Richard Howe wouldn’t call himself a “turnaround guy,” but based on his track record of turning around struggling companies, some of his peers might.
“I’m not a ‘turnaround guy’ just because I’ve done three turnarounds,” Howe says. “You get kind of branded that way, but I’m not really the turnaround guy. Really, I’m a business grower.”
As president and CEO of Inuvo Inc., Howe has already helped reposition the $50 million company to generate fourth quarter revenues 46 percent higher than the same quarter of 2009, which was also the year he joined Inuvo. Part of his strategy to accomplish this was improving Inuvo’s organizational structure to eliminate inefficiency and better carry out the company’s vision.
“I’ve run about a dozen businesses and three of them were turnarounds, and they all have similar characteristic traits to them,” Howe says. “One specifically, is the company has been excessive in its spending of money, so that needs to be curtailed. The costs need to get under control. Two, the team, the people around you often need to be changed, retooled and improved.”
One of the biggest expenses most companies have is in employee head count.
“I believe in team, so I spend a lot of time making sure we have the right people in the right roles in the company,” Howe says.
“You go through an exercise of evaluating staff. We created a system and the system had variables in it, different characteristic traits for what constitutes a great employee and what constitutes a not-so-great employee, and we rank ordered them. We took a look and said, ‘Going forward, what are the parts of the company that we’re going to focus on? From the collection of resources that we have and scores that we’ve gotten from everybody, who’s best to help us achieve the vision of the company?’”
Rather than set a specific head count number of employees to keep or cut, you should simply look at ways to structure the leadership more effectively. Sometimes that can involve small changes in personnel, but in other cases — at Inuvo it was also a matter of consolidating subsidiary businesses — it can mean creating an entirely new organizational structure and changing out entire management teams and boards.
While making personnel decisions is always difficult, reassessing your leadership team is a key part of getting your company back to operating efficiently and profitably on a cash-flow basis. It also demonstrates to existing employees that you’re giving them the leadership they need to achieve growth.
“The whole company was re-energized and re-motivated when they finally realized that we actually did have a senior leadership team at the company that was committed to the success of the company, one,” Howe says. “Two, they felt like they were a part of something that was going to be very successful and grow.”
Howe saw that personnel headcount was the biggest expense base for Inuvo and a key area to improve cost efficiency; yet, before making these decisions it’s important to look at all your areas of business to examine cost saving opportunities.
“Every single expense line in the company we just systematically went down through them and said ‘Why are we spending this money? Why are we spending this money?’ And, is it giving us a return or not?’” Howe says.
Most important, once you have a plan to reduce expenses, you need to enact it quickly.
“When you first do a turnaround, you’ve never done one and you get in there and you tend to over analyze the problems,” Howe says. “It causes you to take too much time to make the kinds of expense cuts you need to make to get the operation under control.”
How to reach: Inuvo Inc., (727) 324-0211 or www.inuvo.com
There will always be unforeseeable challenges and problems that arise to threaten a company’s growth, but according to Rich Howe, the most successful business people are those who undertake such challenges with strong intent and determination.
“It’s one of the single, greatest characteristic traits that I’ve found in successful business people; it’s the sense of urgency,” says Howe, the president and CEO of Inuvo. “It’s waking up and realizing that today is the best day to call someone or do something or get something done. … I’ve just found that those people tend to be able to get the impossible accomplished.”
Even when things aren’t going their way, these people won’t let themselves be steered off course.
“In business, you are going to encounter rough periods,” Howe says. “It’s just going to happen. It seems like some individuals have the ability to get punched in the face and get back up and keep going, and others seem to not be able to deal with those challenges, and they end up failing as a result. The most important characteristic trait of any leader: Can you take a punch and get back up and keep fighting? And if you can, then there’s a good chance that you are going to be successful, because it’s the getting back up part that’s the key.”
Adam Adache needed to make a big change at Adache Real Estate LLC. If it was going to work, he couldn’t give in to the panic that was consuming much of the real estate industry.
“You have no option but to make it work,” says Adache, founder, president and CEO at the 20-employee real estate company. “You have to have that mentality. You run a business and a business is always susceptible to a bad economy and things that might happen along the way. You might have to change your business model. But in your mind, you have to be confident that you’re going to make it work.
“If you have that mentality, you’re not going to sit there and think about the worst-case scenario. You’re going to spend time analyzing and really diving into the heart of the problem and finding out what your true obstacles are. That’s when you’re going to make your decision and make your changes.”
