I thought it would be fun to take a look at an article that ran in Fortune Magazine just over 27 years ago. If you’re wondering how or why the dollar store prizes motivate the sales force, look no further. The cars? They really cost Mary Kay Inc. nothing. There are production (ordering) requirements that ensure the cars are paid for. If the unit doesn’t order enough, the sales director has a “co-pay” which means she pays out of her own pocket for the cost of the car.
Pay attention to some of the things mentioned in the article:emotional compensation, color-coded suits, things that show rank, it’s not about selling, recognition is what people crave most, you can do it too. Nothing ever really changes in Mary Kay.
MARY KAY’S LESSONS IN LEADERSHIP
Nobody knows better than Mary Kay Ash how to motivate a sales force. She masters the true power of employee recognition.
By Alan Farnham
September 20, 1993
(FORTUNE Magazine) – Look at their faces: Women on the following pages are laughing, crying, singing — transported by some power. It’s Mary Kay enthusiasm.
Mary Kay enthusiasm? The cosmetics company?
Earlier this summer, more than 36,000 Mary Kay beauty consultants (saleswomen) converged on Dallas. They arrived, driving signature pink Cadillacs, from Bakersfield and Wichita and Fayetteville and Grosse Pointe and all the cities in between. Destination: the Dallas convention center and a three-day sales rally called Seminar — part convention, part Hello, Dolly!
Summer in Dallas is not autumn in New York. No songwriter ever sang its charms. But these women come gladly every year, paying their own way plus a $125 registration fee for what may be the greatest women’s party on earth. The title ”greatest men’s party” goes to the Bohemian Club of San Francisco for its annual all-male encampment in the California redwoods.
But who has the better time? The beauty consultants, sweltering in Dallas, or the Bohemians in their bower? No Bohemian got roses. Not one got a crown, a diamond ring, or kissed. Well . . . not publicly, anyway.
Before you get to chuckling up your sleeve about Mary Kay, consider: Enthusiasm has propelled Mary Kay sales from $198,000 in 1963, when Mary Kay Ash (now chairman emeritus at 75) and son Richard Rogers (now chairman at 50) started the company, to over $613 million now. It has built a sales force of 300,000, of whom more than 6,500 are driving complimentary Cadillacs and other cars worth over $90 million. It has created 74 ”millionaires” (women who have earned commissions of $1 million or more over the course of their careers). And it hasn’t done too badly by the Ashes, whose fortune Texas Monthly puts at $320 million.
John Kotter, Konosuke Matsushita professor of leadership at the Harvard business school, calls Mary Kay ”an opportunity-generating machine” and Mrs. Ash one of the best business leaders in the U.S. Women who never led anything more demanding than the family dog for a walk have been transformed into sales managers leading up to 20,000 people each. You could do worse than emulate this pink company.
How does Mary Kay do it? By giving people recognition, not just cash. Go to Seminar and you see how it works. Misconceptions quickly explode: These women aren’t bored housewives. Two-thirds have full-time jobs in addition to selling Mary Kay. Several are lawyers. There’s a pediatrician and a Harvard MBA. No one, regardless of background, comes to Dallas to get pixilated on rose (there’s no drinking) or to hear from such stalwarts of the podium as Dr. Ruth or Dr. Kissinger. They come to give and get recognition from women like themselves who have sold one hell of a lot of makeup — so much that they have minks and diamonds and husbands who’ve quit jobs to keep their books.
The most successful, such as Anne Newbury, 52, are introduced by film clips of the kind political parties use to introduce nominees. Over 24 years Newbury has earned $2 million. ”I don’t know about you,” she tells the audience, ”but I had always dreamed of driving Cadillacs ever since I was young. My first Cadillac came easily . . .” The whole audience goes ”ahhh” and slips into her story as if it were a warm bath.
The audience savors Newbury’s success because they know she started out where most of them are now — at the bottom. She bought a Mary Kay makeup case (current cost: about $100), phoned her friends, organized parties in homes, and sold the makeup for twice what she’d paid for it. She then recruited more saleswomen from the ranks of her customers, getting a percentage of their sales forever.
Every saleswoman buys directly from Dallas, all at the same price. Corporate culture is egalitarian, and resumes count for nothing. You say you were a brain surgeon in your last job? Fine. Get a beauty case and start dialing. There’s no cap on how much a woman can earn.
As her sales rise and she recruits more consultants, she advances to sales director (where compensation, including car and commissions, averages $35,000) and eventually to national sales director (average compensation of over $200,000), getting feted royally at each step. That feting is the key to the company’s success.
