Mindset _ The New Psychology of Success - Carol S. Dweck [58]
As resident genius, Skilling had unlimited faith in his ideas. He had so much regard for his ideas that he believed Enron should be able to proclaim profits as soon as he or his people had the idea that might lead to profits. This is a radical extension of the fixed mindset: My genius not only defines and validates me. It defines and validates the company. It is what creates value. My genius is profit. Wow!
And in fact, this is how Enron came to operate. As McLean and Elkind report, Enron recorded “millions of dollars in profits on a business before it had generated a penny in actual revenues.” Of course, after the creative act no one cared about follow-through. That was beneath them. So, often as not, the profit never occurred. If genius equaled profit, it didn’t matter that Enron people sometimes wasted millions competing against each other. Said Amanda Martin, an Enron executive, “To put one over on one of your own was a sign of creativity and greatness.”
Skilling not only thought he was smarter than everyone else but, like Iacocca, also thought he was luckier. According to insiders, he thought he could beat the odds. Why should he feel vulnerable? There was never anything wrong. Skilling still does not admit that there was anything wrong. The world simply didn’t get it.
Two Geniuses Collide
Resident geniuses almost brought down AOL and Time Warner, too. Steve Case of AOL and Jerry Levin of Time Warner were two CEOs with the fixed mindset who merged their companies. Can you see it coming?
Case and Levin had a lot in common. Both of them cultivated an aura of supreme intelligence. Both tried to intimidate people with their brilliance. And both were known to take more credit than they deserved. As resident geniuses, neither wanted to hear complaints, and both were ready to fire people who weren’t “team players,” meaning people who wouldn’t keep up the façade that they had erected.
When the merger actually took place, AOL was in such debt that the merged company was on the brink of ruin. You would think that the two CEOs might work together, marshaling their resources to save the company they created. Instead, Levin and Case scrambled for personal power.
Levin was the first to fall. But Case was still not trying to make things work. In fact, when the new CEO, Richard Parsons, sent someone down to fix AOL, Case was intensely against it. If someone else fixed AOL, someone else would get the credit. As with Iacocca, better to let the company collapse than let another prince be crowned. When Case was finally counseled to resign, he was furious. Like Iacocca, he denied all responsibility for the company’s problems and vowed to get back at those who had turned against him.
Because of the resident geniuses, AOL Time Warner ended the year 2002 with a loss of almost one hundred billion dollars. It was the largest yearly loss in American history.
Invulnerable, Invincible, and Entitled
Iacocca, Dunlap, Lay and Skilling, Case and Levin. They show what can happen when people with the fixed mindset are put in charge of companies. In each case, a brilliant man put his company in jeopardy because measuring himself and his legacy outweighed everything else. They were not evil in the usual sense. They didn’t set out to do harm. But at critical decision points, they opted for what would make them feel good and look good over what would serve the longer-term corporate goals. Blame others, cover mistakes, pump up the stock prices, crush rivals and critics, screw the little guy—these were the standard operating procedures.
What is fascinating is that