Comments

Hi Tom:

Sometimes I think the world really lack of talent. That is very terrible.

Talent to do things for good not for bad. Things for bad I think they can't be recognized as talent.

It seems to be that in the next years there will be more problems to find talent. "The Economist" Magazine dedicated a whole section of it on October 5th.

"THE SEARCH FOR TALENT"
http://www.economist.com/surveys/displaystory.cfm?story_id=7961894

http://www.economist.com/printedition/displayCover.cfm?url=/images/20061007/20061007issuecovUS400.jpg

Are we talented enough?

Best regards

Juan Miguel Robles Vargas

Posted by Juan Miguel Robles Vargas at October 23, 2006 8:04 PM

Just finished up (way late) The Smartest Guys in the Room, on the eve of Skillings' sentence.

A few strong impressions:

--It was no fluke; this was a culture out of control. Lay's pathological inability to constructively confront would have created its own dysfunction even absent Skilling and Fastow.

--The height of absurd ambition, to me, is Skillings' crossing out of the word "Energy" in the company's ambition to Be The World's Greatest Energy Company. When your ambition has no link to product or customer, watch out.

--It is more than a little worrisome that two of the US's iconic business institutions--arguably the Top Two--namely Harvard Business School and McKinsey--gave Skilling top endorsements. Baker Scholar at HBS, and partner at McKinsey (as you well know).

Now, HBS will criticize its own; professor Yoshi Tsurumi totally took of the gloves in going after George W. Bush. And McKinsey had ten years or so to vet Skilling. Basically, he is certified and certifiably the best, according to those two institutions' own processes. Hmmm...

Second, as "Smartest Guys..." points out, this is another case--but perhaps the most striking one--of no one seeming to take responsibility. Not Skilling, not Lay, not Andersen, not V&E (law firm), not the analysts on the Street, not even the credit ratings agencies, not even the Board of Directors of Enron itself. Everyone just points the finger.

In fact, it's worse; there is, in the case of Skilling, and of the late Ken Lay, and a host of others, absolutely no sense of remorse. (Andy Fastow appears to be the only one with a shot at genuine contrition). Worse than that, an honest (insofar as Skilling can be) insistence that he and they Did Nothing Wrong. If the term moral blindness has any applicability, here it is.

For a very interesting take on the whole subject, read Malcolm Gladwell's piece on The War for Talent, at http://gladwell.com/2002/2002_07_22_a_talent.htm, where he higlights the lineage of the whole Enron debacle right back to leading HBS and McKinsey thinking. Provocative!

One last thought: we don't need more laws, there were plenty to convict. And we won't fix this with walls separating conflicts of interest; this one gets down to basic simple values and character. Sounds trite, but hey JP Morgan talked about the same thing a long time ago, and he had (Wall)Street cred, didn't he?

Posted by Charles H. Green at October 23, 2006 8:34 PM

Charles Green: Great comment. Alas, in general we would not need laws if we could count on character. But we are a flawed lot.

Posted by tom peters at October 23, 2006 10:06 PM

Tom, your ethics, and that book Credibility, are totally opposed to everything that Skilling and Lay stood for.

The Bible, and many other sacred or philosophical texts, from Socrates, Buddha, etc. place massive emphasis on being a humble, modest, servant leader.

Arrogance, hamfistedness, brute force, etc. accomplish nothing that lasts, nothing of value.

It's ironic that we need government, a low credibility entity, to curb the excessive greed and exploitation of corporations.

When a bully comes at you with a big stick, you sometimes need a bigger bully with a bigger stick to help you out.

Ken Lay is NOT dead. He faked it, I'm very sure. Look at the closed casket, etc. plus how the attorneys saved his estate so the poor merry widow could keep the tainted cash.

Very very sick.

Posted by steven e. streight aka vaspers the grate at October 24, 2006 12:11 AM

Push for growth at all costs. A credo that cannot work, there is a cost, a human cost, a moral and ethical cost. We could all grow our companies with a singlemindedness precluding all issues, but like a freight train eventually the consequences will reach their destination and without a brakeman, the inevitable will happen.

Posted by Bob Hail at October 24, 2006 3:51 AM

You may feel free to read a post titled "Jeff Skill(ing!)" on my blog. Shall appreciate your comments / thoughts...

Note: click on my name-tag to visit my blog.

Posted by K.Sriram at October 24, 2006 5:47 AM

"It will ever be thus."

USA governance checks and balances seem to even the playing field over time - new DESIGN of governance architecture is a radical NEED though.

Love the "Ken Lay NOT dead" hilarious rumor above ... want to do that too ... $100M & basking somewhere SECRET!

Posted by sean at October 24, 2006 8:30 AM

Sorry being a dumb limey had to look up the Ken Lay stuff the 'joke' would be a variation on the theme about Elvis, Lord Lucan and Shergar! still cool tho

Posted by Patrick at October 24, 2006 9:07 AM

"I didn't know any of this stuff was going on in my organization." - Jeff Skilling -

What can a CEO do to improve organisational performance when he/she does not know any of the stuff that was going on in his/her organization? Not much. What do you think?

Posted by VK Narayanan at October 25, 2006 5:44 AM

Good question VK - the answer is resign.

