Message-ID|NNP :|: <|NN 31386690.1075860837352.JavaMail.evans@thyme|NN >|NN Date|NN :|: Fri|NNP ,|, 30|CD Nov|NNP 2001|CD 07:48:06|NN -|: 0800|CD (|( PST|NNP )|) From|IN :|: steven.alexander@us.artemisintl.com|NN To|TO :|: ken_lay@enron.net|NN ,|, kenneth_lay@enron.net|NN Subject|NNP :|: A|DT Supportive|JJ Note|NN Mime-|NNP Version|NNP :|: 1.0|CD Content-|NNP Type|NNP :|: text|NN /|NN plain|JJ ;|: charset|NN =|SYM us-ascii|JJ Content-|NNP Transfer-|NNP Encoding|NNP :|: 7|CD bit|NN Dear|RB Mr.|NN Lay|NNP :|: 

I|PRP 'm|VBP writing|VBG this|DT note|NN to|TO you|PRP as|IN a|DT show|NN of|IN support|NN to|TO you|PRP during|IN your|PRP$ dire|JJ times|NNS .|. 
The|DT reason|NN that|IN I|PRP share|VBP this|DT with|IN you|PRP is|VBZ my|PRP$ respect|NN for|IN you|PRP as|IN a|DT CEO|NNP ,|, a|DT business|NN leader|NN and|CC a|DT person|NN .|. 
My|PRP$ wife|NN is|VBZ one|CD of|IN your|PRP$ employees|NNS who|WP routinely|RB shares|VBZ stories|NNS about|IN you|PRP that|WDT are|VBP nothing|NN less|JJR than|IN inspiring|JJ .|. 
I|PRP know|VBP that|IN during|IN difficult|JJ times|NNS ,|, sometimes|RB words|NNS emerge|VBP that|WDT can|MD help|VB people|NNS through|IN difficult|JJ times|NNS .|. 
I|PRP believe|VBP that|IN you|PRP are|VBP sincere|JJ man|NN and|CC know|VB that|IN you|PRP must|MD be|VB broken|VBN hearted|JJ ,|, but|CC I|PRP hope|VBP that|IN this|DT article|NN can|MD help|VB you|PRP lead|VB a|DT dispirted|JJ workforce|NN to|TO see|VB things|NNS more|RBR clearly|RB .|. 
My|PRP$ wife|NN ,|, Shelly|NNP Pierce|NNP ,|, has|VBZ worked|VBN for|IN Enron|NNP for|IN the|DT past|JJ two|CD years|NNS and|CC like|IN many|JJ of|IN your|PRP$ employees|NNS ,|, has|VBZ lost|VBN a|DT great|JJ deal|NN of|IN her|PRP$ life|NN savings|NNS .|. 
Of|IN course|NN ,|, I|PRP accept|VBP most|JJS of|IN the|DT blame|NN for|IN this|DT for|IN reasons|NNS related|VBN to|TO this|DT article|NN .|. 
I|PRP lost|VBD my|PRP$ investment|NN discipline|NN and|CC held|VBN out|RP the|DT false|JJ hope|NN that|IN Enron|NNP could|MD not|RB falter|VBP .|. 
After|IN reading|VBG the|DT article|NN to|TO her|PRP while|IN I|PRP was|VBD out|IN of|IN town|NN ,|, I|PRP believe|VBP that|IN her|PRP$ spirit|NN was|VBD a|DT bit|NN rejuvenated|JJ and|CC she|PRP was|VBD ready|JJ to|TO face|VB the|DT challenges|NNS that|WDT lay|VBP before|IN you|PRP .|. 

Mr.|NN Lay|NNP ,|, I|PRP appreciate|VBP the|DT opportunity|NN that|IN you|PRP have|VBP given|VBN my|PRP$ wife|NN and|CC our|PRP$ family|NN and|CC hope|VBP that|IN this|DT story|NN inspires|NNS you|PRP to|TO regain|VB your|PRP$ successes|NNS .|. 

