HR practicioner Paul Knoch reviews the books Conspiracy Of Fools by Kurt Eichenwald and Disney War by James Stewart . The review examines both books’ tales of “corporate culture gone awry” and argues that they should be lessons to HR.
Both Conspiracy of Fools: A True Story by Kurt Eichenwald and Disney War by James Stewart are cautionary tales of corporate culture gone awry. If HR professionals are to be the “guardians” of an organization’s culture and identity, it may be instructive to consider these two examples of how greed and ego combined to effectively blind an organization to its own steady demise.
Culture can be difficult to define or identify. Some organizations create a strong culture that permeates every aspect of their business. Southwest Airlines, for example, has attempted over the years to create a culture that emphasizes their “David vs. Goliath” struggle against larger airlines. In the 90s, Microsoft built a culture that valued slavish devotion to the company and praised employees who dutifully put in 70-hour workweeks.
But what is culture? Organizational culture has been defined as the shared beliefs and values established by leaders and then communicated and reinforced through various methods, ultimately shaping employee perceptions, behaviors, and understanding.
A strong organizational culture can have many positive aspects. It can help define the kind of employee who would succeed at a company and screen out those who would not. Your culture can also reinforce your
brand or identity. A strong culture that is clearly and consistently communicated can also help new employees assimilate more quickly and smoothly.
But what happens when an organization’s culture goes awry? In some instances, your culture can work against the progress and success of a company by discouraging or even prohibiting open communication or honest analysis. As HR professionals, we bear some of the responsibility for maintaining and promoting a culture that remains open to feedback and receptive to criticism.
Both Eichenwald’s Conspiracy of Fools: A True Story and Stewart’s Disney War offer a fascinating look at two powerful organizations with strong cultures. Unfortunately, in both instances, the cultures of each institution became blind to honest self-appraisal and hostile to anyone who sought to promote positive change. It’s easy to castigate corporate executives as greedy, but it’s more informative and useful to examine how the culture of their organizations evolved to the point that greed was considered a virtue.
The name Enron has become synonymous with corporate greed and deceit, yet few people know the true story behind the headlines. In Conspiracy of Fools: A True Story, Eichenwald tracks Enron’s amazing ascension from a lowly pipeline company to a global energy broker with soaring profits and cozy connections with major Washington power players. Eichenwald brilliantly combines precise details and thorough research with heart pounding storytelling that will keep the reader turning pages late into the night.
Conspiracy of Fools: A True Story is essentially a story of three men: Enron CEO Ken Lay, President Jeff Skilling, and CFO Andy Fastow. Each of these men play a pivotal role in Enron’s success, and each is partially responsible for the company’s eventual collapse. For HR professionals, there is a lesson here in studying these individuals. In Lay, you see the corporate chieftan who was so confident in his company and in his people that he was blind to any problems until it was too late. With Ken Skilling you have a portrait of wildly intelligent and successful executive whose character faults made him susceptible to greed and ego. And finally, with Fastow you have the “villain” who intentionally skirts the law and practices deception and intimidation for his own profit.
It would be easy to dismiss the Enron debacle as an example of corporate greed, but that would be a mistake. Rather, as Conspiracy of Fools: A True Story illustrates, Enron was an example of how a corporate culture can become poisoned by success until all that matters is creating profit by any means and at any expense. At Enron, the truth was not welcome. In one symbolic and telling scene, Jeff Skilling corners an Enron employee who has been sounding an alarm about Enron’s questionable accounting practices. “You are acting like a cop!” Skilling hisses with barely concealed rage, “We don’t NEED cops here.”
You don’t need a degree in finance to enjoy this book. Eichenwald’s masterful narrative puts the reader right in the middle of every boardroom debate and backhanded deal. Conspiracy of Fools: A True Story is a must read for fans of business nonfiction or anyone seeking a comprehensive and objective “insider” view of the largest bankruptcy scandal in the history of the United States.
In Disney War, Stewart tells the story of Michael Eisner’s tumultuous reign as CEO of Disney. From his early creative collaborations with Jeffrey Katzenburg to his later boardroom battles with Roy Disney, Stewart provides a front row seat into one of the most spectacular high profile careers in American business history.
Stewart’s book was originally intended to simply document Eisner’s role as an executive, but the timing of his research coincided with a dramatic period of turmoil within Disney Corp. While not as gripping as Conspiracy of Fools: A True Story, Disney War provides a compelling and insightful look into the world of Disney and Hollywood.
What is most striking about Disney War from an HR perspective is how Eisner was unable to support or even tolerate a second in command. In every instance, Eisner would undermine and alienate anyone who was given the number two position at Disney. On one hand, Eisner was a brilliant businessman who revived the Disney brand and transformed the struggling company into a major media powerhouse. On the other hand, Eisner was a paranoid, spiteful man with an almost pathological ability to twist the truth.
While Eisner was able to produce record revenues for Disney’s shareholders, he also drove away an all-star list of talented executives and artists with his mercurial personality and guerilla tactics. In one memorable example, Eisner pursues his best friend Michael Ovitz to take the number two position at Disney. Ovitz eventually agrees to leave a profitable career as a Hollywood power broker to join Disney. On Ovitz’s very first day at Disney, Eisner begins to systematically undermine and sabotage him until he quits just a few months.
Few of us will ever know what its like to be a major Hollywood power player. Disney War is an often-fascinating look inside one of America’s most cherished (and profitable) brands. Stewart is effective at
portraying a complete picture of a very complex man. While Eisner’s accomplishments are legendary, his legacy is perplexing. Ultimately, Eisner’s career will always be tarnished by his inability to support and
promote those around him.
For HR professionals, Disney War vividly illustrates the dangers of a CEO whose power and judgment go unquestioned. Eisner was, at times, his own worst enemy. Without the checks and balances of a strong second-in-command and an active, independent board of directors, Eisner’s ego and paranoia ran rampant. Without a proper plan for succession, the only choice Disney shareholders had was to stage a rebellion. The conclusion to Eisner’s career was a sad and avoidable exit under clouds of controversy.
For my part, a true story is always more interesting than fiction. Both Disney War and Conspiracy of Fools: A True Story provide riveting accounts of larger than life figures from the American business landscape. One is reminded of the ironic inscription on the shattered statue in Percy Shelley’s “Ozymandias”:
My name is Ozymandias, king of kings:
Look upon my works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away.
Paul Knoch is the HRmanager for Cannon Beach Christian Conference Center and is a frequent poster on the HRHero.com Employers’ forum. Paul and his wife Carol live in the beautiful Pacific Northwest with their two daughters ages 4 and 12.