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.”