The change Adache had to make was a merger of his firm’s project sales and marketing division with its bulk real estate division. The economic crash was leaving a growing number of distressed properties unsold and Adache needed a way to get them off the market.
By merging these two divisions, he thought the firm would be better able to use its resources to cobble together deals that would get the properties sold that were bringing down the rest of the market.
“We convert an offer that is rejected into a new opportunity and that new opportunity is still a revenue-driving opportunity,” Adache says.
The challenge for Adache was he couldn’t just gather everyone together and tell them, “Everything you’ve been doing is bad and it doesn’t work anymore.”
“When you’re coming in to sit down with your staff and tell them that your current model isn’t working, it has a negative connotation to it,” Adache says. “So you have to quickly know how to spin it into a positive. I talked about the successes we had in the current approach. I talked about how we need to make it more successful, which I think is what every company strives for.”
Be open about the obstacles your business is facing and why what you’ve been doing isn’t working anymore. But make sure you follow that up with a discussion about what needs to be done to get things turned around.
“You have to explain, ‘I’m right there with you,’” Adache says. “They have to buy in to the long-term opportunities of remaining positive. The only way they are going to do that is if you paint the picture why we’re months away or even days away from turning the company around for the positive. You have to paint the picture and then get them involved in painting the picture even better.”
As you move forward in the discussion and gather input, keep in mind that you need to be the one who puts together the plan that hopefully gets you out of your funk.
“Give some ideas and a general direction of where you’re going to sail the ship,” Adache says. “Along the way, you can make some detours based on the input of everyone you have. Be open and simultaneously searching for other options while you’re moving ahead, even if it appears you’re moving in the right direction and things are going good. You need a backup plan and a backup plan for your backup plan.”
Most important, keep an open mind and an open ear.
“If you’re too hard-headed and not open-minded enough and you don’t listen to your people, you could crash and burn on whatever you’re doing,” Adache says.
How to reach: Adache Real Estate LLC, (954) 566-7400 or www.adachere.com
Lay it all out there
Adam Adache is all about projecting a winning attitude and being an optimist when things look bad. But that doesn’t mean he steers away from bad news that his employees at Adache Real Estate LLC need to hear.
“Our company, just like any company, hasn’t been averse to layoffs and the changing market,” says Adache, the firm’s founder, president and CEO. “Fortunately, we’re growing again and we are back on a hiring phase. But we had to make changes. When you have to lay off employees and cut pay, it’s not a positive discussion. In order to get them to buy in to everything, you can’t say, ‘OK, this person is laid off and your salary is cut. We’ll talk to you tomorrow.’ You have to spell out the short-term goals and long-term goals in a plan and explain how you’re going to overcome it.”
You need to find a way to stoke the passion of your people to help overcome this latest challenge.
“They can’t just say, ‘I’m going to do it because it’s part of my job,’” Adache says. “When you’re in business selling a product or service, it’s our belief you have to do it with passion. You can’t do it with passion unless you buy in.”
Do nice guys always finish last? Jeffrey Pfeffer, author and Stanford University professor, has a strong hunch that they do. He argues that an agreeable, modest demeanor puts one at a serious disadvantage when it comes to reaching the upper echelon of the corporate world. Part of the problem is people worry too much about what everyone else thinks.
In his book, “Power: Why Some People Have It and Others Don’t,” Pfeffer presents a plainspoken set of principles to ensure that a business professional gets noticed, connected and promoted in rapid succession. In this interview, he discusses why caring what others think is a recipe for disaster and why readers should seek to stand out from others.
You offer the advice that getting noticed is a key step on the path to obtaining power. Is there a right way to go about promoting oneself?
One thing that people often fail to do correctly is get other people to sing their praises for them. Even if you know that the person who is singing your praises has been hired by you to do it, it’s still better than doing it yourself. Do a favor for your colleagues and your organization; sing their praises and, in return, have them sing yours. Having other people tout you is a very good thing that some people don’t do enough of.
When the choice is between being noticed even if you’ve done it on your own versus not being noticed, it’s important for people to be noticed and be willing to stand out. Again, that goes back to this notion of not being liked. Some people say to themselves, ‘If I stand out, other people will envy me.’ That is certainly correct. People will envy you to the extent that you start out with a group of people and you rise up the organization faster than them. Get over what your peers are thinking about you because your peers are also your competitors.
You wrote that some tactics that would be considered workplace bullying are actually effective for the perpetrator. Are there cases where it can prevent someone from achieving power?
