From: mike.mcconnell@enron.com
To: gary_anthes@computerworld.com
Date: 2000-10-09 08:16:00+00:00
Subject: Re: Thanks and a few residual questions

Gary,

Thanks for the email.  Here is my attempt to type out a response.  I hope it 
helps.

1.  It was a matrix organization.  The IT personnel reported into the Global 
Tech. group but we did that for communication and consistency  purposes 
rather than simply control.  They attended business unit staff meetings and 
the BU had a great influence in the review process and gave constant 
feedback.  It was vitally important for the "customer" to be happy and that 
the IT person completed the projects from the BU.  When it came to the review 
process itself, GT ranked all the employees and peers but the business unit 
had the greatest influence on where the person actually ranked and was rated.

2.  When Enron Net Works was formed, nothing really changed on the day to day 
working of the IT world.  IT (Global Technology) was folded into the newly 
created 5th business unit at Enron.  Remember Global Technology had more that 
IT alone.  We had an eCommerce commercial group, a principal investments 
group and was developing eCommerce or Technology origination roles developing 
around the world.

Philippe Bibi is the CTO for Enron and Enron Net Works.  He is in the office 
of the chairman of ENW with Greg Whalley, CEO and Louise Kitchen, the newly 
appointed COO.  Both LK and GW are non IT people.  There are many VPs on the 
next level that are IT executives.

3.  In a nut shell, Scott grinned when I told him of my 2 weeks experience 
and title as CEO with Enron's goal of becoming the largest B2B player in the 
world.  He chuckled and said something like, "That sounds like Enron, it 
always looks at things differently.  He then stated that my CEO title and 
Enron's approach was very unusual but that it would be more common place 
soon,  as this was the way of the future and Enron was the first to recognize 
it and change its culture".

4.  When i used the word cannibalize, I meant that if we didn't change the 
business ourselves, than our competition would do this for us.  For example, 
we were the leading trader of natural gas in the US by far but we initiated 
EnronOnline and completely changed the way we traded natural gas and did it 
for free.  Thus we cannibalized our own successful business even when it was 
going great.  We are looking at all of our businesses for changes like that.

Gary, I hoped that helped.  Please don't hesitate to contact me if you have 
any other questions.

Mike






"Gary Anthes" <Gary_Anthes@computerworld.com> on 10/06/2000 04:18:40 PM
To: Mike McConnell <mike.mcconnell@enron.com>
cc:  
Subject: Thanks and a few residual questions




Hello Mike,

Thanks for sending me those presentation slides. They are good background. And
thanks so much for meeting with Julia and me this week. It was most 
interesting
and helpful. I'm confused on a couple of points, so would you mind answering a
few more questions?

1. You said that after Enron created the Global Technology group, you "seeded
people out into the business units, and the way we did that is we had those
people be totally accountable both to us and to the business unit head." So, 
at
that point it was a sort of matrix organization, with IT people dispersed
thoughout the business units but at the same time accountable to a central IT
organization for things such as standards, is that correct?

2. Then, this spring when Net Works was formed, did those 1,500 IT people
essentially leave the business units to join a more traditional IT 
organization?
Roughly how many non-IT people, and of what types, are part of Net Works? Two 
of
the three top managers in Net Works are non-IT (from trading), correct? Does 
any
given IT person now still live in a matrix world with responsibilities to IT 
and
to a business unit?

3. For some reason, my recorder messed up and I couldn't decipher what you 
said
about Scott McNealy's reaction to your background, etc. at the breakfast. 
Could
you repeat that?

4. You said: "We had to cannibalize our own businesses. So what I think you'll
see five years from now is that the IT world will look totally different." 
What
did you mean by "cannibalize our own business"?.

Thanks again.

Regards,
Gary Anthes

Gary H. Anthes, Editor at Large
Computerworld  (www.computerworld.com)
1331 Pensylvania Ave. NW;  Suite 505
Washington, D.C. 20004
gary_anthes@computerworld.com    ganthes@mba1974hbs.edu
202-347-0134 (voice)   202-347-2365 (fax)