16 June 2006

Company of the Past; Company of the Future

An interesting and insight-provoking post concerning the relative grounds of companies, from a friend who is an employee of "the new AT&T," coming from "the old AT&T." The irony is that, according to their respective conceptual grounds, the old AT&T was actually newer than the new AT&T.

Let me explain: AT&T was once the telecommunications behemoth in the United States, providing residential and commercial, local and long distance calling. In the mid-80s, the company was broken up into AT&T, that handled long haul communications, and the so-called Baby Bells that served individual regions around the country. After trying out various business ventures, AT&T settled into a primarily business-oriented focus, becoming one of the global, tier-1 ISPs in the mid-to-late 1990s (and, incidentally, retaining their prolific and prestigious Labs division). Meanwhile, the various Regional Bell Operating Companies - RBOCs - enjoyed (and in some cases, didn't enjoy very much) varying degrees of success.

Among the successful ones was SBC, whose CEO, Ed Whitacre, went around the country buying up the less successful RBOCs. His second-last acquisition, completed last year, was to acquire AT&T itself - the ISP and Labs innovator - effectively reassembling what was once AT&T into what is now being touted as "the new AT&T." I'll let my friend continue:
At SBC, they have many different networks and systems. Nothing is integrated. If you want to know how many SONET rings are in the assets that belong to SBC, at least four different people have to pull inconsistent reports out of different legacy systems (probably old mainframes) in different regions, representing former Pac Bell, former Ameritech, former, SW Bell, etc. (At AT&T a single data steward reported a single number into a single system)...

On the other hand, voila, they automated HR. There is an automated HR system where the employee has to put in his accomplishments, properly written using "HOW" language, and also his goals for the upcoming year. The system automatically generates an email to one's manager to review the goals and accomplishments. Verbal advice has been to undercommit and overdeliver. Because of course, when dealing with an automated system, there is no opportunity for dialogue. It would seem to me that honest, regular dialogue with one's manager would be a more effective management tool than an automated system...

I don't know what this says about the cultures of the two respective corporations. That SBC couldn't figure out (or never even tried) how to automate networks and so tried to automate people? That SBC really thinks of the world as a giant factory and we are all only cogs in a big machine? That AT&T automated networks to save money but it never occured to them to automate people?
The answer according to the way I look at organizations, their effectiveness, and the temporal situation of their dominant ground (ie. where the boss's minds are at), is fairly evident. SBC is firmly rooted in the Industrial Age - an age built by BAH (Bureaucracy, Administrative control, and Hierarchy) in which the dominant psychology is to consider people as interchangeable machine components. The "old" AT&T, on the other hand, transformed itself into a more UCaPP-influenced company, in which relationships, interactions, and interpersonal dynamics were more influential in management thinking. I say "more influential," because even the old AT&T still had many BAH elements. But the change in mentality was clearly present, as evinced by where it invested its money for internal infrastrutural systems. (As well, this was strongly influenced by the leadership of former CTO, Hossein Eslambolchi, who was definitely a UCaPP guy.)

So the nominal new AT&T has retained the dominant BAH characteristics of the old SBC, while the old AT&T's UCaPP influences are becoming less and less visible - a step backwards, in my view. This, of course, is not surprising, given Ed Whitacre's apparent lack of understanding of the effects of UCaPP in world at large. Not surprising, but certainly ironic.

As an aside, I think the (post-doc? ...or am I getting ahead of myself?) study of the corporate culture implications of the merger between SBC and AT&T would make a great project. Here are two companies that came from the same origin, split for nearly two decades and then re-merged. In the interim, one stayed BAH, the other began to acquire UCaPP characteristics. It is rare that we have live examples that are so perfectly set up for empirical study.

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