Bottom Line

LLP

MARCH, 2001

Iwalked into the boardroom at 7:55 A.M. , five minutes early. The senior management team was already seated at the long conference table. Some glanced up, others looked away. They were not happy to see me. They knew what was coming.

I ate no breakfast that day. I didn’t want blood draining from my brain to my bowels. I like that hungry, focused feeling, that sense of physical lightness and mental clarity when I work a boardroom.

I took a seat next to our client, Jimmy Charles, CEO, Big Retailer, Inc. He smiled at me glumly. He smelled of Scope, Brut, nervous perspiration. I dreaded what I’d have to tell him.

Theoretically, I am Jimmy’s employee. But I tell him what to do. I make more money than he does. I have the power to terminate him. One word from me to his board and Jimmy is ousted, replaced like an interchangeable part in a malfunctioning machine. It’s a responsibility I don’t relish. In fact, I hate it, would much prefer not to issue these corporate death warrants on the condemned, whose only crimes were not making their numbers, or presiding over firms in flames and not being able to put out the fire.

The others at the table I barely knew, although I’ve talked briefly with some of them two or three times during my infrequent supervisory visits here over the past sixteen quarters.

Jimmy rose, called for silence, and introduced me.

I stood as Jimmy sat. Good morning, I said. I’m truly sorry to have to tell you this, I said, in a soft, conciliatory voice. But it’ll come as no surprise to you that your numbers are not good, I went on. I always cut to the bottom line—it’s clean, direct, surgical, humane.

They glared at me. A corporate lynch mob. Most will soon be casualties of the downturn. They all wore those dark, mud-colored suits you get buried in—casketwear.

Your firm will not make third and fourth quarter estimates, I said. Your stock’s already bleeding and that’ll depress it even further. You may not do much better in first and second quarters next year. There are significant functional problems as well. These must be addressed immediately.

No response from the VPs. They stared at me, mute, expressionless, perhaps in a state of shock, as if they were unaware of these problems and had never before heard what I was now saying.

I went on. Unfortunately, you’ve got to slash personnel by at least twenty percent. That could eventually boost your stock price. Although there’s no guarantee. You’ve got to close forty-two of your unproductive retail stores. Your online unit is not performing and you’ve got to fold your catalog division. The details are in our report.

Several members of the senior management team glowered at me, as if I were the author of these corporate misfortunes. Maybe I am. I’m the Martell and Company senior-most partner who presided over this failed turnaround effort. Mea culpa, perhaps. Yet they can’t blame me for the economic slump.

We’ve outlined additional recommendations, I said. You’ll find them in our report. We also have an implementation team ready to help you carry out our plans for you. We’ve scheduled a full presentation for early next week.

From the Martell and Company Handbook: In all official business communications with clients and prospects, written, oral or e-mailed, never say I or Me. Always refer to Us, Our, We. You’re representing Martell, not yourself, as Adrian has admonished us so frequently. And always: sell more services, contract for more billable hours, regard every client problem as an opportunity for the company.

You’ve already restructured your debt, I went on with my litany of their problems. So it’s likely you can’t get any further financing at favorable rates. Once you pay down your short-term notes, you may be able to borrow again if necessary, depending on your prospects. But if there’s no turnaround by third quarter next year, we’d advise reorganization under Chapter 11. We’re prepared to assist you in this necessity. You’ll find the details in our report.

I hated to inform them of these brutal realities, but I must. And despite Adrian’s injunction to deliver all such comments in an icy, dispassionate voice, my sympathetic tone revealed my feeling—I have become too emotionally involved lately with my failing clients, a violation of a principal Martell and Company taboo.

Jimmy Charles looked up at me from his chair. Nick, he said in a mild, non-accusatory voice. You told us to change our ad agency, to undertake a new campaign, to reposition ourselves as more youth-oriented, to buy more time and space. You advised us to redesign our stores, bring in new products. We’ve done everything you recommended, and now you tell us we’ve failed and that we should go bankrupt? That’s your fault, not ours.

I didn’t respond to the charge against me. Instead, I told Jimmy, If you don’t implement my suggestions, it’ll be your last failure. You’ll never come out of bankruptcy. It’ll be all over. Remember Ward’s? Gone. Pan Am, gone. Handy Andy, gone. The list goes on and on.

Jimmy’s eyeballs were red, unfocused, lonely, his expression morose, the result of too many isolated hours poring over quarterly numbers which whispered to him of his impending doom.

