After searching for work unsuccessfully for more than a year, unemployed business executive Dick Loan, 53, decided last Oct. 5 to sit down in his Gold Coast apartment and chart his options coldly and scientifically.
During his quest for a job, he had sent off 400 resumes, made 600 telephone calls, answered 200 newspaper ads and approached 100 target companies at the highest level. His efforts had yielded only four or five interviews. It was time for a decision.
Loan pulled out a sheet of buff-colored ledger paper. Across the top he wrote, ”Dick`s Return to Gainful Employment.” Underneath, he listed eight options. He listed the advantages and disadvantages of each. And he estimated the odds of success in each endeavor.
”Finance Job in Chicago” was at the top. This was his real line of work, in which he had spent his entire adult life, rising to be president of the finance division of a Fortune 200 company and earning a six-figure salary. (Loan`s last name prompted lame jokes throughout his career.) Under ”Per Cent Chance of Getting,” he wrote, ”With effort, 50 percent.”
The other options, which showed an extraordinary range, included:
– Start Up Own Finance Company. He had already drafted a comprehensive business plan and approached investors. Chance of success: 5 percent or less. – No Job, Until Pension Takes Effect at Age 65. Chances: 100 percent. Disadvantages: no security, no medical benefits. Health (and pride) might get shaky.
– Labor Job in Chicago. Loan smiled. ”I could see that the hardware store over on State Street was looking for a regular floor guy,” he said.
”`No Experience Needed.` There would be no work pressures; you just sign in and do your job. I would just have to make it through the 12 years until the retirement checks start coming in.”
– Open a Bar-Restaurant With Chris and Tom (his two sons). Advantages:
Total entrepreneur (own boss). Disadvantages: High risk-may be difficult to sell it if it does not work out. Chance: High Percentage.
A growing number of middle-management executives face Dick Loan`s predicament. Amanda Bennett, a Wall Street Journal reporter whose book ”The Death of the Organization Man” skillfully chronicles the turmoil in the executive suites, reports one estimate that 35 percent of middle-management jobs have been eliminated since 1981. Entire layers of people are laid off, sometimes after mergers and acquisitions, in the name of making operations more efficient or cutting costs.
The mass layoffs are continuing into the 1990s. In the Chicago area, companies that have sliced middle managers recently include Sears, Marshall Field and Continental Bank. And there`s no hope in sight. Management expert Peter Drucker predicted in the Harvard Business Review that by the year 2000, half the management layers in corporate America and two-thirds of the actual managers will be gone.
Layoff terminology ranges from the euphemistic (the mass firings are called ”downsizings”; the newly jobless executives are ”on the beach”) to the cruel (managers who have spent decades with the same enterprises learn from the business press that all along they were ”dead wood,” part of
”bloated bureaucracies”).
Gerald Murray, general manager of Porter/Novelli, a Chicago public relations firm with major corporate clients, said middle managers are stunned to learn the rules have changed.
”It would be like being in baseball for years and suddenly finding out that the other team gets to play eleven men in the field, and that you have to throw four strikes to get their batters out,” he said.
The danger signs
Dick Loan`s ordeal, like so many others`, began when his company was sold. He had spent 16 years building a finance division for FMC Corp., which has its headquarters in Chicago. His assignment was to make loans to FMC customers who bought the company`s giant cranes, excavators, rail cars and farm-harvesting equipment.
In 1986, a New York thrift institution bought his division, and he and other top executives moved to the East Coast. Loan is doggedly determined to be fair, and he has no personal criticism of the men who became his new bosses. But he said it soon became clear to him there was a difference in philosophy; he wanted to expand the finance division, while they acted with what he describes as excessive caution.
Corporate America can be as indirect as a medieval lord in communicating that someone is falling out of favor, but Loan recognized the signs. ”I started to get fewer phone calls,” he said, ”and I was invited to fewer meetings.”
After a year and a half in New York, in June 1988, he was fired. ”The boss called me to his office,” he said, ”and I asked if I should bring my notebook to take notes. When he said no, I suspected something was up.”
In what is now standard practice, he was immediately escorted out of his boss` office to meet a waiting representative from an ”outplacement” firm, part of a new subspeciality in the business world that counsels newly fired executives. (The Wall Street Journal`s Bennett reports that the number of such firms more than quadrupled in the 1980s.) Loan learned that he would get four months` severance pay. He was surprised, but the amount is typical: Only the very top-level executives drift earthward under more-generous golden parachutes.
Fortunately, Loan did not have to experience an indignity that is becoming increasingly common in corporate ”terminations”: having a security guard stand by as you clear out your desk and surrender your office pass as though you were an Army officer cashiered for misconduct.
