The value of generating change
An Enron case study

Below is a list of Business Case Studies case studies organised alphabetically by company. To view more companies, please choose a letter from the list below.

Page 6: Conclusion

In most companies a good idea is a fragile thing. Enron’s President, Jeffrey K. Skilling, says:

“like a lighted match, easily blown out by the cold winds of rigid management”

Traditionally, large companies find it harder to embrace change than small, entrepreneurial companies. Enron, however, is an exception. Enron looks for markets which are undergoing change, finds out as much as possible about these markets and then provides the best ideas to take these markets forward.

In 1998, 50% of Enron’s income comes from businesses that did not exist 10 years ago - such as electricity trading, international power projects and renewable energy. The best way of highlighting the way in which Enron has generated change is to focus on real examples.

Teesside Power Plant

At the first signs of liberalisation of the UK energy market in the late 1980s, Enron began the development of the 1,875 megawatt Teesside power plant, the world’s largest independent, combined cycle gas-fired power and related large natural gas processing facility. Teesside embodied Enron’s ability to bring together all the aspects of a large-scale infrastructure project, from the acquisition of fuel and the negotiation of long-term electricity and steam contracts to the design, engineering, construction and operation of the facilities.

In addition to the 120 people it employs at Teesside, Enron employs 500 more in its operations in London, Oslo, Madrid, Moscow and Frankfurt. In London, the company operates a sophisticated trading floor, where all energy-related commodities are traded, including natural gas, electricity, natural gas liquids, crude oil and refined products, to markets ranging across Europe, Central Asia, Russia and the Middle East.

Strategic Alliance with Russian Utility

In February 1998, Enron signed a 10-year strategic alliance and a $55 million joint financing project with Unified Electricity Systems (UES) - Russia’s largest electricity utility. The alliance will enable the two organisations to identify joint projects in Russia, Europe and Central Asia and is particularly significant in terms of Enron’s strategy to become a leading energy services provider across Europe. Based in Moscow, UES owns and operates the country’s 57,000 km national high voltage grid, as well as central and regional dispatch centres and substations. The company generates nearly 20% of Russia’s total generation capacity and holds a majority shareholding in 52 of the country’s regional electricity companies.

Clean Energy

Enron has set its sights on becoming world leader in renewable energy. It is developing new lower-cost technologies to generate power from environmentally friendly, renewable energy sources, such as wind, solar and hydro, which will play an important role in future international development. Through a joint venture partnership with Amoco, Enron is exploring a unique opportunity to supply solar rooftop panels for residential and commercial use in Japan. In the state of Nevada, the companies are pursuing a solar project in conjunction with the US Department of Energy.

Through Enron Wind Corp, a leading wind energy power plant developer, operator and manufacturer, Enron is pursuing wind power projects in Brazil, Chile, Greece, Honduras, Italy, Mexico, Spain, the UK and the USA .

In all of the cases highlighted, Enron has sought markets which are undergoing change and has used focused, entrepreneurial teams to start new businesses in these markets, while maintaining and expanding its existing core skills and strengths.

Enron | The value of generating change
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