Vickie Berry nurtures SBC into the AT&T fold

Vickie L. Berry. AIA, SLCR, Assistant Vice President of Corporate Real Estate at SBC Communications, now AT&T, was interviewed by Eileen McMorrow, editor and publisher of McMorrowReport.com, and Michael Lobash, an editor with Building Operating Management during the National Facilities Management &Technology conference. Berry has achieved a career pinnacle few can claim—30 years with her employer.

Q: Please begin by summarizing your career track from architecture to strategic planning?

In January 1992, I moved to the Dallas Logistics operations. In Dallas, I ran a 500,000-sq.ft. distribution center, the cable-cutting operation, and managed inbound/outbound transportation and reclamation/resale.  During this time I was promoted to director and obtained my Logistics Certification from Georgia Tech.. In 1997, we completed our first merger with Pacific Bell and in January 1999 I returned to the real estate organization.  I was transferred to San Ramon, California to manage the West Transactions group.  I obtained my Real Estate Brokers License.  Within two years I returned to Dallas, was promoted and assumed property management responsibilities for the enterprise.  By then, SBC had acquired Ameritech and Southern New England Telephone and was over 140,000 million square feet in size.  September 2005,  I began working full-time on merger planning for corporate real estate and am now working on merger integration. 

From SBC to AT&T: Mergers & Acquisitions

Q: Please describe how SBC incorporates real estate from acquired companies. 

A: The first three mergers I worked on were easy because we had no overlapping portfolio.  After mergers were approved, business unit teams, including corporate real estate, conducted due diligence to determine best practices, which were then implemented by each region.  Corporate Real Estate organized with centralized senior leadership in Dallas and regional operations. 

The AT&T merger created overlapping portfolio in 13 states, consisting of 13 million of AT&T’s 51 million sq.ft. Real estate personnel had “parlor room” discussions with our peers to share lawyer-approved information, such as location and size of the portfolio.  Using this information, we developed implementation plans, including detailed business model and staffing recommendations. Interestingly, our pre-merger plans were almost identical to the post-merger team plans; staffing models were within 0.1% of each other.

Q: Can you describe the strengths and weaknesses of various approaches? 

A: The parlor room discussions enabled us to develop a play book, which saved us three to five months and sped up the integration process.  It also enabled us to start a working relationship with our counterparts, if only on by telephone.  In prior mergers, no communication was allowed until after the merger closed.

Q: What is your merger and acquisition strategy for the real estate and facilities management departments? 

A: We maintained our existing regional boundaries for facilities management, design and construction, and planning. We also created an additional Eastern region.  Once directors of each region are named, they will hire staff.

Michael Lobash, Vickie Berry and Eileen McMorrow discuss SBC’s corporate culture transition as its real estate and facilities management practices migrate to the AT&T model.

Q: What are your concerns, if any, about the changes? 

A: We worry that we will lose talented and long-time employees. Another concern is that differences in contracts with occupational or union workforces may impede our ability to quickly make changes.

Q: Will SBC’s real estate decision-making process become more decentralized? 

A: We will continue to have centralized senior leadership and regional operational decisions.

Real estate and operations moving to one system

Q: How you begin collecting data on real estate and facilities once SBC acquires a company?

A: First, we identify all locations by facility type  and gather basic data such as square footage and number of occupants.  Next, we gather all building-related costs such as energy, maintenance, repair and rent.  We have yet to combine all original SBC portfolio data into one system.  Then we combine basic portfolio data and match financials.  Our SBC financials are in one system and AT&T financials are moving to that system.  Deployment of SAP modules begins this fall and will take almost two years.  By 2008, we hope to have all real estate data and operations in one system.  The first release is scheduled for October 2006 and will include our master real estate information and leased/owned administration functions.

Q: How is that data used to make decisions? 

A: Data takes most of  the emotion out of decision-making. It is particularly helpful in discussing occupancy costs.  We also provide energy costs by each data centers so the IT team can consider that when they add equipment.  It also allows us to marry portfolio data to the strategic data we collect through our planning effort with the Business Units and develop plans to optimize our real estate portfolio.

Q: Please describe the RECAPP software program. 

A: RECAPP helps catalog capital projects, prioritize and forecast the capital program.  As funds become available, we can assign priority to a list of projects globally, rather than regionally. The list is then manually reviewed with the regional teams so adjustments can be made as appropriate.  We also use RECAPP to capture deferred maintenance projects.  Similarly, they can be prioritized on a national basis and as additional funds become available, projects are approved.

Q: How does your department function? 

