Dream Job Turns Into a Nightmare

Skilling was the only Enron manager who refused to fully reimburse the company for his division's office space and cafeteria services. He got a cut-rate deal, Wyatt said. "He screamed and hollered," she said. "We ended up basically letting him do whatever he wanted."

'Rank and Yank'

Skilling set about imposing his philosophy on Enron.

He adopted what he called a loose-tight management structure that pushed executives and employees to be creative in pursuing the big deal. Loose meant taking risks. Tight meant central controls over critical parts of the operation, such as trading and credit risk.

"You want to try a new product with a customer, you don't have to ask me. Just do it. We just took away a lot of clutter," Skilling said in an interview with University of Virginia professors preparing a case study of Enron's management style in 2000.

Skilling told Robert Bruner, one of the professors, that as many as 20 executives reported to him directly, forcing him to delegate decisions widely. He said he depended on subordinates to bring problems to him.

He rarely sent e-mails, colleagues said, and did not prepare notes for his presentations to Enron's board. After approving the most complex tax transactions, designed to bring the company millions in deductions, he declined to accept copies of the documents, pushing them back across the table, a former executive said.

Being unconventional was good business, he asserted.

"I always said our weirdest people were our best people," he said. "Weird people come up with weird ideas. Hallelujah. It's the weird ideas that create new businesses."

But some were not so blinded by his light. Alberto Gude, a former Enron vice president in computer systems, remembered Skilling as an erratic manager who micromanaged projects he cared about, but was recklessly inattentive to the fundamentals. He had "a total lack of regard for how a business should be run," Gude recalled.

Once, when an Enron executive named Michael Ohannesian was meeting in a glass office with a vendor, Skilling walked past and made an obscene gesture behind the vendor's back. "He thought he was the smartest man in the world and everyone else was stupid," Ohannesian said.

Gude said: "We were creating a very arrogant management team. We were treating people, like venders and providers, like dirt. We were trying to project a figure of Super Human."

Skilling imposed a Darwinian personnel system known as "rank and yank," where a committee of two dozen executives rated employees on a numerical scale to determine promotion, bonuses and firings. He told Harvard Business School researchers that his approach eliminated office politics, because "you can't kiss 20 asses at once." But many employees were demoralized by the system, saying it encouraged Machiavellian scheming and punitive paybacks.