The Smartest Guys in the Room
In the documentary “The Smartest Guys in the Room” there were many things that went
wrong, I will explore three specific things and relate each to the readings we have had during the
course of this unit. First and foremost the leadership running the company was corrupt and
arrogant. We will dive into the leadership relationships with employees and the consequences of
the lack there of. Second, we will explore Enron’s organizational culture created by upper
management and the consequences for the employees who were affected by this culture. Then
finally, we will look at the unique way Jeff Skilling used workplace bullying in an attempt to
protect himself and the company. The discussion of things that went wrong could go on and on
but these are three things we will explore in this paper.
In the Kouzes and Posner reading the text states that effective leaders envision exciting
and ennobling possibilities. Leaders have a desire to make something happen, to change
something that no one else has ever created (p.220). This describes Jeff Skilling perfectly. He
was a very charismatic man who was very confident in the way he presented himself and his
ideas. He built a relationship of trust that gained the confidence and loyalty of employees so
much so that no one ever questioned where the earnings were coming from. No one inside the
organization ever asked the question why which is ironic because the documentary states that
this was a motto Enron upheld. This vision of exciting and ennobling possibilities was
contagious and excited the entire company to commit and invest in the future by investing in
employee 401K’s while at the same time upper management was selling off their stock. This
was one of the consequences of the employees’ relationship with Skilling and his leadership.
This was only one of many things that went wrong in this organization.
The reading goes on to discuss leadership by saying, “In some ways, leaders live their
lives backward. They see pictures in their mind’s eye of what the results will look like even
before they’ve started their project; their clear image of the future pulls them forward. Leaders
cannot command commitment, only inspire it” (p. 221). Jeff Skilling was a very effective leader
when it came to getting others to follow him and trusting him. He definitely lived his life
looking to future results even before the company had built the structure or created product.
When he was shown in clips speaking he was very inspiring and charismatic. He led the
investors and employees to believe that they would benefit from investing in the company.
Many did just that and suffered greatly. His vision and leadership got many premier banks to
invest as well. He was very skilled at playing on Wall Streets greed. This could only have been
done by a skilled and talented leader. The film quotes, “No one who was supposed to say no
said no. They were all getting paid as long as they kept Enron succeeding they’d make money”.
This was a direct result of effective leadership within upper management that not one person said
no. This type of leadership was a major factor in what went wrong with the company.
Finally, Kouzes and Posner state, “Leaders enable others to act grand dreams don’t
become significant realities through the actions of a single person it requires team effort. It
requires solid trust and strong relationships. It requires deep competence and cool confidence, to
get extraordinary things done in organizations; leaders have to enable others to act” (p.222). The
film described the top executives as having a ‘Macho’ culture and taking trips and adventures
together. This would support the team effort that these upper executives used to pull this off.
Having all the executives in compliance and supporting one another only reinforced the
employee trust and confidence in the scam. The text uses the word ‘cool’ confidence which
describes each of these men very well. At one point Jeff Skilling is quoted as saying, “I am
Enron”. This statement is a direct result of arrogance and greed. Having the team of executives
stand behind the unethical practices of the company was another thing that went wrong with this
organization.
The culture of Enron was established by a group of very charismatic leaders. The
organizational culture that was created empowered employees to not ask questions and just
continue making good earnings with their 401K’s and not ask any questions as to how the
company was making the money. In the Pinnington reading it talks about a research study that
studied companies reputed to possess ‘string’ cultures and found that the employees don’t just
talk about it, but their firms establish meetings and workshops on culture and culture change.
This statement reminded me of the part in the documentary when the group was gathered
together and they unveiled the banner. It stated the new company motto and the future goal of the
organization which was to be the largest company in the world. The organization and its
employees were often shown in a large rooms being talked to by the top executives. They would
be assuring them that things were going well. They would defend themselves against negative
articles written and media coverage. Each of these meetings were creating an organizational
culture of the arrogance and greed and the attitude that the company was above all the negative
press. As quoted from the film regarding corporate culture, “Within the corporate culture in our
country, you can gain the whole world but you can lose your soul.” This organizational culture
was a downfall for the company and a significant reason the company fell.
What is a workplace bullying? In the Daniel’s reading the term is described as a global
concept that incorporates harassment, intimidation and aggressive or sometimes violent
behaviors (p. 159). Jeff Skilling began to create this environment for one reporter who began to
investigate Enron. He was very deceiving and condescending to her as she asked him for
financial records. Even though she was not an Enron employee, his bullying was noticed and felt.
The top executives possessed several of the “eight daily sins” of bullying bosses, specifically,
deceit which is defined as lying, giving false or misleading information. Skilling was the voice
of Enron among the employees. He was very deceitful and abused his power by lying and giving
false and misleading information to the employees. As quoted in the film, “Employee reactions
were such that they had lost everything and he continued to encourage them to invest. He left
employees hanging and gave them 20 minutes to clean out their offices and get out of the
building. Insiders were disloyal to all the hard working employees.” These statements are
evidence of being bullied. A bullying boss is selfish only protecting themselves. This was
evident among all the top executives. The documentary was heartbreaking to watch the
employees lose everything.
In conclusion, there is not enough time or room in this paper to discuss all the things that
went wrong in this case. The bottom line is that Enron and its executives crossed over into the
dark side by arrogant leadership abusing their power. They fell into the dark side by creating an
organizational culture of arrogance and greed. They bullied those who questioned company
practices and threatened those who spoke up. Each of these things, among many others led
Enron to their mighty downfall.