Interview Segments on Topic: Challenges/Accomplishments
“Jack” Koten is a founding director and first president of the Arthur W. Page Society. During his career he worked in a variety of operating, financial and corporate communications departments for Illinois Bell, AT&T, New Jersey Bell and Ameritech Corp.
At Chicago-based Ameritech Corp., one of seven telecommunications companies divested by AT&T in 1984 as the result of a federal government antitrust lawsuit, he served as Senior Vice President of Corporate Communications. He also was president of the Ameritech Foundation, which made grants totaling $25 million annually to education, economic development and cultural institutions.
After he retried, Koten organized The Wordsworth Group, a consulting firm dedicated to assisting non-profit organizations to improve their management practices, reputation and revenues. He has received numerous awards and honors, including honorary doctoral degrees from two institutions, and was inducted into the Arthur W. Page Society’s Hall of Fame in 1995.
Block: We’re talking to Jack Koten. Jack’s a retired senior vice president public relations of the Ameritech Company which was absorbed into, what is the name, SBC which is now, if you haven’t seen the TV commercials, is now AT & T. Jack and I shared an experience 25 years ago. When the AT & T and the Justice Department of the United States settled an anti-trust suit that affectively broke up the Bell Telephone System. And which is where Ameritech came from. It was the Midwest piece of that breakup. And I wanted to talk to Jack about I saw my recollections of that were from the AT & T point of view where we were in affect had devised the announcement plan but Jack was in the telephone business side of it. And it would be interesting to me and I hope to everybody else to get his recollections and whatever lessons he may remember from that because AT & T was sort of the top of the pyramid. It was the holding company that owned all of the Bell Telephone Companies. But the fact of the matter the employees, for the most part a million of them, were immediately employees of the telephone companies and the customers were customers of the Bell Telephone Companies to AT & T so Jack saw that event, to put it politely, unfold from a different perspective than I did. And Jack talk to us about that. What happened?
Koten: Well I want to tell you. It’s a very good question and actually came somewhat as a shock to us even though the trial had gone longer than the negotiations had gone along for some time. But when the word was finally released that the break up of the Bell system was going to actually take place in January 1, 1984. It really came as a shock. I think to employees and particularly to employees in the operating companies. The company I was involved with at the time was Illinois Bell, which was designated one of the five Bell companies which were going to become part of the Midwestern Company. There were seven companies operating companies that were created from what became Nine X on the east, Bell South in the south, Southwestern Bell, US Western, Pacific Bell but we were located in the heartland and in our company was composed of the operating companies in Wisconsin, Michigan, Ohio, Indiana, and Illinois. And I would say that the very first sense besides the shock of it was a sense of divorce. Like there was an enormous divorce in the family. I mean we could not believe that something like this was going to happen. AT & T had been providing cover for us for years. We felt very much a part of the Bell System and part of the Bell family. In fact the entire Bell system was regarded by most of the million employees that you cited is a large family. We were all dedicated to providing service to our customers, to meeting their needs, and to doing community service type things and it was an extraordinary work experience. So the fact that this company was going to be severed from AT & T was at the outset was was quite a shock and employees were I would say at the outset sort of dazed. They were disappointed. They were mad at the government. They were mad at the FCC. They were mad at the Justice Department. Mad at most at AT & T for allowing such how could this actually happen. I mean who in their right mind would break up the world’s largest company even though it was a monopoly but a company that people liked, that provided good service, that provided good service at low rates. It just seemed incomprehensible to those of us who were on the street so to speak and working out in the heartlands. So when we recovered from that then the question became well what do we do about it.
Block: What do we do now?
