Rating: 
Summary: Well-Written, Well-Researched and Well-Edited...
Review: For anyone interested in the Enron scandal and what actually happened, this book is a must read. As noted, McLean and Elkind are excellent journalists who also had the benefit of good editing. Despite the arcane nature of some of the issues, it reads well.
The shortfall: It is difficult to criticize but the book focusses almost exclusively on Enron, the key Enron players and Arthur Andersen. It ignores and glosses over the roles played by "the enablers", the major commercial banks plus several of the investment banks. Also missing from the notorious "enablers" is McKinsey and Co. which worked closely with Skilling (a McKinsey alumnus) to create the framework for the fraud ...did they create the fraud ...no, but they "enabled" the fraud. And yet when one learns that McKinsey people were present and in fact, sat-in on Enron board meetings, one can argue they were as clueless as the board. Let's grade the quality of their work: A+ for intellect; C- for smarts!
In fact, if McLean and Elkind had cast their net a little wider they could have written an even more compelling narrative of Enron and not only what happened, but why it happened. As one finishes the book, in the distance one can still hear the dull whine of the Andersen shredders at work.
Rating:
Summary: Business 101: Something to learn from
Review: The book is organized in a chronological fashion. But at the same time, certain chapters were focused on key players in Enron:
- The story about Kenneth Lay.
- a story before enron became enron. Mostly, about acquisition.
- Story about Jeff Skilling and how he started off in McKinsey and how he entered Enron and eventually rose to be the top guy on the helm.
- It tells a story about Skilling's other lieutenants like Pai, Baxter, Rice, et.c
- It tells a story about how Fastow rose up the ranks (by the way, he was not originally one of the people in Skilling's inner circle).
- And much more...Some interesting things you will learn in this book are: - How Skilling was able to transform Enron's Busines Model from an "old Economy" Company into a "New Economy" Company similar to Tech-companies like eBay, Cisco, Microsoft, etc. - Understand how Skilling's team transformed the way they handle their accounting. Concepts like Mark-to-Market accounting and Off-balance Sheets. (Something I never knew before I read the book). - Learn about how they manage acquisitions and how they use acquisitions as a means for them to hide the true financial situation of the company. - Learn about how Fastow has maneuvered himself in the inner circle of the Skilling Team and how he had made himself as the Czar of Finance and Accounting from the eyes of Investment and banking institutions like CitiGroup, Chase Manhattan, etc. - Know about the working environment and culture in enron which Skilling has transformed into a "Make Creative Ideas... Nevermind the cost.." and a "Get the deals... we deal with delivering our commitments later." kind of culture. - Learn about the personalities of the key players. What type of social life do they have from Bike Safaris in Mexico to exotic bars. I find this book quite interesting (considering I have never ever had any interest in reading books cover-to-cover. Though most of the books I read are technical and IT-related, I find this book very good to read. The book is well written and proof-read (no grammatical or spelling errors). In terms of reading time and efforts to read this books (here I go again with my technical statistics)... - I find it good to read on flights. It allows you to pause for sometime to actually let you reflect.
- Total Reading time for slow readers like me is around 15 hours. For a long-haul flight from Los Angeles to Manila, you'll probably finish the book by the time you arrive to your destination. Summary, you will like this book. Good Day!
