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JUNE 12, 2006
By Jack and Suzy Welch The Real Verdict On Business Enron-like behavior is rare. Most businesses play by the rules, and the rules work Ever since the Enron verdicts were handed down last week, there has been an understandable focus on the victims of the company's collapse: employees who lost jobs and pensions, shareholders who collectively lost billions of dollars, and residents of Houston, where Enron played a large charitable role. These victims, it was said, could take only cold comfort in the verdicts. Yes, the system worked. In fact, the old system worked, since Jeff Skilling and Ken Lay were tried under laws that were on the books long before passage of the Sarbanes-Oxley Act in 2002. But the convictions, everyone rightly agreed, could not bring back all that lost money or repair all those disrupted lives. Nor, we would add, do they seem likely to bring back the optimism, confidence, and courage that made business so much fun. Yes, fun. Remember? Before business-writ-large became demonized because of Enron and other companies where wrongdoing was found, being in business felt different. The bursting of the dot-com bubble certainly had an impact, but we're talking about a phenomenon that supersedes that. It's hard to quantify, but we sense a kind of fear and trembling everywhere we go. People worry about taking risks. They're anxious about the future. They're hesitant to say they love work. In short, business has lost some of its spark. What an unnecessary shame. Why? Because if there is one thing the corporate scandals have shown us, it's that bad behavior is actually pretty rare. The Wall Street Journal estimates that about 1,000 people have been convicted of corporate crimes since July of 2002. That's 1,000 -- not 10,000 or even 100,000 -- out of the tens of millions of businesspeople. Not every case of bad behavior has been uncovered, but an overwhelming number of businesses play by the rules, and most of the time, the rules work. WE KNOW THAT, and you probably do, too. You just might be having a hard time admitting it these days. Some time ago, we were speaking to a group of insurance agents in Florida. They were a cheerful bunch until one man asked: "Is it just me, or do other people here feel ashamed to admit they work in business now? I mean, sort of...dirty? I know I haven't done anything wrong and that I work with good people. But still...." There was silence, and then the crowd gave him a round of supportive applause. They were all in the tank together. This sort of self-loathing isn't the only worrisome fallout of the changed business climate. Managers everywhere tell us that they are spending vast quantities of time in defensive mode, heads down, chanting: "Compliance, compliance, compliance." Now, we're obviously for accuracy in reporting and ironclad integrity. But the blood in the water, even five years after Enron, has too many businesses swimming in circles instead of charting new horizons. Look, business isn't perfect, and it never will be as long as it is comprised of human beings. After all, we have laws galore, and people still drive above the speed limit, rob convenience stores, and, of course, do far worse. The FBI raids one congressman's office; another is indicted and resigns. A journalist at a respected newspaper fabricates stories for years. A man of the cloth takes what's in the collection plate to fund a lavish lifestyle. Just as you could write off business because of such aberrations as Enron, you could write off all public servants, the media, and the clergy because of a minute percentage of politicians, journalists, or padres. But you might as well write off all of humanity. Business is a huge source of vitality in the world and a noble enterprise. Thriving, decent companies are everywhere, and they should be celebrated. They create jobs and opportunities, provide revenue for government, and are the foundation of a free and democratic society. People who work at winning companies give back: They pay taxes, mentor in schools, volunteer at firehouses. So don't buy the line that Enron is business, and business is bad. Enron and the others were exceptions. Business is good. In fact, business is great. Yes, Enron had its victims. The whole awful story is a tragedy. But we can't let a small group of companies rewrite reality and make businesspeople cower in shame and lose their courage. We can't let business -- society's engine and great hope -- be Enron's final victim.  Jack and Suzy Welch look forward to answering your questions about business, company, or career challenges. Please e-mail them at thewelchway@BusinessWeek.com For their podcast discussion of this column, go to www.businessweek.com/search/podcasting.htm
BW MALL
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