American Transtech
Expansion - April 1986

 

Greenfield Site And Teamwork Help Create Innovative Organization

Jacksonville, Fla. - The former stock and bond division of AT&T's treasury department transformed itself into an innovative new organization by moving to Jacksonville and creating a lean management structure built upon teamwork.

"For a 50% reduction in costs, an increase in quality and people being happier on the job, it was worth a try," says Bill Hightower; CEO and president of AT&T's American Transtech.

The company headed for a Greenfield site, a new location with no preconceived notions about structure, explains Gail Furman, director of shareowner services, who served on the team responsible for developing a business plan for the new company. "We felt we had a better chance to be successful relocating our operations than by staying in the same New Jersey location and occupying five more floors. We wanted to star fresh, and develop and opportunity to have a strong and human-centered culture."

"When we decided to move to a 'Greenfield' site, there was a margin for difference," agrees Nancy Dreicer, a vice president. "And the key to our success was people. So, part of our strategy was to create a culture where we had the involvement and high commitment of the people form the beginning. It was one of our major strategies; it wasn't just an afterthought."

Committed to its customers and to its employees, American Transtech has revitalized its workplace and work force since moving into the Jacksonville headquarters in 1983. Earnings have jumped while the company had grown from its original shareholder services organization to five separate business units including direct marketing, information distribution services, date security services and financial record keeping.

American Transtech's renewal, which only started with the relocation and continues today, centers on three areas:

  • Shaping a unique company philosophy that focuses on shared values and goals
  • Streamlining the management structure, from five to three tiers, thus increasing the communication between employees and executives
  • Redefining the workplace through socio-tech design in order to optimize both the human and technical sides of the business.

American Transtech's hold ventures into such new areas are being noticed by its parent organization. "As a social experiment, we've certainly generated interest among AT&T's leaders. We've received a lot of internal press and visitors, who have come to see what we're doing with our social structure and technical analysis. They are even implementing some of our ideas into the larger corporation, " says Furman.

 

An Evolving Organization

The vision for American Transtech came from former president Larry Lemaster, now at Bell labs, who was particularly sensitive to quality of like issues. Lemasters adapted to vital concepts of teams, communication and a concise management structure to the new company. In 1984, High-tower ran in AT&T's Olympic torch run. It was that year that he also took the presidency of American Transtech. Hightower was chosen as Lemasters successor not only for his expertise but also for his ability to move the vision forward.

"We let strongly that the human side had to blend with the business focus," explains Furmans. "We have a responsibility to the corporation a responsibility to our customers and a responsibility to ourselves. Our goal is to have a high-performance organization. What people contribute is a willingness to participate."

"Just the fact that we made it a three-tier organization, and stressed teamwork, cooperation, enlarged responsibility and authority - that in itself was quite different from what we had come from," says Susan Gottesman, director of human resources and technical training. "We have line managers here who are given revenue and expensive responsibilities, who are actually managing their own mini-businesses."

 

The Commitment to Culture

The essence of American Transtech is found in its culture, shaped by the succinct values that are printed on a 2.5 x 3.5 - inch pamphlet given to all employees, Nearly 60 employees, chosen by their peers, helped write the philosophy. Their shared values are what make the organization tick.

"Values are very personal and very important," says Hightower: "our experience has been that people with similar values tend to be able to work together more effectively as a team."

The team is the cornerstone of the company's philosophy. American Transtech wanted to take management decision-making and push it down to the people doing the work. Those people are organized as a team and, as such, are more willing to share information than people would be in an individual environment. And when all team members have the same knowledge, they are more likely to interact creatively. That team environment is reinforced by daily team meetings.

"The most exciting thing about American Transtech is innovation and I think that our corporate culture is on the leading edge of how companies would operate," said Dreicer.

 

Shedding Some Tiers

Effective communication was an important consideration when American Transtech leaders decided to restructure its management.

"Communications is the most important feature in an organization, and you don't always feel that with in a hierarchy," explains Dreicer. "So we consciously created a structure where there are only two steps between an officer and somebody who does the work.

