Q&A With AT&T’s Channel Chief Kevin Leonard

In tandem with a company restructuring in fall 2008, AT&T Inc. has revisited its channel strategy and combined them into one organization under a new vice president of Alternate Channels. AT&T veteran Kevin Leonard was tapped for the new post in late November. He now heads four organizations: the Alliance Channel, which combines the previously separate small business and enterprise groups; Teleconnections, a dedicated telemarketing arm; ACC Business, which sells non-AT&T branded services to small business; and Mobility Indirect Channel, which sells wireless solutions.

Leonard comes to the job with 27 years at AT&T. Most recently he served as vice president of AT&T’s National Mass Markets with the responsibility of providing consumers with long-distance services throughout the United States. Since joining AT&T in 1982, he has held positions in product marketing, product management, customer service, channel management, process reengineering, new business development and sales management.

PHONE+ spoke to Leonard about his new role and his plans for the combined channel. What follows is an edited transcript of the interview.

What precipitated the leadership change for the alternate channels?

It was less a leadership change. It was a structural change. AT&T announced last September/October time frame … a new structure in the way AT&T set itself up that aligned by segments. Ron Spears became CEO of AT&T Business Solutions serving large and small customers for the complete product line — be it mobility or wireline products. That was not how we were structured [in the past]. Based on that new segmentation and organizational model, it was a natural evolution to look at all the organizations inside this new AT&T Business Solutions business and say what makes sense and what doesn’t. It was in taking inventory about how we went to market that we realized we were going to market with alternate channels in multiple ways. So we said, “Let’s stop that. Let’s bring it under one umbrella. … Let’s take a look at each of these channels and see the best practices in each one. … What works really well and can be exported into the others as we try to blend this into one channel organization?” It’s really a structural change as opposed to a leadership change.

I believe one of the key people was Celine Azizkhan. Is she no longer working in the channel?

Celine had one of the pieces that I talked about of the multiple that came in. Celine is not supporting the channel any more. She elected to retire from AT&T.

Your most recent role at AT&T was in running a mass markets program for the carrier. To me that says “consumer,” so I’m wondering how that translates for you in this new role, which is primarily business.

The last role I had was VP of AT&T National Mass Markets. In that role, I had responsibility for a business for AT&T that really had several million customers — both consumer but also small business — that was what was left of the old legacy AT&T organization. As we were purchased by SBC and then renamed, it’s the legacy T business that I was running for them. I was responsible for everything from the customer experience all the way through pricing the distribution — you name it. It was a very full job and a great experience.

Were there channel-related responsibilities in that role?

Well we did have sales and we did have channels, but not anything like we have here inside of this alternate channel where we’ve brought them together.

Will this be your first experience working in channels?

I’ve had lots of experience at AT&T. My job prior to National Mass Markets, I ran the prepaid card business in AT&T. That was everything from strategy to design, production, fulfillment, distribution. One of the elements of that role was the way we sold prepaid cards through partnerships and retail establishments. We were selling those cards through tens of thousands of retail establishments across the country — the largest to the smallest ones.

Prior to that, I ran the entire program management organization for AT&T. The legacy T business, which had multiple channel jobs for both consumer and small business —be it the direct marketing, outbound telemarketing, direct mail, feet on the street, channel marketing through agents. That was embedded in that organization as we were growing that business.

I had stints in the AT&T business markets sales organization. I have a lot of sales and channel experience in my background.

Can you summarize your message to the channel at the January 2009 kickoff meeting?

Yeah. One of the things we wanted to do at the kickoff was to invite our partners in — for anyone who wanted to join us — to come on in and listen to the new AT&T Alternate Channel and what our direction was and why we were combining the various groups together into one and what advantages we thought in time we would be able to bring to the market. It was important for us to share that as well as some of the product direction, marketing direction and segment direction for the company. We had the leaders of our business there and I was thrilled that it ended up being the largest turnout of any kickoff that we have had for our kickoff.

How many were there?

We don’t give specifics. We were well in excess of a couple of hundred firms that joined us for the meeting. It was the largest one we had. It was a two-day event and great way to share information. Part of what we delivered to them was our commitment to the channel and how important they are to our success. They provide an element to AT&T that allows us to have much broader distribution than you can do efficiently on your own. You don’t want to grow a tremendous huge sales organization when you can partner with people who are out in the field and doing business with small businesses everywhere. We are committed to them. We go a sense that they are very committed to us.

Did you provide them a report card for last year?

…We talked about the successes channel by channel. …We talked about how each one of those channels had positive growth last year, not only overall but also in the key product areas of IP. We talked about some of the things we want to bring to the channel this year in terms of what they could expect from us. Then, we sat down and listened to what they feel they need to continue to be successful.

Have you made any changes to the channel structure since you have been there?

It’s a work in progress, right? We are looking at multiple organizations and bringing them together. Clearly we’ve already made some changes. We were able to identify some seams that we could eliminate to help our solutions providers. One is that we blended the regional structure and the EBS Alliance channel into one. Now when you are in geographic territory and dealing with one of our channel managers, they are going to represent AT&T from small to large depending on what your customer needs. There aren’t any more boundaries in that regard. … We are going to eliminate segment boundaries. As those solutions providers are partnering with customers, they don’t have to figure out who to work with inside AT&T, the channel manager can work with them.

In time as we continue to integrate these teams, it will be much more efficient and effective. The feedback from our solutions providers was positive. We now have to execute for them.

