BURNED-OUT BOSSES Managers are facing more painful tasks, like firing wave after wave of people. As a result, more bosses are losing their taste for the job.
By Lee Smith REPORTER ASSOCIATE Rosalind Klein Berlin

(FORTUNE Magazine) – BECAUSE WE believe in you, we are raising your sales quota 20%. But your relationship with customers is already strong, so we're trimming your travel budget. Also, would you mind sharing your secretary with several other managers? Finally, over the next few months we want you to reduce your staff by a third. Oh, one more thing . . . As corporations restructure, they are forcing managers through one of the most harrowing stress tests in business history. It is more than just the searing pace of change that makes bosses feel pressed -- it's what's happening where their business touches their lives every day. The sales and production quotas they have to meet go up relentlessly, but everything else about their careers seems headed down: operating budgets, travel allowances, expense accounts, salary increases, and opportunities for promotion. Most painful of all, managers who were trained to build are now being paid to tear down. They don't hire; they fire. They don't like the new mandate, but most have come to understand that it's not going to change. That realization makes the daily routine different: Work no longer energizes; it drains. If this is something you see in others -- or feel yourself -- you're not alone. A growing number of line managers, senior staff, and other executives suffer some stage of burnout. Though not a precisely defined medical condition, burnout has recognizable symptoms and is a result of prolonged stress, says Dr. Donald E. Rosen, a psychiatrist who directs the Professionals in Crisis program at the Menninger Clinic, the celebrated psychiatric hospital in Topeka. ''Victims are lethargic, feel empty, no longer able to take satisfaction in what they once enjoyed,'' says Rosen. ''They have a deep questioning of the value of the tasks they perform.'' In everyday parlance, they hate to go to work, not just on an occasional morning but on most mornings. Companies devote vast resources to dealing with the trauma of downsizing, but most of that goes to the most obvious victims -- those let go. Outplacement firms that help the displaced find new jobs collected $700 million in fees last year. But over time, many survivors may suffer more psychological damage than the departed. The dismissed sales manager who goes to work for a small but growing fish may settle for less income and fewer benefits at the new company but be more content than the colleague who remains behind with a whale struggling to turn itself into a shark. Observes Daniel Yankelovich, the public opinion scholar whose organization recently completed a survey of top executives on the tactics of reorganization: ''Most managements don't have as firm a hand on the human aspects of restructuring as they do on finance and technology.'' That shortcoming can wind up costing employers greatly in lost talent and lower sales. David Noer, an expert in organizational behavior at the Center for Creative Leadership in Greensboro, North Carolina, calls the misery of those left clinging to the big fish ''survivor sickness.'' No one knows for sure how many executives suffer from it. Companies that are aware of the problem in their midst are not eager to talk about it. But a striking increase in the number of disability claims for mental and nervous illness may be an indicator. UNUM Life Insurance, which writes more private disability policies than any other U.S. insurer, says the number of such claims it processed rose from 7.8% of its total in 1989 to 10.2% in 1993. Survivors, says Noer, go through a process of psychic numbing that is similar in many ways -- although certainly far less shattering -- to that of those who have lived through plane crashes or similar disasters where other people perished. Even though there may be a rationale to the reorganization, survivors often feel guilty because from their perspective it is arbitrary; they are no worthier than those who were fired, only luckier. Under the circumstances it seems almost immoral to take much joy in work. So they become morose and cautious, worrying that they will be washed away in the next wave of discharges. Meanwhile, they work harder and longer to make up for the toil of those who have left. Fatigue and resentment begin to build. A director of marketing reflects with contempt and exhaustion on the reorganization that the television station she works for has gone through. When she joined the company in 1985, she respected her employer and enjoyed managing her staff of eight. Two years ago a handful of senior executives unexpectedly revealed plans for a top-to-bottom restructuring. ''We down in the trenches had no voice,'' she says. The effect on her department was paralyzing: She lost half her staff to layoffs. ''Things that once happened as automatically as breathing ceased to work,'' she says. ''I walked in one day last summer and discovered I had three full-time jobs. With a load that size, I hate them all. As a result, my employer is getting 10% of my former creativity and maybe 50% of my energy. I'm the classic employee who quit but still shows up to pick up her paycheck.'' BUT NOTHING -- not overwork, not confusion, not lost perks, not apprehension -- is as deadening to a manager's morale as firing subordinates. To do it once is traumatic enough, but subsequent dismissals wear down one's resilience. The American Management Association's most recent