Inside Enron's Enigma: Working Before the Scandal

Working at Enron was a blend of stress and excitement, as the company pushed its employees to their limits. Under Jeff Skilling's leadership, Enron attempted to establish a meritocratic environment where competitiveness and skill improvement were paramount.

Creating a Meritocracy Under Jeff Skilling

Enron's goal was to foster a highly competitive yet continuously improving work environment. By firing 10% of its workforce each year, Skilling aimed to enhance the skill level and overall quality of the remaining employees. This strategy led to the creation of one of the most ruthless and stressful organizations within the industry.

This relentless pursuit of improvement translated into generous rewards for top performers. Enron was known to reward its best employees with bonuses that exceeded $1 million. These bonuses trickled down to employees who could demonstrate significant value, equivalent to at least 10 times their salary. Such incentives were designed to keep the workforce constantly striving for more.

Acutely Competitive Environment

However, this so-called meritocracy led to an unsustainable and toxic work environment where employees were often pitted against each other. The competition was intensified by the evaluation process, which involved peer ratings and hierarchical assessments. This constant pressure to perform well not only created an atmosphere of fear and stress but also fueled a culture of one-on-one rivalry.

Pushing the Envelope with Financial Instruments

Despite the stress, working at Enron was also incredibly exciting. The company was at the forefront of finance, constantly innovating and pushing the boundaries of financial instruments and derivatives. One of the more complex transactions involved linking the prices of natural gas and ammonia. By tying the price of natural gas to the price of ammonia, the company was able to create a financial mechanism where the prices moved in sync, creating new revenue streams and significantly enhancing profitability.

For instance, one of the projects involved an ammonia producer whose primary input was natural gas, which accounted for 90% of its costs. Through a sophisticated financial instrument, the company was able to create a mechanism where any decrease in ammonia prices led to a corresponding decrease in natural gas prices, and vice versa. This was a complicated transaction with no direct correlation between the two prices, but it was essential to the company's strategy.

The result of these efforts was tremendous revenue generation. Employees were expected to generate between 8 to 10 times their salary in revenue. The pressure was immense, but so was the excitement, as the workplace was always buzzing with innovative ideas and the pursuit of groundbreaking solutions.

The Aftermath of the Scandal

Despite the initial success, Enron faced a catastrophic scandal that ultimately led to its collapse. The environment of stress and constant competition eventually turned into despair and shock as the company's collapse sent ripples through the industry and the broader economy. After the scandal broke, many felt lost and uncertain about their future. However, like many, the author managed to find a new role quickly, marking the end of an era and the beginning of a new chapter.

In conclusion, working at Enron during the golden years was a unique experience, blending stress and excitement. While the allure of significant bonuses and the potential for rapid financial success was enticing, the culture of constant competition and the eventual collapse of the company remain a poignant reminder of the risks and consequences of unchecked ambition.