Refashioning the Familiar

When a headhunter called Candace S. Matthews about an opportunity at Amway, she initially scoffed at the idea. “Were they even still around?” she thought. “Would [the role] be bigger than what I’m doing now?” After all, she was already president of Soft Sheen-Carson, a consumer products division of the cosmetics giant L’Oreal USA, and she had held a series of top marketing positions at some of the world’s leading corporations, including Procter & Gamble and The Coca-Cola Co.

What Matthews didn’t realize at the time was that the family-owned, multilevel network marketing business had grown beyond offering a line of cleaning products. Encouraged by the recruiter to re-examine the offer, Matthews became receptive, even enthusiastic. “I had no idea of the company’s global scope,” she says of the enterprise that operates in more than 50 countries, employs 13,000 staffers, and at the time grossed roughly $7 billion in revenues. “It was huge, and totally under the radar.”

Matthews would soon discover how she fit into Amway‘s growth equation. In 2007, the board, led by co-CEOs Steve Van Andel and Doug DeVos, decided that the company needed transforming. The direct sales leader lagged behind its competitors in connecting well with American consumers. In the company’s early stages of growth, 80% of its revenues came from the United States and 20% from international markets. Now those percentages were reversed. Expansion was happening rapidly in areas such as Russia, India, and China, its largest market, with only marginal growth in the U.S. Amway’s bruised reputation here also contributed to flat domestic sales. Matthews, 50, who came aboard at the end of that year, says, “They [knew] they needed to transform and laid out three main pillars: growth through innovation, consumer orientation, and performance driven.”

Amway needed a strong chief marketing officer who understood how the pieces came together and who could infuse a new level of dynamism into the organization. Matthews was the executive for the job.

She was tasked with moving the company from a multilevel marketing business model to a consumer driven model; creating the strategic direction for the five lines of business; and establishing a process for new product development and consumer insight, as well as developing global positioning for Amway products and brands. She wasted no time tackling this audacious mission. Matthews, who controls a budget in the hundreds of millions, has launched a fully integrated marketing program, which her 600-person global team executes in support of 3 million distributors who sell five categories of products: beauty, nutrition, home care, personal care, and durables.

“This fall we will unveil the new Amway brand identity, which will be modern and contemporary with a strong connection to distributors and consumers,” she says. The components include a powerful promotional video that she directed, highlighting Amway products and how they enhance the lives of individuals across the globe, and a vibrant new Website offering details about corporate history, brands, business-building opportunities, and community engagement.

While most companies were battered by the worst economic climate in a generation, Matthews’ efforts helped boost Amway’s revenues to $8.2 billion, an impressive 15% gain in 2008. The company projects solid growth in the single digits for 2009.

She’s on track to hit those growth targets, having already designed a multipronged platform to propel Amway to its next stage of business development. Her intense focus on the impact of culture on brand acceptance and regional sales models has reinforced a marketing approach that blends innovation, technology, and interpersonal relationships. Through her business prowess and inventiveness, she is helping turn Amway into an even more dynamic global powerhouse. For that reason, Candace S. Matthews has been selected as our 2009 Black Enterprise Corporate Executive of the Year–the first such honoree to serve in the C-suite of a privately held corporation.

RETELLING THE AMWAY STORY
Amway has a history of growth and transformation. Headquartered in Ada, Michigan, outside Grand Rapids, Amway started in 1959 when two spirited entrepreneurs, Jay Van Andel and Rich DeVos, who had started roughly six other businesses, began selling a line of cleaning products door to door. By the early 1960s, the high school buddies’ determination and sales prowess had paid off: The company had expanded to more than 700 employees, a network of 100,000 distributors, and estimated retail sales just exceeding $500,000. The two had found a formula that worked for any dedicated salesperson: A good sales pitch, a demonstrable product, and reasonable pricing. By the 1980s, Amway had grossed a whopping $1 billion in retail sales.

If you were a child in the 1970s or 1980s, chances are you knew of loyal, entrepreneurial-minded folks who sold Amway products and, in turn, would try to persuade others to not only become a customer but to join its network of independent business owners, or IBOs. But this novel distribution model drew criticism and accusations that the company was operating a pyramid scheme or, even worse, a cult. In 1979, the Federal Trade Commission ruled that Amway was indeed a legitimate business.