Rating: 
Summary: A Fascinating Read With All the Gory Details
Review: Enron was the largest corporate bankruptcy to date. Just a year earlier it was a 70-billion dollar company and the most respected company in the energy field. By the end of 2001 Chuck Watson of Dynegy said he wouldn't take it if it were free. What happened? How could such a large and powerful conglomerate, in which analysts hyped right to the bitter end, fall so fast. Bethany McLean and Peter Elkind take the reader from the beginning of Enron's rise to the colossal fall. From the beginning Enron was determined to rewrite the "rules" of how the business of energy was done around the world. Ken Lay, the founder of Enron, learned the natural gas business from his early days at Florida Gas and then Transco Energy. In the early 1980's gas prices were largely regulated by the federal government. This led to gas shortages when prices were too low and oversupply when the government hiked prices. Distributors would try to lock into long-term contracts called "take or pay" to protect themselves from future shortages. These contracts were bad from the pipeline owner's point of view because they had to pay the higher rates even if lower rates were available. Lay saw a way out of this dilemma, however. He set up a fledgling spot market for natural gas. The producers who let Transco out of these long-term contracts could sell directly to their customers, paying Transco to move the gas. Lay was a hero and it would propel him toward his vision of a deregulated gas world in which customers would always have the gas they need at the best price. When Ken Lay created Enron he had a different view of energy than anyone else in the business. When energy was deregulated in the late 19080's prices plunged. Money wasn't being made in oil; it was being made in trading oil. This was Lay's grand vision. In the words of the authors:"Oil trading was about trading, not about oil." The senior executives didn't know much about trading but as long as it made money no one cared. Oil trading was a way of promising to deliver oil in the future while locking in the price today. From its earliest days Enron struggled to survive. Lay had a vision of the future but he needed someone to show him the way. Enter Jeff Skilling. To Skilling natural gas wasn't about energy; it was about supply and demand. Whenever there was too much supply or too much demand there was money to be made. Instead of long-term contracts between suppliers and customers Skilling envisioned Enron acting as an energy bank. They would purchase gas from producers at one price and sell it to customers at a higher price. Enron would profit from the exchange and the customer would always be able to get gas. All Enron needed to do was to have matching customers for every contract to buy natural gas. He would revolutionize the oil industry. He never cared for the old oil executives; he wanted smart Harvard graduates under him. It didn't matter to Skilling if they never worked in the industry before; they would figure it out. The problems with Enron can be traced back to these early days. The people involved had great ideas but were poor in their ability to manage and carry them out. Those that could were treated as second class citizens by Enron management. They rewarded the people with the best ideas. It didn't matter if their grandiose plans never made any money. It would become the culture at Enron-a corporation built on vision but near-sighted on detail. The book is a long and difficult 414 pages. The deals and machinations of Enron's senior management are difficult and complex. The Smartest Guys in the Room is about these deals and not about the people. We know very little about how people truly felt about Enron through its rise and fall but we know a great deal about the gory details. For those with some accounting background it is a fascinating story. For the general reader it probably will be a bit bewildering
Rating:
Summary: Not For Lay People
Review: There's blame galore to go around for the spectacular downfall of Enron Corp in that sober year of 2001. Accountants, rating agencies, regulators, lawyers, consultants, bankers--and these are just the bad actors outside the corporation. Look inside, where Bethany McLean and Peter Elkind treat their readers to a thorough journalistic scouring, and the smell of the rot almost wafts off the pages. The authors rightly spend the vast majority of the book examining the personalities and circumstances that allowed the company to become what it was at the end of its life. Mix a potion that's one part hardscrabble Harvard MBAs, one part energy deregulation, and one part hysterical bull market, and you've got a financial molotov cocktail. Sadly, as we all know now, it was largely the little guy who paid the price for all the hubris of the players in this story, a fact that tends to get lost in the authors' painstaking recreation of the most complicated shell game in history. But the story of Enron's fallout could provide the material for a whole other book. In this one we get the tale of the players, people like Ken Lay, Jeff Skilling, Rebecca Mark and Andy Fastow, all filled with an equal mix of remarkable brilliance and fatal arrogance. All are indicted by these authors as rabid players in a game they made up themselves, deeming themselves beyond the petty world of rules and regulation. But coming in for equal excoriation is the system itself, the web of enablement and intimidation that allowed Andy Fastow to quietly hammer together the company's coffin in the form of a maze of phantom accounting entities designed to prop of the appearance of the corpse inside. The most unnerving theme the book treats indirectly is the effect of mass psychology--the way exceptional personalities distort and transform reality on a systemic scale. And it offers little in the way of how something like this could ever be prevented in the future. One word of warning for people not acquainted with basic finance: this is a complicated story, about erstwhile geniuses in the arcane use of financial products and regulatory loopholes. Though it's enjoyable even if one can't follow every detour down each accounting scheme, some knowledge of Wall Street and its workings seems necessary to understand the implications of the book overall. Given the fact that most experts didn't understand what went on here, the authors do their best to keep things as simple as possible, often using helpful metaphors and simple summations after a few pages of analysis, but they have no choice but to assume a level of sophistication among their readers. Which leads to one gripe. In "The Smartest Guys In the Room" not a single institution or individual player involved with Enron escapes the authors' finger-pointing notice, with but one exception. Where were the journalists in all this? Why did short-sellers have to be the ones to ask all the tough questions? Bethany Mclean should take understandable pride in being the first one to pry the door open on Enron's malfeasance, but she was just a little late. One would think that with the mass of financial journalists on CNBC, the Journal, the Times, etc., that just one would have bucked the collective cheering squad and dug deeper into what this supposedly invincible company was up to. But of course, this was the bull market. A time when everyone was exuberant when they should have been scared.
