McLean, Bethany, and Peter Elkind, The Smartest Guys in the Room, Penguin Books, New York, 2004.

Enron Epitomizes All That Is Wrong With Corporate America: Greed, Arrogance, and Charlatanism

By: Steve Rubis

Corporate America at the turn of the new Millennium faced numerous scandals. These scandals involved both individuals and entire corporations. The Smartest Guys in the Room is a catchy title that epitomizes the Enron story. The majority of Enron employees believed that they were the smartest in the room. McLean and Elkin use their investigative journalism as a point of departure in order to generate a true financial history. Descriptions of interpersonal dynamics, corporate culture, and audit complacency provide more than a history of Enron’s demise. Smartest Guys in the Room exposes Corporate America of the new Millennium for what it is: greedy, arrogant, and unaccountable.

The authors illustrate how intellectual hubris served as a catalyst for Enron’s demise. McLean and Elkind attempt to describe the history of the Enron Corporation. These authors begin with the company’s humble beginnings in the 1980’s. McLean and Elkind give readers an in-depth, often overly detailed, description of the rise and fall of Enron. They describe in great detail the interpersonal relationship of the major players: Ken Lay, Jeffrey Skilling, Rebecca Mark, Andrew Fastow, et al. The book serves as the pre-eminent source on how Enron fell. The interviews, myriad sources, and minute detail create an anatomical map of Enron. Readers who seek to learn every last detail about Enron should start with McLean and Elkind.

McLean and Elkind provide a simple account of the history of Enron. The authors attempt a metamorphosis of their financial journalism into a financial history. Their financial history attempts to retell the development, growth and demise of one of America’s most innovative corporations. Their goal is to detail the shenanigans so that the reader can develop a better understanding of the Enron debacle. Primary sources serve as the foundation of their account, which started with the author’s own investigative journalism.

Smartest Guys in the Room is a clever title since it summarizes the entire book. Enron Corporation hired the best and brightest and offered these employees a blank check. The corporation encouraged employees to push the envelope to ensure that profit targets were achieved. McLean and Elkind illustrate this arrogant corporate culture as the recapture the personal dynamics of management. Andrew Fastow and Jeffrey Skilling epitomize the intellectual arrogance and charlatanism of Enron. Fastow and Skilling pushed the envelope beyond reason using financial games as well as belittling to ensure Enron’s prominent reputation.

McLean and Elkind offer an authoritative source for future historians. Any future researchers interested in corporate scandals or Enron should start with this history. While cumbersome at times due to immense detail, the book give the best account of the Enron story. Smartest Guys in the Room is complimented by its much less dense cousin 24 Days: How Two Wall Street Journal Reporters Uncovered the Lies that Destroyed Faith in Corporate America by Rebecca Smith and John Emshwiller.