The peril of leadership letdown

One of the most eye-catching and surprising leadership fiascos in American history was the theatrical meltdown of the Enron energy corporation. When Enron collapsed in late 2001, it became clear as water that people in the highest echelons of Enron leadership had enriched themselves by creating partnership designed to disguise over a billion dollars in company losses. Sitting in the highest corner office of this financial house of cards was CEO Kenneth Lay, who had transformed a modest company of gas pipelines and power plants into the world’s biggest energy trading company. An internal investigation concluded that Lay had done nothing wrong, he was guilty only of a “laissez-faire management style.”

CFO Andrew Fastow has been portrayed as the real nasty piece of work of the Enron fiasco, since he created the borderline-legal partnerships called “special purpose entities” that were used to hide the company’s losses. Fastow made over thirty million dollars from the scheme, and millions more went into the pockets of people in Fastow’s office.

Also at fault was the accounting firm Arthur Andersen, which designed the creative ledgers that helped Fastow to keep his partnerships afloat and buoyant for so long. Top executives at Arthur Andersen’s home office in Chicago dumped blame on the Houston office, where Enron’s audits were.

Please understand me that I do not allege and assert to understand all the labyrinthine and tortuous ins and outs of the Enron implosion. I am not saying also that anyone at Enron or Andersen did anything that was scandalous, but one thing is clear, sitting on the mountain-top of history, top management at Enron and Arthur Andersen cannot duck responsibility for this massive corporate letdown—a letdown that cost many small investors and Enron employees their life savings. Andersen’s top brass in Chicago tried to pass the buck to the Houston office—but the Houston office is just as much Arthur Andersen as the Chicago office. The buck just won’t pass!

Kenneth Lay, who resigned as Enron CEO in February 2002, tried to make the case that he was a victim of subordinate, that he did not have a clue of what was going on in his own company. Well, perhaps it is better from Lay’s perspective to have the whole world think him a fool than a villain. But the truth is, everything still rises and falls on leadership. Remember, if it is good, it is leadership and if it is bad, it is leadership.

How can a leader say that he does not know what is going on under his or her watch? As it is in an organization so it is in a nation. Everything that happens in a nation, from the highest to the lowest levels, it will be idiotic and thoughtless of the President of a nation to say that he or she does not know. Whatever happens in a nation, the ‘arrow-head’ should be held accountable. Take for instance; everything that happened during the last administration did happen on the watch of Dr. Goodluck Ebele Jonathan and he should be held accountable for them all. And everything that is happening now—is happening on the watch of President Muhammadu Buhari. After his tenure in office, he is going to be held accountable for them all!

It is only in Nigeria that past Presidents are never held accountable for what happened on their watch. Heads under them would roll for leadership letdowns, but Heads of States would be walking freely and without stinting. We have turned logic and common sense on its head in Nigeria and we are wondering why things are not working. Nothing will work here until we start to do things the way they are being done in sane climes.

Back to the issue I am ex-raying today. The Enron debacle and shamble took place on Lay’s watch, and in the final analysis, it makes little difference whether Ken Lay was not watching on his watch, or whether someone should have been watching Ken Lay. He was the leader, he was the captain of the Titanic, and when his ship went down, he was called upon to answer for it.

When an organization fails, it is because the organization’s leadership has failed and when a nation fails, it is also because the nation’s leadership has failed. If the leader does not know about an impending disaster, it is because he fails to find out. If he did know and let the ball drop, it begs the question: “why didn’t he do anything about it?” Either way, the buck stops with the person in charge. That is how it is, and that is how it should be—no excuses, no shifting of blame.

Organizations fail for many reasons, but those reasons come down to a leadership failure:

The leader failed to set a clear vision for the organization

The leader failed to make the right business decisions

The leader took stupid risks

The leader was too timid and took no risks whatsoever

The leader failed to hold subordinates accountable

The leader lacked knowledge about the competition

The leader lacked originality, imagination, and innovation

The leader allowed the organization to acquire excessive debt

The leader did not maintain effective financial control

The leader failed to encourage continuous improvement

The leader did not encourage effective communication

The leader was not responsive to changing conditions.

In every case, whenever either an organization or a nation fails, the blame can be traced squarely to one person: the leader. Either the leader was incompetent or the leader was a nasty piece of work. In the case of our beloved country, Nigeria, we do not trace the blame to ex-presidents; we only trace it to those who served under them. Is it wrong to hold accountable those who served under them? No. But holding those who served under them accountable without captains of varied Titanic ships accountable is evil. The law that binds the poor should equally throw the rich into a dungeon. But as long as the law that binds the poor continues to set the rich free, we would never have a country.

See you where great leaders are found!