------------------------------------------------------------------------------------------------------------------------------------------------------------|SYM From|IN the|DT USA|NNP Today|NNP ,|, Tuesday|NNP ,|, November|NNP 27|CD ,|, 2001|CD ,|, page|NN 15|CD A.|NN 

"|'' In|IN recession|NN ,|, face|JJ brutal|JJ facts|NNS ,|, thrive|VBP "|'' 

By|IN Jim|NNP Collins|NNP 

A|DT man|NN in|IN his|PRP$ early|JJ 20|CD s|VBZ recently|RB asked|VBN me|PRP ,|, "|'' So|RB what|WP 's|VBZ a|DT recession|NN like|IN ?|. "|'' 
Its|PRP$ an|DT entirely|RB alien|JJ concept|NN to|TO him|PRP ;|: he|PRP 'd|MD grown|VBN up|RP during|IN the|DT greatest|JJS economic|JJ boom|NN in|IN modern|JJ memory|NN .|. 
His|PRP$ question|NN drove|VBD home|NN the|DT fact|NN that|IN we|PRP have|VBP n't|RB faced|VBN a|DT severe|JJ ,|, protracted|JJ economic|JJ setback|NN for|IN nearly|RB 2|CD decades|NNS ,|, leaving|VBG us|PRP terribly|RB unpracticed|JJ at|IN dealing|VBG with|IN tough|JJ times|NNS .|. 

With|IN this|DT recession|NN -|: long|RB in|IN coming|VBG ,|, perhaps|RB long|JJ to|TO stay|VB -|: now|RB officially|RB upon|IN us|PRP ,|, it|PRP is|VBZ imperative|JJ that|IN corporate|JJ leaders|NNS relearn|NN a|DT key|JJ lesson|NN about|IN how|WRB great|JJ companies|NNS (|( and|CC great|JJ people|NNS )|) deal|NN with|IN difficult|JJ times|NNS differently|RB from|IN how|WRB they|PRP deal|VBP with|IN merely|RB good|JJ ones|NNS .|. 
That|DT lesson|NN is|VBZ the|DT "|'' Stockdale|NNP Paradox|NNP ,|, "|'' a|DT peculiar|JJ psychology|NN shown|VBN by|IN those|DT who|WP emerge|VBP from|IN tough|JJ times|NNS not|RB just|RB intact|JJ ,|, but|CC stronger|JJR .|. 

Adm.|NN Jim|NNP Stockdale|NNP was|VBD the|DT highest-ranking|JJ U.S.|NNP military|JJ officer|NN in|IN the|DT Hanoi|NNP prison|NN camp|NN during|IN the|DT Vietnam|NNP War|NNP .|. 
Tortured|NNP many|JJ times|NNS during|IN his|PRP$ 8|CD -|: year|NN imprisonment|NN ,|, Stockdale|NNP lived|VBD without|IN any|DT prisoner|NN 's|POS rights|NNS ,|, no|DT set|JJ release|NN date|NN and|CC no|DT certainty|NN as|IN to|TO whether|IN he|PRP would|MD ever|RB again|RB see|VB his|PRP$ family|NN .|. 

He|PRP shouldered|JJ the|DT burden|NN of|IN command|NN while|IN fighting|VBG an|DT internal|JJ war|NN against|IN his|PRP$ captors|NNS and|CC their|PRP$ attempts|NNS to|TO use|VB the|DT prisoners|NNS for|IN propaganda|NN .|. 
At|IN one|CD point|NN ,|, he|PRP beat|VBP himself|PRP with|IN a|DT stool|NN and|CC cut|VB himself|PRP with|IN a|DT razor|NN ,|, deliberately|RB disfiguring|VBG himself|PRP so|IN that|IN he|PRP could|MD not|RB be|VB put|VBN on|IN video|NN as|IN an|DT example|NN of|IN a|DT "|'' well-treated|JJ prisoner|NN .|. "|'' 
He|PRP exchanged|VBD secret|JJ intelligence|NN information|NN with|IN his|PRP$ wife|NN through|IN their|PRP$ letters|NNS knowing|VBG that|DT discovery|NN would|MD mean|VB more|JJR torture|VB and|CC perhaps|RB death|NN .|. 
After|IN his|PRP$ release|NN ,|, Stockdale|NNP became|VBD the|DT first|JJ three-star|JJ officer|NN in|IN the|DT history|NN of|IN the|DT Navy|NNP to|TO wear|VB both|DT aviator|NN wings|NNS and|CC the|DT Congressional|NNP Medal|NNP of|IN Honor|NNP .|. 

