Article

Ask The CEO

By Hannah Wallace June 30, 2009

In 1992, Tom Kruse, who owned a medical-device store, saw that powered wheelchairs were uncomfortable, bulky and accident-prone. Kruse developed a unique round chair that was maneuverable even in cramped spaces, like retirement homes and trailers, where many seniors live. With $150,000 borrowed from relatives, Kruse and his two brothers (one is CFO today) founded Sarasota’s Hoveround. After struggling to get distributors and dealers, they decided to become a completely vertical company that would do everything from dealing with doctors and insurance to making, shipping and servicing the chairs. Today they have about 450 employees and own 8 percent of the power-mobility market, with annual revenues of $80 million. That’s not enough, says the 52-year-old Kruse, who promises to double market share by 2012.

How can you do that? The healthcare sector is growing, and the need for our product is growing. We keep people independent and out of institutions and that helps control costs. If we can find ways to make our products, better, faster and cheaper—and we will—we’ll continue to gain market share.

How did you make the chair so comfortable? People spend up to 18 hours a day in this chair, and we knew if we didn’t get the seat right, nothing else would matter. We did research on truck [driver’s] seats and astronaut seats.

You started out as a nurse. How has that affected you? It’s everything—who I am and what I do. I loved it—helping the patients, the companionship, and comforting people when they were afraid or even dying. I used to think, “I can’t believe they pay me to do this.” I understand why they pay for this job. I love it, but it’s much more stressful and not as simple.

What don’t people realize about being the boss? It can be lonely at the top. You have to be energetic all the time and have a poker face and convince people the battle can be won when things aren’t going well. And I missed a lot of my kids growing up.

Tough times you’ve weathered? In 2006, we had revenues of $100 million, then insurance reimbursements were cut by 23 percent and we became unprofitable. We had to reduce staff and cut costs and remake ourselves to be successful. It took a year and a half.

Could that happen again? We’re facing a 9 ½ percent cut in reimbursements this year, and the healthcare industry is heading for competitive bidding. But I’ve learned you can always be better and more efficient. People will always need our product. Someone is going to sell it, and whether or not that’s going to be us is up to us.

Three words that describe you?  Motivated, gentle and devoted.

Favorite part of your job? Getting out on the floor and making sure everyone understands what we do and what a difference we make in people’s lives. It can be hard for someone in the insurance department or accounting to picture the look of happiness on a person’s face when he gets his chair. Bar none, our customers say their chairs saved their lives.

Lessons you’ve learned with age? That family is the most important thing, and that you’ll live to fight another day.

Guilty pleasures? I have a Harley, and on weekends, my wife and I will work out in the morning and cycle in the afternoon. Sometimes we’ll take the bike to our place in North Carolina and ride the

Blue Ridge Parkway
. I love it because you have to be completely on your game, giving it 100 percent of your attention.

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