In the old days before competition in the telecommunications business, even planners didn't plan at AT&T.
In those days, Bell System engineers described what they needed to improve and expand the nation's phone system. Then teams of financiers took over and the money machine that was American Telephone & Telegraph Co. went into action.
Today, at the mammoth tree-shaded facility here that has become the Bell System's strategic hub for 3,700 employees, planning dominates.
"Planning is a symptom of disorder," AT&T Chairman Charles L. Brown told the company's local phone company presidents this spring. "When the future seems reasonably predictable. . . planning goes by another name: 'management.' When times are changing, there are planners everywhere."
The disorder Brown was referring to is the most complex corporate reorganization ever undertaken as AT&T complies with the consent agreement that settled the antitrust suit the Justice Department initiated in 1974.
The task before the thousands of AT&T planners almost defies comprehension. "We're undoing the fabric of the business and trying to put it back together again," said John Segall, AT&T vice president-corporate planning and financial management.
By the end of the year, for example, each of the company's 1,500 phone center stores has to be analyzed to determine which is best suited to be selling the simple dial-tone service customers will get from their local phone companies. Others will become sales outlets for telephones, coming from "Baby Bell," AT&T's unregulated offshoot.
But the most significant provision of the agreement reached last Jan. 8 requires AT&T to divest itself of its 22 local operating companies by January 1984 -- D-Day, it is called here. That requires an evaluation of each asset to determine whether AT&T or the divested subsidiary keeps it.
No one knows the final shape that the new AT&T will take, but the divestiture will shrink a company with assets of $138 billion into a $43-billion enterprise.
"It's going to be a smaller company, more like an industrial company, but we don't even know how big we want the company to be in, say, 1987," said Edward Goldstein, assistant vice president-financial management.
Within weeks of the announcement of the agreement, six study groups of AT&T operating-company presidents were named to plan in the areas of benefits, labor, personnel, staffing, future operating company organization and training. By May 21, four thick loose-leaf volumes of procedures were sent out to phone company presidents, along with separate divestiture guidelines.
The first key step in the process, drawing boundaries for the local companies -- or "LATAs," for local access and transport areas -- is nearing completion. Assistant Attorney General for Antitrust William Baxter has been supervising this closely; according to one Bell System official, he has been "sitting in on a large part of it."
"Clearly you can't determine which assets will be assigned to the operating companies and which will be transferred to AT&T until you know which assets are on which side of the LATA boundary," Lawrence Garfinckel, assistant vice president-line of business management, explained in a recent AT&T Management Report.
The process is also not without false starts. For instance, last month U.S. Judge Harold H. Greene required several modifications for approving the agreement between Justice and AT&T, including giving the divested local companies the lucrative Yellow Pages operations and permitting them to enter the customer equipment business, potentially in competition with AT&T.
"We had to go back to square one on our selling strategies," said Lester L. Hendrickson, director of strategic planning. "That's been the state of our world for a number of years, but there was great relief that the judge acted, and this brings us another step closer to getting the thing done."
As complex as the logistics are, they are no more complicated than the psychological changes in the corporation. For AT&T employees, D-Day also represents the end of one of the world's most powerful and distinctive corporate cultures.
The belief in one Bell System, a so-called "service" ethic of almost 70 years, and the emphasis on shifting managers from one Bell System company to another to broaden their knowledge of the telephone business, have been basic tenets for AT&T's 1 million employees.
"It was a learning experience like jumping into a pool of ice water," said Paul Villiere, vice president-network services, who has been a key planner in breakup issues. "People were asked to do things that made absolutely no sense to them. There was resistance from people at all levels and of all ages."
Over the next decade, AT&T officials hope to change the Bell System from what had been a mammoth, often slow-moving and largely regulated utility into a high-technology telecommunications company. The transformation will lead AT&T into computers, home information systems, satellites and mobile communications systems like cellular radio, in competition with a host of aggressive market-oriented companies.
"Great institutions are not known for their ability to turn on a dime, and AT&T has not had a distinct system to bring products into revenue-proding status," Archie McGill, vice president-business marketing, observed.
Randall Tobias, AT&T vice president-residence marketing, is in the middle of developing just such a system, a method for increasing the company's ability to compete for customers of telephones and other electronic equipment. Only in the past 10 years has competition emerged to tap this now booming market.
"Our marketing culture was one of taking orders, but our success in the future will be based on our selling customers," Tobias said. "We will be successful only to the extent that they get a better value from us."
As part of the reorganization process, AT&T's sales force will ultimately be divided into four marketing groups; teams in both the operating companies and the remainder of the corporation to market long-distance services; one for computer-type communications services through the American Bell subsidiary, and a fourth that will sell AT&T equipment.
Thus, the Bell System that Paul Villiere has known for his 32-year career -- and that Chairman Charles Brown has been a part of for four years longer -- is dead. McGill, as much as anyone, understands and even represents those changes.
"Success," he says in aggressive tones foreign to the conventionally placid AT&T style, "will be defined by relative share of a worldwide market."
MGill, one of the few top executives whose career began elsewhere, brought that kind of talk to AT&T from International Business Machines Corp. in 1973 and was involved in new AT&T marketing and planning efforts long before the divestiture decision.
In fact, much of what is going on at AT&T, including new line-of-business planning, was put into place before January in order to meet the government and marketplace requirements of the Federal Communications Commission's Computer II decision.
That decision, which takes effect next year, permits the company to offer unregulated, computer-driven telecommunications services such as the data communications network announced recently by AT&T's American Bell subsidiary.
The realization that the company could in fact do what the Justice Department had been seeking and split itself into pieces appears to have dawned in 1980, on a task force led by Villiere.
That group was set up after the House Commerce Committee passed a bill effecting many of the FCC's deregulation efforts, restructuring the company and limiting its activities. Although the bill died as a result of concerns about its impact on the then ongoing antitrust suit, it ipired a planning group that had a profound impact on the Bell System.
Villiere recalls that it consisted of about 40 people who met in groups of 10 to 12 day after day. "It was hard in my mind to answer the question. . . Can you take apart a nationwide communications system? We decided we could make some of the changes, but realized that all of this is very high-risk."
Yet even at that time, Villiere said, the planners were not working on a total divestiture of the operating companies. Only three -- Pacific, Cincinnati, and Southern New England -- were to have been spun off under a proposal discussed in the Carter administration and only these had gone through the divestiture scenario in great detail, he said.
The efforts to comply with the Jan. 8 agreement began amid near chaos. "For the first three months after the settlement was announced, things were extremely hectic," Hendrickson said, referring to the thousands of AT&T employees coming here for planning sessions. "The parking lot was overflowing; you couldn't get a seat in the careteria or the library.
"Now," he said, "we're back to normal employment, although there are still many long evenings."