A: Regional teams consist of members from each functional group with directors and other managers co-located as often as possible.  We also build local relationships with our clients so that they see us as a single face.  No matter whom they call, the issue is resolved by the appropriate function.  Functional teams start with asset managers, who are essentially client management teams, which create strategic portfolio plans and real estate solutions.  Transaction managers will complete the appropriate real estate transaction for the strategic plans.  Design and construction develops the tactical plans and manages any building construction and/or furniture projects.  Property management tends to day-to-day management until the property is disposed of by the transactions team.

Q: Do you have virtual teams? 

A: Some individuals don’t report to a business location, mostly in the Legacy team.  Property Management employees are generally located in their area of responsibility and not always with a supervisor.

Uniting corporate cultures and work styles

Q: Do you have a crisis leadership strategy?

A: Each business unit develops a Disaster Recovery or Business Continuity Plan. We deal most often with weather-related issues or equipment failure, especially power failures. As the company has gone global, we are susceptible to a wider range of crises.  When Hurricane Rita hit, for instance, we were confronted with basic sanitation and health issues such as lack of drinking water, plumbing, and electricity.  Facility managers and the environmental, health, and safety group are even more valuable and require information to make decisions; too often, rumors and incorrect information spread mass confusion. As a result, once the health and safety organization prepares documents, it makes them available to employees on the company web site.

Q: How does the SBC/AT&T chain of command recognize work style and workplace management issues? 

A: First, we have a staff member responsible for workplace strategy.  In addition, we are upgrading and installing Wi-Fi at major administrative locations and equipping laptops with Wi-Fi cards.  The SBC culture expects employees to report to a business location and to interact personally with other employees.  I believe there is less miscommunication when people are present and not virtual. 

The Legacy AT&T company has more employees who work from home.  This approach was developed to be more environmentally responsible and to eliminate office space requirements.  General office workers are our primary candidates for alternative work strategies.  Technicians are already mobile and sales personnel should not be in an office altogether.  Lab and call center personnel are less likely to be mobile.  It’s important to understand and develop the correct workplace strategies for a corporation. 

Out tasking rather than outsourcing

Q: Please describe your outsourcing philosophy for RE and FM.

Vickie Berry ponders a question about crisis leadership strategy from Eileen McMorrow

A: We really out-task rather than outsource.  The Southwest and West regions use building technician employees, supervised by first-level management, as first responders to emergencies and general maintenance and repairs.  Specialized work (e.g., switchgear maintenance) is performed by specialty contractors.  Recently, tasks such as snow removal, pest control, grounds maintenance, and housekeeping have been out-tasked to third-party companies.  The model we inherited in the Midwest outsourced everyone from building technicians through general management.

We felt it was critical for employees to drive strategic and financial decisions.  Our model now, in the Midwest, is for building technicians and supervisors to be third parties supervised by a second-level AT&T employee and a real estate general manager. 

The Legacy AT&T model outsourced the entire management team and retained the building technician employee.  The union didn’t permit technicians to be outsourced.  Our new model for Legacy is to bring those second-level supervisors and general managers back as employees.  The union will require us to keep building technicians on staff.  As we lose building technicians in each region, though, we will likely look to outsource providers to fill gaps.

Q: Who is responsible for working with contractors? What benchmarks do you use? 

A: Regional teams have total responsibility for partnering and successfully interacting with service providers.  We use the same general benchmarks for contractors as for our own employees: client satisfaction, absenteeism, budget, completed PM’s, overtime, and operational interruptions.

Q: What factors drive your decision to outsource certain services?

A: We hire outsource providers for their experience, knowledge, and intelligence of the business and sometimes for their leveraged buying power.  However, an overarching factor is cost.  Strategic tasks will remain in house.

Embracing new opportunities

Q: What suggestions do you have for those new to the field?

A: Understand and maximize your strengths.  Take advantage of every opportunity to hone communication skills, especially listening skills.  Develop a strong financial understanding of real estate and understand how real estate can be presented as a strategic asset rather than a cost center.  Build a network of contacts, be active in professional organizations, take on leadership roles, and find a mentor or two to learn from.

Q: What valuable lessons you have learned?

A: I’ve enjoyed every job I’ve had and learned from every boss.  I’ve valued being a minority in a male-dominated profession because I wanted to work harder and never stop learning. I’ve learned never to shy away from new opportunities.  It’s good to get out of my comfort zone once in a while and to be positive during change.  I’ve learned how important it is to be visible to your employees during uncertain times and to listen when they need to talk.  And most important: I’ve learned that if I keep chocolate in my office, employees are more willing to come in and talk.

After the merger with AT&T, Vickie assumed responsibilities for Strategic Planning, Asset Management and Operations Support for the domestic and international portfolio.  Vickie also has lead the merger planning for the BellSouth/Cingular Wireless acquisition that was announced in March 2006 and expected to close by the end of the year.