Monday, March 28, 2011

Unsuccessful Habits of Lay and Skilling

In the case of Enron, there were many mistakes made on the behalf of the leadership. When looking at the Seven Habits of Spectacularly Unsuccessful People, there are immediate parallels between the examples listed in that article, and the leaders of Enron, including Ken Lay and Jeff Skilling. And, while arguments can potentially be made for each of the seven habits, in my opinion the most prevalent in this instance are habits #3 and #6.
Habit #3 is when the leader believes that they have all the answers. In the case of Enron, it seemed as though Lay and Skilling believed that their ideas were golden, and immune from failure. This led to aggressive expansion that ended up having a major impact on the ultimate destruction of the company. Perhaps if they questioned themselves more, they would have found something that might have argued against all the acquisitions and new ventures. This also made it extremely tough to oppose them, as they were “full steam ahead” trying to build the company into the greatest in the world.
Habit #6 is when the leaders underestimate major obstacles. Immediately I connected this habit to the Enron leadership not immediately taking the correct measures to fix their financial problems. Instead, they simply manipulated a few numbers on their financial statements, and went on with their business plan to try and keep finding new ways to take over the industry. Perhaps it would have been smarter for them to realize that maybe it would be better to be conservative and stick to what they were good at. This led to them getting in more and more debt, and they were never able to recover, even after trying illegal measures.

1 comment:

  1. I feel that, in addition to underestimating major obstacles, the leaders of Enron were guilty of searching for solutions in their past successes. After their initial success in creating what amounted to a futures market in petrochemicals, it attempted to replicate that success in other markets that were less suited for that business strategy.

    ReplyDelete