Enrons Visions and Values: What are they hiding?

As I was reading about goals in Organizations and Organizing (Scott and Davis) I immediately thought of Enron. The in the above video Ken Lay and Jeff Skilling discuss what they want the public to think is there vision and values. Scott and Davis describe this as the symbolic function of goals. Enron would like the public to believe what Lay and Skilling are saying in the video, but it is just a publicity stunt. Of course part (actually a huge chunk) of what they are saying is true. Enron was BIG on innovation. In fact, as mentioned in my previous post, they sometimes took creativity a bit too far. 

My issue with this video is several lines which come near the middle. The first comes from Jeff Skilling:

     “There probably are times where there is a desire to cut corners, but we can’t have that at Enron.” (3:20)

This statement is highly amusing to me. In its later years (when its cash profitability was headed down the drain) Enron was all about cutting corners. They hid their losses in some very scandalous ways instead of attempting to change their business to make a real profit. They wanted to make the easy buck (or make it appear as though there was a buck) without putting in a lot of effort. This came from the real goal of Enron, to fabricate a rising stock price, even if the company was not doing so well.

Another line that that made me “go hmmm…” came from Ken Lay:

     “Enron is a company that deals with everyone with absolute integrity. We play by all the rules, we stand by our                   word, we mean what we say, we say what we mean.” (3:33)

This was very funny to me because in Enron’s later years none of these statements held true. The definition of “integrity” from Dictionary.com reads: 

     adherence to moral and ethical principles; soundness of moral character; honesty

Enron had none of these qualities. The company had some very unethical/immoral accounting principles and it was not at all honest with its customers. While everything they did was technically legal, they were rule stretchers to the extent that if the SEC really knew what was going on they would be in big trouble (and they did in fact get into big trouble when they finally collapsed). When they said “We’re doing great!” they really meant “We are very sneaky and great at making it look like we are doing damn well.”

Another Jeff Skilling quote that made me chuckle a little:

     “What it ultimately comes down to is our customers.” (4:13)

This is very funny to me. Enron did not give a care about their customers. All they cared about was keeping their stock price up. If this meant that they had to screw a few of their customers over then so be it. 

While the people of Enron were brilliant minded (one would have to be to pull this type of sham off), they had serious issues with their goals. The companies intrinsic goals (the main being to continuously increase the stock price by 15%) led to great conflicts with what their intended visions and values are as stated in the video. If they had stuck to some of what they had said (beyond the innovation) is it possible that Enron may have stuck around? Maybe.

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6 Responses

  1. What struck from this post is that many of these quotes– “What it ultimately comes down to is our customers” or “Enron is a company that deals with everyone with absolute integrity”–could have been said by any executive in any company. GE, Coca-Cola, Goldman-Sachs, Google–I’m sure at one point or another executives in these companies have made similar statements. At Enron, as we are currently finding out in TSGITR, it was all hooey. It is hooey at any of this any other companies, too?

  2. Every company that provides a service or sell goods to the consumer, would have a line like this…it’s called “Institutional Marketing” – when you don’t promote the product/service you sell, but you actually promote the company and its values. It’s when Philip Morris does an ad against smoking – do they really care or they are doing it because of the tax breaks they get??
    Enron’s blinded will to please it’s share holders makes me think…”is that the ultimate goal of every company?”

  3. @ “What it ultimately comes down to is our customers.” (4:13)

    I don’t think they were kidding, it did eventually come down to their customers, when it came to bearing the brunt of the losses. Yes, the whole company did come tumbling down, and the employees suffered a lot too, but so did the poor customers. Maybe what they meant was “… who it ultimately comes down on is our customers.” :-p

  4. AN intrinsic goal was to have EPS grow 15% a year? What do you mean by intrinsic here?

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  6. By intrinsic goals I mean goals inside the company. Looking back on it now I think I meant the “ends” that Enron wanted to reach. This, I believe was one of their problems. They were so focused on getting to the end that they did not care what they did to get there… even if that involved lying, cheating and stealing (they didn’t steal from stock holders… they stole from their customers, the people who lent them money, etc.).

    Nadir… I real like your response about that statement. It is very true, their customers did have to bear the weight. It actually made me laugh a little to think of it that way.

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