You|PRP can|MD understand|VB ,|, then|RB ,|, my|PRP$ anticipation|NN at|IN the|DT prospect|NN of|IN spending|NN part|NN of|IN an|DT afternoon|NN with|IN Stockdale|NNP ,|, who|WP happened|VBD to|TO be|VB at|IN the|DT Hoover|NNP Institute|NNP across|IN the|DT street|NN from|IN my|PRP$ office|NN when|WRB I|PRP taught|VBD at|IN Stanford|NNP .|. 
In|IN preparation|NN ,|, I|PRP read|VBP In|IN Love|NN and|CC War|NNP ,|, the|DT book|NN he|PRP and|CC his|PRP$ wife|NN wrote|VBD to|TO chronicle|NN their|PRP$ experiences|NNS those|DT 8|CD years|NNS .|. 

As|IN I|PRP read|VBP the|DT book|NN ,|, I|PRP found|VBD myself|PRP getting|VBG depressed|VBN .|. 
It|PRP just|RB seemed|VBD so|RB bleak|JJ -|: the|DT uncertainty|NN of|IN his|PRP$ fate|NN ,|, the|DT brutality|NN of|IN his|PRP$ captors|NNS .|. 
And|CC then|RB it|PRP dawned|JJ on|IN me|PRP :|: Here|RB I|PRP am|VBP sitting|VBG in|IN my|PRP$ warm|JJ comfortable|JJ office|NN ,|, looking|VBG out|IN over|IN the|DT Stanford|NNP campus|NN on|IN a|DT beautiful|JJ Saturday|NNP afternoon|NN .|. 
I|PRP 'm|VBP getting|VBG depressed|VBN reading|VBG this|DT ,|, and|CC I|PRP know|VBP that|IN he|PRP gets|VBZ out|IN ,|, reunites|NNS with|IN his|PRP$ family|NN and|CC becomes|VBZ a|DT national|JJ hero|NN .|. 
If|IN it|PRP feels|VBZ depressing|JJ for|IN me|PRP ,|, how|WRB on|IN earth|NN did|VBD he|PRP deal|VBP with|IN it|PRP when|WRB he|PRP was|VBD actually|RB there|EX and|CC did|VBD not|RB know|VB the|DT end|NN of|IN the|DT story|NN ?|. 

"|'' I|PRP never|RB lost|VBD faith|NN in|IN the|DT end|NN of|IN the|DT story|NN ,|, "|'' Stockdale|NNP said|VBD when|WRB I|PRP asked|VBD him|PRP .|. 
"|'' I|PRP never|RB doubted|VBD not|RB only|RB that|IN I|PRP would|MD get|VB out|RB ,|, but|CC also|RB that|IN I|PRP would|MD prevail|VB in|IN the|DT end|NN and|CC turn|VB the|DT experience|NN into|IN the|DT defining|VBG event|NN of|IN my|PRP$ life|NN that|IN ,|, in|IN retrospect|NN ,|, I|PRP would|MD not|RB trade|VB .|. "|'' 

I|PRP did|VBD n't|RB say|VB anything|NN for|IN many|JJ minutes|NNS ,|, and|CC we|PRP continued|VBD the|DT slow|JJ walk|NN toward|IN the|DT faculty|NN club|NN ,|, Stockdale|NNP limping|VBG and|CC arc-swinging|JJ his|PRP$ leg|NN ,|, still|RB stiff|JJ from|IN repeated|VBN torture|VBP .|. 
Finally|RB ,|, I|PRP asked|VBD ,|, "|'' Who|WP did|VBD n't|RB make|VB it|PRP out|RP ?|. "|'' 

"|'' Oh|UH ,|, that|DT 's|VBZ easy|JJ ,|, "|'' he|PRP said|VBD .|. 
"|'' The|DT optimists|NNS .|. "|'' 

"|'' The|DT optimists|NNS ?|. 
I|PRP do|VBP n't|RB understand|VB ,|, "|'' I|PRP said|VBD ,|, completely|RB confused|VBN .|. 

