Answering the Call from a Telecom Leader
Charting the future of public relations
Holmes Report

Answering the Call from a Telecom Leader

In the era of Enron, Global Crossing and WorldCom the old rules of Chapter 11 and restructuring are being rewritten. While still a crisis situation, major companies who file must now also confront a presumption of corporate malfeasance and financial chicanery.

Paul Holmes

In the era of Enron, Global Crossing and WorldCom the old rules of Chapter 11 and restructuring are being rewritten. While still a crisis situation, major companies who file must now also confront a presumption of corporate malfeasance and financial chicanery.
For Williams Communications Group (WCG), a high profile telecomm company and one of the ten largest Chapter 11 filings of 2002, a series of issues, including some early missteps, catapulted their case to a front and center position in an industry riddled with troubled companies. Despite its problems, WCG denied that bankruptcy was an option up until the day it filed. To make matters worse, the Company which had a history of over-communicating, went into radio silence confounding employees, customers, shareholders and the media. MWW was retained two weeks after the filing to help the Company correct its missteps, re-align its messaging/communications and to positively impact the process going forward.
Williams Communications faced a number of challenges. The Company had been spun off from Williams Companies less than a year before the filing – raising questions about heavy debt of the spin and fueling conspiracy theories that the former parent, who still had a significant stake in the Company, had structured a bad spin in an effort to load the WCG with too much debt only to reclaim the upstart debt-free for cents on the dollar through Chapter 11.
While an acknowledged industry leader in terms of network quality and name brand customers, WCG was being impacted by the overall downturn in the sector. Throughout the first part of 2002, the company was giving assurances about its financial condition and denying that bankruptcy was an option, only to have the Company file for Chapter 11 protection in April.
Once the Company filed, its communications plan failed to fully anticipate the complexities of, and conflicts between, its key audiences. WCG was quickly grouped with the likes of Enron, Global Crossing and WorldCom with financial and shareholder issues taking away from its focus on ongoing operations. As the most widely held stock in its hometown of Tulsa, the very community and employee base that the Company needed to rally behind its restructuring efforts were facing material loss of assets and retirement funds.
Meanwhile the local paper, the Tulsa World was making a cottage industry of championing the shareholder cause. Members of Congress were beginning to make noise about Congressional inquiries, the State of Oklahoma Securities Department was launching an investigation with much fanfare and class action shareholder suits were filed. The situation was rapidly getting out of control and nearing the point of no return. The fact that WCG had no financial or accounting improprieties was lost in the shuffle. MWW key objectives were to:
· Rally key audience support behind the Company in order to provide the management team the necessary time to reorganize the Company and emerge successfully from bankruptcy
· Differentiate Williams from the other telecom companies undergoing restructurings; position the Company as the one that will survive and ultimately prosper
· Enable the Company to emerge successfully from Chapter 11
 The immediate priority was to contain the damage, making speed a priority over formal research. Initially, MWW conducted in-depth due diligence sessions with management and outside legal counsel along with reviewing reams of prior press releases, financial conference calls and news articles. A quick media perception and issues audit was conducted to verify intuitive strategy and issues identified in the interview sessions.
Once the immediate issues had been neutralized, MWW launched a formalized perception audit of all key audiences to determine ongoing strategy and tactics and followed up with a second audit prior to emergence to verify audience perceptions of the company’s long-term strategy and prospects and finalize emergence communications strategy.
Though the vast majority of Chapter 11 filings result in shareholders being wiped out, when the investments of an entire community get erased overnight, it’s is a day-by-day battle to ensure that the Company’s message gets heard. MWW and WCG identified key local influencers ranging from elected officials to civic leaders. Through the Chamber of Commerce, the team developed and executed a strategy to educate the business community about the issues and rally support for the Company, including letters to the editor, business leader breakfasts and town hall meetings.
A program of frequent and consistent direct communications (letters, emails, voicemail and personal communications) to the key audiences of employees and customers helped distinguish the facts from the fictions swirling in the marketplace. Major themes included restructuring progress and that WCG was not Enron, Global Crossing or WorldCom. This was particularly important with regard to issues related to the former parent, the Williams Companies, which in addition to the issues related to WCG’s Chapter 11, was also battling Enron related energy-sector allegations. Proactive rumor-mill management, including a web-based two-way feedback mechanism, was implemented to keep employees focused on the task at hand.
Little by little, through a variety of editorial board meetings, one on one media interviews with national financial reporters and trade editors, use of third party validators and sheer persistence, the media coverage became more balanced. Through continuous outreach to the media, news stories, particularly in the hometown Tulsa World turned from a shareholder emphasis to focusing on the progress and milestones WCG was making in its rapid march toward emergence from Chapter 11.
And as the message of saving jobs and contributions to the Tulsa economy began to resonate, shareholders became more patient about waiting to see the outcome – picketing ceased, angry calls and letters reduced dramatically and management was able to focus its energies toward its strategy for reorganization, rather than damage control on the issue of the day. These changes and the more hands on approach to internal communications also helped employee morale allowing them to better concentrate on providing customers with a superior network and quality service, the real WCG differentiators.
Sometimes the proof is in the pudding. Despite an environment that remains anti-corporation, MWW and WCG were able to neutralize hostility, and the Company successfully attracted its key investor within 60 days of the change in approach. Williams Communications successfully emerged from bankruptcy protection in a very short six months while its sector brethren continue to flounder. During the process, the Company experienced 100% customer retention and 100% key employee retention. The attacks from shareholder groups subsided and there is even some talk in Tulsa now of investing in the Company’s new stock.
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