Leadership - Culture Counts

Leadership methodologies are as unique as a handprint. Everyone seems to have their own way of leading. These leadership styles are born from our heredity, rearing, education and personality. In the same manner, those being lead, the followers, are motivated in countless ways. With all this variation in leading and following, it goes without saying that leadership skills in one corporate culture may simply not work in another corporate culture. This blog entry will address the topic of cultural incongruence.

Case In Point: Enron

Enron was a company on the move. Hailed as one of the top companies of the early 21th century, Enron was the place to work. Young, upwardly moving professionals were drawn to a culture of aggressive business strategies, generous compensation packages and a culture that celebrated itself continuously. Equipped with some of the brightest minds, Enron created a momentum seen seldom before. Each year, the company appeared to be moving to increased levels of profitability. In fact, for some it seemed to be good to be true.

Of course, as we know at this time, it was too good to be true. But as one reflects on the case of Enron, you must ask the question “How far down in the organization did the dishonesty and unlawful business practices go?” Were only the top executives aware of what was happening at the company or did the deceitful practices permeate much deeper in the organization?

In my opinion, due to the widespread corruption that was found in the organization, it seems virtually impossible that employees in the lower ranks were not at least somewhat aware of what was occurring. At a minimum, employees in groups such as finance, accounting, trading and human resources. The American public has tapes of traders who knew they were trading energy commodities at 40 to 50 times the rate as energy commodity prices before speculative trading began between energy companies ($80/megawatt vs. $4,000/megawatt).

With this background in mind for a company like Enron, lets now address the topic of leadership methodologies. Let’s speculate on the environment within the trading organization. How did leaders lead and how did followers follow within such an organization?

First, let’s address the topic of shared values. I believe those who worked in the trading organization most definitely had shared values with their leaders. I believe these values centered around proficiency in making the most revenue as humanly possible with little regard for the consequences of their actions on others. I believe the culture centered on top producers and rewarding these producers regardless of ethics and honesty. Leaders on the trading floor were followers of executives such Jeff Skilling and Ken Lay who appeared to focus on revenues and shareholder value above all else.

Second, how do you think those who did not subscribe to these shared values fare within the trading culture at Enron? For those in the utility environment who moved into the trading function, it must have been a culture shock considering the change from a utility environment to a trading floor environment. For those who were focused on maximizing revenue at any cost, the change was an easy transition. For those accustomed to the traditional utility environment where energy was traded to assist your fellow utility, the cultural transition likely did not work.

In conclusion, leading and following takes many forms in today’s business environment. When deciding on where you would like to make your mark on the business world, you should make sure to consider the business culture first in deciding on your employer. Otherwise, you can expect challenges ahead that you may not be able to overcome.