Three of Loan`s four sons were in college, but he was not worried about expenses-yet. As he looks back on his ordeal, he laughs at his initial self-confidence.
”I thought I would get back to work right away,” he said. ”It was just going to be a matter of letting people know that I`m available. I thought I would even beat the severance.”
Loan now knows he was too optimistic. The rule of thumb is that an out-of-work executive will need at least one month of job hunting for every $10,000 in annual income to find a comparable position.
He and his placement counselor crafted his resume with the excruciating detail a poet laureate might devote to a ceremonial ode. They spent three or four weeks reviewing his job history and going over aptitude tests before they even started writing. His ”Selected Achievements” are at the top. ”You specify the profits that you earned for the company,” Loan said.
Other numbers were deliberately left out: the dates he received his bachelor of arts and master of business administration degrees from the University of Washington. ”You don`t want to remind them that you`re over 50,” he said, laughing. ”But they can work it out.”
A resume has one and only one aim: to get an interview. He and the counselor worked with video cameras to improve his in-person presentation. During these rehearsals, they painstakingly developed an explanation for why he left his last job after only 1 1/2 years. They crafted a careful, diplomatic statement, and he memorized it word for word.
He returned to Chicago, which had been his home base for 16 years. He used the telephone to ”lean on” the many contacts he had developed during his 30 years in business. He now has file folders many inches thick with contacts, with careful notations of calls and matters discussed.
The cool treatment
He learned telephone strategy. ”You never tell the boss` secretary what you want,” he said. ”You just say, `There`s a project of mutual interest that I`d like to talk to Mr. X about.` You try to learn her name for when you call back. And you always, always, send a follow-up letter.”
Loan did find, after he had been out of work for a while, that some of his contacts tried uneasily to evade him. Other executives report similarly cool treatment.
He made up classifications for his burgeoning telephone and correspondence files. He spent most of his time making calls from the ”Still Alive” file, but he didn`t give up on ”Some Wiggle Left but not much Output.” In slow moments, he would even try ”Did Their Thing-Died, or Near Death.”
His placement counselor had advised him not to spend too much time on newspaper ads. ”Your chances are almost as bad as a Lotto,” he explained.
”One ad in the Wall Street Journal will generate 400 to 600 replies.” But he clipped and responded just the same, stressing that he was prepared to work anywhere in the world.
Exercise and insomnia
After a year, Loan had gotten only four or five interviews. One company never even bothered to tell him of the outcome of their talk.
To try to maintain some internal equilibrium, Loan stepped up his exercise regimen, swimming and lifting weights for up to two hours a day.
But he suffered from insomnia; he estimated that he hasn`t gotten a good night`s sleep in the two years since he lost his job.
Still, he said he has no bitterness, no desire for revenge, against the people who fired him. He will only admit, with some embarrassment, to taking pleasure in seeing his last employer`s stock price plummet.
As that first year of unemployment came to an end, Loan even tried to set up his own finance company, along with some of the people who had lost their jobs with him. He said he felt responsibility for them. He and his potential partners drafted a 42-page prospectus.
Loan also had deeply personal reasons for trying to revive an enterprise like the one he once headed. He uses a lot of the specialized jargon of high finance, so an outsider doesn`t see right away that he takes as much pride in the division that he helped build as a writer would in a book, or an architect in a skyscraper. He simply wanted one last chance to work at his craft. But the enterprise would have required $25 million in startup financing, and he and his partners couldn`t find the money.
Loan had been paid well during his corporate career, and he had some savings. But his resources were drying up, and his health insurance was lapsing. On Oct. 5, 1989, he decided he had to take action, and he reached for that buff-colored sheet of ledger paper.
On Saturday a new restaurant will have its grand opening at 1615 N. Wells St., across the street from Second City. Two of Loan`s sons, Chris and Tom, both in their 20s, are going to be partners with their dad. Tom is a line chef, and Chris has bartending experience. The restaurant will have a full American-style menu, with lots of desserts for the after-theater crowd. Loan will be in the establishment most of the time. ”People want to meet the owner, to get to know him,” he said. His restaurant will be called The Last Act.
Loan said he doesn`t believe the American economic system is a failure, despite his own wrenching experience. ”It is discouraging to see the search for profits reach an insidious level,” he said. ”But I can`t say that the whole system is wrong.”
He has advice for younger executives: ”You have to get ready for the day that they don`t want you. Nothing is safe. Even the highest tech people, people in computers, are in danger. There is no safe spot.”
In the end, he has a simple conclusion: ”I wasn`t the product that the market wanted.”
