Bimbo Banter


Lehman Brothers—Ten Years Later—One Eternal Lesson to Remember


  • Trends
  • September 14, 2018
  • by Merrie Spaeth

Richard s. fuld, jr. at world resources institute forum

News outlets and commentaries are talking about the tenth anniversary of Lehman Brothers’ bankruptcy, an event that many experts believe pushed the U.S. into the worst recession since the Depression. Analysts are again debating the wisdom of the Treasury Department and Federal Reserve letting Lehman go belly up after having bailed out Bear Stearns. There’s one eternal lesson to remember from Lehman; that is, there’s no barrier between internal and external information. In other words, it’s very risky to say one thing internally and something else—totally contradictory—externally.

Courtesy of the Wall Street Journal in the aftermath of the debacle, we can see that on September 9, 2008, Lehman was internally discussing how to arrange to restructure its debt and estimated it would need between $3 to $5 billion. Their bankers advised against holding a conference call saying it would generate too many questions. Twelve hours later, Lehman held the conference call anyway, and CEO Richard Fuld assured investors that the restructuring (which was anything but secure but was portrayed as a done deal) would “create a clean, liquid balance sheet.” Their CFO Ian Lowitt said that they had “maintained strong liquidity and capital profiles,” which was an outright lie. To cap it off, when an analyst asked about raising billions, Lowitt said they “don’t feel that we need to raise that extra amount.”

Why should we care about a decade-old communication example? The headline of a recent USA Today editorial reads, “The next financial crisis is a matter of when, not if.” Think of all the news that has broken this year. Google and Facebook spying on customers and selling their data. Uber mistreating drivers. Company after company discovered fostering toxic environments where sexual harassment and abuse of women was tolerated, even encouraged. All these companies initially claimed, “Not us, no how,” only to be uncloaked. Yes, Lehman taught us many lessons, and what has been learned? Not much. However, there is an opportunity to learn and grow via this one simple principle: your internal and external messages should be in alignment.



You May Also Like


Erlbw3d0
03.19.19

Celebrating 55 Years of “The World of Henry Orient”

Today is a special day for me. It’s the anniversary of the release of “The World of Henry Orient,” the movie I did with Peter Sellers and Angela Lansbury. Just five years ago, I was back on the… more 

8325104250 3732199178 o (1)
12.05.18

Amazon’s HQ2: The Real Winners and Losers

Amazon’s recent announcement of its HQ2 sites created quite the buzz and left other cities feeling like big losers. However, some city officials still won with their post-announcement communication – others, not so much. Winner – Dallas How… more 

Img 3236
08.09.18

TSA Adopts the “Washington Monument Strategy”

The Transportation Security Administration has set off a storm of criticism for its proposal to stop screening passengers at approximately 150 of the nation’s small airports. Travelers, regulators, elected officials and others are conjuring up scenarios of brazen… more 


Back to Top