Penn State, Enron and the Golden Rule

Penn State’s story is a national lesson. While the facts surrounding that tragedy are different from what the energy sector had endured, the analogy remains pertinent.

A decade ago, the “prototype” for Business 2.0 collapsed. Enron, of course, had been toasted throughout the corporate community. But its exclusive focus on profits led otherwise reasonable people to become blinded. And while the company’s mission statement said all the right things, those worthy goals were ignored. Eventually, though, the light came shining through — and Enron’s downfall was as hard as they come.

Institutionally, Penn State has also suffered from moral failures. Those misjudgments are not the result of massaging income statements and balance sheets. But they are the apogee of covering up alleged human disgraces. Because Penn State ignored the needs of small children and tried to keep its personnel matters “in the family,” it merely allowed an out-of-control situation to become even more reckless. Now, the university is mired in what has been described as the worst crisis in American sports history.

Enron, Penn State — and countless others that will follow in their footsteps — should heed two lessons: Ensuring that their mission statements are fully understood and subsequently upheld and then putting in place a crisis management program that gives the effected communities full access to the available information. Failure to do either will result in a catastrophic situation.

Undoubtedly, Penn State and its former head football coach, Joe Paterno, have been as honorable as they come. But for years they seemingly put sports, or indirectly, the profits that drive that university, ahead of people. If each would have acted more forcefully, they would still have gotten stung. But both the program and its coach would have rebounded. Now, it’s questionable as to when this university and its football team will recover. For the record, Enron no longer exists and its ex-leader remains imprisoned.

Corporate cultures and unclear standards certainly play a part in some of these illicit activities. But individuals who cross the line or who fail to act responsibly must still be held to account. And while moral and legal shortcomings within the institutional world will continue, past history must serve as a guidepost.

Like Enron, Penn State will also suffer. But if this tumultuous experience ultimately serves to reawaken the most basic of human principles, the Golden Rule, then similar calamities may be averted.

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