Leadership literature is very normative in its orientation. It describes a world that would not only be a nicer world, but one in which organizations would actually be more effective if people didn’t engage in bullying and abusive behaviors. But one of the questions people need to ask is, ‘If this is the case, why are there so many bad bosses in the world? Why are there so many bullies?’
People obviously prefer to deal with nice individuals. But above and beyond being nice, they’d like to deal with strong individuals and competent individuals. They like to believe that they’re associating with winners. The interesting thing is that, empirically, in many instances, niceness and competence are negatively correlated in people’s perceptions. [This is] not in reality but in how people perceive others.
Teresa Amabile [Edsel Bryant Ford Professor of Business Administration in the Entrepreneurial Management Unit at Harvard Business School] wrote an article several years ago (titled) ‘Brilliant but Cruel’ in which she found that people who gave negative book reviews were perceived as less nice but smarter and more competent.
What can you offer people who feel as though they’ve reached a dead end on the path to power?
Bernie Marcus, who wrote this wonderful book about his founding of The Home Depot [‘Built From Scratch,’ co-authored with co-founder Arthur Blank], says in the preface that the founding of The Home Depot began with the words, ‘You’re fired.’ He had been fired from Handy Dan Home Improvement Center. There is almost no career that I know of that does not have setbacks and adversity and opposition. The thing that makes people successful is the willingness to say, ‘OK, I’ve had a setback. What can I learn from this? I’m going to persist until I succeed.’
Power: Why Some People Have It and Others Don’t
>> By Jeffrey Pfeffer
>> Harper Business, 288 pages, $27.99
About the book: “Power” is Stanford University professor Jeffrey Pfeffer’s examination of what it takes to successfully play the game of office politics. He suggests that many individuals fail to ascend to higher ranks in an organization because they mistakenly believe that the world is a fair and just place. Pfeffer offers insights into the accumulation and maintenance of power and the reasons why individuals who possess it lose their way.
The author: Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University. He is the author of 13 books including, “What Were They Thinking?” and “Managing with Power: Politics and Influence in Organizations.”
Why you should read it: “Power” is unapologetic in its portrayal of the modern workplace. While the latter half of the first decade of the 21st century was a time in which the title of CEO became vilified, little has been done to change the traditional methods of asserting dominance in the work environment. After years of observation, Pfeffer provides the tactical means to navigate one’s way to the upper levels of an organization. Anyone in management who feels as if his or her efforts to quietly deliver good results are going unrewarded should read “Power.” It’s less a flirtation with the dark side than it is an accurate picture of what it takes to succeed in today’s ultra-competitive work environment.
Why it’s different: There are numerous management books that, as Pfeffer stated in the interview, offer an idealistic vision of what the workplace should be. Pfeffer goes against the grain and gives readers the ugly truth about success. He accepts and promotes the fact that his book will make some readers uncomfortable.
Can’t miss: “Getting In: Standing Out and Breaking Some Rules.” In this chapter, Pfeffer covers one of the more difficult skills for readers to master: the art of self-promotion. It is a delicate art that is rife with opportunities for heavy-handedness. Pfeffer does an excellent job of providing examples of the right ways to ensure that the most important people in an organization notice a reader’s stand-out achievements.
To share or not to share: This is not a book that is likely to be shared. People who oppose Pfeffer’s ideas would not want “Power” to fall into the wrong hands. Readers who agree with Pfeffer’s insights would prefer to keep his wisdom to themselves.
Soundview Executive Book Summaries:
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Thirty-one years ago, and only nine years into his career, Pat Mullin decided to switch accounting firms from Arthur Andersen — then No. 1 — to Deloitte LLP — then No. 8 — and to this day, he’s thankful for that move.
“I wake up most mornings saying, ‘Thank you, Lord — I don’t know why you made me change firms in 1980 … but you did it, and why you did it, I don’t know, but it sure has worked well, because Andersen’s long gone and Deloitte is the No. 1 professional services firm in the world,’” Mullin says.
Now, after a successful career with Deloitte, including serving as managing partner until last June, Mullin will retire next month.
Smart Business spoke with Mullin about some of the leadership lessons he’s learned throughout his career.
Turn failure into success. Sometimes the worst thing that can happen in your life can be the best, because you can really learn from your mistakes. You can really capitalize.
I started my college education at Temple University in Philadelphia, which is where we were from. One day, I got this letter that said for the mutual benefit of the individual and the institution, we suggest you pursue your education elsewhere. I had to read it a couple times to realize they were saying nicely that I was flunking out. My mother and dad — the first question out of their mouth, after being mad at me, was, ‘Where are you going to go to college?’ Failure was not an option. Not going to school was not part of it. That’s what brought me to Cleveland. My brother had moved out here, and that led me to Kent State.
