When communication skills are vital !

Screen Shot 2017-09-20 at 1.26.05 PMRecently, I watched a documentary called Enron: The Smartest Guys In The Room and I realised how much a PR intervention may have saved thousands of investors out or pocket and billions of dollars in unassailable debt. In a perfect world, a crisis communication plan early on could have turned Enron into a small company, but into it’s eyeballs in corruption and debt.

Except in real life, for Enron, making money by any means necessary was the name of the game.

Every company that has been caught by the media for corruption has gone through the stages of the issues life cycle. The four stages are

  1. The potential stage: The moment in a business in which something bad might occur.
  2. Emerging stage: The moments in which a triggering event causes a major issue and begins to fester
  3. Current Stage: When the issue develops into something a company cannot control
  4. Crisis stage: When the media gains a lot of traction on the company’s major issues and a made aware to the public, negatively impacting upon a company
  5. Dormant Stage: When the crisis loses traction with the media, depending on how well the crisis is handled determines how long this issue lingers on in the company.

The entire story of Enron is quite complex, here’s a short overview:

Enron was a major energy company founded by Ken Ley and hired Jeffery Skilling and Andrew Fastow to manage the books and the organisation

Enron managed to influence various state governments to deregulate the energy industry. During the time of deregulation, Enron hid all of it’s debt through mark-to-market accounting (failed ventures were seen as assets in Enron’s books), market manipulation and making companies solely to purchase Enron’s debt. The corporate culture at Enron was to make money for the company by any means necessary. They bribed auditors Arthur Anderson to stay quiet on the issue and it was speculated they bribed banks and lawyers. Enron also encouraged citizens to put their retirement funds into the company knowing that the company was a sinking ship.

In 2000, Enron’s stock was selling at more than $90 per share, By the December 2001, Enron’s stock was 26 cents per share, went from 84 billion dollars to bankruptcy in 21 days and citizens lost their retirement money. Arthur Anderson also failed due to corruption and major Enron employees were sent to jail for fraud and other white collar crimes.

Using case studies like this can help anyone working in crisis communication if a similar situation like this arises. Now as a crisis communicator, the easiest and best way to resolve an issue is at it’s earliest possible stage.

The Potential Stage

The Potential stage happened when states were deregulating the industry. This freed Enron to be more flexible with their business practices and increase the likelihood of corruption. Having a trusted professional would have helped by informing Enron of the potential long term consequences of corruption that can come from market deregulation. That way they are aware of the potential situation and may have been more vigilant against potential corruption.

The Emerging Stage

The triggering event was, when Jeffery Skilling became CEO and began implementing mark-to-market accounting. This was what started the cascade of imaginary numbers, artificially inflated stock prices and market manipulations to cover their losses.

The emerging stage is more difficult to pinpoint. The emerging stages would have occoured when Enron hit insurmountable debt. The emerging stage is when an issue starts to spin out of control and it takes a lot of PR in an attempt to stop it. At this stage, there is no chance of Enron (or any company) escaping the damage.

A crisis communicator could have mitigated it by advising Enron to declare bankruptcy and have a PR campaign detailing how and why the bankruptcy occurred and methods of repayment from investors. This may have gotten Enron staff members indicted for white collar crimes, but they whould have been able to reduce the level of bankruptcy and saved workers their retirement money. People may have looked back on Enron far less negatively than people do today.

The Crisis Stage

The crisis stage started when skilling retired from Enron two months before the financial collapse and the crisis peaked when Enron became officially bankrupt. It was at this stage when Enron decided to handle it by constantly denying any wrongdoing and avoiding the situation they set themselves up for instead of admitting outright that what they did was business malpractice.

It is for this reason that people still talk about Enron today. It is also the reason why the dormant stage of the company lingered on for many years. Had a crisis communicator come across and intervened, they could have easily mitigated the damage. The saddest thing is that it could have happened at any time over the ten years the company were active in the deregulated energy market

So, as a crisis communicator, think about these 5 stages of crisis management from the communication viewpoint. It’s an  interesting consideration. 

Nelson Cumming is an enthusiastic business blogger with AdrienneMcLean.com with a keen interest in Marketing and PR.