Rating:
Summary: Who will be among the smartest guys in a federal prison?
Review: This book will be especially valuable to those who have a keen interest in "the amazing rise and scandalous fall of Enron." I also commend to their attention Smith and Emshwiller's 24 Hours: How Two Wall Street Journal Reporters Uncovered the Lies that Destroyed Faith in Corporate America. The "smartest guys in the room" included Kenneth Lay, Jeffrey Skilling, Rebecca Mark, Andrew Fastow, Kenneth Rice, and Clifford Baxter. Whereas Smith and Emshwiller explored the same company as investigative reporters, McLean and Elkind seem (to me) to have approached their subject as corporate anthropologists. Both books reach many of the same conclusions as to what happened...and why. Two significant differences are that Smith and Emshwiller limit their attention primarily to a period in 2002 extending from October 16th (when Enron announced huge losses caused by two partnerships) to December 3rd (when Enron filed for Chapter 11 bankruptcy); McLean and Elkind cover a two-year period of the company's "amazing rise and scandalous fall." Also, McLean and Elkind devote far more attention to each of the "smartest guys"; Smith and Emshwiller seem far less interested in them, except in terms of the impact of their mismanagement and corruption. Let's say there are two books about the collapse of the twin towers at the World Trade Center; one focuses on the human tragedies associated with it whereas a second book addresses design, construction, and structural issues. Obviously, both approaches are valid. McLean and Elkind suggest that the eventual collapse of Enron was caused less by the greed of senior-level Enron executives than it was by their arrogance and incompetence. Their lack of basic business acumen is astonishing as is their defiance of regulatory agencies and contempt for customers. None of them seems to have had a moral "compass." They exemplified, indeed nourished a culture of brutal competition between and among their subordinates. Each used Enron as a personal ATM as well as a means by which to structure all manner of corporate partnerships and high risk/high yield investments without fear of any personal liability. If one prospered, so did they. If it failed, the loss was Enron's. On to another. Primary blame for all this must be shared by Lay, Skilling, and Fastow. McLean and Elkind rigorously examine the inadequacies of each, suggesting that if only one of the three had not been involved, it is probable that Enron would not have had the problems it did. Attorneys, accountants, brokers (notably Merrill Lynch) and bankers (especially Citibank and JP Morgan Chase) apparently were aware of Enron's bending and then breaking of various laws but were earning so much in fees that they chose to remain at the Enron "trough" side-by-side with Lay, Skilling, Fastow, and other Enron executives. Consider this brief excerpt from Chapter 10 (page 149): Here's how another former employee explains the process: "Say you have a dog, but you need to create a duck on the financial statements. Fortunately there are specific accounting rules for what constitutes a duck: yellow feet, white covering, orange beak. So you take the dog and paint its feet yellow and its fur white and you paste an orange plastic beak on its nose, and then you say to your accountants, 'This is a duck! Don't you agree that it's a duck?' And the accountants say, 'Yes, according to the rules, this is a duck.' Everybody knows that it's a dog, not a duck, but that doesn't matter, because you've met the rules for calling it a duck." There are so many other brief, equally revealing excerpts which I am tempted to include but won't. Earlier, I suggested that McLean and Elkind display in this volume many of the skills of a corporate anthropologist. I also commend them on their skills as storytellers. Of course, it helps to have many colorful characters and such an interesting narrative. Among business books, this is one of the rare "page turners." If Enron remains a classic example of organizational dysfunction, my guess is that this book will remain the definitive analysis of the causes and effects of that dysfunction.