There are some things that I’m really bad at, like languages. When I took French in high school, the priest said to me on the last day, ‘Monsieur Mullin, I have a deal for you. If you agree to never speak my beautiful language again, I will pass you.’ On the other side, I discovered quickly at Kent that I found accounting to be extraordinarily easy. Most of my friends thought it was impossible. I went from flunking out to straight A’s — I think I got one B.
Crisis is a terrible thing to waste, they say, and my life proved true to flunking out at Temple and finding what I was good at. That correspondingly allowed me to focus my strengths and minimize my weaknesses, which is something, over the course of my career, I’ve really tried to do, and I really try to encourage the people I mentor to do the same thing.
Value different people. If you put a group of people together with different skill sets, you get a lot of different perspectives, and those different perspectives are extraordinarily valuable.
One of my biggest clients throughout my career was Dick Jacobs of the Jacobs Group. It was interesting because we’d get in a meeting with him, and he would ask everyone their opinion, and he would always start with the youngest person in the room. He didn’t want to change their view. He wanted to hear what they had to say. He would frequently then go make his own decision, but he really liked all those different perspectives, and I think that’s a very valuable management lesson. What I like about working with people is you get the different perspectives and you get their point of view, and it’s very valuable.
Never stop learning. The way I look at it, I’m not retiring. I’m just starting a new career. I don’t think it’s healthy to quit working. I love golf, but it doesn’t return the love. If it was a female, I would have dumped her 40 years ago.
Commit yourself to an absolute lifetime of education. It’s amazing to me how some people just don’t read. You have to commit yourself to continue to grow. That’s the most important thing that people need to do.
People need to really be flexible and keep growing and setting goals every year. I, every year the first week of January, sit down, and I have goals that I don’t share with anybody. It’s amazing how many of those goals I achieve each year — other than lose 25 pounds. In retirement, I’m going to fulfill that one unfulfilled goal. I divide my goals into Deloitte goals and personal goals — [for example] I’m going to take a course on woodworking and some financial goals on the personal side, and those overlap with the Deloitte goals to some degree. In the Deloitte area, I break it down between clients and people because those are the two things that we really do that are most important.
You have to figure out what works best for you. Don’t make them too long. If they’re more than about 10 words, you probably spent too much time on it. Lose 25 pounds — that’s three words.
How to reach: Deloitte LLP, (216) 589-1300 or www.deloitte.com
Deal activity among both strategic and financial buyers dropped off significantly in February. This slowdown in deal volume was due in large part to the rush to get deals done by the end of 2010, which was driven by the fear of tax changes that never occurred.
Strategic buyers led the way in the second month of 2011 by focusing on smaller deals. The Euclid Chemical Co. bought LaFayette, Ga.-based PSI Packaging Inc., which has annual sales of approximately $6 million. Euclid Chemical is a Cleveland producer of micro and macro fibers for the ready-mixed and precast concrete market and subsidiary of RPM International Inc. The move is expected to add a complementary product line and boost manufacturing capacity and expertise for Euclid Chemical.
Cleveland-area Hartland Payments Systems Inc., the fifth-largest payment processor in the country, sold a small portfolio of merchant customers to Sage Payment Solutions, which furthers Sage’s strategic growth goals. I.D. Images LLC, the Brunswick-based and industry-leading producer of variable information printed labels, closed its third strategic acquisition in the last 18 months and expanded its presence in the Southeast with its purchase of Heather Label Inc. of North Carolina.
In a move to continue its transformation and portfolio repositioning, Cleveland-area PolyOne Corp., a premier provider of specialized polymer materials, services and solutions, sold its stake in Sunbelt Chlor Alkali Partnership to Olin Corp. for $175 million. In addition, Smart Business Network Inc. acquired Cleveland-area Wise Group to further expand its Smart Business Content Marketing Division.
As the inventory of quality targets increase later in the year, look for more strategic buyers to come off the sidelines, rested and ready to make quality acquisitions.
Private equity firms were also active in February, although not nearly at the same level as they were in the fourth quarter of last year. Chicago-based private equity firm Pfingsten Partners, LLC acquired Independence-based TPC Wire & Cable Corp., a leading distributor of industrial wire and cable, from private equity firm Premier Farnell plc for approximately $43 million. Pfingsten Partners investment in TPC is aimed at capitalizing on TPC’s market opportunities and growth potential.
