Last updated on July 9th, 2024 at 03:25 pm
By Dr. Tim Glaid
“Whenever you find yourself on the side of the majority, it is time to pause and reflect.”
Mark Twain
Introduction
During the early 1970s through 2003, I was fortunate to have been employed by the American Telephone & Telegraph Company (AT&T). Historically, and for more than 100 years, AT&T (commonly then known as the Bell System) was the nation’s sole provider of telecommunications service. As agreed within the Telecom Acts of 1934 and 1956, AT&T had operated as a nationwide regulated monopoly, in exchange for its commitment to providing “universal service” throughout the country.
For approximately 116 years, the Bell System consisted of a research arm (Bell Labs), an equipment company (Western Electric), a long-distance company (Long Lines), and 23 local phone companies across the country such as Bell of PA, Ohio Bell, C&P Companies, New York Bell, and Pacific Bell (to name a few).
The decision within the Carterfone lawsuit (1968), formed the foundation for interconnection onto AT&T’s nationwide telecommunications network. Furthermore, spurred on by complaints of high prices, rigid and monopolistic business practices, and slow introduction of new products and services, the United States’ Justice Department filed an anti-trust lawsuit against the Bell System. By 1982, AT&T agreed to break up the company in one of the largest divestitures of all time.
Customer Choices
Working for AT&T Long Lines, which became AT&T Business Communications, our business unit faced an onslaught of competition from the likes of Microwave Communications Incorporated (MCI), and the Sprint Corporation. By the mid-1980s, customers were afforded the opportunity to select their “preferred interexchange carrier”. During this time, AT&T’s long distance market share dropped from its once 100% position, to approximately half of the total market. (Fortunately, the market continued to expand, and thus half of a bigger pie was sometimes better than owning a 100% of a smaller pie.)
Leadership Challenge
The leadership team of AT&T Business Communications was challenged to develop strategies to sustain existing customers, while determining new strategies to win back lost large business and enterprise customers. There were billions of dollars in network losses (revenue) that were targeted to win back, and there equal amounts to protect against these continuing losses.
During the 1980s and into the early 1990s, many large business customers were quite frustrated with AT&T. Complaints included perceptions that AT&T was too large, too arrogant, too complacent, reluctant to offer customized solutions, too slow to make decisions, too rigid, and unwilling to introduce new technologies that would reduce the traditional “minutes of use” (AT&T’s then cash cow product offerings) spend for telecommunications services. Large national and global customers pointed to MCI as an example of a business willing to go above and beyond in meeting their requests, needs, and at times, customized expectations.
Perplexed by the continuous loss of such enterprise business clients, in an era when each market share percentage point represented a billion dollars of revenue, AT&T’s leadership had to desperately identify a way of stopping the hemorrhage of revenue loss. Furthermore, a plan had to be developed in order to win back past losses of these large enterprise customers, and who had disconnected from the AT&T’s network; clients such as Bank America, Smith Kline Beecham, Exxon, the Bayer Corporation, and many others.
Brainstorming
By the end of the 1980s, I was a Sales Manager in the Global Accounts segment of the AT&T Business Communications division. I recall being selected by our Sales Vice President, and asked to travel to the AT&T’s Corporate Office of the Chair in New York City. There, I was part of a 10-person round table brainstorming session on the real conditions of the marketplace. The President of the Business Communications Group (John R. Smart) pleaded for non-filtered, non-politically correct, or exaggerated descriptions about our business and customer perceptions. He requested a no-bull$hit (his words) discussion on the real state of the business, stating he realized that sharing bad news up the “hierarchical chain of command” was not always the norm within the legacy AT&T’s culture. He genuinely wanted to understand what life was like in the trenches, so that he could support a plan to address the massive share losses, as well as to improve customer perception of our business.
As one factor in the development of new and different approach, our discussions fed into the decision to establish a SWAT-like team focused on reversing past losses with large business (enterprise) customers.
AT&T’s Profile Initiative
The AT&T’s Profile Initiative was created in early 1990s, as a win back initiative for large business customers typically spending in excess of $5 million to $10 million dollars per year in telecommunications expense, in which AT&T had either no, or the minority share of the business. AT&T’s Profile Initiative began as a team of business consultants put into place to LISTEN to the clients, and to INVEST in their business success. Our focus was to help these large businesses to formulate and execute their own business strategies. The goal, over time, was to change the paradigm of AT&T from that of a sales-centric company eager to place their products (i.e., telecom minutes-of-use), to a business consulting PARTNER willing to listen, and to do whatever it takes to enable that client’s overall business success.
