[May 21, 2017] In 2001 as part of his senior project in High School, my son Sean wrote an essay about Enron; the most innovative company in America. His idea was to show how a well run enterprise can be successful for its investors. Sean graduated in May but in October of that same year, executives at Enron, aided by bankers and advisors, were discovered to have misled the company’s board of directors and the public.
The company’s failure represents the biggest business bankruptcy in history and it also spotlighted what the moral failure of a few senior leaders can do. Specifically, the scandal that brought down Enron was, in part, the result of people being seduced by charismatic leaders; those leaders who sought personal gain over their employees, their community, and shareholders.
A clear vision, mission, and core values is vital to ethical conduct of any enterprise. This helps create a common identity and provides for a reminder that the company must not just do well financially but also do good for everyone. The four core values of Enron were1:
- Respect
- Integrity
- Communication
- Excellence
There are no Enron employees around that we could ask about those core values. I’m sure they would either refuse to talk about those values because they either didn’t know or considered them just words on paper. And therein lies the problem; organizations with just words on paper – like leaders who talk and say nothing – is all too common today. What they say or write often lacks any meaning at all.
The former high-riding Enron Chief Executive Officer, Jeffrey Skilling, was convicted of federal felony charges (fraud, insider trading, etc.) related to Enron’s collapse and was sentenced to 24 years at a Federal Prison. Appeals have reduced his sentence and he may be released this year.
The question that leaders should consider is whether the lessons learned from this sad chapter in American corporate business will actually stick. Many don’t think so. Someone once said that perhaps the mission statement of large commercial companies should just be “make lots of money without getting caught.”
For more on the Enron scandal, see a Forbes article (link here) and Investopedia article (link here).
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1. http://www.nytimes.com/2002/01/19/opinion/enron-s-vision-and-values-thing.html