Koten: And the thing that really took place was all of a sudden this creation of a will to, by God, if we are going to be separated from the Bell system that we were going to become the best of the operating companies and provide the best service and try to have the best relations that we could have with our customers and the commissions. Well that bit of bravado was much easier said than done. Because one of the first things that I wound up having the responsibility for was picking out a name for the new company. And that I created of course as one always does a small committee made up of representatives of the five companies and a few other people and we hired our ad agency and consultants to help us with this project. And of course everybody had a different idea about what our name should be. And the key thing that became important to us was we had been Illinois Bell Company, we’d been Wisconsin Bell, Michigan Bell, Indiana Bell, Ohio Bell would we keep the name Bell as part of our new. That’s the key, which we were entitled to do. And some of the companies did. But in our situation that became not only was it controversia,l but it was decided that we if we’re going to be separated, we didn’t want to have anything to do with what had gone on in the past. We were going to become a separate entity and that we were going to show the others how this we could make this work and work to our advantage. So there were those who held out for being Midwest Bell, some of course wanted to keep the Bell name called Midwest Bell. Great Lakes Bell, different combinations of names that were actually brought forth and suggested to us. But one of the things that we kind of claimed immediately we started doing research on what names would be most acceptable and forward looking because we wanted to be a forward looking company. And our research showed us that the words that signified in the telecommunications industry progress and future and being innovated words like information and technologies led the way. So we decided if we could create a name that had information and technologies in it that that would be to our advantage and then looking at the lineup of companies. One of the few suggestions I made that seemed to get universal approval immediately was that we ought to have the word American be our first. Because if we were American we would be the first in the alphabetical order of all the companies including AT & T if they chose to continue to be American Telephone & Telegraph Company. So in short order we adopted the name of American Information Technologies Company and that became our name. The trick then became if that’s the name, where all does that have to appear? Stock certificates for example. We were going to have entirely new stock issue and so all of our certificates had to be printed and made and we had to use the name and what do we pick as a symbol to put on this certificate because every certificate has a three dimensional image so to speak and after much discussion we decided to use the god mercury and we used that. Well there was controversy because mercury was and we’re in the Midwest of of course. Mercury was always half nude. And that bothered some of the people that we had.
Block: [inaudible] slippery.
Koten: Right slippery but nevertheless that all straightened out okay and we decided well what color do you want the stock certificates printed. Well you could have them brown or red or whatever. And of course our treasurer immediately said well they have to be printed in green because green signifies money so anyway that’s one of those things that happened in that area. But that just was one of the byproduct type of things that happened. Immediately we needed to develop an advertising and branding type campaign that suggested that we now no longer were Illinois Bell and Ohio Bell etc. That we were American Information Technologies. Our stock ticker symbol was going to be AIT and that became very popular immediately and we started using that in some of the employee information. But the trick was to begin to tell our employees that we were still in the business of providing customer service. We still were regulated by the state commissions, only now that we had the FCC also providing oversight. Our playground shifted from just being Illinois or Indiana or Michigan now to Washington so we had a much bigger arena that we had to adapt to and my boss suggested that in addition now to worrying about what was going on in Springfield which had been my main government relations thing that I ought to start begin to worry about what was going on in Washington as well because we needed to have a Washington office. So as a result our lives began to change dramatically. But the, but the key thing was our, our employees. Employees were the most reluctant to give up the past and enter the future. There were the ones that wanted to yeah let’s go out and really show t hem that we can do this but more and more there was talk about the good old days when we were part of the Bell system when we were part of Ma Bell and all of that. And there was some sense that when we started to repaint the trucks from with Illinois Bell on and having the Bell symbol on it. [03 Jack Koten starts here] with Ameritech is the name that there were people that were not enthusiastic about that. One of the things that I wound up having to do is come up with a graphic design for the how we were going to display the name Ameritech and then that meant choosing the colors. We had a superior [inaudible] Suttoner was the graphic designer, internationally known came up with a beautiful logo and forward looking symbol which we put on the stock certificate and used in our advertising all that. But the color that we chose to use was brown. And we picked brown because it was distinctive. It is a distinctive color. Everybody else had been used to Bell system blue or some combination of that and so we wanted to be different so we had brown. and there were people in the officer group that questioned me on why would we ever want to use a color like brown. And I had to suggest to them that there were thousands of trucks running around the country with brown. UPS and that it wasn’t that we were introducing brown as a color. And also reminded that most people’s favorite sweetness was chocolate. And chocolate was brown and so that we would be in good company. Now I have to admit those were sort of limp reasons for doing that but in the final analysis that it began to take and the people began to accept that as being this is who we are.
Block: Transfer their allegiance. But I’m going to take you back to the human part of it, of breakup. Because this is the story that I don’t know. A couple of things happened. First of all there are no longer Bell system employees. They must have wondered where did my pension go was the kind of thing that might have come up. I don’t know. Also in the terms of the breakup there was one stinker business as you may recall which was who sells or leases the telephones. Because there was a dead last loser. You could not make money and there was in the Justice Department and the judge decided that was AT & T business. So you had many employees who were installers did repair work so on and so forth that were in limbo. They weren’t going to work for you anymore. They had to become AT & T employees or do something else. And of course you had customers. I remember where I was one of the television journalists entrapped me in an interview on the air by handing me three telephones which he had disconnected from his apartment he said and handed them back to me and said “Now what do I do?” So what happened to the customers and the employees in that in that it was a cultural shock for all of them at least those who cared.
