Somebody Should Tell John Stankey: Stop Talking About AT&T’s Culture

Ironically, the first rule of corporate culture should be like the first rule from the movie “Fight Club.”

You do not talk about culture.

It’s a lesson AT&T Chairman and CEO John Stankey hasn’t learned. Last month, he sent a 2,500-word memo, “My Observations on our Employee Survey results,” to managers of the telecom with about 150,000 employees.

Stankey announced he wanted to infuse the telecom with a “more market-based culture” after seeing that employee engagement has declined since 2023. The memo was immediately obtained by Business Insider and received widespread media coverage.

We’ll look at four key points Stankey makes as he tries to change the culture of a company that traces its history to the invention of the telephone. He makes clear that the changes include his December mandate that all employees work in the office five days a week. But he only hints at what else change may bring.

With the memo, Stankey gave in to a temptation that entices many chief executives, according to research by a group led by Benjamin Laker, a business professor at the University of Reading in England. CEOs believe talking about culture will change it.

“Many leaders treat culture as a communication strategy,” according to an article coauthored by Laker and published last week in the Harvard Business Review. “They believe it lives in messaging—in the articulation of purpose, the rollout of values, the tone of internal campaigns. But culture doesn’t shift because a new narrative is introduced. It shifts when systems change.”

What Stankey misses is that changing a culture requires action, not words. To start, those actions must be taken by leaders, not employees. While he implores his employees to change, his Aug. 1 memo highlights what his own C-Suite must do to contribute to the change.  

Stankey promised that leaders of the Dallas-based company will prepare “action plans,” but did not provide many details. Unfortunately, in the meantime, his memo’s generalities and platitudes will only spur employees to speculate about what he means.

The background
Some employees are likely skeptical of Stankey and the direction of the company. He played a key role in AT&T’s $100 billion acquisition of Time Warner in 2018, which The New York Times questioned as “the worst merger ever.”

He became AT&T’s CEO in 2020 and spun off the entertainment assets into a separate company in 2022. Since then, AT&T performance has risen.

But during Stankey’s entire tenure, the company as fallen behind a key rival, T-Mobile, as measured by total return to shareholders, which measures dividends and changes in the share price. It has performed better than its other chief competitor, Verizon.

The memo
Employee engagement at the Dallas-based telecom has slipped to 79%, Stankey writes. Prior year’s percentages were not disclosed.

Market culture, also called compete culture, dates back more than 40 years, to research by two University of Michigan business professors. Employees are highly focused on results, which can result in high-pressure work environments. It has become a trendy business catch phrase.

After the merger, Stankey took over Warner Media, awkwardly telling his key executives, “I will invest to get messages right and articulated when it counts and has the opportunity to move an issue of significance.” That’s according to the Times’ account of the deal.

Stankey apparently didn’t invest time in this memo. Take this example:

“Our cultural tenants include our intent to Win as One,” he writes. “Implicit in this commitment to one another is that we all carry our part of the load aid measurably contribute to the priorities the team.”

I think he meant “tenets,” but does anybody know what the other italicized portion means?

Stankey makes four points as he describes the culture change he hopes to achieve.

1. Compensation. The news media coverage focused on Stankey’s reaffirmation of a seven-month-old edict that employees must be in the office full-time. But he also hinted at changes in how the company will pay and promote workers.

“I understand that some of you may have started your tour with this company expecting an ‘employment deal’ rooted in loyalty, tenure, and conformance with the associated compensation, work structure, and benefits,” he writes. “We have consciously shifted away from some of these elements and towards a more market-based culture — focused on rewarding capability, contribution, and commitment.”

“Loyalty is dead,” responded Aki Ito, chief correspondent of Business Insider.

Maybe. What this change means is not clear.

2. Career growth. Stankey writes, “I agree with the sentiment that everyone should understand potential career opportunities and career paths we have here at AT&T.”

Employees might think that means more promotion from within, more skills or management training or better mentoring programs. Instead, it seems to mean the company’s dramatic reduction in office locations is coming to an end.

The office space cutback began in 2023, when AT&T had 160,700 workers, 12% more than it does now. The consolidation forced many managers to move or resign, prompting Bloomberg to ask whether it was a “mass layoff in disguise.”

Stanky expects department leaders to complete the real estate downsizing but doesn’t give a timeframe.

3. Technology. Stankey implies that up-to-date computer technology is a key to a “market-based culture.” Yet he admits, “There’s still a long way to go.”

He acknowledges that “internal process friction or system constraints” are hampering customer service, and vows to upgrade the company’s technology, but again doesn’t offer a timeframe.

4. Working conditions. AT&T’s employees should work in “a professional, well-maintained, and functional facility,” Stankey says, but apparently many do not.

He vows to improve facilities and “bring them to a more common standard,” as he puts it, but again doesn’t provide a timeframe.

“I expect we all will be required to demonstrate some patience and flexibility as we work towards a better place,” he writes.

More slogans
They aren’t done talking about culture. Stankey promises to give employees “prompts that can be applied in your daily work life.”

Meanwhile, those employees will likely be closely watching whether Stankey backs up what he says — or not.

 “Corporate culture reflects the promises that a company makes and keeps (or doesn’t keep) in relation to the day-to-day employee experience,” Kristin Graham, an affiliate consultant with Ragan Consulting Group, has said.

Tom Corfman is a senior consultant with Ragan Consulting, where he directs the Build Better Writers program.

Are you interested in a conversation with Kristin Graham, RCG’s culture expert, about your organization’s culture? Email Tom to schedule a free, 30-minute conversation.

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