The idea was not to provide high-quality service, but use internal competition, backstabbing and ultimately deception to build a successful organization, at least on paper. Apparently, he craved for respect, and the idea to develop an unsurpassable company in the market. From today’s standpoint, experts argue whether Ken really knew what was going on. Although Enron’s mission statement indicated that the company advocates for integrity, transparency, and respect in reality, people were paid for doing the opposite.Ģ) What you strive for, will ultimately become your reality. The employees encouraged by a potential grand slam did almost everything that could grant them their reward. The organizational culture was revolving around rewards and bonuses, without taking into account the imminent threats:ġ) First and foremost, what your associates and employees are motivated to do is synchronized with the company’s risk-reward system. The Smartest Guys in the Room recounts the effectiveness of the operations which were launched off the radar and why no one was left in command to supervise the company’s proceedings. In the meantime, the executives received a considerable amount of money, because the stock price went up. To make matters worse, these “fictive” deals were actually reported as incomes, without even fulfilling the company’s side of the agreement. Enron without facing any real competition, and encouraged by its position in the market, forgot about the process of providing quality of service.īoth the employees and the executives working in there began preparing contracts that would be traded in the foreseeable future. This pure ingenuity revolutionized the energy markets in the U.S. This was a win-win situation because buyers loved nothing more than a full-cohesion and support in the process, while the sellers needed money beforehand to finance their operations. Selling the gas to buyers for a fixed price allowed the company to reduce the risks linked to the supply and demand and the uncontrollable gas-price curve. What made the company grow so fast, was the plan which emphasized the importance of paying the gas sellers in advance, and making a deal to supply the buyers with a new source of energy, even before the purchase. This energy trading company suddenly collapsed in 2001, leaving pretty much everyone in shock and disbelief.Įnron was something like the middleman in the whole process, or should you prefer – an intermediary between gas suppliers and buyers. The Smartest Guys in the Room provides a recap of the story that will later be known as the rise and fall of Enron.
#The smartest guys in the room summary pdf
“The Smartest Guys in the Room PDF Summary” Peter Elkind is also a prominent author and highly-skilled reporter who is also a contributor for New York Times, Fortune, and other renowned journals. She is the author of several books and works as a columnist for Fortune.
About Bethany McLean & Peter Elkindīethany McLean was born in 1970.
As such, we believe it’s suitable for managers, leaders, and students who are in the process of learning. “ The Smartest Guys in the Room ” is a story about a company which asserted its dominance and wanted to showcase a dose of strength and invulnerability. Stay tuned! Who Should Read “The Smartest Guys in the Room”? And Why?Īre you the smartest guy out there? – Who is, in fact, the decision-maker of the house? Many people are eager to encounter success, and you might want to jump on the bandwagon as well, don’t you?! In this book summary, we try to encapsulate all the events that contributed to the ultimate fall. 5 min read ⌚ The Amazing Rise and Scandalous Fall of EnronĮnron’s rise and surprising collapse in 2001, left everyone wondering what was going on, behind the curtains.