Book: The Smartest Guys In The Room - The Amazing Rise And Scandalous Fall Of Enron

Book: The Smartest Guys In The Room - The Amazing Rise And Scandalous Fall Of Enron

This was by far the most enjoyable, intriguing, thought-provoking, and fastest read I've picked up so far. (As a side note, I have wondered, and still wonder, whether the title is supposed to be a play on the homonym "Smartest guise in the room.")

It was written by a couple of writers at Forbes magazine who were intimately familiar with Enron, having dealt with the company since its inception. They meticulously step through the company's existence from the promising and fruitful beginnings of its energy operations to it's ultimate demise as America's largest bankruptcy, weighing in somewhere in the order of $30+ Billion in debt.

The most enlightening aspects of the Enron saga are the personalities and personal journeys of each of the key players behind Enron's existence. I think it's fair to say, in general, that most successful people in business are either 1) Brilliant, 2)Incredibly charismatic, or 3)Fortunate benefactors of nepotism. The founder (Ken Lay) wasn't very business smart, but had a good idea and was amazingly charismatic and quickly roped in his brilliant minions.

Minions is a bit misleading of a word because I think it has too negative of a connotation. I honestly think that at the beginning, the business plan was legit and had all the promise to be a very successful enterprise. Actually, it was wildly successful in it's first year of existence. If done correctly, the Enron dynasty could probably have been bigger now than it ever was.

The reader very quickly sees what happens when incredibly intelligent people are put together towards a common goal in an atmosphere of amoral adherence to the "letter of the law". Like I said, the operation was legitimately making money hand over fist the first year or so...but quickly after that, all "profits" were merely the magic of clever accounting.

This is a story of brilliance turned to hubris and invincibility but yet no accountability. I think the theme of the epilogue "Is anybody to blame?" sums up well the personalities of the key players involved. Everyone felt as though they had done nothing wrong. It's almost impossible to pinpoint when any laws had actually been broken...the regime was one continual exploitation of loopholes and gray areas.

The tale is truly terrifying in a very real sense. It's amazing to think that one of the worst businesses in American history was heralded as stable and as a "good buy" by many Wall Street analysts even up until the day before it imploded and ruined thousands of people's lives as well as the bottom line in some of the world's largest banks. It's amazing that brilliant accountants and relentlessly charismatic leaders can do more to bolster the stock of a company than actual legitimate earnings.

What I learned: Honesty, honesty, honesty. Then hard work. Then brilliance.