"|'' The|DT optimists|NNS .|. 
Oh|UH ,|, they|PRP were|VBD the|DT ones|NNS who|WP said|VBD ,|, '|'' We|PRP 're|VBP going|VBG to|TO be|VB out|IN by|IN Christmas|NNP .|. '|POS 
And|CC Christmas|NNP would|MD come|VB ,|, and|CC Christmas|NNP would|MD go|VB .|. 
Then|RB they|PRP 'd|NNP say|VB ,|, '|'' We|PRP 're|VBP going|VBG to|TO be|VB out|IN by|IN Easter|NNP .|. '|POS 
And|CC Easter|NNP would|MD come|VB ,|, and|CC Easter|NNP would|MD go|VB .|. 
And|CC then|RB Thanksgiving|NNP ,|, and|CC then|RB it|PRP would|MD be|VB Christmas|NNP again|RB .|. 
And|CC they|PRP died|VBD of|IN a|DT broken|JJ heart|NN .|. "|'' 

After|IN another|DT long|JJ pause|NN ,|, he|PRP turned|VBD to|TO me|PRP and|CC said|VBD ,|, "|'' This|DT is|VBZ a|DT very|RB important|JJ lesson|NN .|. 
You|PRP must|MD never|RB confuse|VB faith|NN that|IN you|PRP will|MD prevail|VB in|IN the|DT end|NN -|: which|WDT you|PRP can|MD never|RB afford|VB to|TO lose|VB -|: with|IN the|DT need|NN for|IN discipline|NN to|TO confront|VB the|DT most|RBS brutal|JJ facts|NNS of|IN your|PRP$ current|JJ reality|NN ,|, whatever|WDT they|PRP might|MD be|VB .|. "|'' 

My|PRP$ conversation|NN with|IN Stockdale|NNP had|VBD a|DT profound|JJ influence|NN on|IN me|PRP ,|, but|CC I|PRP never|RB really|RB considered|VBN it|PRP a|DT business|NN lesson|NN until|IN my|PRP$ research|NN team|NN began|VBD to|TO wrestle|VB with|IN the|DT question|NN of|IN why|WRB some|DT companies|NNS rise|VBP from|IN difficulty|NN to|TO become|VB great|JJ while|IN others|NNS emerge|VBP from|IN those|DT exact|JJ same|JJ difficulties|NNS weakened|VBN and|CC dispirited|JJ .|. 
We|PRP found|VBD that|IN companies|NNS that|WDT became|VBD great|RB embraced|VBD a|DT corporate|JJ version|NN of|IN the|DT Stockdale|NNP Paradox|NNP .|. 

Fannie|NNP Mae|NNP ,|, for|IN example|NN found|VBD itself|PRP in|IN the|DT 1982|CD recession|NN losing|VBG $1M|NN every|DT business|NN day|NN ,|, with|IN $56B|NN in|IN loans|NNS under|IN water|NN .|. 
Many|JJ analysts|NNS thought|VBD Fannie|NNP Mae|NNP ,|, which|WDT was|VBD getting|VBG 9|CD %|NN on|IN its|PRP$ mortgage|NN portfolio|NN but|CC paying|VBG 15|CD %|NN on|IN the|DT debt|NN it|PRP issued|VBD ,|, was|VBD doomed|VBN .|. 

But|CC CEO|NNP David|NNP Maxwell|NNP and|CC his|PRP$ team|NN never|RB wavered|VBD in|IN their|PRP$ aim|NN to|TO not|RB merely|RB survive|VB ,|, but|CC also|RB to|TO prevail|VB as|IN a|DT great|JJ company|NN .|. 
Yes|UH ,|, they|PRP confronted|VBN the|DT brutal|JJ fact|NN that|IN the|DT interest-rate|NN problem|NN was|VBD not|RB going|VBG to|TO magically|RB disappear|VB (|( certainly|RB not|RB by|IN Christmas|NNP )|) .|. 
But|CC they|PRP used|VBD this|DT grim|JJ fact|NN as|IN a|DT catalyst|NN for|IN creating|VBG an|DT entirely|RB new|JJ business|NN model|NN based|VBN on|IN asking|VBG three|CD central|JJ questions|NNS of|IN greatness|NN :|: 

What|WP can|MD we|PRP potentially|RB do|VB better|JJR than|IN any|DT other|JJ company|NN in|IN the|DT world|NN ?|. 

What|WP can|MD best|JJS drive|VB our|PRP$ economic|JJ engine|NN ?|. 

What|WP best|JJS ignites|NNS the|DT passions|NNS of|IN our|PRP$ people|NNS ?|. 

Instead|RB of|IN reacting|VBG to|TO the|DT recession|NN with|IN mindless|JJ restructuring|NN ,|, Fannie|NNP Mae|NNP rebuilt|VBN itself|PRP based|VBN on|IN its|PRP$ answers|NNS to|TO these|DT questions|NNS .|. 
Eventually|RB ,|, it|PRP generated|VBD investor|NN returns|NNS nearly|RB eight|CD times|NNS those|DT of|IN the|DT general|JJ stock|NN market|NN .|. 

