Chapter 9 - Foreign Cultures

However questionable the McKinsey consultants’ assessment of AT&T’s product strengths, their three primary recommendations seemed eminently sensible. Unfortunately, the suggested appointment of a “world-class” insider to work with Bell System management on “tender” marketing issues was ignored. Recruited instead was outsider Archibald McGill, reputedly IBM’s youngest Group VP and a man whose undeniable marketing expertise was often undercut by an abrasive personal style. A bullying popinjay, McGill seemed emotionally incapable of addressing the “tender” issues without rubbing them raw. In fairness, he faced a constantly flip-flopping regulatory framework. But, in any event, what may have been a workable style at IBM was wholly unsuitable for an outsider at AT&T.

The two AT&T insiders who might have contended for the job of director of market management were flummoxed by the new imperative. Ken Whalen, the corporate marketing VP and former president of Michigan Bell, conceded that he “didn’t understand market management.” And Ed Goldstein, the Bell System’s sensible director of product management, explained, “Engineers at Bell Labs are notoriously bad at assessing user needs and need a more disciplined approach,” which he apparently felt incapable of enforcing. The only choice, then, was to go outside for talent. And as Archie later chortled to the Wall Street Journal on December 26, 1978, “I’m the change agent. I came here swinging the bat.”

But the bat wasn’t always wisely targeted, leading mainstream AT&T executives to growl at the effete shrillness of the new batsman. As the hugely capable Long Lines boss, Al Stark, breathed with unmistakable disdain, “Archie didn’t grow up playing stickball behind the industrial yards in Kearney, New Jersey” like the tough old dogs who really ran the company. Enterprise-scale customers were annoyed, too. At a dinner with the Research Board, McGill responded angrily to member questions about AT&T support levels, making empty promises and even emptier threats, eventually bawling that the CIOs were “impolite.” Gerald Montgomery, a clever and feisty member from J. C. Penney, memorably replied, “We’ve all met lots of four-flushers in our careers, but we are always polite.” Archie rushed to his limo. If his goals included improved relations with large corporate customers, the evening had not been successful.

Left adrift in the uncertain churn were three different sales organizations elbowing for account control. The National Account Managers (NAM), targeted at large-enterprise accounts, had been rattling around the Bell System since 1962, mostly handing out crying towels, coordinating with the Bell Operating Companies (BOCs), and conducting an occasional traffic study for the fifty largest accounts (mainly oil companies, automotive, and airlines).

In 1977, NAM account executives trained by McGill’s group were assigned to 125 large accounts, initially earning quite favorable reviews. But the strong start petered out within two years, done in, first, by reorganization, and then by demands for unnatural and unsustainable growth. “We’re growing too fast,” Robert Huber, the Long Lines marketing vice president, told us in 1980. “The NAM program could comfortably handle 20 percent growth per year, but AT&T [meaning McGill] is currently pressuring us for 30 percent.” The NAM accounts were expected to double to five hundred in just eighteen months. “Realistically, we can absorb only half that many,” Huber said. “The heart is beating faster than the legs can run.” The churn in staff turnover was the inevitable result, along with a lack of visible progress in selling data networks, workstations, and PCs to IT organizations. “Our traditional telephone people can’t dance with large accounts as well as Archie’s new computer breed,” said Huber. A competitive product would have provided a booster shot for the NAM reps’ business, but probably not enough to satisfy McGill.

The grumpiness of AT&T’s Marketing VP was palpable when we visited a few days later.