James M. Hill is a director on the ACG Cleveland board. He is also executive chairman, a partner and the chairman of the private equity practice of the law firm of Benesch, Friedlander, Coplan & Aronoff. For more information about the Association for Corporate Growth, visit http://chapters.acg.org/cleveland.
Deal of the Month
February’s deal of the month is Mayfield Heights-based Linsalata Capital Partners Inc.’s purchase of NeuroTherm Inc., a leading manufacturer of interventional pain management products. In addition to marking Linsalata’s fifth platform company acquisition in the last 13 months, the purchase of NeuroTherm is Linsalata’s first platform investment in the health care field. Congratulations to the Linsalata team on embarking into the health care sector.
As president of Generational Equity, Ryan Binkley makes a living helping business owners prepare their organizations for sale. But with the economic challenges over the last couple of years, he’s seen business owners struggle to sell their organizations and potential buyers not be able to get loans necessary to make these transactions. During these tough times, he came to rely on his management and deal-making teams to stay in tune with clients’ needs and help them in the sale-preparation process.
“These are the professionals that work closely with our clients every single day on their exit plan,” he says
This approach by his 250 people helped the firm not only do well the past few years but also earned it a spot on the 2009 Inc. 500 list.
Smart Business spoke with Binkley about how to put together a strong team that can ensure success during tough times.
What’s the key to building a strong management team?
That’s a leadership challenge that’s there in every organization, whether it be private or public, and it’s important for the business owner to continue to have good leaders that can carry on the business in the same manner they do. What we try to do is always have good people that can run their departments at the same level that we could if we weren’t here. That’s the goal for every company, and people need to invest in that instead of solely relying on the business owner to be in a position to be prepared to hand off to someone else.
We built it over time and recruiting good people. We found some people in the industry who had a lot of experience in exit-planning and deal-making. It was a process of coming through and finding the right people that we felt were a cultural fit.
How do you make sure someone is both a professional and a good cultural fit?
It’s through not making a hasty decision and getting to know them a little bit. People are one or the other. A lot of people are one or the other, and it’s spending time with them during the interview process to make sure they share the same values as far as long-term business goals. We just want to make sure we’re doing the right thing for the client long term and not just the short term and be professional and have the right expertise that’s really needed in the marketplace.
What questions can you ask to get to know them in the interview?
There are two things. You have to have skill, and then you have to have the X factor, which is the leadership and integrity. We need to make sure that somebody fits the technical expertise we have, and that comes through their background as well as looking at some of the examples of the work they’ve done. You can talk to someone about the challenges they’ve had, and they can communicate their expectations there or not.
The other is just do they have that leadership factor that’s so important. In this difficult time, we need people who can really communicate with our clients and help them through the difficult times they’re going through and make proper decisions, and it takes a high-quality individual to get that done.
How do you make sure someone can work with clients really well?
I don’t know that there’s any secret formula other than based on experience, but once you analyze them and get a feel for them and how they’ll handle difficult questions that they’re asked, eventually you just go with the instinct you have as a professional. At the end of the day, if they seem to have the integrity and the leadership skills, you have to just go with your instincts.
How to reach: Generational Equity, (877) 213-1792 or www.genequityco.com
Things could have turned out much different for Ali Brown had she not taken control of her life.
“Ten years ago, I was working as an employee in a tiny company in New York,” says Brown, founder and CEO of Ali International, a multimedia company that provides online marketing tools and strategies, coaching, seminars and instructional literature for more than 50,000 women entrepreneurs worldwide. “I was continually frustrated in all the jobs I had, which made me realize I was unemployable.”
Brown saw only two viable options: “I could be unemployed or self-employed, so I started a little freelance writing business, marketing myself online with an e-mail newsletter.”
That newsletter began to grow and Brown started to gain a following online.
“People started asking all kinds of questions about marketing and how I was growing my little business and asking for all this small business advice,” Brown explains. “So I started writing e-books and selling them to the people who were asking the questions.”
Today, that little business has become a multimillion-dollar operation and an Inc. 500 company. Brown publishes a high-end magazine, is regularly featured on TV and radio talk shows, and last year, she was named one of Ernst & Young’s Entrepreneurial Winning Women.
Smart Business sat down with Brown to discuss her passion for helping other women entrepreneurs reach their own goals.
Q: Ali, what drives you?
