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Internal Competition. To save itself from becoming fat and lazy like most monopolies, A.T.&T. purposely sets up internal competition. It pits man against man, office against office, district against district—and carefully rates each performance on report cards that are analyzed by efficiency experts. "We have people breathing down everybody's neck," says one high personnel man at A.T.&T. The company even rates its accounting departments according to how many pieces of paper each one processes; woe to the junior executive who finds himself saddled with slothful clerks. Every month the company publishes its "Green Book," a 32-page pamphlet that critically compares the performance of Bell's operating companies, one against the other, in 41 categories that range from the percentage of calls affected by static (yearly average: 2%) to the rate of resignations (yearly average: 2.4% for men, 17.6% for women).
Many other companies try to copy A.T.&T.'s training and rating program, but they cannot copy the advantage that bigness gives to Bell. A.T.&T. has so many operating companies, divisions and branch offices that it has plenty of demanding and responsible jobs in which to develop and store up executive talent. Men with the stamp of success on them are groomed for high management positions as much as 30 years in advance. Some of the young executives are interviewed every year by one or more of A.T.&T.'s 20 staff psychologists, who plumb their changing moods, opinions and goals.
The men who travel farthest in this obstacle course are tough, well briefed and able. At the very top, A.T.&T. is run by a 2 3-man group that is led by Kappel and President Eugene J. Mc-Neely, 63, a stern taskmaster who supervises operations and personnel and has followed Kappel into three executive positions since 1949. This top team is known to company insiders as "the Cabinet." It is made up of an extremely close-knit and like-minded group of men (median age: 57) with strikingly similar backgrounds. They feel most comfortable with their own kind, even to the extent of lunching together every day in the 22nd-floor executive dining room. Three-quarters of them come from small towns, only a handful went to Ivy League universities, and ten of them have engineering training. In an age when more and more companies are bossed by accountants, salesmen or lawyers, A.T.&T. remains one of the few giants dominated by engineers—with all that implies of diligence, prudence and respect for proven rules.
Conformity or Chaos. Sharply at 10 a.m. every Monday, the Cabinet members sit down in red leather armchairs in the 26th-floor board room for a 21hour meeting. One by one, each man briefs the others on developments in his division—new products, spending plans, struggles for higher rates. But the Cabinet seldom wastes time on detail or minor decisions. All down the line, A.T.&T.'s middle executives try to solve all problems long before they reach the vice-presidential level, leaving only the knottiest ones to the Cabinet. If there is then a dispute, Kappel has the last word. "I may