The Greatest Marketing Scandal of All Time
Enron is known as a symbol of corporate greed. But what if marketing trickery was really at the heart of the problem?
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At the beginning of August in 2001, Enron was known as a successful, stable energy company that had made a fortune in the oil industry and was now pioneering a new form of financial commodity training.
The company was wildly profitable, employing over 20,000 employees and solidifying its position as the seventh-largest company in the United States. With a market value of $70 billion and a stock that traded at $90 per share, Enron was just too big to fail.
That all changed in a matter of weeks.
Two Wall Street Journal reporters, John Emshwiller and Rebecca Smith, received leaked documents from an Enron whistleblower. The leaked documents revealed gaps in Enron’s accounting practices, disclosing that the company was involved in self-dealing trading partnerships to shield large losses and boost the company’s stock price.
By October, it was clear that widespread fraud had occurred. The stock price began plummeting and heads began to roll. In early December of 2001, Enron declared bankruptcy.
In just a span of four months, the seventh-largest company went from a valuation of $70 billion to $0. For all effective purposes, Enron was truly no more.
How could that have happened? How did such a large company — one with over 20,000 employees — deceive so many shareholders and investors?
You could chalk it down to a number of reasons: the charisma of the top executives, the willingness of outside auditors to overlook obvious corporate dishonesty, or the misplaced faith of thousands of outside investors in a company that was too successful to be legitimate.
But when you really boil it down, Enron’s story is a tale of marketing deception.
Marketing Tactic #1: “We’re the Best.”
To say that Enron’s leaders were cocky is a bit of an understatement.
Enron’s top leaders—Jeff Skilling, Kenneth Lay, and Andy Fastow — were known as powerful businessmen whose confidence bordered…
