Another Change in Direction
Back in Michigan, Jay and Rich watched the fight with growing alarm. Their Ja-Ri organization had 5,000 distributors, some of whom were talking about leaving. Nutrilite had alienated many by violating a cardinal principle of MLM called sponsorship—if someone is introduced into the business, or sponsored, by Bill, for example, then that person can’t go buy products from another distributor; he has to buy them from Bill. Jay and Rich felt they needed to protect their distributors as Nutrilite managers began breaking lines of sponsorship. “Carl (Rehnborg), deeply attached to his product line and suffering under crushing regulatory pressure, was not as effective as he might have been in solving these problems,” Jay said. “He was a visionary, he had a strong entrepreneurial drive, and he had a good product idea, but he was hindered by poor managers.”21 Jay stepped in and tried to help resolve the dispute between Rehnborg and Mytinger & Casselberry; Rehnborg even offered him the president’s position at Nutrilite, but Jay turned it down. He couldn’t accept the loss of independence. He said:
It was important to Rich and to me to be self-employed, to set our own courses and make decisions that would truly be our own. Even in a high-level position at Nutrilite, I would be an employee, limited in my ability to do what I thought was best and at the mercy of someone else’s decisions.22
In the summer of 1958 Ja-Ri held a key meeting of its distributors in Charlevoix, ...