When|WRB asked|VBD how|WRB he|PRP dealt|VBD with|IN the|DT nay|NN Sayers|NNP and|CC the|DT analysts|NNS who|WP wrote|VBD Fannie|NNP Mae|NNP off|RP ,|, Maxwell|NNP said|VBD that|IN it|PRP was|VBD never|RB an|DT issue|NN inside|IN the|DT company|NN .|. 
"|'' Of|IN course|NN ,|, we|PRP had|VBD to|TO stop|VB doing|VBG a|DT lot|NN of|IN stupid|JJ things|NNS ,|, but|CC we|PRP never|RB entertained|VBD the|DT possibility|NN that|IN we|PRP would|MD fail|VB .|. 
We|PRP were|VBD going|VBG to|TO use|VB the|DT calamity|NN as|IN an|DT opportunity|NN to|TO remake|VB Fannie|NNP Maw|NNP into|IN a|DT great|JJ company|NN .|. "|'' 

The|DT sad|JJ truth|NN is|VBZ that|IN most|JJS executive|NN teams|NNS wo|MD n't|RB respond|VB that|DT way|NN to|TO these|DT dark|JJ days|NNS of|IN uncertainty|NN .|. 
Instead|RB of|IN using|VBG this|DT recession|NN as|IN an|DT opportunity|NN to|TO fundamentally|RB rethink|VB their|PRP$ business|NN and|CC rebuild|VB a|DT culture|NN of|IN discipline|NN ,|, the|DT will|MD simply|RB restructure|VB ,|, lay|VB off|IN a|DT bunch|NN of|IN people|NNS and|CC liquidate|VB their|PRP$ cultural|JJ equity|NN .|. 
Mediocre|NNP leaders|NNS will|MD hold|VB out|IN false|JJ hopes|NNS for|IN a|DT quick|JJ fix|NN ,|, only|RB to|TO watch|VB those|DT hopes|VBZ be|VB swept|VBN away|RB by|IN events|NNS .|. 
Their|PRP$ companies|NNS will|MD begin|VB to|TO die|NN of|IN a|DT broken|JJ heart|NN .|. 

It|PRP need|MD not|RB be|VB this|DT way|NN .|. 
Those|DT who|WP lead|VBP with|IN the|DT Stockdale|NNP Paradox|NNP -|: those|DT who|WP retain|VBP the|DT unwavering|VBG faith|NN that|IN they|PRP will|MD find|VB a|DT way|NN to|TO prevail|VB in|IN the|DT end|NN ,|, but|CC who|WP also|RB retain|VBP the|DT discipline|NN to|TO confront|VB the|DT most|RBS brutal|JJ facts|NNS of|IN reality|NN -|: will|MD find|VB this|DT an|DT ideal|JJ time|NN to|TO rebuild|VB and|CC reinforce|VB greatness|NN .|. 

Used|VBN correctly|RB ,|, this|DT recession|NN can|MD be|VB a|DT defining|VBG time|NN in|IN your|PRP$ firm|NN 's|POS history|NN that|IN ,|, in|IN retrospect|NN ,|, you|PRP would|MD not|RB trade|VB .|. 
Used|VBN wrongly|RB ,|, this|DT recession|NN will|MD weaken|VB your|PRP$ foundations|NNS and|CC make|VB it|PRP that|IN much|RB harder|RBR to|TO become|VB great|JJ .|. 
The|DT choice|NN is|VBZ yours|NNS .|. 

Jim|NNP Collins|NNP ,|, the|DT author|NN of|IN Good|JJ to|TO Great|NNP ,|, operates|VBZ a|DT management-research|NN laboratory|NN in|IN Boulder|NNP ,|, Colo|NNP .|. 

Regards|NNP ,|, 
Steve|NNP 
Steve|NNP Alexander|NNP Vice|NNP President|NNP ,|, North|JJ American|NNP Artemis|NNP Consulting|NNP Artemis|NNP International|NNP Solutions|NNPS Corporation|NNP Office|NNP :|: +|NN 1|CD 281.338|CD .9616|CD Mobile|NNP :|: +|NN 1|CD 281.830|CD .7430|CD www.artemisintl.com|NN 
