• 03.29.09

The Enron Syndrome

The names, dates, and companies have changed, but like the gerbil on a wheel we’re right back where we were in 2001. Corporate policies that reward executives for behaving badly, all with seemingly no connection to stated company values. You see, true values-based behavior is the key and until we all demand otherwise, the Enron Syndrome continues.

When I started Selker Leadership in 2002, it was to reinvent executive search as a client-centric service that delivered unprecedented value. Seven years later, I am proud to report that our PVA methodology has altered the way people are selected, interviewed and hired. The “V” in PVA stands for Values. It was our premise then, and is still our fundamental core principle, that when you define values-representative behavior for a specific job, and test for this in an interview, you will end up attracting, hiring and developing leaders, and building a values-based culture (See: The Steps to Building a Values-Based Culture of Leadership Part 1, Sept 2002; The Steps to Building a Values-Based Culture of Leadership Part 2, October 2002; Values-Based Hiring as the Leverage to Building High-Performance Organizations, May 2003; and Use your Corporate Sunscreen, April 2008)


Well, what goes around comes around. While “values” haven’t been isolated in the media commentary or blogosphere, when you look at the companies on Wall Street at the heart of our economic collapse, anyone can see that these companies have been chock full of executives seemingly void of values and behaving badly. Now I don’t mean to blame the executives personally, since the truth is, they were behaving within the cultural thresholds of their companies, making decisions consistent with their policies, and getting paid according to their compensation plans. It just so happens that the culture, decisions, policies and compensation plans were not at all representative of the values emblazoned on the company’s walls, websites and corporate Codes of Conduct. It is the “Enron Syndrome” all over again: develop a set of “good sounding” altruistic corporate values, use them to recruit and rally the troops, while the executive leadership does whatever they want in direct contradiction, with a damaging ripple effect.

Just pick any of the leading institutions who participated in the securitization of mortgages and other high-risk instruments and have been the recipients of Federal TARP payouts. I guarantee you will see that these companies all state they are committed to some very familiar corporate values, just like AIG:

• People Develop diverse talent. Reward excellence.
• Customer Focus Anticipate their priorities. Exceed their expectations.
• Performance Be accountable. Manage risks. Deliver AIG’s strength.
• Integrity Work honestly. Enhance AIG’s reputation.
• Respect Value all colleagues. Collaborate with one another.
 Entrepreneurship Seize opportunities. Innovate for and with customers.
Source: AIG’s Code of Conduct

The problem is that these values all exist in a vacuum as an idealized set of concepts that have no relationship to, or bearing on the work that people do on a daily basis. Until all of us, executives, managers, board directors, shareholders, workers and citizens all demand a change, as a country we will continue to experience the “Enron-Syndrome”