Renewing the Business
Several months after the operation, Rich returned to Grand Rapids, which held a homecoming celebration. His body had not rejected his new heart, and doctors were optimistic that the possibility of that happening had passed. And as Rich returned, he found that the company he had given life to was about to undergo a rebirth of its own.
Over the years, the once-nimble, entrepreneurial business had grown large and unwieldy. “Our very size evolved into slowness,” Dick observed. “We added layers and became risk-averse.”9 Indeed, as the turn of a new century approached, Amway found itself at a financial crossroads. One unexpected side effect of its aggressive expansion into Asia was lower instead of higher revenues. The strong U.S. dollar and weak Asian economy conspired to push fiscal 1998 global sales down 18 percent, to $5.7 billion from $7 billion the year before. To cut costs and bring them in line with plunging revenues, the company offered voluntary early retirement for up to 900 U.S. workers and made other workforce reductions.10 It also began looking for inefficiencies in its global business structure and eliminated duplications where several businesses essentially were doing the same thing in some parts of the world. In November 1999, the company also decided to privatize Amway Japan and Amway Asia Pacific, which were partly publicly owned. Amway offered $635 million to buy back the stock.
Another change was taking place, one that went to the very heart ...