Enron convictions give corporations a lesson in the real cost of crisis.
For chief executives everywhere, the convictions of Enron chiefs Lay and Skilling prove again that the cost of a crisis is ultimately determined by your reaction to it.
I often caution clients in complex “bad news” situations to avoid outright discounting or dismissing public concerns about legitimate issues involving their companies. It’s like coming home at three in the morning with gin on your breath and lipstick on your collar – then telling your spouse to not worry her pretty little head about it because nothing happened.
What did or didn’t happen, you just made things a whole lot worse.
The Enron trial will serve as another historic case in point. Lay and Skilling knew dang well there was no smoking gun to prove their guilt. There was no bag of shredded conspiracies, no security camera catching them happily stuffing money into their pants.
They argued that nothing criminal happened at Enron. Nothing. Enron’s collapse, they said, was due to one or two people whose little indiscretions had been exploited by short-sellers, the Wall Street Journal and a vengeful government that coerced dozens of Enron employees to plead guilty for crimes they never committed.
At times even talking down to their own attorneys, Lay and Skilling repeatedly conveyed to the jury of eight women and four men that they were silly pawns in the government’s witch hunt, and that Americans were wrong to worry their collective pretty little head about things they couldn’t possibly understand.
For jurors like Carolyn Kuchera, it was how Enron’s leaders responded to the crisis that made the lack of a smoking gun a moot point.
“Those of us who have full-time jobs did our jobs at night when we got home exhausted. And on weekends. Some of us went to work straight from court,” Ms. Kuchera said. “We were responsible. We were accountable. I think these [Enron] employees were entitled to the same thing.”
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