I had seen that look many times in the past few months on the faces of senior managers with their heads on the block awaiting the inevitable axe—fear, anger, profound disappointment, other emotions less easily discerned and labeled. Their companies were terminal, poised on the edge of a do-not-resuscitate coma. Soon these execs will be unemployed. They’ll lose their performance bonuses. Their stock and options, once worth millions, were now or would soon be next to worthless.

The ad agency failed, said Irving Green, head of marketing and advertising. They sold us on the campaign. Finger-pointing time. The ad agency as scapegoat, fall guy, whipping boy. Sometimes it works, even if it’s not true.

Senior management makes the final marketing and advertising decisions, not the agency, I said. You approved the campaign. You take the credit if it works, take the heat if it bombs.

You weren’t hired to assign blame, Mr. Blake, you were hired to propose solutions, Green barked at me pugnaciously.

I’ve been insulted and vilified by countless senior execs like Green since the downturn. It hurts me to know that so many of my clients resent me, even hate me, for the devastating truths I must utter, for the harsh but necessary remedies I must prescribe for their business afflictions.

I ignore the personal pain, wear a mask of Zen-like indifference, imperturbability, pretending, contrary to my true nature, that these insults don’t affect me. But so many of my clients endure a far greater suffering. I commiserate and identify with all of them, all who were downsized, restructured, demoted, transferred, took pay cuts, were allowed to resign or were terminated. And I sympathize with all those who for the time being have survived and now worked in a paranoid, demoralized gloom, the noose snug around their necks, waiting for the gallows trapdoor to open suddenly beneath them.

I feel similar sympathy for all the middle managers, all the salaried employees, all the hourly workers who have lost their jobs, their checks, their pension, retirement and health care benefits. And for those who have lost through repossession their cars, their no-money-down dinette and living room sets, their suburban tract homes with their meticulously tended, doted-upon lawns because the money stopped coming in. Because I’ve been there along with my mother in similar miserable circumstances, and because we both had worked years ago—underpaid, abused by nasty bosses, living in terror of being fired. Because of all that, I commiserated with all of them.

As for the bankrupt, self-employed entrepreneurs and visionary founders of once insanely profitable high-tech, dot-com, outside-the-box enterprises of the 1990s, I’m sorry for them as well. I understand how bereft they are, how they must mourn their loss as if a beloved child, not a mere business, had died. Of course, they also grieve over lost fortunes in equities and options, grieve as their firms default on loans, disappear through forced liquidations.

I looked at Big Retailer’s senior management team, now in a state of gloomy, silent reflection, condemned to be cut down by the grim corporate reaper. Their faces were hard, ugly and gray like the concrete gargoyles of Notre Dame.

You’ll have to trim your budget twenty percent across the board, I said, lifting my head slightly in an attitude of unchallengeable authority as if I were a medieval European monarch ruling by divine, incontestable right. I then looked away, signaling no more discussion. Board-room stagecraft, dramaturgy. These are the requirements of my profession. Clients expect it, they want it, they pay huge fees to obtain it.

From the Martell handbook: Always affect confidence. That’s what they pay us for: our expertise and self-assurance. Backed up by numbers, numbers, numbers.

I then delivered my concluding bombshell, although they all must’ve anticipated this months ago when Martell and Company was hired to rescue this drowning company. We’ve also recommended several changes at the senior management level.

A silent shock wave rippled through the room. Some people blanched, others flushed. Now the ulcers and hemorrhoids and irritable bowel syndromes flared up, the physical and psychological vulnerabilities kicked in. Green’s left eye started twitching. Others shifted in their seats, squirmed or sat in paralytic shock, popped a Rolaids or Zantac or some variety of tranq. The air turned dense and foul. The stench of corporate flop-sweat. I’ve always hated this moment. Now more than ever because it happens so frequently. I’ve never had an appetite for bloodletting.

Vance Ringer, VP of IT, said, Have your recommendations been accepted by the board?

All of them, I said quietly, regretfully.

An angry, anxious muttering swept through the room. Yes, I felt badly for them, but these are the same sincere, hardworking executives who had once downsized thousands of loyal, long-term employees without compunction, and gave themselves seven-figure performance bonuses. Such are the ironies, contradictions and inequities of the corporate cosmos.

I don’t accept any of your recommendations, Jimmy said. I’m sure you’ve done your homework, Nick. My views and yours are just not in synch.

At least read our report. Discuss it objectively with your senior people. I gestured toward the group seated before me. I’m sure they’ll buy in.

A red flag went up in my mind. Don’t sound too desperate, too pushy, too addicted to their fat monthly fees.

Jimmy laughed. I’ve always admired your persistence, Nick. You’d make a helluva salesman. But we’re going to move in a different direction.

