Inside the AT&T executive suite: a public relations perspective

Inside the AT&T executive suite: a public relations perspective

Inside the AT&T executive suite: a public relations perspective

Michael B. Goodman FRSA, is Director of the Corporate Communication Institute and author of Corporate Communication for Executives and Working in a Global Environment

Tough Calls: AT&T and the Hard Lessons Learned from the Telecom WarsDick MartinPublished by AMACOM

Strategic communication has, now more than ever, taken center stage in the running of publicly traded national and multinational corporations. Dick Martin’s Tough Calls offers CEOs and business decision makers the judgment, insight, and wisdom from his experience as the top communication officer at corporate icon AT&T.

Of his time there, he says that he had “the most visible job in an industry that was inexorably melting away.” As the Chinese saying goes, Dick Martin had the opportunity to work in “interesting” times. Enormous changes confronted him: in the work force – layoffs and downsizing; in the regulatory environment; in the business environment – mergers, acquisitions, spin offs; in company leadership – two CEO successions; in technology; in the relationship with customers; in the relationship with competitors; in stock valuation and stock price; in the business mission and model.

Through all of these changes he took notes with an eye toward writing this book. And the gift he gives us is an objective and insightful ability to search for, and find the truth to tell. Martin is the consummate professional, and a man of the utmost integrity. He also gives us a clear look at how difficult it often is in a corporate environment to know what the truth is.

Unlike many corporate “memoirs,” Tough Calls can be compared to Ben Franklin’s Autobiography – a very “American” tradition of passing on the lessons learned in life to the next generation. For example, in describing a first meeting between hedge fund manager Jim Cramer and Dave Dorman (Michael Armstrong’s successor as chairman and CEO) Martin observed, “As Dorman and Cramer shook hands outside the hotel where they had met, a pigeon left the flagpole overhead … and relieved itself on Cramer’s shoulder. Even the doorman caught the symbolism” (p. 29). He lets the details carry the message.

Martin covers the issues he presented to AT&T employees, shareholders, and the press: executive compensation, downsizing and layoffs, stock options, mergers and acquisitions, “trivestiture,” corporate citizenship, executive resignations and CEO succession, media relations strategy and tactics, corporate boards and governance, and counsel to the CEO. And he confirms that “personality quirks influence corporate decision making” (p. 77). He also shares his insight into his relationship with the CEO with this candid observation: “Successful CEOs are like thoroughbred racehorses: They wear blinders to block out distractions and stay focused on the finish line. My job was to provide peripheral vision, even if it was occasionally at the price of being nipped” (p. 83). He notes with some realistic resignation that his job is also “making it possible for the CEO to read the Wall Street Journal in the morning without getting heartburn” (p. 98).

Martin is clear eyed on the relationship between corporations and the media – “Their impact can’t be tallied in clippings. They serve no master but a public that values entertainment as well as information, and sometimes mistakes one for the other” (p.83). And he observes that when the press gets a “leak,” “once the Wall Street Journal declares something to be news, it is news, even if it technically isn’t” (p. 91). He is not shy about using authorities to bring home a point. He enlists political scientist Bernard Cohen to draw the boundary line of the power of the press – “[it] may not be successful much of the time in telling people what to think, but it is stunningly successful in telling its readers what to think about” (p. 101).

In fact, his 16 chapter titles could serve as a crib sheet for managing strategic communication. For example, in “Understand the power of symbols” he notes the symbolism of the CEO “continuing to draw a fat salary while he laid people off” and if the company executives and board members donated some of their salaries and fees to a fund for laid off employees, it would not have made a huge financial difference, but what a symbolic difference. And “because we didn’t do it, the New York Times could dub AT&T’s chairman a symbol of ‘corporate avarice’” (p. 37).

And in “Don’t confuse politics and public relations” he provides this lesson learned: “public relations is about building and nurturing long-term relationships. Public trust is more important than any short-term political gain” (p. 169).

In “Pay attention to the power of the few” Martin has numerous examples of how to manage some social issues that can easily tie down the corporation like Gulliver in Lilliput. The expansion in early 2000 of highly profitable “adult entertainment” on AT&T’s cable systems is an illustration of the power of single issue groups that gain influence through strident protest designed for the 6 o’clock news. These groups had a point: “Others may distribute pornography, but we expect more of AT&T. They had a better grasp of AT&T’s values than some of the company’s leaders.” Martin and Armstrong met with the group and listened, developed stricter parental controls, but did not get out “of the pornography business” until it sold its cable systems to Comcast.

And the company stood firm when the Religious Right attacked it for its inclusive employment policies (“AT&T was the first major American Corporation to include sexual orientation in its formal diversity policy back in 1975.”) “despite the full force of the Religious Right’s indignation, the company has not caved on its diversity policy” (p. 165). Martin makes the compelling business case for diversity: “… the issue here is so fundamental to AT&T’s corporate values and to its own self-interest that there is no room for compromise. To compete in an industry whose principle engine is human creativity, AT&T must simply attract and keep the best talent available, without regard to race, gender disability, religion, sexual orientation … ” (p. 165).

The turmoil of the telecommunications industry and the obsession with stock price as the only measure of a corporation’s value in the dot-com boom, and ultimate bust, leads Martin to a powerful lesson when he warns corporate decision-makers to “stay off the treadmill of expectations,” because “lowering expectations will not guarantee success, but over promising is the surest path to failure” (p. 197). He narrates in great detail the competition with Sprint and MCI WorldCom, and the utter bafflement at how their competitors were able to achieve such high profit margins considering the enormous changes in the industry, and the pressure on the stock price. “It is now clear that MCI WorldCom … used accounting gimmicks and outright fraud … ” (p. 209) to mislead customers and investors. And in a concise assessment worthy of Ben Franklin, Martin sums it up nicely, “The lesson learned here, of course, is strictly academic: don’t compete with cheats” (p. 98).

Dick Martin has written a powerful and important book of value to decision makers. You can trust his insight and wisdom; you can trust his counsel. And the greatest lesson of all may be that the values of a successful business are simple and old-fashioned, “that all businesses exist only by public approval.” And “openness, candor, doing right by the customer, serving the public interest, and managing for the long pull’ still have power and resonance in to the twenty-first century.