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Jeffrey Skilling Arrives: Gas Bank, Rank and Yank, and Toxic Culture
At 11:29 · chapter starts 10:10
In 1989, Enron brought in McKinsey & Company — specifically consultant Jeffrey Skilling — to devise the 'Gas Bank' concept, turning Enron into a middleman between natural gas buyers and sellers. The idea took off so fast that Skilling left McKinsey and joined Enron full-time just two years later, eventually becoming Ken Lay's de facto co-CEO and protégé. Skilling's most notorious legacy was the 'rank and yank' system: every year, every employee rated every colleague, and the bottom 10% — about 2,000 people — were fired. Josh describes this as 'Machiavellian and also psychotic,' while Chuck notes it created a culture so viciously competitive that traders would metaphorically 'cut the throat of the guy next to you' for a few extra dollars. Meanwhile, Ken Lay maintained plausible deniability with a laid-back persona that masked his knowing orchestration of everything.
Jeffrey Skilling instituted a system where the bottom 10% of Enron's employees — around 2,000 people a year — were fired based on peer ratings. It created a cutthroat culture where traders would 'cut the throat of the guy next to you' for a few extra bucks, all actively encouraged from the top.
