Orrin Woodward LIFE Leadership Team

Winner of the 2011 Independent Association of Business Top Leader Award; Orrin Woodward shares his leadership secrets.

The Soul of Network Marketing

Posted by Orrin Woodward on December 3, 2008

There is an ideological battle blazing in the Network Marketing industry.  At stake is the Soul of an entire industry and whether it retains its free enterprise roots or morphs into a totalitarian control by the few.  On one side are the totalitarians that demand control and obeisance from the “proprietary trade secrets” otherwise, known as your friends and families.  On the other side are the libertarians that believe in free enterprise and the “right to own your own business.”  There can be no middle position here.  Either you are for companies owning the people who freely join their business, but are not free to leave or you are for the free enterprise principle that customers will stay only if you serve them.  Most people begin in business as libertarians and love freedom until they get a big community and then they want to use coercion to keep them.  I don’t believe this can nor ever will work.  People join networking to get out of the bureaucracies and coercion of a corporate job and are highly disappointed when they find out that some networking companies claim to have more control than their corporate jobs had over them.


Networking companies have always touted free enterprise and personal freedoms.  I have attended years of seminars and have heard speakers share quotes from Ludwig Von Mises, F. A. Hayek, Milton Friedman, Ayn Rand, George Reisman and others on stage for their stand on free enterprise.  I love the Network Marketing/Community Building field and what it can do for people’s thinking and lives.  I read most of the books of these giants of free enterprise and economics and was inspired to build a large free enterprise networking community.  I am now very concerned with the totalitarian direction of many in the networking industry.  Why is the networking field moving away from its free enterprise foundations that drew so many incredible entrepreneurs into the field in the first place?   Is the Direct Sales Association the group that can fix this or do they represent only the company’s perspectives?  Perhaps a field led association needs to be created to ensure that free enterprise reigns throughout Network Marketing?


“To deal with men by force is as impractical as to deal with nature by persuasion.” – Ayn Rand, a free enterprise and founder of the Objectivist school


When Lee Iacocca was fired by Henry Ford II, he simply took his ideas, many of his top leaders and went to a competitor Chrysler.  If Ford thought Lee was not fit for their company then they have every right to fire him.  But to then forbid him from getting another job in the automotive field sounds totalitarian to me.   Ford did not stop him from joining Chrysler and Lee did bring over 25 key lieutenants from Ford to Chrysler.  Any sane company would know that firing a top leader will create havoc in their leadership team.  The totalitarians in Networking desire the right to fire people at will and then sue the fired person.  They sue to steal the years of effort in building a community and deny the fired person the ability to compete against them in a free and open market.  Anytime competition suffers, society suffers.  The DSA should encourage competition as it helps the entire industry.  Currently, if the community chooses to follow the leader and not the totalitarians, the leader is sued by the totalitarians either in a public court or worse yet in a confidential arbitrations proceeding.  It may be only a couple of hundred dollars to join most networks, but whoever said it would be several million dollars for the right to leave even after you are fired?  This is not an idle discussion as big corporations are suing numerous top leaders in the networking industry as we speak.  There are multiple top leaders that are being sued for requesting the right to join another network.


The truth is that economic competition is the very opposite of competition in the animal kingdom. It is not a competition in the grabbing off of scarce nature-given supplies, as it is in the animal kingdom. Rather, it is a competition in the positive creation of new and additional wealth. – George Reisman, professor of Economics


Are networking field leader’s chattel or independent business owners with the right to choose where to ply their trade?  I am not for dabbling in numerous enterprises because I strongly believe that focus is essential for success.   Having a “free agency” mentality in our industry I believe is the key.  People should have the ability to come and go as they please, to work with companies and leaders that will serve them.  This ensures that all companies and leaders will serve their communities and put the customer’s best interests first.  If they don’t, just like every other market, their customers will leave and buy product and services from a competitor that does a better job.  Isn’t this what free enterprise is all about?  When a big company decides to insert rules into contracts and sue their top performers rather than serve them, I believe it puts the whole basis of Network Marketing at risk.  Big companies with good will can lose it quickly by inserting rules into existing contracts and destroying the free enterprise principles the company was founded upon.  No other market or industry in the free world operates like this.  To see the devastation of this type of mentality, you have to look no further than the economies of Cuba or North Korea.


“The role which good will plays on the market does not impair or restrict competition. Everybody is free to acquire good will, and every bearer of good will can lose good will once acquired.” – Ludwig Von Mises, the greatest economist of the 20th century


Networking has always been about free enterprise and business ownership. The totalitarians are turning the meaning of these words into Orwellian double speak.  They want to be the only true business owners and everyone else they label business owners even though they are their “proprietary trade secrets”!   What is proprietary to a Networking Company about your neighbor or you friends at church?  Why haven’t the big leaders that are more like prisoners than business owners done anything to rectify this abuse for themselves and their groups?  In corporate America they called this golden handcuffs.  Not happy with the situation, but unsure of what to do.  Many big leaders are stuck in totalitarian organizations and would leave, but are afraid of being sued and bankrupted.  What kind of compassionate capitalism is this?


