Jeff Skill(ing!)

Wondering why I titled my post that way??? Well, because all said & done, JS (former CEO of Enron Corpn) was a highly skilled man – more for the wrong reasons than right…after all, he received his B.S. in applied science at Southern Methodist University (1975), where he was a member of Beta Theta Pi and decided to get into HBS to pursue his MBA, where he was once asked by the interviewer "Are you smart?" – to which he famously replied, "I'm f****g smart"…now you really know how smart this guy could get…I really wonder why such a f****g smart guy would need an Ivy league MBA education!

Well, after graduating in the top 5% of his class from Harvard, he set sail to join McKinsey & Company as a consultant (not too sure how smart he was back then at McKinsey) in the energy & chemical consulting practice and then began working with Enron (well, I guess McKinsey & Company could have put its client’s interest first in this case!) way back in ’87, helping the company create a forward market (its basically a OTC financial market in energy contracts for future delivery) in natural gas. Kenneth Lay was obviously impressed and hired JS to become the Chairman & CEO of Enron in ’91 (I guess he was turning out to be a very creative CEO trying to create off-balance-sheet transactions!)

Well, the last few years have not been that good for Mr. Skilling – he was indicted on 35 counts of fraud, insider trading, and other crimes related to the collapse of Enron and pleaded not guilty to all charges. The main reason for his arrest was his probable knowledge of the fraudulent (creative!) transactions within Enron. It’s astonishing to note that Mr.Skilling spent close to $40 million in preparation for the trial, at least $23 million of which going to his defense lawyers' retainer…no wonder as the old adage goes “UK is made of accountants and USA is made of lawyers”

On May 25, 2006 Mr. Skilling was found guilty on 19 counts of conspiracy, fraud, false statements and insider trading and yesterday, Mr. Skilling was sentenced to 24 years in prison and fined $45 million for his role in the collapse of Enron. He plans to appeal (skillfully, I suppose!). Good Luck with your skills Mr.Skilling!

Tough Choices by Carly Fiorina

I recently read this FORTUNE article based on an interview by David Kirkpatrick with Carly Fiorina and was taken aback to read a few remarks that she had given on HP & its leadership…

Her remarks about…

The recent HP scandal - "Forget the legality. Let's go back to character, judgment, ethics, perspective. I think there is an impact on the Hewlett-Packard reputation, and I think it's very sad."

Her successor Mark Hurd - "I think to call the last 18 months a turnaround is frankly foolish. That's not to take anything away from what Mark has done... Certainly I agreed with his decision to continue to cut costs. It was what I was planning to do." She says that "clearly" HP is on the same course she charted when she was CEO.

HP - "Everybody at HP focused on incrementalism." "HP had become a bureaucracy." "We had 87 different product lines that never talked to each other. This was not a customer-focused business."

I am just puzzled with her comments on HP!

My questions are…Who created an incrementalistic approach / culture at HP? Who shaped the bureaucracy? Who created 87 different product lines with china-walls? Who or what was the reason for HP not being customer centric?

I BELIEVE THE ANSWER TO ALL THE ABOVE QUESTIONS IS LACK OF GOOD ‘LEADERSHIP’ AND ‘CORPORATE GOVERNANCE’... as I always say “Bottleneck is always at the top of the bottle” – Well, anyone cares to disagree?

"Numero Uno" Nooyi

FORTUNE magazine releases its 2006 WOMEN POWER list i.e. 50 most powerful women in business (Ofcourse, it’s an annual ranking of only America’s leading businesswomen). The best thing is that Ms.Indra Nooyi (CEO of Pepsi w.e.f. Oct 01st) has already been ranked numero-uno!