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Merger brings culture clashes, Cingular CEO says

By HARRY R. WEBER
The Associated Press

GENE BLYTHE / AP Cingular Wireless CEO Stan Sigman says it's the hardest work he's ever done, merging Redmond-based AT&T Wireless with his company.

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ATLANTA — Stan Sigman has been merging companies for a good part of his 40-year telecommunications career.

However, bringing together Cingular Wireless and AT&T Wireless could be the chief executive's toughest challenge yet as he tries to keep the new behemoth from losing its No. 1 spot in customers amid clashing employee cultures and hard-charging rival Verizon Wireless.

Insiders and people who have worked with Sigman say the 57-year-old industry veteran, a Texas ranch owner with a razor-thin cellphone always strapped to his belt, is up for the task. They concede the task won't be easy.

"It's not like a slam dunk. They have a few challenges," said Ed Whitacre, chief executive of San Antonio-based SBC Communications, one of Cingular's two parent companies. "I think he'll have to be concerned with the cultures, the different operating methods, the IT systems."

Redmond-based AT&T Wireless Services served more enterprise and business customers; Atlanta-based Cingular Wireless was more geared toward individual cell users.

The new Cingular, now with 47.25 million customers and the nation's largest coverage area, tried to deal with the culture issue when it recently rolled out a new look: altering its logo to mesh its orange color scheme with AT&T Wireless' blue scheme, and changing its catchphrase from "fits you best" to "raising the bar" alongside cellphone signal bars.

A month after the merger, Sigman says some employees of the two companies still refer to each other as "blue" and "orange." Changing that mentality has been tough amid talk of expected job cuts and the rapid pace of Cingular's integration — it refitted 1,100 AT&T Wireless storefronts with Cingular equipment and signs literally overnight.

Cingular thoughts Stan Sigman, chief executive of Cingular Wireless, talks about integrating Cingular and AT&T Wireless, and add-on fees for service. "The first challenge was to prove everybody wrong in what they anticipated when this would close. The next challenge was everybody was saying we would be distracted by this in our ongoing operations as we planned for this. Although that was challenging, we weren't distracted. We still continue to have good performance." "This was like planning for your wedding without being able to talk to the bride." "[Integration] hasn't been flawless, but I haven't seen anything we didn't expect and I haven't seen anything that's of big magnitude." "I tell employees this is about a $41 billion passion I have for this company — to be No. 1." "There are too many add-ons on the wireless bill. The wireless industry has become the tax collector."

In a recent interview, Sigman said the sooner he can nip that culture clash in the bud, the better. He said the company is addressing that through staff meetings and training sessions.

"Every time they talk about 'they' and 'us,' I challenge that," Sigman said. "It's 'we.' But that's normal. I've gone through that a lot."

The Hereford, Texas, native helped start SBC's wireless business in the mid-1980s and directed its integration into BellSouth's wireless group to form Cingular in 2000. Cingular was launched the following year. In 2002, he became CEO of Cingular, a joint venture of SBC and Atlanta-based BellSouth.

Sigman, who has relocated his family 19 times during his career, also has served in various roles at the former Southwestern Bell telephone company, where he got his start in the industry as a supplies attendant and janitor in 1965 in the summer of his senior year in high school.

Part of the problem in the Cingular-AT&T Wireless case was that because of antitrust laws, the two companies, which announced merger plans in February, were not allowed to share data with each other until the deal closed in October.

"This was like planning for your wedding without being able to talk to the bride," Sigman said.

During the interim, Cingular hired consulting firm Accenture to create a "clean room" in which it gathered data from AT&T Wireless and assembled it the way Cingular would want to view it once the deal closed. After closing, Cingular received the information and began implementing its plan. Had the deal not closed, the data would have been destroyed.

Despite his experience, Sigman said he is not blind to the challenge the $41 billion merger poses.

"I'm used to hard work and mergers, but I've never found myself working as hard nor as mentally challenged as I've been with this transaction," Sigman said.

At the same time, he said he is equally optimistic about the company's future. Some analysts have suggested that No. 2 mobile phone company Verizon Wireless could soon regain the top spot in customers if Cingular does not quickly execute its strategy.

The highly competitive Sigman is well aware of lurking Verizon Wireless, insisting he will do whatever it takes to remain No. 1. That point comes across clearly in staff meetings, those who know Sigman say. Walt Shill, a partner at Accenture, describes Sigman as blunt and passionate.

"He may pound his fists and those types of things, but when I've worked with other CEOs I've seen them give orders and demand this and demand that," Shill said. "Stan sets high expectations and then expects them to deliver and then lets them go."

Sigman often uses anecdotes and colorful phrases like "Don't worry about the horse, let's load the wagon," to get his point across to employees, said SBC's Whitacre.

"He's very methodical," Whitacre said. "He'll formulate a plan and watch every step of the execution."

Execution is a key if the new Cingular is to be successful over the long run. Sigman said he knows what's at stake — holding onto the No. 1 ranking.

"That's my commitment," he said. "The only thing that will keep that from happening is if we fail to execute, and failure is not part of our DNA."

Cingular also will be his only focus. He said emphatically that the company has no plans for any more mergers.

"This gives us the assets that we need to do what we need to get done," Sigman said.

Copyright © 2004 The Seattle Times Company

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