Posted by Trevor Gay at October 25, 2006 9:31 AM

Let's not pile in on Mr. Skilling like he was the only one to blame or Congress because (like every other legislature in the world) they'll bolt the stable door only after this particular horse has fled. Let's ask a few other pertinent questions:

Where were the auditors in all this? Specifically, where are the senior partners who ran this account and have they been held responsible for not picking it up? Or were they - and I can't believe this would be the case - not too rigorous in their questioning because they were quite happy to pick up consultancy fees for engineering some of the deals?

Where were the Directors in all this? Again, I can't believe this would be the case but were they just happy to pick up their dividends and capital growth?

Posted by Mark JF at October 25, 2006 9:47 AM

There are two things about the Enron debacle that qualitatively set it apart from many other scandals.

First, this one vaporized the retirement savings of thousands of Enron employees, not just because the company went under, but because their boss, Ken Lay, told them everything was OK, even as he was selling his own stock.

Second, pretty much everyone we should have been able to count on failed us. It wasn't just management and the Enron board (who waived the ethics policy to allow some of the partnerships), it was also the accountants, and the independent analysists and, with very few exceptions, the business press.

I would love to see the Enron employees who lost real money in this go after the money that Skilling and Lay's estate have left.

Posted by Wally Bock at October 25, 2006 1:43 PM

I am not sure how accurat it is, but the documentary "The samrtest men in the room" is brilliant.

The creativity of these guys and also the greed is highlighted. It amazes you the commentaries to the stock market, when they knew the real situation and how they won over analysts.

What amazes you even more, was that it was the legislation at the time, which facilitated parts of their activities.

Posted by Steve at October 25, 2006 5:50 PM

One of the things I have noticed in my 37 years of work in management is the phenomenal growth in the number of accountants employed in healthcare and, I believe, in business generally. Although I am not well read about Enron I have to ask; what is the point of employing an army of highly trained accountants if they are not detecting and confronting what turns out to be criminal activity at an early stage before front line workers lose their pension? If highly paid and highly qualified accountants are supposed to be adding value to business then surely we can expect them to detect this sort of thing. If we need all these accountants then they have justify why they are there. Keeping records of expenditure and income is something anyone can do. I think we can expect professional accountants are to offer more insight than that. Just to add to the mix, in my experience, auditors generally come from an accountancy background too. I am not excusing the Enron CEO who has been found guilty of criminal activity and who ultimately, quite correctly, carries the can. My simple question is; what is the added value of armies of accountants?

Doctors are asked by healthcare managers to provide an evidence base to justify their requests for service improvement. I suggest it is time to see accountants do the same - provide an evidence base for their existence.

BTW – This is not just an ‘anti-accountancy rant’ - Some of my best friends are accountants (still) and I have the same discussion with them.

Posted by Trevor Gay at October 26, 2006 6:19 AM

Wally ... amen. The dittoheads should be even more shameful than the perps at some level. They are specifically charged with not buying the party line.

Posted by tom peters at October 26, 2006 6:38 AM

Trevor,

Accountants don’t come from a different planet. They are just a bunch of bean-counters amongst us…they are normal people like us and are very much subject to criticisms and conflicts of interest or collusion (you may call it whatever)…that being said, that doesn’t justify their position as a conscious keeper of corporate structures…be it anyone Trevor, if one has the INTENTION to commit fraud or scheme a sham or if one doesn’t act in the best interest of the organization (intentionally), it doesn’t matter whether or not he is an accountant…first, one must be a fit & proper person (in all respects)..then one’s profession matters…I repeat…”Person first, Profession next”

Posted by K.Sriram at October 27, 2006 2:20 AM

Hi Sriram - I like the expression 'person first profession next' and indeed I use it all the time when describing the late and unlamented Dr Harold Shipman the Doctor here in England who murdered 220 of his patients in the last 25 years. ‘Murderer first, Doctor second.’ We do not – as a result - consider all doctors to be murderers like Dr Shipman. My point about accountants is that there has been a massive growth of accountants in healthcare and all that I can see they have done is to produce better ways of measuring things. I am trying to see what value they actually ADD. I don’t know much about Enron but I excuse front line staff more than accountants about ‘whistle blowing’ because if anyone SHOULD have smelled a rat then it was accountants surely - wasn't this all about the handling of money? Instead of inventing complicated processes for checking things (costing more than they yield) why doesn’t the accountancy profession invent smart, meaningful and sensitive ways of detecting fraud earlier or better still preventing it happening in the first place?

Good discussion – Believe it or not, I really don’t have a ‘downer’ on accountants per se and in my career as a front line manager accountants helped me more than I will ever know because their sage advice balanced my natural impetuousness and lack of attention to detail. I guess my main frustration is that accountants like all of us have to justify why they exist and at the end of the day it is the accountancy profession (generally) that writes the rules on governance.

Posted by Trevor Gay at October 27, 2006 5:17 AM

Yes. All that. But 25 years. 6 years more than Federal Sentence for Murder. There is something intrinsically indecent which make the punishment and its moral values worse than the crime. It is simply disgusting and nobody is saying so, just valueless vindictive rubbish.

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