On a frigid February night in 1976, Betsy Bernard got a phone call from a company called AT&T Long Lines, asking if she would be interested in a summer internship. Then a junior at St. Lawrence University in Canton, N.Y., Bernard had already served as a legislative intern at the Massachusetts state house, working as an aide to the city solicitor in Boston, and had studied for a semester in Kenya. She didn't know what "long lines" meant -- it was the antecedent to AT&T Long Distance -- but it was Ma Bell on the line. So she said yes.
It was the last resume Bernard sent out for nearly two decades. She spent the next 18 years at AT&T (T) in operations, marketing, strategy, and finance positions. She left for five years during the late 1990s to work first at Pacific Bell, then at California startup Avirnex Communications. But she returned to the fold in March, 2001, as president of AT&T's consumer-services unit. Telecom insiders called it the "worst job in corporate America" because the business, which sells residential phone service is shrinking -- fast. In 2002, sales totaled $11.5 billion, down 22.3% from 2001.
THE CONSENT DECREE. Yet Bernard's performance obviously pleased CEO Dave Dorman. Just 18 months later, she was promoted to president of AT&T, the first woman to hold that position. Bernard's primary responsibility is the telco's crown jewel, AT&T Business. The 60,000-strong unit sells phone and data services to corporations and racks up $27 billion a year in sales and $1.6 billion in profits.
Bernard's achievements speak for themselves. And perhaps that's why, unlike many of her high-powered female peers, she is so candid about how she got to the top. "The telecom story is about the consent decree," she says, referring to AT&T's $38 million sex-discrimination settlement with the U.S. government in the mid-1970s. "One of the things that gave me a huge advantage was the fact that I was in a special [management] program" that AT&T created in the wake of that case. Consequently, "I was given hard-core operational, line, and P&L jobs along the way, and not career-pathed into midlevel staff positions." In Bernard's view, that's what has separated her from "a lot of ambitious, talented women who somewhere along the line get off track."
That experience was also what helped Bernard find what she calls her "feminist voice." As a twentysomething, she had believed that results were all that mattered. Her mother, an early TV talk-show host, taught her that she could achieve anything through hard work. "I thought that I was part of a different generation, one where we were going to be evaluated strictly on our merits," she recalls. "Then, 15 years later, you look around and say: Where's everybody?" Bernard doesn't buy the assertion of some other women CEOs that the glass ceiling doesn't exist: "You want to say that. You want to believe it. But look at the statistics," she says. "Look at the number of women who started out at the same time I did [but couldn't climb the corporate ladder], and you can see that something is happening" to hold them back.
CONSUMING JOB. That said, Bernard's brand of ambition is pretty extraordinary. Her "7 by 24" job frequently takes her across country and around the world. The week she met with BusinessWeek Online, for instance, she had already been to California, Iowa, and Kansas. At the beginning of May, she reluctantly sold her mountain retreat in Lake Tahoe, Calif. -- the home she had planned to retire to before being lured back to Ma Bell by CEO Dorman. Bernard hadn't had time to visit Tahoe since the summer of 2001. She still has an 11"x14" digital photo of the view from the house (plus two more of her beloved dog Phoebe) pinned above her desk.
Is such sacrifice a fair tradeoff for landing one of the highest-profile positions held by a woman in U.S. business? Certainly, one consolation is that Bernard is one of America's highest-paid female execs. Her compensation tops $2 million a year, before stock options and other extras. "It's a great job," she says. "Does it have unique challenges? Yes. But every industry, every business has challenges. That's what makes me excited to go to work every day."
Challenges, indeed. As change sweeps across the U.S. telecommunications business, no one faces a bigger dilemma than Ma Bell. Seven years after Congress voted to let carriers reunite the local and long-distance phone businesses, AT&T has been transformed from a formidable incumbent into just another challenger to its offspring Baby Bells Verizon (VZ), SBC Communications (SBC), and BellSouth (BLS). Still, in 2002 it produced $3.2 billion in free cash flow. Bernard's plan is to use that cash -- AT&T plans to spend $3 billion in 2003 -- to invest in new products and wrest customers from the likes of MCI (WCOEQ.PK) and Sprint (FON) in the lucrative but supercompetitive business market, where AT&T now holds a share of about 40%. This, despite a flurry of rumors that AT&T will merge with Bell South, the smallest of the Baby Bells.
"THEY'RE WRONG." Bernard wouldn't comment on merger speculation -- though she admits that some consolidation in the telecom industry makes sense. Whatever happens, she maintains that AT&T has a "great go-it-alone" strategy: "The economy will recover. And when it does we will be uniquely positioned to grab a greater leadership role in the part of the industry where everyone believes growth will come again."
Investing through a downturn is a tried-and-true business strategy. But for Bernard, making it work is also personal. "The appeal [of returning to AT&T] -- and I don't want this to sound egotistical -- was that people were saying some not-so-nice things about my alma mater," Bernard reveals -- including that its glory days are over. "They're wrong," she adds, "and I'm going back to prove it." By Jane Black in New York