ANALYSIS: Client Profile - PR prominent in AT&T's company-widerestructuring

AT&T's PR efforts have been woven into its operations since Arthur Page held the comms hot seat. And even though the giant telecom is under media scrutiny, its PR remains involved in everything from top decisions to sales. Julia Hood reports.

AT&T's PR efforts have been woven into its operations since Arthur Page held the comms hot seat. And even though the giant telecom is under media scrutiny, its PR remains involved in everything from top decisions to sales. Julia Hood reports.

A recent article in The Economist entitled "Survival of the slowest" renders an image of AT&T that the company would like everyone to forget.

This analysis of Global Crossing, the once high-flying whiz kid of telecommunications, explains how the new-economy model was failing, even as more "bureaucratic

operations (read: AT&T) are set to thrive.

"The crowning glory is that the industry's old-fashioned, old-economy giants look in good shape to clean up,

the article reads. "Too slow and too cautious to build their own fiberoptic networks, they can now lease lines from their nippier rivals at rock-bottom prices."

"There is an assumption that because we are big, we are bureaucratic and slow-moving,

says Dick Martin, EVP of AT&T's PR, brand management, and employee communications. "As if the reason we didn't make the same mistakes Global Crossing made is because we are slow and bureaucratic."

One day, the media may believe AT&T's claims to being nimble and on the cutting edge of technology. But the company will never change the fact that it virtually symbolizes the entire telecom world. "AT&T is such an icon that it is often used by the media to explain a story that affects an entire industry,

Martin says. "We are a shorthand for saying, 'This is what's going on in telecoms, good or bad,' and we also have so many share owners that we are newsworthy."

Media attention in the past year has focused principally on AT&T Broadband's merger with Comcast, restructuring, and - following the Enron scandal - close scrutiny of AT&T's financial statements. Leadership succession is also hotly debated, as chairman Michael Armstrong will be leaving to head up the newly minted AT&T Comcast Corporation this year.

Speculation over the broadband merger was one of the biggest telecom stories of 2001. The rumor mill was operating at full throttle until the Comcast announcement in December. "In general, I think there was a lot of misinformation,

says Mike Goodman, a senior analyst from The Yankee Group, who covers the Comcast deal.

"Every other week I used to read in The Wall Street Journal that someone else was coming close to an agreement to buy AT&T Broadband. Almost as though when Mike Armstrong brushed by someone, he was there to talk about broadband."

PR takes undeserved blame

AT&T can never hope to escape the rumors, and its PR team may take some of the blame, both for not responding to them and for the level of negative media that can gather around such a big company.

This is particularly true in the telecom industry, which is facing one of the toughest periods in its history. "When a company is as under siege as AT&T,

says Gershon Kekst, president of Kekst & Company, "and has been going through one major business event after another, each requiring complex explanation, you get into a situation in which you want to shoot the messenger.

"Invariably, a company in that position is taking hits in the investor, employee, and press communities. It begins a chain reaction, with one hit leading to another,

Kekst adds. "The easy thing to do is sit back and say, 'Boy, their PR has a problem.' But I can tell you from personal participation and observations, it is rare that a corporate communications department remains as solid, focused, and committed as these guys do at AT&T."

Martin, who was appointed EVP in November 1997, heads up a team that is vastly different than any other in AT&T's history. In 2000, PRWeek reported that the PR department had a staff of 250, which was down from some 440 in 1996. Now, just 186 make up the PR departments. AT&T is still in the midst of a restructuring that began at the end of 2000, which divided its PR into four divisions: business, consumer, broadband, and wireless (which has since been spun off as an independent company, with the PR unit headed by Adele Ambrose).

No room for an agency

Prior to the reorganization, AT&T's PR was already relatively decentralized.

But now the roles are strictly focused on the different units, with VPs heading up each division and reporting to Martin. The company has never employed PR agencies to any great extent, using Burson-Marsteller and Kekst, among others, only regionally or on a project basis.

Part of the reason the company doesn't feel it needs an AOR may be rooted in PR's close ties to senior management. "One of the things I've always been proud of is the head of PR has always sat at the decision-making table at AT&T - going back to the 1920s, when Arthur Page was in charge,

Martin says. "The assumption is that you are going to contribute to business problem-solving, which happens throughout the organization."

VP Michele Tringali is COO for the PR department, as well as head of employee communications. Her job includes developing training programs for the PR staff, including technical and business classes. "It makes the PR people much more effective if they can talk to a standpoint of a particular technology - they're more effective counselors,

she explains.

Tringali also manages internal publications, such as an e-newsletter and a newly overhauled strategic publication called AT&T Connect.

PR is also closely aligned with the sales force. One PR manager is assigned to each of the 13 regional sales VPs to provide counsel on building relationships and contacts, and identifying customer segments.

However, convincing the sales team it needs PR help is not always easy.

About six years ago, AT&T had to curtail its sales work to focus on public policy issues related to the 1996 telecommunications bill. "When we reembarked on this, it wasn't always welcome,

explains Steve Clawson, VP of PR for AT&T Business. "They weren't sure we were in this to stay.

Sales people also resented spending time on PR when they could be selling. To overcome the objections, the PR divisions did some self-promotion, circulating case studies on successful PR-sales collaborations.

The AT&T brand plays a significant role in its PR approach. Sara Lipson, VP of planned asset management, is responsible for all aspects of the brand, and reports to Martin. "It's really a great organizational marriage, because all of us believe the most effective campaigns a company can have are consolidated."

Martin previously worked on AT&T's advertising, and sees the brand from a holistic point of view. "One of the interesting things we discovered is that people feel they have a very personal relationship with the company, which is surprising.

When restructuring was announced, research done by AT&T revealed that even large shareholders were more concerned with how the change would affect their service, not their stock. "They defined the relationship in terms of a customer relationship."

Which may partially explain why AT&T continues to engender such constant speculation and headlines. "I sometimes envy my colleagues who spend every waking moment wondering how to get into the press,

Martin reflects. "I spend every waking moment trying to stay out of it."

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