By 2000, Amway had grown to a multibillion-dollar operation run by the founders’ sons. Today, product lines manufactured by the company are supported by a broad team of professionals including 400 scientists and 100 engineers. Amway owns and operates 6,311 acres of organic farmland in the U.S., Mexico, and Brazil. In the past decade, the company has gone through several permutations as the owners sought to continually enhance their business model.

In 2000, in an attempt to improve its image in the U.S. as well as develop and acquire new businesses, Amway formed the holding company Alticor. Quixtar would replace the name Amway in the U.S. and relaunch as an online business.

The board, however, approved setting another agenda in 2007 and, for the first time in the company’s history, recruited outside talent: Among them Russell Evans, a former Boeing and General Electric exec as CFO; former S.C. Johnson Wax Senior Manager Steve Lieberman as managing director of North America; and Matthews as CMO.

With the new team in place, one of the first decisions was to reintroduce the brand in the U.S. using the original name, but this time as Amway Global. According to R. Dale Wilson, marketing professor at Michigan State University, it was an astute business move. “The problem with [changing the name of a product] is you have to build brand awareness, and that could cost hundreds of millions of dollars,” he offers. “Using the old name, they could focus on changing attitudes around the brand.”

The newly installed CMO’s next challenge was indeed to change perceptions among corporate managers and independent distributors who viewed sales and marketing as interchangeable functions and communicated to customers only through direct sales channels. “I’m bringing the discipline of consumer marketing to this business model as well as an understanding of the difference between marketing and selling,” says Matthews, “demonstrating that you have to augment selling with marketing efforts.”

Initially, Matthews’ brand-building strategy wasn’t popular with distributors, who believed investment in such marketing would diminish individual growth opportunities. Changing that mindset required an education process, she says, in which distributors “could see facts, data, and then understand the business opportunity within this new model.” Matthews showed them that if the direct sales model tapped 20% of market share in a particular category, then 80% of that market represented additional sales opportunities. Moreover, aggressive marketing to that segment would create product awareness and, in turn, boost revenues. “Our Nutralite business is our biggest business,” she says. “We are the world’s largest vitamin supplement company. We have the world’s largest market share, and literally nobody knows about us. What would happen if we actually started telling the story about this brand?”

Matthews also had to direct international distributors on how to address specific issues within their regions. Over the past year, she hired chief marketing officers in six regions to serve on her CMO council. To convey her expectations to the group, she used a stuffed octopus. “I said, ‘We think globally here,’ ” she explains, touching the head of her colorful sea creature, “and then we implement through each of our areas,” in which she points to the octopus’ tentacles. “So I gave everyone a stuffed octopus and when we get into one of our meetings and people get too far down into their details, I say ‘Whoa, whoa, whoa–get back to the head of the octopus.’ ”

Carlos Costa, manager of strategic business lines for the Latin American Transformation Team, recently back from an assignment in that region, successfully applied her strategy. “We have adopted Candace’s philosophy in the region,” he says. “Our leader has started saying, ‘We’re not regional marketing; we are the Latin American marketing team.’ Since then we’ve been seeing a lot of success.”

BUILDING A POWERFUL TEAM
Growing up in New Brighton,

Pennsylvania, Matthews wanted to follow the path of most of the town and work at the local steel mill. She, however, intended to manage the operation. That aspiration led her to earn a degree in metallurgical engineering and administrative and management science from Carnegie Mellon University. The youngest of 18 children, this minister’s daughter was raised in a strict but loving household where trying to keep up with older siblings inspired a competitive streak. An avid math and science student, she became adept at solving problems and, as such, adopted cracking Sudoku codes as her favorite pastime.

Upon completion of her M.B.A. from Stanford University in 1986, the then 27-year-old Matthews was recruited by corporate star Ann Fudge to work at cereal maker General Mills. At the time, Fudge, now retired, was a director of marketing who earned the distinction of becoming one of the most powerful African American female executives in corporate America. The young professional gained an influential mentor.

