4. 25. John Keller, "AT&T Plans to Slash Work Force-Breakup Will In- volve Financial Revamping, Over 20,000 Job Cuts," Wall Street Journal, September 27, 1995. 26. Lippmann, p. 157. 27. Sloan, "For Whom Bell Tolls." 28. A twenty-year Pepsi veteran named Larry Smith, who was respon- sible for bottling franchises in Texas, was the first person to real- ize that "people were drinking [Coke's] trademark." When he couldn't get the headquarters staff in New York to pay attention to his ideas, he hired a local ad agency, which designed the fa- mous blind taste tests in 1985. The challenge took Pepsi's share Notes of the Texas soft drink market from 6 percent to I4 percent and ultimately led Coca-Cola to reformulate its soft drink. Despite their marketing prowess, Coke's executives missed the key point of the tests: They were blind. When people knew which brown, fizzy liquid was Coke, most said it tasted better. Their taste buds were overwhelmed by the symbology surrounding Coke, the feel- ings of refreshment it evoked, maybe even the warm memories of small-town parades and patriotism. For an entertaining ac- count of the cola wars, see Thomas Oliver, The Real Coke, The Real Story (New York: Random House, 1986). 29. John Keller, "Beleaguered CEO: AT&T's Robert Allen Gets Sharp Criticism Over Layoffs, Losses-Foray Into Computer Field Was a Costly Failure; Aloof Style Irks Many-But He Makes No Apolo- gies," Wall Street Journal, February 24, 1996. 30. AT&T's shareowners approved the employee option grant, which at the stock's peak in mid-1999 was worth about $2,000. Before the options could be exercised, however, the stock price declined below the strike price and never recovered. In September of 2002, the company offered to exchange the options for a smaller num- ber of restricted shares, which were to be held for three years before they could be sold. 3I. Lesley Stahl, "Easy Money in Hard Times," 60 Minutes, April 7, 1996. Chapter 3 I. Mark Landler, "How Snap Analysis Spurred an AT&T Slide," New York Times, August 21, 199