The recent collapse of Enron offers lessons in communication for everyone. Enron, the Texas-based energy company, capitalized on the volatility of energy prices in the late 1990s. Through its strategic and aggressive marketing of electricity and gas, Enron realized sales of more than $1.1 billion in 2000. The eventual collapse of this energy trader in the largest bankruptcy case in U.S. history is a story of cover-ups and scandals, and it is a story of how organizational messages are sent and received.

The investigation to determine how Enron lost billions of dollars eventually led to Arthur Andersen, Enron’s accounting firm. When federal officials approached Andersen, looking for financial documents related to Andersen’s audit of Enron, they found many documents crucial to their investigation had been destroyed. Andersen was charged with obstruction of justice for shredding documents.

It was in the fall of 2001 that Andersen managers first got wind that an investigation by the Securities and Exchange Commission (SEC) into their Enron account was likely. In a downward-bound structural message, employees of Andersen working on the Enron account were directed by managing partner Thomas Bauer to make sure they complied with the firm’s “documentation retention policy.” But what, exactly, did Bauer mean when he used the term “document retention”? What message was he sending to the staff accountants working on the Enron audit? Anderson employees apparently understood the message to mean the opposite of document retention–to destroy rather than to keep documents. In her testimony, Patrica Sue Grutzmacher, another Andersen manager working with Enron, claimed that when Bauer referred to the firm’s document retention policy, it was a policy requiring the destruction of certain records. So, Bauer’s message to comply with the policy actually meant employees should destroy documents. Although the verbal message employees received was to comply with the policy of retention, what Bauer ordered and what employees understood was to shred the documents.