As Matthews began her marketing career at General Mills, she followed Fudge’s guidance when it came to maneuvering politically charged corporate environments. “I had to learn how to operate in corporate America as an African American,” Matthews recalls, “because you face things in which you would be appalled. But you’ve got to learn how to handle them so you can constructively take it to the next level.”

Matthews’ mentorship, marketing skills, and empathy, a trait she inherited from her late mother, established leadership qualities that enabled her to ascend to top positions at the world’s most powerful corporations.

Although not especially tech-savvy, Matthews constantly relies on technology to power her marketing agenda. She’s enlisted the aid of tech guru Mike Edwards, director of digital and consumer experience marketing, who outfits her with the latest gadgetry– today it’s her iPhone–and crafts her digital strategy. Edwards asserts, “She is an advocate for the digital space and stays up to speed with the information. As long as we have the measurement to put in place, she’s pretty good about letting us go out and play.”  His team recently launched a viral philanthropic program in nine languages called the One by One campaign for children; it uses social and global networks to carry the message of Amway’s Nutralite brands. And he’s preparing to release a fully integrated iPhone application that will enable distributors to offer full presentations with graphics and videos and allow consumers to complete purchases.

A FORMULA FOR WORK-LIFE BALANCE
On a recent visit to Matthews at Amway headquarters, she was preparing for a 10-day business trip to South Africa and Ghana aboard the corporate jet. Her assistant, Jayne Germain, was briskly pulling together the details. The medical packet prepared at the company’s onsite facility included everything from bug spray to prescribed medicine. Her passport bulged with additional pages and visa documents; cash for remote areas; and information about the security detail that would accompany

her on certain legs of the trip. “I am extremely busy, but I am never stressed,” says Matthews, navigating in her two-seater Mercedes convertible to the 8½ -acre ranch she shares with her husband, Bruce, and three children, twin girls Sydney and Simone, and son Seth.  Her commute is all of seven minutes.

“Never stressed,” is a phrase one rarely hears from an executive–particularly a senior-level professional woman, wife, and mother. When you meet her husband though, you quickly understand. The two were married 10 years ago after a four-month courtship. A quality control engineer with a degree from the University of South Florida, Bruce owned a coffee shop and home-improvement firm when they met and married in Atlanta. Matthews was at Coca-Cola at the time.

Hailing from a big family, she never suspected she would encounter fertility problems, but she did. So the couple adopted from the foster care system–twin girls, now 11, who were received at age 3 with a “failure to thrive” diagnosis, and their 4½-year-old son who has been with them for since he was 1. Matthews remarks, “They are thriving and it shows how environment and nurturing can change a child. I would encourage more black families to consider adopting out of foster care.”

In 2001, Matthews received a job offer from L’Oreal to head Soft Sheen Products, once a black entrepreneurial institution in Chicago. She expected it to be a career-making but demanding opportunity, especially with a young family that required special attention. “I asked her, ‘Is this what you want?’ recalls Bruce. “When she said yes, I offered to stay at home.” And he’s been a stay-at-home dad ever since.

Today, Bruce runs the ranch, managing all household duties, the children’s care, and schedules. He also oversees construction of their home and barn, which houses two horses: a Tennessee walker and a quarter horse. “A man does whatever is necessary for his family,” he says.

Bruce plays a supporting role in his wife’s career. He attends company events and offers professional help. For example, he recently attended a dinner in which Matthews was wooing a marketing candidate to Amway. Bruce provided the candidate and his wife with information on Matthews’ management style, the company’s family-oriented corporate culture, the owners’ dispositions, and family life in Grand Rapids. A few weeks later the candidate accepted the position, saying he was won over by the company’s approach.

Matthews never imagined when she received the headhunter’s call two years ago that she and her family would be presented with so many opportunities. At Amway, she’s still focused on building an effective team and a winning strategy to help the company reach its goal–dubbed “12×12”–$12 billion by 2012. She says, “The best of all worlds is when the best of who you are can come out in what you do.”

–Additional reporting by Benice Atufunwa

This story originally appeared in the September 2009 issue of Black Enterprise magazine.