The New Bell System is The Old Bell System

In a NY Times piece today there is a long discussion on how ATT is trying to adjust its workforce to meet the challenge from Amazon, Google, Netflix. Well good luck guys!

I had spent, on and off, about ten years in the System before and after Divestiture. Early on in NY Tel and Bell Labs. Frankly it was the most rigid environment ever. Only after doing a few dozen start up and even Corporate America the old Bell System was designed for drones.

For example, when I went to NYNEX at a dinner one night the head of HR said that the rule was that "The A students went to ATT and the Labs, the B students to Western Electric, and the C students to the Operating Companies" Furthermore in the Operating Companies you had grads from fourth rate schools like Manhattan College, I spent time there, and few if any from say Harvard or MIT (again went there too). Schools like Manhattan educated great swarms of followers, for NYC jobs, Con Ed, the Telephone Company, the Government. You learned how to separate green papers from pink ones.

Now along comes a world of competition. The Old Bell System approach is to set the walls up higher. Remember that the new ATT is really South West Bell, an Operating Company filled deliberately with all those C students.

But wait! Their competition such as Google, has A+ students from MIT and Stanford. The world is now technical, and how do we see the paper sorters competing? Not well.

So according to the Times the ATT CEO is trying to retool. Good luck. It is a 40 year task. First they cannot attract the great students. For when they do these people will report to the old C students and the smart one do no tolerate fools very well, so they will leave, and the old guard will say to themselves that the new ones were bad to begin with.

The CEO is now trying to revamp the company. The Times states:

In an ambitious corporate education program that started about two years ago, he is offering to pay for classes (at least some of them) to help employees modernize their skills. But there’s a catch: They have to take these classes on their own time and sometimes pay for them with their own money. To Mr. Stephenson, it should be an easy choice for most workers: Learn new skills or find your career choices are very limited.

Now that really makes sense. You want to educate C students on their own dime to become A+ students. Well fish without wings will have trouble flying. 

The article continues:

By 2020, Mr. Stephenson hopes AT&T will be well into its transformation into a computing company that manages all sorts of digital things: phones, satellite television and huge volumes of data, all sorted through software managed in the cloud. That can’t happen unless at least some of his work force is retrained to deal with the technology. It’s not a young group: The average tenure at AT&T is 12 years, or 22 years if you don’t count the people working in call centers. And many employees don’t have experience writing open-source software or casually analyzing terabytes of customer data.

Yes, 22 years, you have to remove the call centers. Is there a way to "train" someone to be a high techy? Not really. Never works. These people have been encultured  to be followers, paper sorters, understanding the GEI, the General Executive Instructions. Yes there is or was a "book" that you followed. For the most part he has a workforce of 220,000 chosen to do what they are told, by the book. The world has changed however.

Then there is this statement:

But Randall said his brother was not necessarily like the rest of the work force because there will always be hard, outdoor tasks for people like him. “There will be people turning screws and digging trenches. I’ll be long gone before that is over. But other guys I know in Oklahoma will do a skills pivot” with additional training, he said.

The problem is that technology will make this outdoor workforce obsolete. Strange the lack of discussion on wireless here. It is wireless that will replace lines, be they copper or fiber. 5G will be Gbps to each users from towers that can be set up in a day or actually purchased and facilitated by the customers themselves! As Tom Sawyer go the others to white wash the fence so too can a carrier get customers to create and operate their own network. That is thinking outside the box. ATT is still justifying copper lines on poles in Oklahoma. That is why Google may win, if it gets rid of that fiber business. But alas most likely it will be some other new Creative Destruction entity which will do that.

And the key risk is that if one tries to bring in better people, like Google, the existing culture will generate "antibodies" and attack and eliminate the new. Happens all the time. It is a Gresham's law applied to competence, bad employees chase out the good. Right now ATT has a somewhat monopoly in wireless along with Verizon. That is the survival hook for a while. The barrier to entry is the license. The risk there, however, is that when unlicensed bands can become more effective then the value of the license deteriorates. Things always change.