Winner
TXU corporate communications team: Rising above the perfect storm

In September 2002, TXU was a leading global energy company that appeared to be ahead of the curve in leadership and strategy. The slowing economy, tightening credit market, and spate of corporate scandals hitting the electric utility industry had seemingly passed it by, while major competitors found themselves in a cycle of deteriorating credit. The number of firms receiving credit-rating actions accelerated dramatically during 2002, and the effects were overwhelmingly negative. In fact, by the end of the year, there were an unprecedented 182 downgrades and only 15 upgrades.

On October 4 of that year, however, TXU soon found itself in this credit and liquidity crisis, forced to lower earnings expectations because of financial difficulties in its European operations. At a time when analysts, banks, and investors had little tolerance for even a hint of bad news, the announcement sent shockwaves through the company, including a 75% plummet in stock price, an 80% cut in dividend, sale of the firm's UK operation, bankruptcy of remaining European assets, and a $4.2 billion write-off of that investment. TXU also saw its credit rating slashed to junk status, and questions began swirl about its business practices, business model, and ethics. There were suddenly real doubts about TXU's future.

Despite these events, TXU weathered the storm, though it took a seven-month period between that October day and May 1, 2003 – when the company issued a better-than-expected earnings report – before Wall Street believed the firm would survive. In the interim, TXU's corporate communications team had to deal with the largest financial and confidence crisis ever to descend upon the century-old company.

The team partially attributes the company's survival to its ability to stick to four key strategies throughout the crisis. First, it sought to reassure stakeholders that in spite of an extraordinary confluence of circumstances, TXU was a strong, stable, and viable business. Second, all communications were to be timely, relevant, and clear.
Third, the primary source of information for stakeholders would not be external media, but TXU's corporate communications group. And finally, TXU wanted to project an image that it was always in control during the crisis. The company mobilized its integrated communications team to push its key messages and keep its board of directors and senior management closely involved in the process.

Sticking to these four guiding principals, the company used several means of formal measurement to keep track of its progress throughout the crisis. TXU invested in media monitoring and a reputation survey, as well as employee polling, to make sure its messages were effective. This attention to formal measurement impressed the judges.

Honorable Mention
Weber Shandwick and Case Western Reserve University: Minimizing impact

Case Western had retained Weber Shandwick to help reposition the institution, but before the ink was even dry on the contract an armed man entered a campus building and took more than 100 hostages. When it was over, two people were wounded, an MBA candidate was dead, and the WS account had become one of crisis management. The PR team targeted five key audiences: current and incoming students, prospective students, parents, alumni and donors, and faculty and staff. It responded to every media inquiry within one hour of initial contact, and constantly updated its statements. The university president appeared on Weekend Today, and a special ceremony was held to honor the slain student. The results showed that none of the current or incoming students changed their minds about attending, and the school maintained its ranking in US News & World Report's college-ranking issue.

Finalists 2004
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TXU corporate communications team: Rising above the perfect storm

Weber Shandwick and Case Western Reserve University: Minimizing impact

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