Emotional compensation matters almost as much as cash. To women who’ve made their pile, it probably matters more. And at Seminar, they get it. No lights are hidden under bushels here. Color-coded suits, sashes, badges, crowns, bees, and other emblems show how far each woman has come. (Bumblebees are favorites, since they denote success against tough odds: Aerodynamically they shouldn’t be able to fly.)
Sales director Deborah Robina wears a bracelet reading ”$1,000,000.” Its band is gold, the numerals written in 32 diamonds. The amount is how much she and the group of saleswomen she leads sold last year, and she’s proud of it. Women with lower sales wear metal lapel bars giving the amount: ”$25,000.” Like generals inspecting ribbons, they immediately see who’s done what.
National sales director Shirley Hutton of Minneapolis will, if asked, give you a tour of her coat. After 20 years with Mary Kay, she has won just about everything there is to win. She personally made $800,000 last year and expects to break $1 million this, which would be a first for a national director. Her suit is a creamy white, denoting director status. Several of her jewels she bought while vacationing with Mrs. Ash, who regularly invites star performers to join her on trips.
Developing women’s leadership potential gives Hutton satisfaction. ”Give me a hard-working waitress,” she says, ”and in a year I’ll turn her into a director making $35,000.” More often now, she helps women escape corporate jobs.
Gloria Hilliard Mayfield, Harvard business school ’82, escaped — but it took a while. She worked for IBM and became a marketing manager for Stratus Computer of Marlboro, Massachusetts. Then one day she attended a Mary Kay sales party. She liked the cosmetics. But what really impressed her was that her consultant sold $350 of merchandise in two hours.
Five months later Mayfield had her first company car, and by 1990 she had switched to selling Mary Kay full time. Did she get flak from her business school pals? ”Lots,” she says. ”When you’re from Harvard and you say you’re starting an entrepreneurial venture, people are all ears. Then you tell them it’s Mary Kay; they say what?! I try to explain it’s no different from my having a Ford dealership. The Ford dealer’s an independent entrepreneur. So am I.”
Mary Kay women don’t think of themselves primarily as sellers of cosmetics. Says CEO John P. Rochon, ”They are selling what we believe to be the premier business opportunity for women today.”
Mayfield much prefers Seminar to the IBM conventions she attended. ”I didn’t see much recognition at IBM. At Mary Kay, if you do well, you know for a fact you’ll get recognition. It’s not influenced by politics.” She likes her Cadillac and diamonds, but it’s the company-paid trips for sales champs that she likes best. ”Mary Kay has incredible vacations — five-star, so untouchable. We all went to London. They closed Harrods for an hour so that only we could shop.”
Mrs. Ash goes on many of these jaunts. Mayfield finds her uniquely approachable. ”You wouldn’t just walk over to, say, John Akers,” Mayfield explains. ”But Mary Kay calls you her daughter and looks you dead in the eye. She makes you feel you can do anything. She’s sincerely concerned about your welfare.” Amazingly, she is.
When Shirley Hutton’s daughter was ill with a kidney stone, Ash phoned twice to visit with the girl. By such touches, every ”daughter” in the company learns a lesson: When somebody takes an interest in you, it feels good.
The 300,000 consultants try to treat customers the same way, remembering their birthdays, sending them little notes, showing they’re interested. That’s what sells the makeup.
RECOGNITION from Ash is what her salespeople crave most. She personally crowns four Queens of Seminar — women who have excelled at sales or recruiting. She kisses them and puts roses in their laps. She pats hands, looks deeply into teary eyes.
And she tells and retells the story her listeners cannot hear often enough: How Mary Kay, a young saleswoman for Stanley Home Products (a direct seller of cleaners and brushes) was so poor she had to borrow $12 to travel from her Houston home to Stanley’s 1937 convention in Dallas; how she took along a box of crackers and a pound of cheese because she couldn’t afford restaurant meals; how, sitting in the back of the convention hall, she saw the top saleswoman crowned queen and given an alligator handbag; how she, Mary Kay, burned to have that bag and pledged she would win next year; and how she did, only to discover that Stanley had changed the prize. ”Do you know what it was?” she asks in disgust. ”A flounder light.” It doesn’t matter that no one in the audience quite knows what a flounder light is. It just sounds bad — nowhere near as nice as a purse.
These stories reverberate daily, thousands of miles away. Two weeks after Seminar, in Chatham, New Jersey, Nancy Olson, 24, beauty consultant and former nanny, is telling her customers about Mary Kay: ”. . . and then, when she won the contest the next year, the company had changed the prize. It was a flounder light!” The women are appalled.
When Ash wants, she can be funny. At Seminar, after some hotsy-totsy director has testified how she sold a record sum, Mrs. Ash will challenge the audience by asking, with Jack Benny timing, ”Now what’s she got that you couldn’t have fixed?”
In other words, with a little work, you can do it, too.
