I don’t think the “oops” situation will show up early under all circumstances. If it’s a situation where we’ve been before, tasting success and failure, we could sense its symptoms and diagnose early. But if it’s a new venture and we are passionate about it, we’ll give it a longer rope hoping for the best.
That said, Enron collapse had many dimensions. Not just the non-admission of a mistake or not having the gall to capitulate. The perpetrators walked into it with eyes wide open, perhaps relying on the theory of “greater fool”—that goes there will always be a greater fool to whom you can palm off your bad bets. Had they been lucky, they would’ve even gotten away with it all—perhaps selling off to a Private Equity fund just like Sam Zell did (with Equity Office Trust) to Blackstone, sensing the madness of subprime early on, and Schwarzman going public and cashing out...
I don’t think the “oops” situation will show up early under all circumstances. If it’s a situation where we’ve been before, tasting success and failure, we could sense its symptoms and diagnose early. But if it’s a new venture and we are passionate about it, we’ll give it a longer rope hoping for the best.
That said, Enron collapse had many dimensions. Not just the non-admission of a mistake or not having the gall to capitulate. The perpetrators walked into it with eyes wide open, perhaps relying on the theory of “greater fool”—that goes there will always be a greater fool to whom you can palm off your bad bets. Had they been lucky, they would’ve even gotten away with it all—perhaps selling off to a Private Equity fund just like Sam Zell did (with Equity Office Trust) to Blackstone, sensing the madness of subprime early on, and Schwarzman going public and cashing out...
Wouldn’t you agree, Eleizer...?