Friday, July 15, 2016


On March 26, 2001, a young Houston native with an MBA from the University of Texas, Brian Cruver, started working at the biggest and best corporation in his hometown. The opening price of Enron's stock that day was $61 even, its closing price was $61.48, and its trading volume was 4,112,900 shares. And Enron's future was looking brighter all the time. For an ambitious business grad like Cruver, this was a dream come true. His job description was "product development manager," his product was credit risk, and he and his team members worked to develop ways of selling credit risk derivatives to people looking for -- get this -- protection against third-party bankruptcies.

On March 26, 2002, Enron was a standing ruin, its stock opened and closed at twenty cents, its trading volume was a few million shares, Cruver hadn't sold a single credit risk derivative in several months (Enron was clinically dead, but irony was alive and kicking), and he figured he should shave soon. He was also mulling over whether to write a book about the most recent -- and the most physically, emotionally, and psychologically taxing -- year of his life.

But I'm getting ahead of myself. Let's start with Cruver's first day on the dream job:

...Like anyone from Houston and anyone who went to business school in Texas, I had always known that Enron was the ultimate launching pad for a business career. Highly respected, bitterly admired -- if you were craving the fast track, you dreamed of working at Enron. Everyone knew it, and everybody talked about it: the people of Enron were simply "the best and the brightest"... and now, I was finally one of them...
The excitemnet was mixed with a wave of relief. Finally, I would get instant respect from family, friends, business associates, and complete strangers. Finally I could just say "Enron" and not have to explain where I worked. Everyone would be impressed.
I had taken a couple of risks after B-school.
First I joined a small, babyish trading firm on the other side of downtown Houston. Even though the firm was owned by Shell, it simply couldn't compete (with Enron, that is) and quickly fell apart.
Then I wasted a year of my life creating No explanation needed on that one.

(Unless you wonder why irony seems to follow this man around like a shadow...)

With Enron, I finally felt like my days of high risk were over. It was time to get back on track and reap steady rewards from the dues I had paid -- the time and money I put toward getting an M.B.A., the years of grinding away at Excel spreadsheets. Finally, I was ready to sprint down the path to my success. I had just hit the jackpot in the form of a safe, secure job at the seventh biggest company in America...

Back then, Enron was hiring people at an astonishingly fast rate. So fast, in fact, that it had its own New Employee Waiting Area. Cruver and some forty other people were hired on the same day. He would later learn that mass hirings were typical at Enron -- as well as mass firings. (This is not to be confused with the very mass layoffs that would come in November. These firings were peer-reviewed, and all Enron employees were required to participate in the process. Not kidding. More on that later in this series...) He would learn lots of strange things about his new company during his brief stay. In the meantime, Cruver was simply, and happily, overwhelmed.
The group's orientation would last eight long hours. During their lunch break, Cruver's new boss, Greg McLainey, came down from the trading room to talk with him. McLainey was also the man who'd hired him for the credit risk management position. For that reason, he had something to say... 

McLAINEY: "There's something I need to tell you about. I'm telling you because I don't want you to be caught off guard."
ME: "All right."
McLAINEY: "There was a slight mix-up in the hiring process."
ME (frozen stare): "This is a joke, right?"
ME: "Uhhh..."
McLAINEY: "It's no big deal. We're going to keep you. I just wanted you to know because some people aren't really happy that you're here. I want you prepared because they'll probably say something to you."
ME: "Are you telling me you didn't want to hire me?"
McLAINEY: "No, I wanted to hire you. It's just that the group really hadn't agreed to hire you.
ME: "Interesting."
McLAINEY: "Just think of it like you're adopted."
At that moment I heard a "pop" -- the sound of my bubble bursting. I was thinking that April Fool's Day was not for another week...
The rest of the afternoon was a blur; I could think about nothing but my conversation with McLainey. When the time came to head upstairs to my new desk and my new career at Enron, I had a whole new type of energy. It wasn't the "I made it" energy from before, but more of an "I'm pissed" energy. All I could do was bite my tongue and act professional.
One of the best business skills I have is the ability to hide my emotions and what I am really thinking. So when I finally met with the people in my group, I was able to smile and say "Hello," "Hi," and "Nice to meet you" -- while in my head I was greeting them with "Bite me"...
At least Cruver wasn't the only one at Enron with those "skills."

He's a trooper, though. His first rule for conquering corporate America is, "You can't go home until everyone else above you in the organization has gone home." On day one, he stayed until everyone except the head of his group, one Doug Waterston, had left. No cigar, but close -- and a sure-fire way for a new kid to win many a brownie point.

Still, while his first day had been disappointing, as he headed off to his car, Cruver decided that it didn't really matter. Enron was, plain and simple, a way cool place to be a part of. In addition to Enron being the seventh largest corporation in America, lavishing its employees with fat salaries and year-end bonuses, and matching fifty percent of every dollaran employee put into his 401(k) (which I interpret as a red flag -- where in the hell would that much free money possibly come from?), there were... the Star Wars motifs...

Enron was the Dark Side of the Empire, the dominant force in the energy universe, taking control of everything in its path, relentlessly gobbling up other companies and assets. The Dark Side could manipulate anything -- from politicians, to suppliers, to regulators, to entire commodity markets. Other companies were simply helpless against the sheer size and strength of Enron's wicked force.
Chief Executive Officer Jeff Skilling was known as Darth Vader, a master of the energy universe who had the ability to control people's minds. He was at the peak of his strength, and he intimidated everyone. He had been lured over to the Dark Side from McKinsey & Company in 1990.
Chairman Ken Lay, a bit past his prime, was the Emperor. He had trained Skilling, and was now unleashing him on the rest of the energy industry as part of a master plan. Lay had built the Empire to its current strength. Now Skilling was running the place, but the Emperor was still the boss.
Enron headquarters in Houston was the Death Star. All of Enron's competitors were lined up and down Smith Street, watching helplessly as the Death Star grew, and grew, and grew. Their only hope was to destroy it while it was still under construction.
The Star Wars theme was actually well received by people inside Enron. They didn't really mind being the bad guy, as long as it meant they were all-powerful and dominant. I didn't mind joining the Dark Side either -- after all, the Emprie offered great pay and excellent benefits...

For a while.

* * *

Tomorrow: Cruver's second rule for conquering corporate America, and how Enron became the Dark Side...