survey of employment practices at 870 companies found that almost half had reduced their work forces from mid-1992 to mid-1993. For two-thirds of those companies, this was at least their second year of downsizing in a row. Unlike most other duties executives undertake, cutting staff is not something they get better at; they often get worse. More precisely, it gets worse for them. David Sokol sprinted onto his fast-track career at the age of 27, ten years ago. He built a garbage-to-electricity co-generation business from scratch to 1,100 employees and $350 million a year in revenues. Three years ago Sokol and a partner made a major investment in California Energy, which sells power to utilities, and gained management control. The previous managers had so burdened the company with unneeded staff that earnings on revenues of $90 million were only $5 million, a profit margin far below the industry average. The new management decided to let 150 people go. Sokol fired 15 personally. ''It made me angry because it wasn't the employees' fault,'' he says. His stomach twisted into a knot before each dismissal. One year later Sokol left California Energy to become president of a much larger company and discovered to his dismay that it had even more serious financial problems. There he had to fire half a dozen senior people and supervise the dismissals of several hundred other employees. ''You get through firing people the first time around, accepting it as part of business,'' says Sokol. ''The second time I began wondering, 'How many miscarriages is this causing? How many divorces, how many suicides?' I worked harder so that I wouldn't have to think about it.'' Adam Zak, an executive recruiter in Chicago, in the course of a search visited a prospect he had known before as an assertive, powerful executive. Since their last encounter, Mr. Take Charge had gone through several rounds of . firing subordinates. Zak describes him: ''He was smoking, had lost weight, had trouble looking me in the eye, was extremely nervous. It seemed to me that a few months of telling people they were out the door had gone a long way in destroying his personality.'' In another case, a rapidly rising executive in a major communications company had been required to eliminate several thousand jobs a couple of years ago. It bothered him, but he soldiered on, putting in more hours at work. Last year he was promoted, and a month later he was asked to oversee the elimination of several thousand more positions. Within weeks of that new assignment he began losing his appetite and had trouble sleeping. Although he had never had difficulty making decisions before, he started to second-guess himself. Was he cutting the wrong jobs? Occasionally he began to cry spontaneously. One day he couldn't get out of bed. With the help of medication and psychotherapy, this executive is back on the job. But the incident helped illuminate for his employer the depth of the crisis among the senior staff. Hundreds of managers have had to tell waves of subordinates they were finished. And they see no end to it. ''People there don't know when the rain is going to stop,'' says one of the company's retired executives. The toll on managers rises: The human resources department reports an increase in absenteeism and alcoholism among managers. The medical department has called in consulting psychologists. In the course of continuing restructurings, IBM has eliminated more than 100,000 jobs over the past four years. Listen to a former marketing vice president who spent 20 years with the now struggling computer maker. ''Through most of the years, I loved that company so much I would get excited on Sunday night about going to work on Monday,'' she says. But beginning in 1986 and every year since, IBM has been shrinking. ''Every year we'd call it something different -- early retirement, reorganization, reengineering,'' she recalls. ''It was slow water torture.'' At first she could tell subordinates that they could have jobs if they were willing to be mobile. Moving from Armonk to Oklahoma was unrealistic for most IBMers, tied down by spouses with other jobs, houses, schools, and commitments. Still, she wasn't actually firing anyone. As those faraway opportunities began to vanish, the executive spent days on the telephone trying to find ''catchers,'' colleagues who might be able to scoop up the + talented people she had to let go. ''I came home every night worried how this one or that one was going to support himself. I snapped at my husband. I had trouble sleeping.'' At Christmastime in 1992, she promised herself that the next time a decent retirement package was offered, she would take it. So in the middle of the following year she left IBM. ''Reorganization had been five years out of my life,'' she says, ''and when I quit, I felt the biggest load in the world had been lifted from my shoulders.'' As she circulated her resume elsewhere, one prospective employer was attracted by her experience in downsizing. He had the same thing in mind for his company. She fled the prospect. Some managers are able to cope easily with successive dismissals -- employees call them the ''hatchets.'' But many more executives loathe it. For 15 years Nolan Brohaugh, a senior associate at the Menninger Clinic, has helped conduct weeklong seminars in which managers take a break from their routine and reflect on their work. ''I've never met one of those caricature executives with blood dripping from his teeth,'' says Brohaugh. ''In my experience, they have a lot of trouble even firing people who deserve to get canned.''