A: The best part is my job is helping other women succeed through starting their own businesses. I offer products, resources, coaching programs and a community that’s dedicated to helping women entrepreneurs. These range from online marketing basics to one called Business Building Blocks.
When people go to start a business, they don’t often know what they should be thinking about in the legal department, marketing department or financial department. So this is Business 101 in a box. You start thinking differently when you’re an entrepreneur, and if you want to be wealthy, you have to learn how to take risks and do it in a smart way.
Q: What makes Ali International’s value proposition unique?
A: My clients and customers say they love following me because they get business advice in a fun, real way. I talk with women who may be running a business from their kitchen table. They’ve got kids running around and they’re juggling their lives. Unfortunately, there are very few role models out there, so I’m able to fill a need in the marketplace.
Q: Speaking of role models, what’s the best advice you’ve ever received?
A: It came from one of my mentors: Aim for the top because there’s more room. There’s actually less competition at the top, so I’ve not looked at the people around me in my industry but at the people who are at the top of the industry. Then, I ask how I can get there and position myself to stay there.
Q: As you’ve worked with women entrepreneurs, what are some of the different challenges you’ve found that they face?
A: There are two that stand out. One is the often-talked about family and work balance. For women who may traditionally be in the home, they feel pulled in different directions. But on a more personal and human level the other challenge is learning how to take risks and believe in themselves. Women are often programmed for safety. It’s in our DNA. We want to be safe and secure, and it’s really scary for women to put themselves out there. They’re often thinking, ‘What will people think of me? Can I really do this?’
So for many women, I see the personal journey even more rewarding than the financial journey because the person they become in the process is priceless. They become this incredible role model for their family and for the women around them. It’s a ripple effect, and it’s really going to change the world.
Q: What’s the first step toward learning how to take risks?
A: Surround yourself with risk takers. You’ll begin to realize that in order to become successful, you have to become comfortable at being uncomfortable. You are often the average of the people who you are around the most, so seek out a network, come to a conference or join a coaching group where people come together and exchange ideas. Figure out the level that you want to be at, and seek out people who are already there.
Q: Where do you find opportunities for your own growth?
One key to growing any business is listening to your customers and clients, but you also need to keep a long-term vision of what you want. I have my path, which is helping women entrepreneurs. But at the same time, I keep an ear to the ground and listen to the topics that they’re interested in and the needs they have. That’s where the coaching came from. I was publishing courses and books, and women still said, ‘I want to talk to you. Can you coach me one on one?’
My events started because they wanted to get together in person. Now, I have a conference every year called SHINE, which has become the premier conference for women entrepreneurs. This past year, it was in Las Vegas. In 2011, it will be in Dallas. It’s a three-day event, and we bring together hundreds of women entrepreneurs.
Even my magazine is about business, life and style for women entrepreneurs. I heard the things they were talking about and created something around it. That’s something you need to keep in mind when you’re looking for ways to grow a company: When you hear ideas respond to them, but you also have to figure out a way that those ideas will make money.
It’s a constant journey of evolving your business model. Match the path you want and the passion you want to get out to the world with what they will be willing to take out their wallets and pay for. You also must figure out how to provide value.
Q: What advice would you offer a woman who is unhappy with her current situation and looking for a change?
A: The first step for any woman who has an idea for a business or any woman who just wants to start a business is to start paying attention. Start paying attention to ideas that you have and write them down. Listen to ideas that people are talking about, then get out immediately to start networking to make it happen because that’s going to change your life.
Q: So what does the future hold for Ali Brown and Ali International?
A: In the next few years, you’ll see me doing a lot more media and television, expanding internationally and having more events, reaching women in developing countries and helping them develop how entrepreneurship can help them.
How to reach: Ali International, www.alibrown.com.
When a client called on a Saturday asking about the capital gains tax rate to know whether to take an offer on a piece of property that had been for sale for years, he was surprised when Mark Lloyd called him back 10 minutes later with the answer. But it’s that kind of service that has allowed his financial and estate planning business, The Lloyd Group Inc., to grow from the basement of his home about 20 years ago to more than 2,100 clients and $150 million in money under management today.
“We’ve just watched our business grow even during these tough times,” the principal says. “It’s just been continuing to grow leaps and bounds each year.”
Smart Business spoke with Lloyd about how he’s grown the company despite the tough economy.
What’s the key to growing business even during tough times?
It is so easy to get depressed when you’ve got double-digit unemployment and you have a lot of uncertainty about taxes coming up down the road. A lot of people have chosen to be stagnant. We looked at that as opportunities. We’ve been focused on growth.
