sure your management team that you hire is very much aligned and invested in the company's mission and vision, and you also have to make sure they are very passionate, they have a passion for the industry. It's easy to go and hire someone who has been a GM for a retail industry or a completely different industry, but the question is, does that person have the passion for the direct sales industry? So hiring your management team is very important. The last thing I would say is when you go to a market, you're going to be relying on so many partners. For example, your warehousing partner, your third-party warehouses, you are dependent on your last-mile shipping companies, your bank providers, your payment providers. All of those, make sure you partner with the right partners out there. It is more of a longer-term marriage. Do the 360 understanding, make sure you get good references, and pick the right partner. Those are some of the things I would ask if anyone's looking to expand. Those are some of the good takeaways from my learnings.

Oh, geez. I'm going to go back to something besides 'don't be a pilot.' I have to go back to something I found that Gary Young said: 'If you're not living on the edge, you're taking a lot of space.' Be innovative, be creative. It is okay to fail, as long as you learn from that failure and you don't repeat it. I think you got a bright future ahead of you.

Good question, Wayne. When you're part of a bigger machine, when you're part of a global company like Young Living, which is such an amazing company, the sun never sets. What I mean by that is you have 30-plus countries that are constantly operating. I could be sleeping, but those markets out there are operating. So if there is one thing that keeps me up at night, it's the aspect of a global company like us. Operations never sleeps. Every day is a new day, constant challenges, different challenges.

My job is to 100% support the markets out there. They are my customer. If I'm not supporting them, that means I'm sitting here getting a paycheck for no reason. A question I ask every day when I leave the building is: what did I do to make a market successful? If I can proudly answer that question saying yes, I did that, that makes me come back every single day. That's the change we do here.

What gets me up in the morning? That's a good question. I ask myself most of the days. Without a doubt, mate, it's the people I work with. I know I keep saying it's such an amazing company. The people I work with are my family. They are part of me. My wife laughs at me sometimes when I'm driving on the road, I'll pick up my phone and call someone I work with because I value that touch point. I said this when I started the podcast: I genuinely, truly feel that I found a home away from home. It's the people I work with. They are my why that I keep coming back every single day.

Well, thank you, man. It's an honor to be part of your podcast, and I wish you the very best of everything as well.