Dismissal is clearly an attack on the ego of the person being fired, but in ways that are less obvious it also assaults the ego of the person wielding the ax. Dr. Gerald Kraines, a Harvard psychiatrist and CEO of the Levinson Institute, which advises companies on organizational strategies, explains how. ''We all carry around internal aspirations, generally ideals from our childhood,'' he says. ''Anything that increases the gap between what we think we ought to be and what we are actually doing drives down our self-esteem.'' OVERWORK DOESN'T do that. Toiling 70 hours a week may be exhausting, but it's consistent with the American ethic. Taking the redeye overnight flight from Los Angeles to New York so as not to miss a day's work is as much an occasion for boast as complaint. Firing is something else. Its underlying principles are un-American -- authoritarian and classist. Like nothing else in a manager's repertoire, it accentuates I'm-the-boss-and-you're-not. Also, from kindergarten through business school, Americans are taught to expand and build to the horizon. Firing has the smell of defeat and retreat.

As the manager's self-esteem is threatened, he is inclined to work harder -- beyond what is required by the reduction in staff -- to feel good about himself again. The reason for that response, says Kraines, has to do with a physiological defense mechanism: ''When there's a threat -- whether it's to our bodies or to our self-esteem -- the mind ratchets up a few notches.'' For short spurts, that can help prepare an effective response to the threat. But if the brain stays in racing gear for too long, mental and physical reserves run down, and burnout begins to set in. One of the first things to go as the flame flickers is creative spirit. Managers undergoing prolonged threats react in one of several ways, says Kraines. They become hostile toward those around them or toward themselves -- depression -- or they try to impose strict control on everything within their jurisdiction. ''All of those postures discourage the easy flow of ideas, which is the basis of creative output,'' Kraines observes. Once this syndrome takes hold in an organization, the result can be a cadre of uptight managers with little energy or imagination. What makes the waves of dismissals in recent years especially damaging is that so often workers have been fired not for cause but because their skills were no longer needed. They were accountants, perhaps, when the times cried out for salespeople. Consider the torment of a 49-year-old controller of a Midwestern utility. He is active in his church and not long ago led a major fund-raising drive on behalf of a paralyzed girl. He has generally found business compatible with his faith and generous nature. Even when he occasionally had to dismiss a misfit, someone not cut out to be an accountant, he felt okay about it. ''One young man started a string of quality photo shops, and we became customers,'' he recalls. But late last year the controller had to fire 18 accountants because the utility had sold off some of its properties and no longer needed so large a staff. ''That was very different,'' he says. ''I no longer had the crutch of being able to say this was the best thing that could happen to them. It wasn't. One woman had been with the company for 15 years. She told me her father had just died, and her mother was sick. I felt as if I was the one being fired.'' CEOs don't enjoy handing out pink slips any more than lower executives do, but at least the CEO gets some balancing psychological benefits out of a downsizing. The company's outside directors and security analysts, to whom the layoffs spell higher profits, applaud his courage for doing what has to be , done -- excellent salve for the self-esteem. Subordinate managers don't receive that applause. Muses Levinson's Kraines: ''Misery flows downhill.'' ANOTHER REASON for managerial angst is that midlevel bosses face two incompatible assignments: Be a cold-blooded cost cutter, and be liked. Notes the Menninger Clinic's Dr. Rosen: ''He has been told that the new management style of the Nineties is to think