Outside of the Box Thinking
The salient characteristic of AT&T’s Profile Initiative was to elevate the profile of each business with all layers of AT&T’s managerial structure, up to and including the Office of the Chair (i.e., Chairmen, Presidents, Executives, Decision-makers). High opportunity businesses would be targeted for investment and ultimate win back. A customized team was built around the client’s business, and not on AT&T’s menu of products or services in which they sought to sell. Positioning within the client’s organization was paramount, as was becoming intimate with the client’s internal business plans.
Many of the targeted businesses had previously signed long term (i.e., 2-year, 3-year, or 5-year) contracts with MCI or Sprint. Thus, there was not an expectation of an immediate sale. Winning back such clients would take time and investment. As part of the AT&T’s Profile Initiative, we were EMPOWERED to use the full array of AT&T resources in order to change the way clients perceived our company. Once again, our goal was to change the paradigm of AT&T from merely being a vendor, to that of AT&T as a business partner and a value-added consultant to the client’s organization.
For example, during this timeframe (early to mid 1990s), the Bayer Corporation was a large chemical company quite concerned about safety (employee, environmental, etc.). AT&T, a business that not only used chemical batteries in thousands of central offices across the country, and employed men and women nationwide who performed dangerous feats to ensure uninterrupted service, was quite proficient in the area operational and hazardous safety measures. Ultimately, AT&T’s safety teams shared best practices within the Bayer Corporation as an example of how two businesses could partner for mutual success. Over time, each such investment helped to sway the Bayer Corporation in to reallocating their telecommunications spend back to AT&T.
Members of the AT&T’s Profile Initiative were encouraged to imagine carrying a “Profile VIP Card”. Approved by the senior leadership team throughout the entire corporation, and anytime we were met with internal resistance to creative and customized solutions to meeting client’s requests, we could pull out our Profile Card and request immediate escalation into the upper epsilon of the company. Recognizing our organization represented opportunity to win back lost business, a priority was placed on finding common ground in answering customer challenges.
The AT&T’s Profile Initiative adopted “green light” brainstorming sessions, where members of the Initiative immediately joined requests to address challenges in addressing client requests, and to brainstorm around potential solutions. Members would drop everything when such requests were made, normally the same day or the first thing the following morning. We used the diversity and creativity of our entire nationwide Profile team, in order to answer the challenges of our clients.
Concise and succinct communication was embraced, where a one-page document became the preferred standard. This was quite a change from the traditional AT&T, where documentation was often measured in support and justification for customized requests. Focus was on a succinct description of the situation, including the competitive risk and/or win back potential. In a sentence or two, we precisely identified what we were requesting. We listed the benefits to AT&T. We provided a description of the consequences of non-performance; and finished within a statement of the action plan that would be followed upon an AT&T win.
The AT&T’s Profile Initiative learned to share best practices. This small cadre of about 200 members within five regional directors, and under the leadership of John Wood, established regular communication so that all strategies and tactics were shared in ways they could be emulated with other win back opportunities.
Finally, the AT&T’s Profile Initiative learned to celebrate victories, small to large. All activities were linked to the overall goal of becoming our clients’ strategic partner. And should the relationship result in the sale of additional “minutes-of-use” contracts, the celebrations grew in size and significance.
Conclusion
The leaders of AT&T embraced a radical change in the way they managed the large business sector of our industry. Shifting away from an internal focus of selling and meeting sales quotas in a vendor-customer manner, to a business that listened and invested in clients while acting as partners and business consultants. The AT&T’s Profile Initiative helped to shift away customer perceptions and paradigms. Enhancing a sense of urgency, elevating the profile of the client’s organization within all managerial tiers of AT&T, creating succinct and effective communications, establishing green light brainstorming sessions, sharing best practices, providing “VIP card” recognition in order to cut through internal red tape and past business practices, changing compensation plans to reward and motivate teaming and helping others, celebrating small and large wins, and having fun in all that we did contributed to the winning back of billions of dollars of revenue in the first few years of the program. The leaders of AT&T took a business risk in the design of a new and different approach to the marketplace, which demonstrated AT&T’s long-term commitment to the investment in our business partners’ success.
I commend and respect AT&T’s forward thinking back in the early 1990s, and I encourage all to learn from the benefits of thinking outside of the traditional and proverbial box in facing their own business opportunities, and for leading others within today’s organizations.
Lead on!
Tags: Business Administration Programs, Higher Education, Management