"It's a takeoff on the phone game," she said. "The management principle is simple: The fewer people you have talking and taking messaged between the caller and receiver; the less chance for mistakes, this is a lean structure based on communication. With five layers, you have at least one layer watching people do the work."

The 15-member business team is comprised of the company's four officers, a line of business executives and directors with external responsibilities. The business team analyzed the external environment and determines goals and strategies for the company. The second tier is the managing system, where division leaders get resources, manage boundaries, pass information on, as well as lead and create the vision for the people who do the work. The third tier: the operating system, is the core workers.

 

Designing a Socio-Teach System

The company's physical move to Jacksonville as only the first of two major changes. The second began a year after the move when a socio-tech consulting firm was hired to mesh the social and technical parts of the business.

Though American Transtech had created a new management structure from the outset, it had essentially kept the same workflow and design as the former stock and bond division of AT&T. That combination of a new technical system and an outdated social system and an outdated social system had created some "disconnects between the way we were doing the work and the social structures," says Gottesman.

In 1984, Hightower contacted Starr Eckhold, who invited another consultant, Paul Gustavson, to work with him. "First Bill asked, 'Where so we want to go in the future? What so we want to be?" Then, he looked a the current situation and asked 'How is it being done now?" From that, we developed a transition plan," recalls Gustavson.

"American Transtech had done well with managing divestiture but now it wanted to grow new businesses. The company's external environment had also changed - their customers had new needs. So, it was logical to organize their structure around their customer's needs.

 

Choosing Jacksonville

American Transtech innovative company needed to be located in an equally progressive community. Jacksonville, with its positive partnership between corporations and city government, was the Greenfield site the company was seeking.

"The obvious cooperation between the public and private sectors helped convince us to choose Jacksonville," says Hightower.

American Transtech had given it relocation consultant's very specific criteria for choosing the appropriate city. It sought:

  • A similar business climate in the financial marketplace.
  • A suitable quality of life for its relocating employees.
  • A sufficient labor pool for financial services employees.
  • The ability to put up a building quickly, because the company wanted to erect the entire 460,000-square-foot building in less than a year.

Ground was broken in November 1983, and American Transtech moved into its computer room eight months later; the entire building was completed in 11 months.

The building itself is a physical statement of the company's culture. Built in the shape of a W, it offers a window view to most of its employees. Open space is the rule inside, which has only a half dozed traditional offices. The majority of the work area is designed to be functional, with movable partitions dividing the space.

The site selection search began with 60 cities, which were narrowed down by time zones. Since American Transtech's core business involves shareowners, it wanted to be in the same time zone as the New York Stock Exchange. The company, with other branches located in New York City and Wall Township, N.J., also wanted a site that had direct flights to and from Newark International Airport.

When 10 sites remained, the consultants and people from AT&T began visiting the locations. They identified themselves only as representatives of a Fortune 500 company, Furman says, because the move was still in the planning stages and the company was still undecided about where it wanted to go.

Jacksonville Chamber of Commerce quickly formed a sales team made up of Commerce, the Mayor's office and the Jacksonville business community. "The professionalism and cooperation of the team represented the critical difference in the selection process," says Hightower.

 

Integrating New Hires

The final step in American Transtech's relocation to Jacksonville was to hire employees from the local community. And once again, it was the company's unique culture that was stressed most.

"These people didn't even know what American Transtech was, although they knew what AT&T was," recalls Dreicer. "And we got up in front of them and said, 'we have this Vision. When you drive to work every day to work for this company, we want you to feel good about it. We want you to contribute you ideas and your innovations. We want you to be honest." And to some off the people in Jacksonville these were words that they had never heard before."

American Transtech started interviewing while its new facility was being built. In the beginning, company officials spent a half-day with every new class of 100 people, and service line leaders spent another half day. In those early classes, team meetings war held every day to discuss what the new employees were learning, and how they were going to handle the mammoth task of divestiture.

"Our culture is the key to our success," adds Furman. "There has got to be a way in which you can orient someone to a company's culture where they really see the value in it. You don't just want to tell them about the structure and have them nod and say, 'Yes that sounds great'," says Dreicer.

The company continues to stress its culture with newcomers and has now turned its focus toward integrating new employees at the management level.