Jeffrey Skilling- A Bad Leader

The leaders of Enron displayed many of the common characteristics of bad leadership. Jeffrey Skilling, who served as president and chief operating officer of Enron from 1996 until 2001, when he became CEO of the company, exhibited numerous forms of bad leadership. In fact, Skilling may be more responsible for the shocking collapse of Enron than any other leading figure. The reason that Skilling was able to reach such a high position in Enron despite his bad leadership was his initial success, as he was largely responsible for the development of Enron’s highly profitable “gas bank.” However, after this success, Skilling almost immediately displayed one of the characteristics of bad leadership described in Seven Habits of Spectacularly Unsuccessful People: he relied on what had worked for him in the past. Once Enron’s growth began to dwindle, he tried to extend the same business model that he had used for natural gas to electricity, water, broadband, pulp, paper, and lumber. Rather than examining these different areas individually and applying the best business model to each one, Skilling forced his old business model onto these separate markets. Then, once certain markets began to fail, such as the broadband industry, Skilling exhibited one of the most harmful attributes of bad leaders: he refused to admit he was wrong. Skilling could not admit that the company was expanding at too fast a pace or that the business model was not working in some areas since his credibility depended on the success of the company. Moreover, the success of the company itself relied on the public’s misconception that Enron was financially stable. As a result, Skilling never attempted to change the hopeless direction in which the company was heading, and instead focused his efforts on making the company appear to be successful to the public and the employees.

Skilling also had a huge ego and seemed to consider both himself and the company to be invincible. As stated in Seven Habits of Spectacularly Unsuccessful People, “When CEOs actually do possess a measure of genius, they are especially prone to slide into this illusion of personal preeminence.” As an incredibly talented businessman and graduate from Harvard Business School, it is not surprising that Skilling fell into this trap. Unfortunately, Skilling’s feeling of invincibility and belief that he had all the solutions to Enron’s problems ultimately led him to ignore the numerous risks of his business model. What is even more unfortunate is that these characteristics helped lead to one of the largest business failures in history and ruined thousands of peoples’ lives.