Koten: Well it was a big cultural shock for the customers about the, and confusion about the telephone instrument itself, and the connection. And we did our best with it was what I would call customer information pieces that were direct mail. We used advertising. We used letters directly to the customers trying to explain the difference but I have to admit that the job was long and arduous to get people to really understand that we provide the service up to a certain point and then the inside wiring was either on their own or that we would do it for a special fee. It was no longer for the phone instrument was whatever instrument they might have back to the central office that that had been separated. And that was a point of great dissatisfaction as far as customers were concerned. Customers were confused about who to call for what whether it was repair service and if it was repair they’d be ask. Well where is it? I don’t know where my phone. The phone is dead. I don’t whether it’s outside or inside or what. You know and that was that I’d say as hard as we tried, in all the states to overcome that, that experience ultimately turned out to be the best teacher as far as the customers. After you’ve had a few run ins here and there, that’s a bit of a problem, the fact the customers got two bills now instead of one bill because of long distance services were provided by a different supplier, all of that is made time and time again when you go to a party or a meeting or whatever is they said the break up of the Bell system is the stupidest thing that the government has ever done. And then why did you let it happen. It was always our fault. It was like something gee we just said go ahead. Break us up. We don’t care. And time and time again that required you know kind of patience and being calm relatively speaking. To respond to some people who were quite irate. In the meantime the employees particularly the contact employees whether they were the service reps [inaudible] they had to deal with the customers just like the installers and repairmen who went out. And we equipped all of them with a little what I was going to call cheat sheets but I won’t that’s the wrong term to use here but with information pieces. Key talking points about what how to respond to these questions. And I would say that the majority of employees handled that pretty well. But as you well know not all employees are gifted with the ability to respond to people particularly irate customers. If the customer was friendly and nice usually that went pretty well. But if the employee was met head on either over the phone or face – to – face, those situations caused concern for us. We had a halo effect immediately after the breakup in ’84 and’85 where we had the Ma Bell influence carried over which we benefited from and then as customer experience multiplied, customer attitudes towards the service group providing dropped and all of that then required a regeneration of ability and of course in our company as you well know in the Bell system, the public relations department handled the customer information job. They were responsible for the advertising for the directory introduction pages everything that was explained to customers as well to employees funneled through our department. And I would have to say that our public relations people in the department understood this. They were willing to give of their time and energy and work extraordinary amounts of time to try to fix these things. But it was so pervasive that it just didn’t ever seemed to go away. Our advertising agencies and firms that we hired to help us with our customer information, they all worked diligently but it was a time factor that finally began to work in our advantage. When we would go to meet with state legislatures or and meet with the Congress. I remember meeting the representatives of various delegations in Washington, and of our congressmen and they all they are there in Washington. They had every opportunity to put their finger in the dike. But do we see much finger in the dike sort of thing. They are down there saying “I’m getting nothing but complaints back in my district about what you’re doing” like we should have actually tried to do something about it. And the fact is that it was a long pull. Now from your perspective you’re dealing with a whole different seam but we felt that we were in the field. We were in the front lines. And that the best thing that we could do is try to do our very best and not let the negative publicity that we got or comments whether it was on television, or whatever, really begin to get us down, and slowly that all began to turn around. I like to say that it was directly because of our efforts but it really was because of the efforts of really about 100,000 employees like when we were created, we were the 30th largest company I mean nobody really appreciated how big AT & T was. We came out as the 30th largest company in the United States. And it there were a lot of customers a lot of employees involved.
One of the things before we go to the next question and I just wanted to chip in is and thank you because this is stuff that I was to be happily involved in. But the judge gave us 18 months from the time we agreed to the settlement in order to actually operate separately. So you had your employees and our own…in limbo not the whole 18 months but a lot part of the time they many didn’t know which side of the dividing line they were going to land on or whether they would go to work for AT & T. Did they stay with Ma Bell. They’ve had angry customers. They were angry. And I think what probably did pull the whole outfit through all of this was that I, I used to say that the old Ma Bell was one third business, one third family, and one third religion. And it was a terrible shock but I believe that attitude that services our business many customers may not necessarily believe that every day, but service was our business and so we’re going to get through this mess and come out the other side. And the other thing is that it’s a high irony in terms of how government works in a democracy because it was 25 years ago more or less, that this happened and the whole darn thing has been put back together with the consent of the same Justice department. So, several hundred thousand employees went on the Bataan death march several tens of thousands of them lost their jobs and their careers altogether. Unknown amounts of marketing money was spent as you just described to explain we’re Ameritech and we’re here to serve you and it wasn’t very long that you’re AT & T again.