April 12, 2006
Enron: The World's Leading Energy Company
Posted by Christine Hurt

Like many people, I've been following the Enron trial mostly through the Houston Chronicle blog and the WSJ blog.  One discussion in the comments of the WSJ blog was over the wisdom of Petrocelli bringing out on direct items relating to Skilling's wealth and his vanity plate "WLEC," which stood for "World's Leading Energy Company."  Most commenters pointed out that inoculating the jury against adverse facts is a common and intelligent tactic for direct questioners, but I also think that these facts help Petrocelli's broader aim.  Petrocelli has to portray Enron as a great company, where people loved working and where people made a lot of money.  Now, the word "Enron" has taken on so much baggage that it's hard to make people remember that Enron used to be "the" company to work for in Houston.  (This would be like convincing your kids that the Dallas Cowboys used to be America's Team or that the Bee Gees used to be really cutting edge.)

The goal is this:  Enron was a great company that took great risks.  Some risks panned out, some didn't, but at the end of the day, Enron was a great company.  And had things gone as planned, you would be writing your utility payments to Enron, paying less, and getting great service.  But, there was a run on the banks, and because Enron had chosen to remain a growth company, the run hit Enron hard.  And, the Enron culture created great entrepreneurs and one or two rogues who got too greedy (Andy Fastow).  But, Skilling was not a rogue.  He believed in Enron and made a lot of money.  He quit to move on to new horizons, and after he quit there was a run on the bank.  He offered to come back, but it was too late.  Who is Jeff Skilling?  He is George Bailey.  He sacrificed a lot for his company and is on his way to his trip around the world when there is a run on the bank.  Then, someone he trusts loses the money while George is not looking.  Will our hero be redeemed?  Or will he be punished for someone else's error?

Part of me really wants to believe this story.  Enron was a great company.  The true tragedy of Enron is that the case studies will all be about the fall of Enron (check the HBS case studies) and very few about the actual Enron projects.  Why did Azurix fail?  Why did Enron Broadband fail?  Why did Dabhol fail?  These are questions about risk, success and failure that could actually add to the body of knowledge if someone would look at them.  The interesting question is what made these high-risk projects fail, not why someone would cover up a failure.  That's an easy question.

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