TOUGHCALLSDickMartinAT&TandtheHardLessonsLearnedfromtheTelecomWarsAMERICANMANAGEMENTASSOCIATIONNEWYORK•ATLANTA•BRUSSELS•CHICAGO•MEXICOCITYSANFRANCISCO•SHANGHAI•TOKYO•TORONTO•WASHINGTON,D.C.PAGEi..........................10940$$$FM09-03-0414:59:04PSSpecialdiscountsonbulkquantitiesofAMACOMbooksareavailabletocorporations,professionalassociations,andotherorganizations.Fordetails,contactSpecialSalesDepartment,AMACOM,adivisionofAmericanManagementAssociation,1601Broadway,NewYork,NY10019.Tel.:212-903-8316.Fax:212-903-8083.Website:–Toughcalls:AT&Tandthehardlessonslearnedfromthetelecomwars/DickMartin.p.cm.Includesbibliographicalreferencesandindex.ISBN0-8144-7243-51.AT&T—History.2.Telecommunication—UnitedStates—History.I.Title.HE8846.A55M372005384.06573—dc2220040184512005DickMartin.Allrightsreserved.PrintedintheUnitedStatesofAmerica.Thispublicationmaynotbereproduced,storedinaretrievalsystem,ortransmittedinwholeorinpart,inanyformorbyanymeans,electronic,mechanical,photocopying,recording,orotherwise,withoutthepriorwrittenpermissionofAMACOM,adivisionofAmericanManagementAssociation,1601Broadway,NewYork,NY10019.Printingnumber10987654321PAGEii..........................10940$$$FM09-03-0414:59:05PSTomywifeandpartner,Ginny.Shemakesliarsofthosewhosaybeautyisonlyskindeep.PAGEiii..........................10940$$$FM09-03-0414:59:05PSThispageintentionallyleftblankContentsAcknowledgmentsviiIntroduction11.Don’tDancetotheMusicofYourOwnBuzz112.UnderstandthePowerofSymbols313.TakeControl534.CompletetheCEO695.ExpecttheDumbingDownofReality856.WorkInsideOutTowardYourCustomers1037.Don’tLetPluggingLeaksBecomeanObsession1218.CastingIsEverything1399.PayAttentiontothePoweroftheFew15510.Don’tConfusePoliticsandPublicRelations16911.SayGood-ByetotheRah-RahBrother-andSisterhood18312.StayOfftheTreadmillofExpectations19713.It’sOkaytoChangeYourMind21114.CredibilityBreaksAllTies22715.ReimagineYourCompany’sMission24116.PracticeAmbidextrousLeadership257Appendix:SelectiveChronology269Notes273Index287PAGEv..........................10940$CNTS09-03-0414:59:09PSThispageintentionallyleftblankAcknowledgmentsPartsofthisbookhaveappearedinsomewhatdifferentformintheHarvardBusinessReview,ThePublicRelationsStrategistofthePublicRelationsSocietyofAmerica,andThePREncyclopedia,scheduledtobereleasedbySagePublicationsin2004.SeveralofmyformerAT&Tcolleagues,especiallySueFleming,SheldonHochheiser,andBruceBrackett,searchedtheirfilesandmemoriestohelpmekeepdates,names,andeventsstraight.PatPol-lino,whostartedatWesternElectricwithmeseveraldecadesagoandtodayholdsanimpressivepositionatMercerManagement,providedtheoutsideenthusiasmthatIneededinordertogetseriousaboutthisproject.Mostimportantly,heintroducedmetoPaulHempattheHarvardBusinessReview,whoconvincedhiscolleaguesthataPRguyfromAT&T,ofallplaces,mighthavesomethinginterestingtosay—andthensawtoitthatIdeliveredthegoods.PaulandhiscolleagueAndyO’Connelltaughtmethevalueofgoodeditors.EllenKadin,atAMACOM,pickedupwheretheyleftoff,patientlyhelpingmeshapeabookthatwouldappealtoabroaderaudiencethanIfirstthought.SeveralfriendsofferedconstructivecommentsandsuggestionsasIdevelopedmymanuscript.EdBlockprovidedtheperspectiveofhisowncareerdirectingpublicrelationsforAT&T.GershonKekst,oneofthewisestPRcounselorspracticingtoday,helpedmecalculatethetruemeaningofmyexperience.MicheleTringali,whooncehandledpublicrelationsforAT&T’sconsumerlong-distancebusiness,helpedmetobetterunderstanditsintricaciesanddynamics.AdeleAmbroseandBurtWolderhelpedmereinterpretseveralofthemoresignificantexperiencesweshared.MollyDowdandMagdaGuillenofKekstandCompanywerepar-ticularlyinsightful‘‘civilian’’reviewersofthefirstdraftandofferedmanyhelpfulcommentsandsuggestions.JackJohnsongavemethePAGEvii..........................10940$$ACK09-03-0414:59:17PSviii•Acknowledgmentsbenefitofhisexperienceinboththelegalandinvestmentbankingprofessionsandprovedtobeasharp-eyededitorinaddition.AndyBlackprovidedsomeofthefinancialanalysis.AlSolecki,myattorneyandfriend,keptmeontherightsideofmyresponsibilitiestomyformeremployeraswellastomynewreaders.JohnKeller,whoisnolongeraworkingjournalist,wasgenerouswithhistimeandthoughts,aswereseveralcurrentjournalistsandformercolleagueswho,fortheirownreasons,prefertoremainanonymous.MikeArmstrongplayednoroleinthewritingofthisbook,al-thoughhesawadraft.Hedisagreeswithmyinterpretationofsomeeventsandwithmanyofmyconclusions.ButImustacknowledgehisroleinthisstory.Idiscusshismistakesaswellasmyowninthesepages.ButnooneshouldoverlookthefactthathetookononeofthegreatestchallengesinAmericanbusinessatatimeinhislifewhenhecouldhavecoastedintoretirementintheglowofdecadesofachieve-mentatIBMandHughesElectro