Post-Enron management philosophies for surviving uncertain times.

Chuck Watson
Chairman and CEO of Dynegy

"The real leaders are those that figure out how to get things done beyond what they could get done themselves."

The Executive

Age: 52
Undergrad: Oklahoma State University, B.S. in business and economics
Board memberships: Dynegy. Founding member of the Natural Gas Council. Also serves on board of Interstate Natural Gas Association of America, Baker Hughes Inc., on the executive committee of Edison Electric Institute (EEI) and is on the board of trustees for the Baylor College of Medicine.
Earlier in Career: Director of Conoco

The Company

Market cap at end of 1Q 2002: $10.56 billion
P/E ratio at end of 1Q 2002: 12.83
Revenue 2001 : $42 billion
Net Income 2001: $648 million
Employees: 6,600

Managing an energy company used to be so much simpler. Your company was called a utility, your earnings were regulated, and you didn't have to know how to deal with pesky little problems like mergers with a partner that you thought was worth the fire-sale price of $9 billion, but in reality was worth maybe $270 million. Maybe.

Welcome to Chuck Watson's world. It may be more like your own world than you care to think.

From a meager staff of six in 1985, Watson has built Dynegy into a 6,600-employee company with a $9 billion equity market value in 2001, and a compounded growth rate of 45 percent. Yet, even with such impressive company performance, Watson has remained focused on what he calls the Dynegy vision: striving to be a leading global energy company respected for the manner in which it delivers value to stockholders. That philosophy, Watson says, is something he has had with him all along, and was formalized into a vision statement at Dynegy about two years ago. And, he says, it's a philosophy shared by all senior management at Dynegy.

Watson is a big believer that senior management must all buy into the same philosophy if the company is to be run consistently. At Dynegy, he says, most of the senior management has been together for years, and have "grown up" in the company with the same Dynegy vision that Watson espouses.

While vision statements are often maligned in the Dilbert-world of cubicles, companies with managers that truly walk the walk of their vision statements can improve not only employee trust, but also productivity, according to Marti Smye, president of coaching and executive development at Korn/Ferry International. When management is honest and open with its workforce, she says, performance usually improves. Smye says she has seen really big turnarounds in companies where the employees' attitudes were quite negative initially. To make such a dramatic change, she says, the CEO and the senior team made an honest, concerted effort to communicate not only company goals, but also why management was taking particular actions. "[T]he workforce is very forgiving. People do want to believe," she says. "Most people want to do a good job, whether they work to live or live to work," according to Smye. Moreover, she says,