Enron cultists follow the leader

Was ENRON also a cult?

Providence Journal/January 24, 2002

Enron is a big company going down the tubes, to be sure. But was it also a corporate version of the Branch Davidians or Heaven's Gate? And did Enron's chairman, Kenneth L. Lay, operate in much the same way as David Koresh and Marshall Applewhite?

"There are elements of cultish behavior in Enron," asserts Dave Arnott, management professor at Dallas Baptist University. Arnott is author of Corporate Cults, which describes how some companies take over their workers' lives, using methods similar to those employed by traditional cults. The book identifies other all-consuming organizations as corporate cults. They include Southwest Airlines, Microsoft and Nike (where some employees had the swoosh logo tattooed onto their ankles).

Cults share three basic traits, according to Arnott. (1) They demand complete devotion of their followers, (2) they have a charismatic leader, and (3) they foster separation from the community. Enron scores on all three.

Enron nurtured a quasi-religious belief in the company's mission and its leader's greatness. It ran elaborate motivational sessions, where moderators would distribute inspirational rocks bearing the words "integrity," "respect" and "Enron." Many employees referred to Enron as their "family," and only team players need apply.

Workers at the Houston headquarters spoke of devoting 12-hour days to the company. They skipped lunch. Anyone who didn't put body and soul into the job got fired (as did two employees who criticized the company on Internet message boards). At any hint of attack, they'd rush to their company's defense. Journalists who criticized Enron's role in the California energy crisis received piles of angry mail from the Enron ranks.

Cathie and Wayne Stevens both worked at Enron's Pacific General Electric subsidiary in Portland, Ore. They had put all of their retirement money in Enron stock, ignoring the advice of a Paine Webber counselor to diversify their assets. Here is how Cathie described the couple's sense of personal connection with Enron: "We're gonna sit with it -- you know, believe in a company."

Note how differently the media have treated job cuts at Ford Motor Company and at Enron. The stories went: Too bad about the layoffs at Ford; the workers just have to find new jobs. Reportage on the tale of Enron, by contrast, took on a more tragic cast. After all, these people had given theirs souls at the office.

After losing both their jobs and retirement assets, Enron workers recounted their "lost faith" and "sense of betrayal." Such phrases underscored a deep emotional relationship with their employer. Enron meant far more than a weekly paycheck. It provided a way of life. Arnott wrote: "In corporate cults, the leader is often a workaholic, good looking, and suave, and/or has a famous reputation for business acumen." Ken Lay fit the bill.

Lay stood right next to the president. A central figure in Houston's power elite, he watched Astros games from the best seats at Enron Field. He raised $100 million for the University of Houston, and supported the symphony and the ballet. There was talk of his running for mayor.

And he convinced the world that he possessed a business genius of mystical proportions. Only last June, The Economist gushed about the EnronOnline product as possibly the "most successful Internet venture of any company in any industry anywhere."

If sophisticated analysts got sucked into the Enron cult of invincibility, what chance did brainwashed employees have? By September, the stock had already lost half their value and the CEO had just resigned. But all Lay had to say to his flock was that the stock was fine, and they stayed.

The greatest indication of Enron's cultish behavior, in Arnott's opinion, was its separation from everyday life and language. "They wrote their reports so that the external financial, regulatory and accounting communities didn't know what they were doing," he said. The unintelligible and confused scripture of David Koresh and Marshall Applewhite had much the same purpose: to keep the outside world at bay.

There is, of course, one big difference between Lay and traditional cult leaders. Koresh and Applewhite perished with their followers. Lay had no intention of sharing their fate. While urging his employees to stay the course with Kool-Aid, he cashed out of Enron stock to the tune of many millions. No team-playing fool he.