AT&T's announcement yesterday that it would withdraw from the consumer phone market is an interesting sign of changing markets and the potential failure to adapt. The New York Times today said that,
“Despite losing an average of 10 percent of the long-distance market in each of the last three years, AT&T is still the field's leader, with 30 million customers - a 25 percent to 30 percent share of the market, according to Tim Horan, an analyst at CIBC World Markets. It also has 4 million local phone customers. But as a group, the Bells' share of the long-distance market is now 35 to 40 percent - bigger than AT&T's, Mr. Horan said. Together, the Bells now have approximately 40 million long-distance subscribers, he said, compared with about 8 million at the end of 2002.”
It seems like they are selling “typewriters” and “blacksmith tools” for those old enough to remember these things. Also, a few of you may remember when AT&T was the blue chip stock of older retirees? My uncle had some and it traded in the 60s. I think it paid a safe dividend above markets rates. Now it has fallen from 22 to 14 in the past year.
I worked with AT&T as a consultant at a number of points and the people were always great. In the mid-80s I led the development of several CBT programs to help their sales force with the transition from simply selling telecom products and services to selling computers. I certainly take no responsibility for the results. Then in the mid-90s I was involved in the creation of a knowledge management system to support their call center consolidation. In this case, the major benefit was to reduce the learning curve as people took on new areas of customer service. This effort was very successful and got adopted widely across the organization.
I find it a bit sad to see such a major US institution fall on such hard times. Interesting to compare it to IBM, which sold the typewriters I referred to earlier. I also did work with IBM in the mid-80s. In this case, it started with a study of the competencies of their marketing reps and continued with several courses on how to be a more consultative sales person, although at the time the “sales” word was not used and all men wore white shirts and ties. The radical ones wore blue shirts and ties and as a consultant you were expected to dress like the more conservative ones. I recently ordered, "Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround," to get the official version of their transition from Lou Gerstner.
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