“Capitalism demands the best of every man – his rationality – and rewards him accordingly. It leaves every man free to choose the work he likes, to specialize in it, to trade his product for the products of others, and to go as far on the road of achievement as his ability and ambition will carry him.” – Ayn Rand


The whole argument sounds frighteningly familiar to the history of Major League Baseball before the reserve clause was eliminated.  A player could play out his contract and be a free agent, but the owners of the team has a reserve clause that allowed them to still own the player.  Players would leave the game and have to get side jobs to survive because the owner raked in the profits at the players’ expense.  Curtis Flood fought over this reserve clause and eventually won.  The owners argued that it would destroy the game of baseball by having free agency and that there would be no stability in teams.  Economics theorized that free competition for the best players would raise all salaries and it did.  History has proven the owners wrong and all the major league players have benefited by higher pay and better retirement packages and the owners still make big money.  Freedom of movement for entrepreneurs is essential to create true competition. 


“If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion” – F. A. Hayek, Nobel Prize winner in economics


People in sports and networks do not come to see the owners, but do come to see the leaders.  In rare instances, this is the same person.  But many times the owners make the vast majority of the profits and the leaders handle the heavy load of leading and being controlled by bureaucrats.  Just as Curtis Flood stood for all of his fellow players and sacrificed personally for their future gain, I believe the key leaders in the Networking field must stand for the right to freely join or leave a company if they are not being served.  Any leader worth his salt would understand that jumping companies on a regular basis will hurt their credibility and raiding others people’s groups is just poor character.  People have the right to choose who they wish to be in business with and should make these choices with character and integrity in mind.  But adding reserve clauses and threatening to sue any top leader who is not being served properly only hurts the whole industry.  Reserve clauses made the players chattel of the owners with no freedom to leave one team for another.  Non-competes and “proprietary trades secret” clauses make distributors no longer owners of their own business, but “owned” by the company they are in business with. 


“I think that nothing is so important for freedom as recognizing in the law each individual’s natural right to property, and giving individuals a sense that they own something that they’re responsible for, that they have control over, and that they can dispose of.” – Milton Friedman, professor of economics and one of Ronald Reagan’s favorite economists


As a leader, I am moving in the direction that I know will help millions of people have their victory, if they choose to do the work.  If a Networking company is not serving their customers or if I am not serving my team then I have no right to demand anyone to stay.  The ethical way to leave any company is to sit down with them and share your issues.  Perhaps they were unaware there were issues.  If they address and fix the issues then you both are better off.  If you sit down and they tell you to beat feet, then you should be free to pursue other opportunities not get sued.  Everyone ought to have the right to start their own business! Any time the freedom of action is hindered by totalitarians, by that same proportion free enterprise is hindered.  The catalyst for all free enterprise is the entrepreneurs and by denying freedom to entrepreneurs, you lose the competition that brings out the best practices for the end consumers.


“Entrance into the ranks of the entrepreneurs in a market society, not sabotaged by the interference of government or other agencies resorting to violence, is open to everybody.” – Ludwig Von Mises


The totalitarians desire control so they can pay less than their competitors and still fence in the unwilling distributors by fear and intimidation.   We freely join and we should be free to leave any community that is not meeting our needs.  Anything else is not free enterprise and you certainly cannot say that distributors own their own business if they are not free to sell their business and move on.  Totalitarians are unwilling to satisfy the consumers, but unwilling to lose their power.  In order to achieve these contrary principles, coercion is inserted into the contracts by non-competes, costly arbitrations, “trade secrets” language, etc, to restrict competition and maintain power.  My thoughts are: Let free enterprise reign!


Big business depends entirely on the patronage of those who buy its products: the biggest enterprise loses its power and its influence when it loses its customers. – Ludwig Von Mises


These are my opinions, what are your opinions?  God Bless, Orrin Woodward


This is not a bash networks discussion, but a discussion to make the networking field the best for entrepreneurs to enter.  If you won’t post under your real identity then why should I post your opinions?

2 Responses to “The Soul of Network Marketing”

  1. […] did for Networking Times.  Art has quickly become a good friend and his vision for taking the Network Marketing field mainstream is in line with the leaders of the Team.  Art has accomplished many things in […]

  2. […] Network Marketing was designed as one of the purest forms of free enterprise where anyone can achieve success based upon their willingness to dream and achieve.  Free enterprise ensures that companies and distributors are free to serve the customers and if they are wrong the customer will freely choose to go elsewhere.  This freedom allows anyone with a dream and work ethic to achieve.  Superstars from all walks of life abound in this profession who took charge of their personal situations and rose through the ranks to achieve uncommon success.   Competition between distributor groups force the best ideas to rise to the top and the best leadership to be rewarded with increased business.  In the same way, competition amongst companies is good in that it drives compensation levels up along with product quality in a beautiful example of free enterprise at work.  I am proud to be part of this wonderful profession and forever thankful for the changes that this profession forced me to confront, in order to grow.  […]

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