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Power Failure: The Inside Story of the Collapse of Enron by Mimi Swartz and Sherron Watkins


Rating: (Recommended)


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Living Large

It’s morbid curiosity that drew me to reading Mimi Swartz’ Enron book, Power Failure. The fact that former Enron VP Sherron Watkins was involved helped. It’s a fascinating tale of hubris and office politics. Here’s an excerpt from Chapter 8, “Living Large” (pp. 133-5):

You could have it all: You could take risks (but they were hedged risks, under a huge corporate umbrella), you could be—in fact, you were supposed to be—an intellectual (and no one called you a nerd!), and of course, you could get really, really rich, maybe even overnight—the way it had always been in Houston.

In short, if you worked at Enron, you could embrace the old myths in a new way: You became a brilliant risk taker who was backed by a multibillion-dollar corporation—and the rewards were the same as they'd always been.

So, people flocked to Enron to embrace the conundrum. There was pressure, there was abuse, there were near-psychotic levels of competition, but everyone knew they were just a deal away from making it really, really big. You just had to hang in there; leaving Enron would be like a star reporter quitting The New York Times or an honor student walking away from Harvard or a bound-for-glory baseball player abandoning the Yankees—anything else was going to feel like a step down. Did you want to work with average people who made average incomes and had average ideas? Leaving Enron meant admitting that you, too, were average—instead of being the smartest, the fastest, and the best in the business.

As the millennium approached, the company's growing success in fact bred two Enrons. The first was the idealized Enron—the Enron that the New York Times called "a model for the new American workplace — every bit as much as the Silicon Valley start-ups that usually come to mind when the subject is entrepreneurship or innovation"—the company that routinely landed on Fortune's lists of the most innovative and best companies to work for in America. The survey Enron submitted to Fortune's "100 Best Companies to Work for in America" poll made Enron sound like corporate heaven: "On many of our floors the offices have glass walls or no walls at all, even for management," the scribes in the PR department wrote. "Nothing is hidden, secrecy is passe." Enron was benevolent: "If employees fail, there is no time for recrimination because they are already in hot pursuit of the next opportunity." Enron's leaders were the kind of guys you'd want for your best friends: "Ken, [and] Jeff, . . . clearly set the tone for how the rest of the company operates. They are friendly, approachable and ready to listen. They say hi in the elevator and ask how you are doing . . . they personally read and reply to all employees' suggestions and comments and they hold open forums for discussion at floor meetings. . . . [T]heir passion for new ideas and ways of doing things has sparked the creativity among employees that is building brand-new markets around the country and the world."

But Enron insiders knew hype when they saw it. Contributors to Fortune's "100 Best Companies to Work for in America" survey were supposed to be selected at random from within their companies. But at Enron, the same executives in Human Resources and Public Relations filled out the forms every year, creating out of thin air the corporate oasis that annually ranked higher and higher on the business press's laudatory lists.

Eventually, Enron employees came up with a different name for their company: The Bizarre Social Experiment. This company was forever reorganizing, so no one ever really knew for whom they were working or what, exactly, they were supposed to be doing. This company put ever-younger and less-experienced people in charge of business units. This company threw ungodly amounts of money at new business concepts. This company devoted itself to perpetual and monumental change: As Ken Lay liked to say, "In ten years we expect the majority of our profits to come from businesses that we aren't even in today." Unless, of course, the market suggested you were unfocused, and then it was time to backtrack.

In other words, despite the great press, Enron was a company enveloped in chaos.

To read more about the chaos and its aftermath, pick up Power Failure, sit back, and be shocked by how events unfolded.

Steve Hopkins, May 27, 2003


ă 2003 Hopkins and Company, LLC


The recommendation rating for this book appeared in the June 2003 issue of Executive Times

URL for this review: Failure.htm


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