One of the main reasons why we do that is because we are educators first. We have always gone out to the community and talked to the people. Our focus has always been, ‘Can we make something better for our clients? Can we educate our clients in a better way? Can we offer something different then everybody else out here that we’re competing against?’ There are so many financial planners. They’re a dime a dozen on every street corner with every major firm that’s out there. What makes us different than them? That’s been our focus. If we can give the best customer service — not only promise the best customer service but deliver the best customer service — our business will flourish. If we fail to do that, we’ll be like everybody else.
How do you deliver the best customer service?
We listened to our clients. We said, OK, what is your risk tolerance? How do you feel about the future? How do you feel about the markets? We can be as disciplined as we can be, but if you’re not comfortable and you’re not sleeping at night, we don’t want you there. We want you to be happy.
Another thing that we do is we stay in contact with our clients all the time. Not only are we sending out monthly newsletters to our clients, but we do client appreciation events. We just care for them and they know that we’re here for them all the time.
Where we feel our biggest values come is when their life situation changes, we want to be there for them. Whether it be helping them filing a claim with long-term care insurance — instead of just passing it on to the insurance company. Let us help them with that.
[We have] customer service to the point that on the weekends, our company phones get forwarded to one of our assistant’s cell or my cell phone. We get a surprised voice on the other end of the phone that says, ‘I didn’t realize that you were working today,’ or, ‘Why are you working today?’ and we answer back — ‘We’re not working but we’re taking the calls.’
A lot of it is just staying with good customer service, taking care of clients but, more importantly, educating them. We want to listen to our clients and do what’s right for them.
What’s the key to effective listening?
Don’t do anything in a hurry. I may visit with people three or four times before they ever become a client. I don’t have a time frame. I have a strategy that the first interview I have with a client is just get-to-know-them time. I get a snapshot of what their situation is.
I know what questions to ask, and I listen to what their responses are. That directs me on how to proceed with them. Basically it’s taking good notes, hearing what their concerns are, hearing what their goals are and helping them with a budget — that’s critical.
People want honesty. They don’t want someone to make them feel good. They want to know, ‘Here’s where you’re at and here’s how you can get there.’ They want a solution. That’s where we come back with a solution. Then, at that point, we let them filter out and absorb all the information we shared. Then we come back and say, ‘Now, it’s time to act. Do you want to proceed with what our recommendations are? You let us know.’ And because we’re educators first, people respect that. They make the decision whether they become a client of ours or not.
How to reach: The Lloyd Group Inc., (770) 932-0387 or www.thelloydgroupinc.com
It’s tough finding your footing in a new industry like solar installation. Randy Bishop constantly reorganizes Verengo Solar Plus to deliver value at a reasonable intersection of price and profit.
The president and CEO found the solution by breaking down silos to get sales support across the organization from 175 employees — 75 of whom joined the team since January 2010.
“It’s incredibly important to make sure that everyone is aligned and no one area is getting out of whack,” says Bishop, who achieved revenue of $15 million in 2009, then hit that mark again only halfway through 2010. “That’s how we’ve been able to grow.”
What’s the key to thriving in a recession?
Having the right business model helps an incredible amount when times are tough. The operational side of things becomes critical in a recession.
We’re very focused on … our sales engine. That is where the cost can get most out of whack most quickly. That’s not to say the back end isn’t as important. If the sales and marketing aren’t right, it’s impossible to make it up on the back end. So our entire organization has a very strong orientation to the sales and marketing function.
Execution is incredibly important in those areas. We’re not believers in spending for just branding or awareness purposes. All of our marketing spend is related to generating leads and quantifying that cost per lead and cost per sale. It requires a lot of collaboration between marketing and sales to make sure that what’s being (promised in marketing) is being delivered from the sales channel and that there’s consistency all along that process.
If there’s any disconnect, then the customers vote with their business and go somewhere else.
How do you get consistency across sales and marketing?
A huge part is making sure that incentives align the organization. Make sure that everyone is pulling for the common goals. It’s very easy to have those be out of whack, so we spend a lot of time making sure that everyone’s aligned in terms of what they’re trying to accomplish.
And then communication: Our head of sales and head of marketing sit next to each other, and they constantly speak to each other. We have very tight feedback loops between the two.
How do you align the rest of the organization to that?
No. 1, we have company values that ensure that that is front and center. We have all-hands meetings quarterly to make sure that we reinforce that message. And we ensure that we are recognizing and celebrating the right behavior and extinguishing or correcting the wrong behavior. We need people that think outside of silos, and when we see silo thinking, we make it very clear they need to find a different (job).