You spoke about integrating staff. Where are you at in doing that?

Each one of the regional structures now is responsible for the entire product line for our solutions providers and end user customers for a particular geographic territory. But at the same time, each one of the geographies is no longer independent. They work as one unit. We are facilitating the cross-boundary limitations that might have existed at times. We certainly tried to eliminate them in the past, but it’s going to be easier under the new model.

Those are the things we have underway and I’m sure we’ll find other ways to create efficiencies for AT&T and our solutions providers.

Are there any partner-enablement initiatives planned for this year?

…Some of our organizations had the ability to sell our mobility solutions, which as you know is one of our premiere growth areas for AT&T, and other areas did not. …We want to have one seamless program, so that all of our solutions providers have the ability participate in the full range of our products and services. That would be one very big area that we are trying to get out as quick as we can.

AT&T and many other companies have announced layoffs during the economic downturn. I was wondering if those layoffs impacted the channel organization in any way?

AT&T is a great company. We have a great balance sheet and assets. Even companies as strong as we are make sure to position ourselves for continued success. No organization is immune from that. When you take a look at our org — the alternate channel team — I believe we are better equipped to handle the solutions providers than we were before by blending all these organizations. I think that’s only going to improve in terms of the number of people we have supporting them as well as the processes by which and the procedures that we can bring to them. We are better equipped today than three months ago. I think we will be even better three months from now.

Did you have layoffs or lose people from eliminating redundancies from combination?

I won’t get into specifics on an organizational basis. AT&T was impacted. I think from an alternate channel perspective we are in better shape.

So the channel was impacted or not? I can’t tell from your answer.

I don’t give specific information. I have lots of organizations in my team now. What we are doing is looking across the Alliance Channel — the Teleconnections Channel, the ACC Channel, the mobility indirect channel, the SMB indirect alliance, the EBS indirect alliance. What we are trying to do is figure out where we can take practices from each one to make sure all of them are more efficient and effective.

All the segments that you mentioned are still existing in some way or disappearing?

They still all exist and I wouldn’t call them segments. I would call them distribution channels.

They are just coordinated through you now?

Exactly, rather than each having an independent strategy, we come together and hammer out on a daily basis how to make sure what we are doing is … we all know what each other is doing and make sure it’s better and better for our customers and solutions providers.

How do you think the recession is impacting telecom agents in general?

Listen the economy is the economy. We don’t have to look real hard to find some more bad news. All you have to do is turn on the news. I look at it a little differently. I think AT&T is in a great position to help consumers today.

If you think about what’s happening — unemployment rate from a raw numbers is the higher than ever — I think inside that there are opportunities. If you think about the small business engine in the U.S., as they try to make the right decisions for their businesses, they will be focused on what they do best and what products and services they deliver. They are going to be looking for help in some of the areas that perhaps in better times they took on themselves, but they no longer can afford to do. That can be and very often is telecom. The opportunity for solutions providers and AT&T is wonderful to get out there into the marketplace and work with these customers so that we can deliver these applications, these services, these technologies to help them in their business that prior to that they were doing it themselves.

The other thing that is going to happen is America is a resilient country and our people are resilient and we are proud of that fact. The unemployment rolls — they are not going to stay there. They are going to do things to provide for themselves and their families. So there is an opportunity for the creation of small businesses. We want to make sure we are in there working with our solutions providers so that AT&T is the one helping them establish and fulfill their communications needs and then grow with them as they grow.

There are two ways to look at this. But I really do believe in the small business space as it relates to communications solutions, there’s a great opportunity here. We need to make sure we are where our customers are. That’s part of the AT&T value proposition and vision statement. We want to make sure we are there and our alternate channel organization helps us get there.

Have you identified any particular solutions that you think will be hot sellers for part-ners this year?

Again, we support small business from the smallest to the largest, so it runs the full spectrum and suite of services. If I were to take a couple that would continue from last year and accelerate even, [they would be] the whole MPLS movement from the old frame and private line structure to more of an MPLS structure, which we know provides not only cheaper bandwidth but also better feature functionality.

They can do more, which also enables another application like VoIP. So, you don’t have to run multiple networks. You don’t need your data network. You don’t need your voice network. You can eliminate one network and manage everything over one. I think that’s going to be very im-portant.

The third one that is absolutely critical is mobility. Our customers want to provide service where their customers are. Mobility gives them that ability.

What do you think are going to be partners’ biggest challenges for this coming year?

I think the economic marketplace. It’s their biggest opportunity and their biggest challenge. We need [and] they need to be out there with our customers understanding their business, understanding the AT&T products and services and how those products and services can help solve those individual business needs. We’ve got to move more into working with those customers to show them how communications technology can help them in times of crisis like this and economic downturn as well as in growth areas. Sometimes, not everyone does that. Sometimes not everyone tries to truly understand a business as opposed to just sell them things. I think we can’t just sell. I think we have to understand their business and how to help them.

The biggest opportunity is the biggest challenge. If they can overcome it, they will have a tremendous year. If they don’t, they will have a hard year. I think we’ll find a nice mix of solutions providers and partners that do it well and are successful and we look forward to working with them.

I can tell you in talking with them — many of them over those two days [at the kickoff meeting] and since I’ve been on the job — they feel the same way about the opportunity. They are, although worried about the economic conditions, bullish about what it means for their businesses if they can get it right.

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