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May 28, 2004

News & Opinion: Armstrong at AT&T

By: 800-CEO-READ @ 10:16 PM – Filed under: Management & Workplace Culture

There is a feature article* in Wednesday's (5/26/04) Wall Street Journal about C. Michael Armstrong. He is retiring as chairman of Comcast after forty years in business. It will be interesting to see how history treats him as a business leader. He has taken hits for his reign as CEO of AT&T, but many are looking at that period again with the information now available.
In Armstrong's words from commencement at Shenandoh University: "What we didn't know was that WorldCom was fraudulently cooking their books for $6 billion in the year 2000. Qwest was federally investigated, individuals criminally charged and it has restated billions of its financial reporting."
Here is the business book angle of the story. This from the WSJ article:
A low point for Mr. Armstrong came in 2002, when he learned that Mr. Bossidy devoted a section of his book "Execution: The Discipline of Getting Things Done" to Mr. Armstrong's mistakes. The three-page section said AT&T's strategy went wrong because of bad personnel choices and faulty assumptions. Mr. Bossidy and co-author Ram Charan noted that long-distance rates declined faster than AT&T assumed and that it took AT&T longer than expected to execute its plan.
Writing before WorldCom's fraud was disclosed, the authors said AT&T "did not take into account its organizational inability to compete against aggressive rivals in a fast-moving marketplace."
Mr. Armstrong complains Mr. Bossidy never called him for comment. A spokeswoman for Mr. Bossidy declined to comment on why he didn't speak to Mr. Armstrong before publication. She also said the comments in the book about Mr. Armstrong "were not personal" and were "consistent with widely reported accounts of the company's strategy."
Mr. Bossidy declined to comment on whether WorldCom's fraud changes his opinion of Mr. Armstrong's strategy.
Making matters worse, Ralph Larsen, a former AT&T board member who had been one of Mr. Armstrong's biggest supporters, wrote a blurb praising the book that appeared on its back cover. Mr. Larsen says that when he read the galleys of the book, the section about AT&T wasn't included. Mr. Bossidy's spokeswoman says that the AT&T material was in the galleys.

I am used to seeing this sort of he-said/she-said in the politics, but not in the small world of business books.
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