Part of it is hiring the right people [who] understand that if a sale doesn’t go through, then no one has a job.
How do you identify that collaborative spirit during interviews?
It’s just asking people how they’ve demonstrated behaviors in the past that align with what we’re looking for.
(Before we interview) a customer service manager, we’ll come up with a difficult customer service scenario where maybe a customer feels they were promised something by sales, we can’t deliver it … and it’s a time-sensitive issue. How would they proceed with it? You want insight into how they think.
A wrong answer would be to tell the customer that they’re wrong. A wrong answer would be to call up the salesperson and yell at them. A wrong answer might be to promise the customer we’ll do whatever it takes to get it right.
If you create silos and reward that type of thinking, then you poison the environment. You have to figure out: Do you have the right people in the right positions — and not just for their position, but are they working across the organization, as well?
How to reach: Verengo Solar Plus, (877) 403-3479 or www.verengosolar.com
Back in the day, Michael Fisher saw companies spend millions understanding consumer opinions, hoping to position brands for mass appeal. But in today’s interactive social environment, one-way broadcasts won’t cut it.
“Today, I have a whole new way of collecting that feedback,” says Fisher, senior vice president of sales and marketing for the American operations of Alterian Inc., which has 130 employees and accounts for 40 percent of worldwide revenue. “The company doesn’t have to ask the consumer what they think; they’re quite active in telling you. You just have to be in the position to listen.”
Consumers are already discussing their experiences on Twitter and Facebook. Brands just need to be there to engage personally. Alterian, an integrated marketing firm, helps clients do just that.
Do more than listen. Social media monitoring applications allow you to go out and understand what people are saying across many social networks. Organizations can listen. The real challenge is that today’s consumer expects you to be doing more than listening.
Today’s consumer expects the kind of personalization and the kind of precision that they’re used to seeing, that may have manifested as a personalized direct mail component or a very structured and personalized e-mail or a phone call. Consumers are expecting that precision in the social communities.
Organizations should think long and hard about moving beyond listening and develop a way to respond to what it is they’re hearing — but in a way that is very analytical and very disciplined and very open and transparent.
If you want to engage the consumer, it can’t only be about stimulation. You have to take the monologue and turn it into a dialogue. You have to not only speak, but you have to respond and talk back. It’s a send-and-receive world that we live in today, and consumers expect it. When they don’t get it, they transact elsewhere.
Know when to engage. If a consumer says on Twitter that they don’t like this company or they don’t like this product, the onus then falls to that brand to respond appropriately. You should engage.
In some instances, somebody may say, ‘I don’t like Payless Shoes,’ and you may find the people that love Payless Shoes will come on and say, ‘Shut up, because we do.’ So there’s the whole notion of self-correction. Then you don’t need to respond because your fan base will do it.
You’ve got to have the analytical chops to measure this and to allow it to happen and to respond to it when appropriate and to allow for self-correction when appropriate.
Open the dialogue. Look at Vail Resorts. They’re not out telling you, ‘Come spend your money.’ They’re out telling you, ‘Track your improvement,’ or, ‘Measure how much fun you’ve had at one resort over another. Track how well you do against people that are skiing in the areas that you’re skiing. Build competitive communities. Engage with us.’ It’s a pretty powerful message.
Encourage people to give feedback not just on what they’ve bought from me but what other things are they doing with other products.
The consumer responds to not being sold when you just open the dialogue. Don’t promote when the consumer is looking for you to engage. Consumers sometimes will tell you, ‘Sell me this. I’m ready to buy this.’ And then you do, because they’re looking to make that transaction. But in the social world, make sure that you’re taking advantage of engagement as your strategy, not strictly selling. There’s a time and a place for it.
Integrate social strategy. If you listen to the conversation and people are completely agitated with you and you’re British Petroleum, it might not be a good time to try to sell them (gasoline). It might be a great time to tell them [about] the Save the Whales donations that you’re giving.
The data will tell you that. That data can come from all of the channels you choose to interact with consumers in. Don’t only look at what you’re hearing socially, but look at it in terms of people buying at the pump, the transaction volume decreases, people not going into your convenience mart. There’s all kinds of ways for you to see how the consumer feels — beyond social — that should indicate what you should or should not say, what you should or should not be selling (and) when you should or should not be doing it.
How to reach: Alterian Inc., (312) 704-1700 or www.alterian.com.