Her own story is full of pathos, and she uses it to build a bridge to every woman who has ever been slighted or underrated by a man. After Ash left Stanley Home Products, she worked 11 years as head of sales training for another company she will not name. She returned from a business trip one day to discover that her male assistant, whom she had just spent nine months training, had been made her boss — at twice her salary.
”It hurt my feelings so bad,” she says. She appealed the injustice to her superiors, who ignored her. ”It was a board with seven men on it, no women.” She quit.
For a while she worked on a book about her experiences, then decided to turn it into a business plan for a company that would treat women right, ”not ruin their self-esteem” or limit how much money they could make. After she had invested her life savings of $5,000 in the company, and only a month before its doors were set to open, her husband dropped dead at the breakfast table of a heart attack. With her children’s help, she went ahead — at age 45.
She is revered. At Seminar a sales director presented her with a drawing of Mary Kay and Christ, with Christ looking on approvingly. The difficult thing to convey about such gestures is that they are made and accepted with absolute sincerity. Everything about Mrs. Ash is straight and stripped of false emotion. She is the giver and receiver of true love, on a mass scale.
Morley Safer of 60 Minutes tried needling her about the sincerity of her religious feelings. (She constantly stresses the Golden Rule and the need to put God ahead of family and career.) Wasn’t she ”using God?” he asked. ”I hope not,” Mrs. Ash said evenly. ”I hope He’s using me instead.” Cynics do not remain cynics in her presence long.
Males play a role in the Mary Kay universe, but it’s limited. About 2,000 sell the cosmetics, and one of them recently became the first man ever to win his own pink Cadillac. But at Seminar, husbands outnumber these Kaymen handily. The husbands know, without being told, that they’re fifth wheels here and that their job is to be quiet and not get into trouble.
The company provides an activity program for them (golf, bowling, tennis, sight-seeing) and classes where husbands long in harness can pass on useful tips to freshmen. If, for example, you’re out driving in your wife’s Cadillac and some guy pokes fun at its color, tell him he is mistaken: It’s not pink, it’s salmon. Other classes lay out legal facts of life: The wife’s business is not a partnership but a sole proprietorship. It belongs to her, not to the couple.
For husbands who are office managers for their wives, another class discusses the merits of getting such aids as call waiting or a car phone. Says the husband-teacher: ”A car phone gives you a warm, fuzzy feeling when she’s out on the road at night. You know she’s got security.”
In general, Seminar speaks to husbands with a candor that would get another company in hot water, were the sex roles reversed. A husband’s highest function, it’s implied, is to support his wife’s career. If for some reason he can’t do that, he should get out of the way.
When Mrs. Ash addressed a group of husbands by videotape at the latest Seminar, her tone was friendly, respectful, but to the point: Woman was created from man’s rib not so she could tower over him or be trampled underfoot. Woman was created to stand beside man as his equal. She certainly wasn’t meant to earn 74 cents to a man’s dollar. ”This is why women are fed up with corporate America,” she continued. ”I promise you your wife will be making three times the money of her corporate job. Plus, you’ll get the benefits of her living positively, putting God first, family second, and career third.”
WHAT DO women want? No mystery here. Freud could have saved himself a lot of trouble. One Seminar woman told a group of husbands: ”I want my husband’s support emotionally. I want to be told I’m okay. I want him to say: ‘Maybe this year wasn’t what you thought it would be, but next year will be better.’ Don’t put barriers in my way. Put the bags in the car. Sometimes just put an arm around my shoulder that says: You’re great.”
One Queen, overcome while being crowned, cried out to her husband in the audience, ”Thank you, honey, for all the Kraft Dinners, the clean socks, the laundry.” How well will all this work once Mary Kay the woman is gone? Says a husband: ”There will be a flood of tears unlike anything you have ever seen. I’d love to have the tissue concession.”
But she isn’t about to go gently, or without makeup, into that good night. She and her ”daughters” have grit. Anne Newbury once rose from a hospital bed so she could go out and sell a little more makeup to qualify for an Acapulco holiday. (”How I had always dreamed of going to that romantic destination!”) Mrs. Ash, when ill, has presided over Seminar from bed, via closed-circuit TV.
No one doubts the company will keep going. She ensures that by transplanting her beliefs and goals (and stories) into every woman she touches.
Says Gloria Mayfield: ”She just shoots her whatever right into your blood veins.” The bigger question is, When will the reward-by-recognition idea catch on at other companies? And will it work with men, who may be more apt than women to say,”Skip the crown, just give me $50”?
Husbands at Seminar reported some success already at getting their employers to pay more attention to praise. There’s hope. Says Kotter: ”The genius of great leaders is that they understand money is only one of the things that make people light up.” Applause and prizes do it too.
Just remember: Ixnay on the flounder light.