AT&T: Lesson from the Crypt #7: Don’t Outsource Thinking

“Don’t cross THEM,” a friendly fellow officer advised me on my first day at AT&T.  “THEY’ll ruin your career.”

THEY were everywhere, bellied-up the conference table at every meeting, decks of viewgraphs always at the ready (PowerPoint penetration of AT&T was slow).  Nothing could be done until we knew what THEY thought – and not that much was done after.

THEY called meetings; THEY facilitated meetings; THEY assigned followup; THEY designed Board meetings and presented to the Board; THEY often called for more of their own kind as reinforcements.  And THEY could wreck your career.

THEY were the consultants.

AT&T had already discovered outsourcing when Bangalore was still a sleepy village and the streets of Shanghai were clogged with rickshaws.  AT&T outsourced thinking.

In Freedom Evolves, Daniel C. Dennett writes:

“…the brains of domesticated animals are significantly smaller than the brains of their nearest wild kin, and this is not just a by-product of selection for large muscle mass in animals raised for food.  Domesticated animals can afford to be stupid and still have lots of offspring, for they have in effect outsourced many of their cognitive subtasks to another species, us…”

AT&T outsourced thinking to THEM – the consultants.

They came at high day rates and in return for large retainers from every major consultancy in the US.  You know who THEY are.  Some of you even began your careers as consultants yourselves.

THEY were on all sides of every major strategic decision and every minor tactical decision AT&T made.  No idea could be advanced unless it was consultant-vetted.  Warring senior executives each had their own phalanxes of consultants drawn up to advance their agendas (whose agendas? the consultants or the executives? impossible to tell).

THEY advised AT&T to divest its nascent wireless business at the dawn of the cellular age because THEY knew – their studies showed it – that there was no market for the poor voice quality that cellular technology delivered.  THEY advised AT&T to buy back into cellular at an enormous price twenty-five years later – same firm if not the same consultants.  I don’t know but suspect THEY also convinced AT&T to spin AT&T Wireless back out again just as the landline business went to hell in a hand basket.

THEY – most of them, at least – were against starting AT&T WorldNet Service.  No one would use the Internet before broadband, THEY said, and no one would use a service that unreliable.  Probably wasn’t nice of me to dredge out their old reports on why wireless would never catch on.  But (full disclosure) I had my own consultants.

John Walter’s nine month career as AT&T President and COO wasn’t a happy one.  But he did ban THEM!  All of THEM!  There was stunned silence in the meeting rooms.  It’s not clear whether banning the consultants or closing the executive dining room in Carpetland is what finally did him in.  It was a noble try, though; and was immediately reversed as soon as he was gone.  Maybe somebody should have told him what THEY can do to your career.

Outsourcing thinking, though, will cause the brains of your company to atrophy.  It’s a bad idea.  I’m sure it never happens at the new AT&T (formerly known as SBC).

Lesson from the Crypt #1 is don’t manage for quarterly results.

Lesson from the Crypt #2 is you can’t innovate flawlessly.

Lesson from the Crypt #3 is vertical integration doesn’t work anymore.

Lesson from the Crypt #4 is don’t send your losers to heaven.

Lesson from the Crypt #5 is navel gazing is a bad culture.

Lesson from the Crypt #4 (sic) is the emasculation of Golden Boy.

(yeah – I know – I recycled the number).