Rob, independent of dotted/solid lines, you already have the primary and 
complete responsibility to manage the office and the business.  At the risk 
of being bold,  I think the undercurrent of your note and your discussions 
with Haedicke over the last couple of days is a matter of absolute control.  
Ownership and passion are important characteristics of our best commercial 
people but so is fostering a diversity of opinions and ideas.  With the back 
and mid office,  the current Enron model is based upon scale and 
standardization which generates tremendous operating leverage.  Further, it 
helps us manage risk and is a board mandated control issue.   In the 
long-run, it is actually less costly (ie) systems that don't work together, 
less transferable human capital, un-managed legal risks, etc. 

A lot of your points are very valid and Haedicke has never and never will get 
in the way of managing commercial business; however, Mark, Wes, Sally, Beth 
et al have a mandate to provide a flexible, scalable but standardized 
delivery mechanism, that manages our risk across the broad empire.  Don't 
quit protecting the business and your people; however, please help accomplish 
some of these goals as well.

In short, I would like to keep the reporting structures the same.  

Lets take the earliest opporunity to discuss this.

Regards
Delainey

   
---------------------- Forwarded by David W Delainey/HOU/ECT on 11/02/2000 
09:41 AM ---------------------------


Rob Milnthorp
11/02/2000 09:17 AM
To: David W Delainey/HOU/ECT@ECT
cc:  
Subject: Reporting Structure

Dave, at the risk of rocking the boat, I would like you to consider the 
following. As you know, with the exception of Origination & Finance, all 
other Canadian departments (Trading, Legal, Ops, Acctg, HR, Govt, & IT) 
report directly to someone in Houston while having a dotted line to me. 

In my mind, this is completely backwards (ie. it should be a solid line to 
me, and a dotted line to their respective counterparts in Houston) for the 
following reasons. First, performance feedback is not communicated to these 
individuals in a timely manner if at all. Even when it is, more times than 
not, it is perfunctory in nature. In fact, I think that feedback is given 
somewhat reluctantly because the manager  in Houston has really no idea 
whether the individual in Canada is doing a good job or not. 

Second, it is sub-optimal. I seem to be spending more and more time dealing 
with issues between the Canadian employee and their respective manager in 
Houston. Many of these conversations revolve around my first point. Case and 
point, we almost lost Laura Scott earlier this year because she was feeling 
unappreciated and felt that her boss had no idea the hours/effort she was 
putting in. And just yesterday, I had a very unsatisfactory phone call with 
Mark Haedicke regarding Peter Keohane. The result - I now have a very 
demotivated lawyer on my hands.

Third, it is costly. Having senior people fly up to Calgary/Toronto to "stay 
in the loop" and to complete performance reviews is both costly from both a 
dollar and time perspective.  

Frankly, I'm not looking for more performance reviews to do, but I do think 
its important that staff receive meaningful feedback in a timely fashion. I 
know what these people do - I work with them every day. It is my job to lead, 
inspire, and motivate but lately it feels like it is my job to liase between 
Houston and the employee.

I would appreciate your thoughts on this.

Regards
Milnthorp