KENNETH L. LAY'S sudden decision to pull out of testimony he was scheduled to give before a Senate committee Monday is certain to create "blowback" for chief executive officers and corporate board members. Blowback is what happens when shortsighted decision-making comes back to haunt you in ways that are more dangerous than the original threat.
It's obvious that Enron's former CEO and insiders didn't say what they knew when they knew it. Early evidence indicates they did just the opposite: The insiders and the CEO misled or, more graphically, lied to the rest of us.
Corporate image and the personal reputations of even the best and brightest CEOs are being harmed as this crisis in corporate leadership unfolds. When one CEO is tried in the court of public opinion and found guilty by journalists, pundits and the public, there is immediate blowback. Every CEO and often the board members of corporations become objects of public distrust and contempt.
Reputation blowback isn't good for America. Distrust and suspicion demoralize each and all of us. Now is the time CEOs and board members must face their responsibility and work to restore public trust and confidence in the corporation as good citizen.
Just as President Bush is leading the nation in a war against terrorism, CEOs must lead their corporations in a campaign that aims directly at America's working people. It's time CEOs focused resources on restoring the good name of leadership.
Old-school public relations and glitzy advertising are not the answer.
Do you trust Madison Avenue? It would be a mistake if corporations and their boards were to buy in when the gurus of Madison Avenue come knocking, encouraging them to spend and spin their way out of the hole Enron is digging for everyone.
Old-school public relations and fuzzy-focus advertising are techniques for marketing a product. While they are proven tools for driving consumer demand, marketing communication is seldom effective during a crisis or for managing a reputation.
When the goal is to prevent blowback or to re-establish trust and confidence, human contact is preferable to commercialized mass communications. CEOs must address issues important to the audience and journalists, and must avoid the temptation to create spin. They must act with discretion and always exercise sensitivity.
By focusing on what journalists need to hear in order to get the company's message out, CEOs will be forced to deal with the issues and concerns of real people in real time - creating a virtual "no spin zone."
Create and implement community-building initiatives based on the news story of the moment rather than on marketing objectives.
View dialogue, collaboration and two-way communications as keys to realizing the corporation's mission and purpose.
Encourage and sustain a vibrant corporate culture, accentuating the value of good corporate citizenship and the issues that make a difference to people.
Initiate outreach programs that inspire employees, customers, community leaders and the public at large, connecting stakeholders directly to the men and women who form the engine of corporate leadership.
Pursue opportunities to portray the corporation and its leaders consistent with its values and contributions, creating an identity based on trust and confidence in the corporation's mission and value to the community and those it serves.
Just as Sept. 11 changed the way America views security and risk, the blowback from Enron's failure must change the way corporations, CEOs and corporate boards communicate with the public. The times demand a break with the past.
Because blowback is a steamroller, reputation management and crisis communications are as much about nudging a frightened CEO, board of directors and their communications specialists into facing the public creatively and fearlessly as they are about encouraging the public to put its trust in a besieged organization.
CEOs and corporate boards of directors must step up to the challenge. It can be accomplished if CEOs and directors move immediately to create open, candid, consistent communications based on the real news rather than doublespeak and spin.
Levi Rabinowitz is a Baltimore-based crisis media specialist.