I was speechless for a moment as I scrolled down mentally through my repertoire of tactics to retain their business. Nothing more effective came to mind. I was stunned by the suddenness and finality of Jimmy’s dismissal. I had no inkling, no clue that he’d do something so drastic to save himself.

But I should’ve anticipated that he’d oppose bankruptcy. Chapter 11 would depress the value of his stock and options, his profit-sharing money, his buyout package. He’d lose untold millions, and he’d forever have that ineradicable reputation as the blundering CEO who destroyed Big Retailer, and he’d be dismissed from the aristocracy of successful corporate toppers.

As if reading my mind, Jimmy said, I don’t want you to think that this is spur-of-the-moment, Nick. We’ve been considering new initiatives for some time.

He invoked the all-purpose corporate euphemism: new initiatives could mean firing personnel, vendors and purveyors, cutting benefits, slashing salaries, whatever nastiness that might go down more smoothly with another name.

Is there any good news, Mr. Blake? asked Ms. Alice Woodfin, VP Human Resources. She was a fast-talking hyper type. Pretty, perky, but perhaps a few pounds overweight. Too many lunches at Gene & GeorgettI’s interviewing prospective mid-level hires.

No, there’s worse, I replied. There’ll be no performance bonuses this year, and no contribution to your profit-sharing accounts. We’ve recommended that to the board.

With my last unhappy announcement there was a sudden eruption of angry chattering.

As I said, Nick, we’re going to move in a different direction, Jimmy told me emphatically. In fact, we won’t be retaining your services any longer.

Not retain our services? I said, surprised to hear a tremor in my voice which had suddenly gone unnaturally high and thin.

I think we need new ideas, Jimmy said.

I had never before lost a client. I regarded it as an intolerable failure, for the client and for me. Adrian would be furious. He’d think me a fool, an incompetent, a blue chip fuck-up. I couldn’t let that happen.

Whoever you hire will tell you exactly what I told you, I said, trying to reinforce my argument. To begin with, bankruptcy will abrogate your union contracts and building leases. You can renegotiate with better terms.

There was no reaction. The room fell silent.

Jimmy turned to me and said quietly, I’m sorry, Nick. He then excused himself from the meeting, telling his senior managers to discuss whatever other business they may have pending and asking his secretary to type up the minutes and send him a copy.

Having worked with these people over a period of many months, I expected at least a courteous farewell as I left the boardroom with Jimmy. But there was hardly a peep of good-bye or adios to remark my departure.

FLYING BACK to Chicago on the United red-eye I called Adrian at home, as instructed.

How’d it go at Big Retailer? he said. One-twenty A.M. and he’s still wide awake.

We lost them. I said.

Lost them?

They no longer require our services.

We’ve been terminated?

Yes.

They fired us?

Yes, I said. Jimmy Charles blames us for his problems.

Blames us? Adrian said, his voice ascending. No. He blames you. He was your client.

I’m sorry, Adrian, I said.

You know what that’ll cost us in annual accounting and consulting fees?

Ten to twelve. Meaning million.

At least.

A long moment of silence ensued during which I heard only the droning of the jet engines. Then Adrian spoke again.

Why have you done this to me?

There was no proper response to his question, so I said nothing. On any given day, Adrian sees himself as either God’s beloved, or His victim. He perceives his fortunes fluctuating daily up or down as if they were traded in some cosmic stock exchange. If the Dow falls a percentage point or two, Adrian decries his misfortune, attributes it to divine retribution. If prime increases twenty-five basis points to Adrian’s disadvantage, he sees it as the Almighty’s punishment. If a senior partner commits some error injurious to the company, Adrian takes it personally. So, I knew it would be futile to say anything more and awaited his next remark.

At last he said, I want you to conceive a dozen new ideas to salvage the account and present them to me no later than this Friday.

Their only option is reorganization, I said.

What about a junk bond issue to raise cash? Or spinning off their appliance and electronics divisions into separate retail entities? What about a strategic merger, in which company B also acquires their debt? Come on, Nick, pump up that colossal brain of yours.

I’ll work on it, I said, without enthusiasm or confidence. Now what happened at Major Airlines?

On my swing through the East I had seen Major Airlines also. They too were sinking into a quagmire of declining revenues, rising fuel costs and unmanageable debt. But they were amenable to my recommendations.

Major Airlines will go Chapter 11, I said. Their trade unions are ready to talk. Pilots and flight attendants too. Good, good, Adrian said. Send them eight of our people to implement the bankruptcy and restructuring.