Rating: 
Summary: Missed opportunity
Review: Excellent journalism and very well articulated research from McLean and Elkind make this a gripping read for anyone who wants to understand the forces that drive corporate greed. Banks, rating agencies, lawyers and accountants are not spared in what is a scathing criticism of profitability over ethics and plain common sense. What disapponted me, however, was the authors' obvious decision to skim over the political elements of the whole scandal. Kenneth Lay was one of the single largest individual contributors to the Bush campaign in 2000 and also made available corporate resources, such as company jets, on numerous occasions. Dick Cheney had secret meetings with company executives at a time that the wheels were beginning to fall off and it is impossible to believe that this was all innocuous, although in the rare instances that the authors refer to such events, they will have you believe that this was the case. Time will hopefully still reveal more about the murky political dealings of Enron, but it is a crying shame that this otherwise very well written book is not a place where you will learn anything at all about that dimension, despite there being no shortage of facts to be found elsewhere in the public domain.
Rating: 
Summary: Hindsight is 20/20
Review: Monday morning quarterbacks. I would have been far more impressed if the writers had actually done due diligence as the caompany was engaging in such flagrant abuses, and blown the whistle years earlier. What I want to know is: where were all the dedicated business writers (ahem ahem) taking a truly critical look at Enron as the company was destroying it's employees pension plans and criminally "Laying" waste? Far too little too late. Suggestion to the authors: In the future...why not try investigating corruption before a company collapses and destroys lives? It's more challanging, noble, and let's face it, helpful! Not particularly impressed with the storytelling/writing.
Rating:
Summary: The most informative Enron book; could be more readable
Review: I've read most of the major Enron books that have been published and, in my opinion, this one is best in terms of delivering clear information about what happened to cause Enron's apparent success and its inevitable failure. The authors show how Enron parlayed some very bad policies and practices: 1. paying huge compensation on the basis of overly optimistic projections for projects that were really bad deals;
2. booking and reporting income by marking-to-market overly optimistic estimates of future purchases and sales;
3. creating a byzantine structure of special purpose entities built on a massive conflict of interest with its own crooked CFO and designed to keep the Ponzi scheme going to hide real results from investors and lenders;
4. paying its supposed overseers of directors, accountants and lawyers enough to get their greed to overcome their professional responsibilities; into one of the most astounding and tragic business stories in American history. Having praised the authors for their coverage of the story, I only rate the book as a four star effort because of the writing. The writing is straightforward, efficient reporting as one might expect given the authors' background with Fortune magazine. But, I believe that truly outstanding books are written by wordsmiths who are so good at telling a story that a reader finds the book hard to put down rather than being hard to pick up and slog through. Too often for my taste I found myself working at reading to the end of this book rather than savoring it. To me, that's the difference between a well chronicled story and an exceptional book. Should you read this book? I'd say definitely yes if you're interested in the Enron story. Just don't expect to be entertained very much while you're being informed.
Rating:
Summary: The Best Enron Expose Out There
Review: Whether you're an experienced corporate player, a business school whiz, or just interested in what preceded Enron's 2001 fall, this is the book to read if you only read one Enron expose. Thre's enough detail to satisfy advanced business folks without losing the casual reader completely.
Rating:
Summary: Smartest Guys in the Room: The Amazing Rise and Scandalous F
Review: More than any other company, Enron has become synonymous with the outrageous levels of corporate greed and hubris that lie at the root of our economic woes. But the web of accounting procedures, puffed up-revenue, and complex derivatives trading was not a deliberate scheme to defraud investors; it happened through a pattern of activity that resulted from the obsession of keeping the stock price rising at any cost. This is the most thorough examination of Enron to date, based on hundreds of interviews and the examination of thousands of documents over a year and a half by two Fortune magazine reporters. Ultimately, this is a story about the personal shortcomings of the individual players, epitomized by Jeffery Skilling, the man who would rise briefly to CEO and then resign during the chaotic months before Enron's collapse. With a brilliant intelligence matched by an enormous ego, he could never admit, even to himself, that something was terribly wrong with the company he helped create. The Enron death spiral took on a life of its own, with many of the worst sins committed by employees who believed they were simply doing what they were told. Laying extensive groundwork, the authors ably convey the multidimensional nature of this story
| 