Adrienne McLean DTM – SpeakersTrainingCamp International Instructor and the Founder of The Speakers Practice – Adrienne specialises at The Speakers Practice helping clients to confidently deliver presentations for maximum impact for sales presentations, pitching to Investors, promotional presentations etc.

Adrienne has been training presenting to camera programs since 2012 and has been coached by Lou Bortone – US Video Marketing Expert.

 You can contact Adrienne on adrienne@thespeakerspractice.com.au or ring on 0414 367 960.

The Importance of Communication when the Business is attempting to adapt to Change.

Let’s get you out of your comfort zone. Instead of talking business, let’s start with a little philosophy. A man called  Heraclitus, an ancient Greek philosopher said “No man ever steps in the same river twice, for it’s not the same river and he’s not the same man”

Change cannot be avoided. Yes, you can resist it for awhile, but change is like going on a train: You can hop along for the ride or it will pass you by. Skip too many trains and you will never get to your destination. This kind of philosophy applies to a business when undergoing change.

A lot of times it is hard to move into new waters but here are a couple of tips to help your business through change for the better.

1. Understand the Big Picture

Instead of losing yourself on where you want the business right now, start thinking about where you want the business to be several years down the track. That is your map, the place you want to be.

Your vision is the map and the change are the directions. While the directions may look daunting, you will understand that there is a light at the end of the tunnel and hopefully that will motivate you to keep going.

2. Be Positive

If you have a negative attitude, you tend to worry about failure. If you are negative about the change, you have already failed. If you have a negative attitude, your employees may become Mr. Sad, Mr. Angry or Little Miss Trouble themselves.

People don’t like working with others if they have a negative attitude and they will resist change, making it more likely that your change initiatives will not succeed.

Maintaining a positive attitude to change leads to the likelihood that employees will be more accepting of that change. Fearing change is normal, but accepting that fear is key and finding positivity within yourself is likely to influence your employees towards the changes you set out to make.

You know you have succeeded with change if the employees turn into Mr. Happy and Little Miss Sunshine

3. Communicate to others

It’s very easy for a boss or an owner to be locked up in a room and send a form email to employees about the changes you intend to make and hope the change occurs outside the confines of the office.

Form letters are good at making sure everyone gets that message, but it can be bad for the lack of two-way communication. Make sure people can ask questions about your change initiatives and make sure you can answer them. Talk to other people who have undergone a similar process and what they have experienced.

With the flow of information, people become more informed and therefore make better decisions. While change is being implemented, it can make the process easier when everyone is informs and on the same path.

4. Don’t Give Up!

Determination is a great quality in business. If you follow step 1 in the guide and look at the big picture, not giving up is an invaluable tool to change not only in business but in life.

For example, if I wanted to lose weight and gain abs, I know that if I exercise regularly, perform abdominal exercises with a healthy diet, I can achieve that in about 4-6 months. However, if I quit after the first exercise session, I will never get the abs I want.

Similarly, in business, if you know the right strategy to achieve your business goals, you have to know that the change is not always going to be easy. As a matter of fact, it might suck. However, if you have determination, you will have a better chance to get through the hardest parts of the change and you may be able to achieve your business goals.

The Bottom Line

I believe that the attitudes towards business (and corporate culture in general) come from a top-down approach. What the CEO thinks, feels and acts will seep down all the way to the bottom of the employee working totem pole.

That is why these tips are about attitude and organization. If the times are a changin’ and you can adapt to it in your mind and your actions, your coworkers will likely go through the change in the workplace a lot easier than a company who fear change and believe it is the enemy.

Nelson Cumming is an enthusiastic business blogger with AdrienneMcLean.com with a keen interest in Marketing and PR.

Adrienne McLean DTM – SpeakersTrainingCamp International Instructor and the Founder of The Speakers Practice – Adrienne specialises at The Speakers Practice helping clients to confidently deliver presentations for maximum impact for sales presentations, pitching to Investors, promotional presentations etc.

Adrienne has been training presenting to camera programs since 2012 and has been coached by Lou Bortone – US Video Marketing Expert.

 You can contact Adrienne on adrienne@thespeakerspractice.com.au or ring on 0414 367 960.