Client:

TXU Corp, a Dallas-based energy company which manages a portfolio of competitive and regulated energy businesses. In the competitive TXU Energy Holdings segment (electricity generation, wholesale marketing and retailing), TXU Energy provides electricity and related services to more than two million electricity customers in Texas.

Challenge:

Following a dramatic fall in wholesale gas prices in the UK, TXU Corp took decisive action to exit its UK and other European businesses, selling a substantive part of them and putting the remaining units into administration – all within a two-week period.  However, the process meant writing off billions of dollars and led to market and rating agencies concerns about the US parent company’s liquidity in the US. As a result, the share price in New York collapsed as rating agencies reviewed and re-graded the business on an almost weekly basis.

Response:

TXU Employee roadshow

In the middle of the unfolding crisis the key aim internally was to reassure employees that the company was in control.  The approach was about being open, available and straight talking – maintaining dialogue and ensuring the story employees listened to came from the company, not the media.

The communications activities to support this approach at the height of the unfolding crisis included putting a daily voting poll on the company intranet for employees to decide which topic they’d like an update on that day.  The choices ranged from the latest credit rating agency announcement to the impact on employee pension schemes.  Polls closed at lunchtime and the update of the winning topic was posted within an hour.

The activities also included a leadership team-led two-week employee roadshow to all key locations within weeks of the crisis happening to listen to employees concerns as well as reassure them and talk about the way forward.

Once the situation stabilised, the next phase involved reputation rebuilding, primarily with employees, customers and investors.  It was conducted against a backdrop of a decimated share price and the devastating effect that had on employees’ 401K pension schemes; multiple lay-offs; frozen salaries; Boardroom changes, including a new CEO; and a major business restructuring.

Maintaining key communication principles – increasing dialogue through being open and straight-forward and a focus on two-way communications – was vital to keeping employees on-side.

Results:

• Employees remained committed and engaged – in the 12 months following the crisis, employee engagement scores – which were already top quartile – rose in three of the four quarterly employee surveys conducted
• The engagement was aligned to a transformation of the business performance.  The company moved from bottom quartile in the midst of the crisis to a high-performance industrial enterprise.  TXU became a top performer in the power sector, regularly delivering 70% annualised returns to shareholders and earning the rank of seventh best in the S&P 500.
• External recognition – the campaign won major awards, including the US PRWeek Crisis Management Campaign of the Year.