'There are ways to operate in very challenging, difficult environments. And it's not like this'
When AT&T CEO John Stankey’s 2,500-word memo to managers went viral in early August, it did more than just ruffle feathers inside the telecommunications giant.
The memo, published and analyzed by Business Insider, was a response to employee feedback about a full return to office policy, but also communicated a shift away from “familial” loyalty and tenure with a blunt message to employees: get on board or get out.
The memo revealed that 79% of respondents to AT&T’s employee survey felt committed and engaged, yet overall engagement scores had declined. Stankey’s response was clear: “If you are of the small minority that shared comments similar to ‘I have heard this nonsense before and I'll ignore things until this goes away…’ or ‘Things were just fine the way they were…’ there might be a disconnect between you and your current professional choice.”
For Canadian HR professionals, the memo serves as a lightning rod for debate about the future of employer loyalty, workplace culture, and leadership in a post-pandemic world.
The end of the “loyalty contract”?
Stankey’s memo is explicit about the company’s new direction.
“We have consciously shifted away from some of these elements and towards a more market-based culture — focused on rewarding capability, contribution, and commitment,” he wrote. The old “employment deal” rooted in loyalty, tenure, and conformance, he says, is being replaced by a transactional, performance-driven model.
But is employer loyalty really dead? According to Julian Barling, professor of leadership at the Smith School of Business, it’s not as simple as a CEO making an announcement.
“Breaking the loyalty contract takes two to agree. One person can't really just decide it's dead,” says Barling.
“If other people still are driven by, so to speak, the old model, if one party believes it and the other party just breaks it, the organizational research shows that the consequences are really negative.”
Risks of hardline approach
Stankey’s memo was intended to clarify expectations and set a new course for AT&T, but experts caution that the tone and delivery may have unintended consequences; Barling suggests there may have been more intent to the memo than purely employee expectations.
“The tone suggests to me that he may be being squeezed, and the pressure that he's under would be reflected in the pressure he's putting others under,” Barling says, explaining that the message likely raises more questions than answers.
“When people see this kind of information, they don't know what's most important, and as a result they look at everything,” he says.
“He would have been far better advised to pick a few things that he really wanted to emphasize and just send it, and then maybe send another one a month or a week later. But it borders on the incomprehensible.”
Mary Crossan, professor of strategic leadership at Ivey Business School, sees both intent and risk in the memo, highlighting that while it’s reasonable to communicate a shift to more competitiveness, Stankey’s message missed an essential sense of balance.
“I think there was good intention in the memo to try to clarify where the organization was. And I think he was trying to indicate that they need more of a performance and competitive culture,” she says.
“You can't grow yourself back to health by cutting costs, it just doesn't work. It hasn't worked in the past, and we shouldn't expect to see it help right now. There are ways to operate in very challenging, difficult environments. And it's not like this."
The CEO is going to lose the some of the qualities that — if he had coupled it with that performance-driven side of things — "could have actually been the solution to move forward, not having a pendulum swing from one thing to another," Crossan says.
Employee surveys: missed opportunity?
AT&T’s memo was a direct response to its employee engagement survey, but the way the feedback was addressed has drawn criticism; as Barling notes, “if 79% or something of your people respond and are giving you a specific message, what you're really saying with this email is, ‘I heard you all, and here's why you're all wrong.’”
He warns that mishandling employee feedback can backfire. Organizations deploying employee surveys should be prepared to immediately address and act on the feedback they receive, he says, regardless of what the feedback is.
“People spend a lot of time filling out employee attitude surveys, so don't beat them up for doing it,” he says.
“Don't do it unless you're willing to guarantee … that you will send an email out at the end of the employee attitude survey, telling people what you found,” but crucially, he adds, it must begin with positive learnings.
For Barling, the memo raises questions about the role and influence of HR in shaping culture and policy – as he puts it: “My hope would be in an organization of that nature … that you have a head of [human resources] who is at the top management table and who is respected and who would be listened to in the same way that you would do with the head of finance.”
A singular focus on any aspect of competitiveness can create new risks, Crossan adds: “We have these imbalances that can lead to, for example, over weighting on drive and becoming highly competitive, but without the accountability.”
Managing through challenging times
The drive for competitiveness and cost-cutting is not new, but experts caution against an overcorrection. The research is clear: breaking mutual expectations and trust in the workplace can have serious consequences.
“At the very best, it's not helpful, and at worst, it's an opportunity missed,” says Barling.
“It's probably created confusion and anxiety, and there's enough research for this, people who are confused and anxious simply don't perform at their best.”
Crossan agrees, “we want the work to be one that people feel that they're respected and the work that they do. We don't want it just to be transactional in some kind of way that's just, people putting in the hours. That's not the formula for success.”