of himself and his people as teammates.'' But in front of his subordinates the manager has to play contradictory roles: He is their friend; he may also be their executioner. The strain of reconciling these personas fans the flames of stress and resentment. In firing longtime employees, managers feel that they have violated a trust. ''You joined AT&T knowing you would never own the biggest house in the neighborhood,'' says Chuck Taylor, 56, a former division controller there. ''But in exchange for lower income, you got an implicit guarantee of lifetime employment.'' Or did until the mid-Eighties, when Taylor and hundreds of other managers began to dismiss what eventually amounted to 140,000 workers. Typically, those whom Taylor fired were men between 45 and 55 with a child or two in college and a wife who stayed home. One of the men broke down and shouted abuse at him. Security came and escorted the distressed employee out of the building. Taylor's morale sank. ''When I was in high school trying out for football, there was a guy who put a slip of paper in your locker if you were cut from the team,'' he says. ''We called him the Turk. Nobody wanted to get near him. We looked the other way when he came by. At AT&T, I began to feel like the Turk.'' So in 1989, after participating in three rounds of downsizings, Taylor accepted a generous retirement package and left. What can companies do to help thousands of other valuable, experienced managers before they burn out and leave? The Levinson Institute's Kraines insists that the first thing top management must do is walk managers below them through all the steps that led to the decision to restructure the company. What was happening in the marketplace that made it necessary? Why did they have to reorganize in this way and not in some other? Were there mistakes made at the top? This kind of information can lessen the guilt and enhance the performance of the managers who stay behind. AT&T may be getting the message. When James Smith, 47, a division manager in Indianapolis, had to fire 20 of his 80 subordinates in 1988, he fretted that & if he had led his troops better he might have prevented the downsizing. His guilt grew into a sense of personal failure. ''I would characterize my reaction as depression,'' he says, ''waking up at 2 A.M., crying at times, feeling out of control of things.'' Unlike Taylor, Smith stayed on. He is still cutting staff, but AT&T has made the anguish of his assignment more bearable. The company has taken great pains to explain how changes in the global marketplace and not managerial failures forced the restructuring. The financial benefits for those who are leaving have improved as well.

TOP EXECUTIVES also need to spell out which of the company's traditional values will be preserved, says Kraines. Lifetime loyalty to employees is gone. What else is out the window? Will prestigious products be junked if their profit margins erode a bit? ''People join companies for more than paychecks,'' Kraines points out. ''You don't want people signing a new psychological contract they can't live with.'' Sound advice, no doubt, but it doesn't do much to relieve the anguish of layoffs. Top management ought to acknowledge the pain. ''A restructuring is always presented in nothing but a positive way, as an opportunity to get lean and mean or whatever,'' observes one psychologist who counsels senior executives on relations with colleagues. ''That may be true, but it creates a taboo against talking about the other side of the restructuring. It doesn't give people permission to say, 'This is hell.' '' Constant restructuring has become a fact of business life in this era of change. Well and good, but companies that don't acknowledge the stress that survivors undergo and support those who are in danger of burning out may find that their glistening, reengineered enterprises end up being run by charred wrecks.

BOX:

''A few months of telling people they were out the door had gone a long way in destroying his personality.''

Dismissal attacks the ego of the person being fired, but also assaults the ego of the person wielding the ax.