Mission Statement
Enron Corporation was founded through a merger of two natural gas pipeline companies in 1985. Because of this merger Enron was the largest gas distributer in the United States. During the period of 1996-2000 the corporation grew rapidly. The Corporation did not have a formal Mission Statement, which included such items as “This is where we’re going to go, this is what we’re going to do, and this how we’re going to do it” . (Hosmer, p.151) Instead they developed a seriesof stated values, specific assigned goals, performance reviews, and incentive payments:
1.Stated values: The core values of the company were described
Simply, butemphasized continually with posters on the walls throughout thebuilding and pamphlets handed out in every training program. Therewere four of these basic values:
Respect. We treat others, as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness, and arrogance do not belong here.
Intergity. We work with customers and prospects openly, honestly, and sincerely.
When we same we will do something, we will do it; when we say we can not or
Will not, do something, then we won’t do it.
Communication. We have an obligation to communicate. Here, we take the time to talk with one another……and listen. We believe the information is meant to move, and that information moves people.
Excellence. We are satisfied with nothing less than the very best in every thing we do. We will continue to raise the bar for everyone. The great fun her will before all of us to discover just how good we can really be. (Cruver, 2003, pp. 42-45)
The other three stated and/or goals were:
2. Assigned goals. The goals of the company were also simply stated and emphasized
frequently. The first of the two goals was companywide it was stated on Enron leading in the natural gas industry, secondly in the energy, and lastly in the global economy. The Divisionalgoals were designed to forward leadership ambition. This team concentrated on “meeting numbers” which meant growing the business and attaining steady revenues and returns.
3. Performance reviews. Enron believed there were few causes for failure. They expected success and ensured it by semi-annual reviews. The employees referred to the review process as “rank and yank”. The semi-annual reviews were done by the Peer Review committee which was made up of senior executives who asked “peers” of the same division to fill out a form evaluating other members of the same team or division. Each employee was rated on catergories such as: innovation, effort, and imagination. The forms were then combined with accounting records that detailed financial performance of the division and then each member was ranked on a forced curve from 1 to 5. 1s were considered excellent the term used was “water walkers”, but there could only be 10 percent of them. There could only be 15 percent of 2s and 3.5s, 25 percent of 4s , and there had to be at least 15 percent of 5s, the 5s were considered to be failures. They might be great performers, but that performance only mattered to the other employees within the groups or divisions.
People who got 5s were “redeployed,” which meant that they were given a desk, a computer, and a telephone and two weeks to find other employment within Enron or some where else. Where the computers and telephones were was called “the departure lounge” going there “ meant you got fired, only in a really slow and painful way.” (Quations from Cruver, 2003, p. 63)
4. Incentive payments.Employees at Enron who received 1s and 2s on their reviews in a steady series on their semi-annual reviews could expect substantial rewards, with promotions, salary increases, year-end bonuses and –best or all, in the view of numbers of financially orientated people who had been attracted to Enron- big stock options. (Hosmer, pp. 162-65)
This was Enron’s version of a Mission Statement.