Malcolm Gladwell has a fascinating article in the latest New Yorker in which he examines what Enron actually did wrong. Gladwell offers some intriguing thoughts about how the collapse of Enron was not just a “transmitter” failure but a failure on both the part of “the trasmitters” and the “receivers.” In other words,

it wasn’t just the case that the company sent misleading signals. It was also the case that those who were supposed to be listening to and interpreting those signals didn’t do their job.

In a post on his blog, Gladwell examines one of the consequences of this perspective. While one might have expected shareholders to uncover Enron’s weakness themselves (since they had the economic incentive to find the truth), it was the Wall Street Journal using open source information that uncovered the story.

While I agree with most of Gladwell’s points, I think he overstates his case as he enumerates the reasons why one wouldn’t have expected a newspaper to uncover the Enron story. He states that

you’d think that hedge funds, shorts, arbs, and analysts—all of whom were massively partial and economically motivated—would have been the first to see the “real” Enron.

But they weren’t. Reporters were, a group who—at least in theory—you’d think were in the least advantageous position. They aren’t partial to the proceedings. They have no money at stake. (Compared to their Wall Street counterparts, in fact, they barely make any money at all.) They aren’t (relatively speaking) as well-trained as financial intermediaries. They have to serve a general audience, which disposes them against highly technical examination. There are real limits on how much space and time they can devote to a particular story, and their rewards for doing well are almost entirely internal and professional: good reporters are rewarded, largely, by having their status elevated among other reporters. On Wall Street, seeing truth gets you a million dollar bonus. At a newspaper, it gets you a slap on the back.

These characteristics may be true for a general newspaper (like, say USA Today), but I think that the WSJ is a slightly different beast. First of all, I find that its articles assume a higher level of economic and business knowledge than any other paper I’ve read. So the supposed need to write for a “general audience… disposing them against highly technical examination[s]” holds less water. Furthermore, the WSJ seems to use independent, investigative reporting as a distinguisher. I think I read something in their first edition of the new year about WSJ working to further expand this skill set. It seems that the paper sees such work as a critical part of its brand, and why readers will pay a premium (WSJ’s content remains some of the most locked down of any newspaper I deal with regularly) for access to it. Thus, seeing truth seems like it would earn a WSJ reported much more than a “slap on the back.”

One can almost imagine a future where organizations like the WSJ begin to look more like private intelligence firms like Stratfor and less like a newspaper of old. The business model becomes expert research and analysis of ongoing trends that simple content aggregation (X happened in Y, the stock market was up/down A%, Mr. T say “Blah”) won’ t provide.