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Marvin L. Mann: The Boss at Satellite Business Systems

February 27, 1985

NEW YORK (AP) _ Its name may be Satellite Business Systems, but from the boss’ point of view, its future depends on down-to-earth business sense.

The boss is Marvin L. Mann, an Alabama native who recently took over as president and chief executive of fledgling SBS while remaining a vice president of International Business Machines Corp.

The joint duties are not unusual in this case: IBM owns 60 percent of SBS, a provider of long-distance telephone and other communications services. The remaining 40 percent is owned by Aetna Life & Casualty Co.

SBS is in a burgeoning, high-technology industry, and it is nice to have the resources of an IBM in your corner. But so far SBS is struggling to establish itself in an extremely competitive industry, and to Mann success in this business still depends on certain fundamentals.

″You manage costs so your costs are competitive, you try to provide some uniqueness to your customers, but above all you provide service and quality,″ he said. ″I don’t have any fancy approaches or techniques, it’s all basic.″

SBS, based in McLean, Va., was founded in 1975 by IBM, Aetna and Communications Satellite Corp., or Comsat, and began operating in 1981. But last summer Comsat bailed out and sold its stake to IBM.

More than $800 million already has been poured into SBS and $100 million more is scheduled to be invested this year. Some observers have said that SBS’s losses to date total more than $400 million and that profitability is several years away.

During a recent business trip to New York, Mann, 51, declined to be specific concerning SBS’s losses. But he said that the company’s revenue doubled last year to $289 million and that both revenue and SBS’s drive toward a profit are ″on track.″

IBM and Aetna are ″concerned that obviously we make progress toward our ultimate goal,″ Mann said. ″But they recognize and we recognize that it’s going to require substantial investments over a fairly long period of time before we get to the level where we can be a strong competitor in the marketplace.″

SBS initially was started to transmit corporate data. But when the data- transmission market failed to grow as projected, and American Telephone & Telegraph Co. was split, SBS moved more into the voice-transmission market.

The company created SBS Skyline, a long-distance telephone service that competes with AT&T, MCI Communications Corp., GTE Corp. and others.

But SBS’s bid to become a major player in telecommunications remains with the business market, which accounts for 60 percent of its revenue while representing only 40 percent of its 170,000 customers.

SBS welcomes residential customers, particularly those with above-average telephone usage, but it is not going to spend the money required to compete head-on with MCI and the others in an effort to snare as many residential customers as possible, Mann said.

″Frankly, we’re targeting our activities much more toward the medium and larger commercial enterprises,″ activities that require both voice and data transmission, Mann said. SBS’s strengths lie in those markets, and those markets represent the higher profit margins, he added.

SBS also represents one of the ways IBM is enlarging its presence in communications, particularly its effort to link computers, communications switching equipment and other office-automation products into single systems.

It is no surprise, then, that the head of SBS spent his career at IBM in a broad range of areas from manufacturing to marketing.

Mann, the son of a truck driver, grew up just outside Birmingham and received a bachelor’s degree from Samford University there. He married his high-school sweetheart, spent three years in the Navy and then earned an MBA in marketing and economics at the University of Alabama.

After graduation in 1958, Mann joined IBM as a salesman, and from there held a succession of posts that involved not only computers but a host of other products. Among his efforts: work on the universal product code - the bar codes on store items for electronic pricing - and IBM’s newest line of typewriters and printers.

″I’m not an engineer,″ said Mann, whose low-key voice contains a trace of his southern roots. ″But I have enough of an understanding of it that I don’t get snowed.″

He sees one of his primary jobs as ensuring that SBS’s 2,400 employees, many of whom came from other communications concerns, find a common purpose about their company and their roles in it.

″You have to build a culture in a business like this,″ he said. ″You have to have your people understand your expectations, and you have to set high goals and principles for them.″

Mann’s own efforts include working up to 14 hours a day, and he acknowledged being ″a very involved manager.″

He quickly added, however, ″You don’t do the job for the people, you have to let them develop and learn to do it themselves. But you have to make sure you know when they need your help.″

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