AT&T announced a shocking decision: It would fire 30,000 people and cut its payroll by 40,000 jobs. The company would split into separate long-distance, equipment, and computer companies, and the job cuts followed that decision. The stock market reacted to the news by adding $6 billion to AT&T's stock market value.

CEO Robert Allen was met with considerable criticism for his decision. The stock market reaction increased Allen's own stockholdings and options by about $5 million. When asked about the fact that the layoffs would make him richer, he reflected on the decision. "Did I make the decision [in order] to increase my personal wealth? Hell, no," he said. "Increasing shareowner value is the right incentive for me to have at AT&T. Is it the right incentive for me to affect 40,000 people? . . . I don't know. . . . Is it fair? . . . I don't know if it's fair. I don't make the rules . . . it's the worst part of my job. I have the personal experience of saying to people, 'There's no place for you here.' It's not fun. I don't like it."

Why the need for the downsizing? AT&T's $7.5 billion purchase of NCR mainframe computer company five years ago may have been a bad decision. Allen concedes that AT&T took a bath on NCR because "we didn't make it work." First, AT&T had tried to build a computer business internally, and failed. Then it bought NCR, which was at the time making around $350 million. After the purchase, nothing went right. Last year the computer business lost an estimated $600 million before taxes-not counting the $1.6 billion that it cost to restructure and get out of the business of making personal computers.

Part of the criticism facing Bob Allen and other CEOs who make downsizing decisions has to do with fairness. Is it fair that companies are eviscerating their payrolls, people are losing jobs, and top managers retain high salaries? Some don't think so. They believe that top executives and boards of directors, who make such decisions, should step up and share the pain with employees who are affected. Shared sacrifice might go a long way toward making these decisions a little more palatable.

SOURCES: A. Sloan, "For Whom the Bell Tolls," Newsweek, January 15, 1996: 44-45; C. J. Loomis, "AT&T Has No Clothes," Fortune, February, 5, 1996: 78-80. © 1996 Time Inc. All rights reserved.

ORGANIZATIONAL REALITY

3M's Ten Commandments for Managing Creative People

3M is one of the most visionary and adaptive companies in the world, and it owes its success to its creative employees. The company makes 66,000 products as diverse as fire hose linings, surgical gowns, bingo supplies, and Scotch tape. So what is 3M's secret? 3M keeps the magic going using ten commandments for managing creative people. In a nutshell, they are:

1. Give folks time to follow their muse. Technicians are free to devote 15 percent of their time to any project they wish.


2. Create a culture of cooperation. Everyone is encouraged to call up any other employee and tap into their expertise. Part of every person's job is to share knowledge-on the phone, in person, by e-mail, or any other way.


3. Measure your results. Each of 45 business units measures not only sales, earnings, and market share, but also what each business unit has done that is new.


4. Stay ahead of the customer. The most interesting products are ones that people need but can't articulate that they need.


5. Stage a lot of celebrations. The top awards are given on 3M's Oscar night, where some innovators are inducted into the Carlton Society, a hall of fame for company immortals.


6. Be honest and know when to say no. Managers decide early if an idea just won't make it commercially, and tell the person who came up with it. The creator can then shop the idea to another part of the company, which might pick it up.


7. Make the company a lifetime career. 3M rarely lays off people, and depends on long-term employees who know the 3M philosophy. They reason that it's tough to fire a lot of people and then ask the survivors to be innovative.
   
8. Give your best managers assignments overseas. Half of the company's annual sales come from outside the U.S. The company believes that you have to live abroad to learn that customers have different tastes and values, and that there are different ways of accomplishing goals.


9. Keep increasing R&D spending. 3M has for 20 straight years, even in the tough times.


10. Don't follow everything Wall Street tells you. Play it prudently so you have a cushion of money to let your technicians chase their dreams.

SCIENTIFIC FOUNDATION

Introverts, Extraverts, and GDSS

How do personality characteristics influence individuals' feelings about group decision support systems? The authors of this study focused on extraverts and introverts to see whether they reacted differently to the use of electronically supported meetings. Students in a large public university participated in a laboratory experiment. In small groups, they generated solutions to difficult ethical decisions for which there is no single correct answer. The task, therefore, encouraged a great deal of discussion. The students completed the Myers-Briggs Type Indicator to determine whether they were introverts or extraverts. They were randomly mixed in small groups. First, they tackled an ethical dilemma in a group using a GDSS. The group used the GDSS to generate suggested solutions, and then the group members removed suggestions that had a low likelihood of solving the ethical problem. The members then voted on the suggestions that survived. Upon completion of the GDSS session, the subjects moved to a conference room and tackled a similar ethical dilemma in a face-to-face group using the same procedure. To ensure that the scenarios used did not influence the results, the order of their use was varied.

The results were interesting. Introverts felt best able to contribute with the GDSS. While introverts may be more uncomfortable in group discussions than extraverts, the GDSS environment gave them opportunity for equal participation. All of the participants produced more original solutions with the GDSS, but generated more discussion in the non-GDSS environment. If the quality of proposed solutions is important, the GDSS appears to provide the best forum to accomplish this. It supports idea generation with fewer comments. On the other hand, if the organization prefers more discussion and embellishment, face-to-face meetings might be better.

SOURCE: R. E. Yellen, M. Winniford, and C. C. Sanford, "Extraversion and Introversion in Electronically Supported Meetings," Information & Management 28 (1995): 63-74.

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