Four of our people would be adequate.

Eight, Nick, eight.

That’s too much.

Goddammit, Nick. I said, eight. Why are you so argumentative lately?

I said nothing. I’d send them four anyway. Adrian won’t know until next quarter’s report—assuming he reads it, which he often doesn’t—and perhaps by then his appetite for more billable hours will be temporarily satisfied. I say temporarily, because Adrian is insatiable.

Nick, did you hear me?

Yes, I said. I never defy Adrian on the big things. Whatever his orders, I comply. They’re usually smart, frequently ruthless, sometimes complex, even Byzantine, and almost invariably—until the recent downturn—successful. But I’ve never sent a client more people than I thought necessary before, and didn’t intend to start now.

Send eight and get the job done twice as fast, Adrian said.

Twice as fast never happens, I said. Twice the billing, however, is a certainty.

Good night, Nick.

Looking back on that night, I realize now that it marked the beginning of the end of our relationship, its inexorable piece-by-piece disintegration that would end disastrously for both Adrian and me, and for Martell and Company, in a totally unexpected way.

I dozed sporadically for the rest of the brief flight back to Chicago, dreaming of my late father, seeing him in his prison grays, reliving in sad reverie that one occasion when I was a child and my mother and I visited him at the Illinois State Penitentiary just before he died. For some inexplicable reason he’d been much on my mind lately.

SIX-TEN the following morning. Adrian and I were running on treadmills side by side, matching stride for stride at twelve minutes per mile. But Adrian ran on an inclined plane, burning more calories, expending more effort, more sweat.

We were alone together in the Martell and Company fitness center, on the top floor of the towering postmodernist building we occupy on North Michigan Avenue. The others hadn’t arrived yet.

Adrian abhors fat and sloth. He wants his partners to be clones of himself, Adrianoids, but not quite as bright, not quite as assertive, as industrious, as inventive, as indefatigable, as driven. Or as thin, muscular, rich, powerful and intimidating.

Some people say I resemble him, although I have more hair and none of it is gray yet. I wear contacts, he sometimes wears glasses. Adrian is over sixty, I’m thirty years younger. But Adrian works diligently on retaining his youth.

And so he has built this glass-enclosed penthouse gymna-sium-sweatshop, with Nautilus machines, free weights, swimming pool, steam baths, plus other elaborate items to build strength and stamina, torture the human body, test human will power—all designed to train his people for the mental and physical challenges of working for him.

If you want to make partner, a half-hour minimum, three times weekly workout is mandatory. You don’t get a piece of Martell and Company’s pie unless you’re fit, lean, and a consummate kick-ass motherfucker in your specialty—Adrian’s terminology. He personally monitors attendance. Consultants sign in and out by the clock. No stand-ins, no desk potatoes.

We ran then for a few minutes in silence, Adrian shirtless, muscular, in shorts. He has a small blue and red tattoo on his left shoulder: a horn of plenty disgorging its provender. He is slightly higher than me on his inclined plane, sweatier, leaner, more imposing. He is six foot two, imperious, robust, with short cropped salt-and-pepper hair. He is also a world-class cocksman and mindfucker. I happen to know his love handles have been liposucked, his eye bags unpacked, drooping lids propped up, neck tightened and ironed out, jawline redrawn more crisply. These surgical renovations of the CEO were assigned by accounting as a line item expense under Marketing: Redesign, collateral materials.

We finished running and Adrian moved now to a boxer’s heavy bag hanging on a chain from the ceiling. He is a black belt in karate and vigorously, maliciously whacks and kicks the bag as if it were human. I stand nearby resting from my run, watching.

Droplets of sweat flew from his body, anointing me with his holy exudate each time he struck a blow to the torso-sized bag. Ummph, he uttered an explosive nasopharyngeal grunt.

"I’ve hired a firm…ummph…to sweep the office and all domestic branches…ummph…for bugs, Adrian said midst a flurry of hits and kicks to the bag. …phones included."

Bit paranoid, isn’t it? I said.

Paranoid, no. Prudent, yes. He flung a final vicious kick at the bag and stepped back, grabbing a large bath towel from a nearby rack and draping it around his neck.

I’ve often wondered who or what that bag represented, but long ago gave up trying to explain Adrian in Freudian terms. I’m done here, Adrian said.

I walked with him to the showers. The other consultant-partners and wannabees were arriving, fanning out into the sunlit room to their various exercise apparatus and devices. Hello, good morning, how ya doin’.

Who’d be bugging us? I asked Adrian.

Our competitors, he said. "Our clients’ competitors.