Trylon Communications  - December 2004

Tough Calls

A new book by Dick Martin, former PR guru at AT&T, is a must read for marketing executives. The book (Tough Calls: AT&T and the Hard Lessons Learned from the Telecom Wars)  examines many of the struggles the company endured as it tried to find its way in the deregulated jungle. One example highlights the unintended consequences of a PR campaign:

In late 1995 AT&T was involved in manufacturing, telephone service, and computers, so it decided to split the company into three pieces. The move made sense from a shareholder and management perspective, but involved significant employee downsizing.

The PR team crafted a message that was geared towards investors. The company actually hoped to set the record- for downsizing by eliminating 40,000 positions - thus demonstrating its determination to build investor value.

The dream message turned into a nightmare as AT&T quickly became the poster child for corporate greed. The PR team gained more press than it could have ever imagined – almost all bad.

By not recognizing the importance of television media, not responding quickly to negative press, and not taking into account the emotional effect of certain facts, AT&T suffered a series of negative stories that hurt the reputation of the company, causing both a drop in share price = and customer attrition.

The book’s writing is clear and brutally honest. For example, here’s a postmortem on this PR tragedy: “No one at AT&T's executive table understood the full emotional impact of our downsizing announcement on people beyond those who were directly affected. Incredibly, in hindsight, none of us had connected the downsizing announcement to (Chairman and Chief Executive Officer Robert) Allen's compensation, which had been largely decided months earlier….

“Ironically, we eventually did some of the right things, but by the time we did them, it was too late. For example, we ran ads to help displaced workers find jobs. Had the ads appeared in the first days following our downsizing announcement, they would have demonstrated some degree of social responsibility. Ninety days later, they appeared to be a reaction to the public backlash rather than a sincere effort to help our employees.”

Clearly, any communications executive can learn from this book, so it goes on our suggested reading list. For more information and a sample chapter detailing the crisis above, click here.