"We have a fundamentally better business model." It was 2000, at the height of Enron's rise from energy utility to Fortune 10 commodities trading juggernaut, and company president Jeffrey Skilling was on top of the world, talking like "the smartest guy in the room." What Skilling didn't fully appreciate was that revolutionary business models don't amount to much if you can't execute on the vision.

If Enron were just emerging today, it would be hard to view it as anything other than a leading innovator, at least in terms of understanding the value of a truly global supply chain, as described by C.K. Prahalad and M.S. Krishnan in their new book, "The New Age Of Innovation." Like Prahalad and Krishnan, Skilling eschewed the old vertical integration model, whereby companies controlled most of the factors of production. Owning physical assets like gas pipelines didn't matter to Enron, which viewed itself as a "market maker" in those industries, not as an OEM. Skilling said Enron would win based on liquidity--its superior ability to find and package the lowest-cost supplies from around the world and then guarantee delivery as the trusted middleman.

"Certainty of execution and certainty of fulfillment are the two things people worry about with commodity products," Skilling told me in 2000. Enron, by virtue of its expertise, networked relationships and reputation, could deliver on that promise like no other company, he said. Enron would rake in billions of dollars by taking a percentage of each transaction.

And it did--for a little while, at least. Enron had decades of experience delivering energy products such as natural gas, oil, and electricity, and EnronOnline was ahead of its time as a platform for making markets in those commodities. But in 2000, Enron was also trying to break into online trading of telecom bandwidth, data storage, pulp and paper, metals, and other commodities, areas where it had little to no experience.

Enron's reach exceeded its grasp. In telecom, for instance, company executives grossly oversimplified the task at hand. Enron's plan was to develop switching hubs or "pooling points" nationwide to provision high-speed circuits to customers in a matter of days, even seconds, compared with the weeks and months it took the established telcos. But in the end, its plan was all smoke and mirrors. The software for those pooling points never got out of the development stage.

So much for reinventing the century-old telecom business in a few months.

Once it became clear that Enron was both over-promising what it could deliver and (oh, yeah) playing fast with its financials--crafting off-balance-sheet deals and other illusions to inflate earnings--the trust and certainty of execution that Skilling liked to brag about evaporated. Enron's "fundamentally better business model" was exposed as a shell game.

Skilling, convicted in 2006 of fraud, conspiracy, insider trading, lying to auditors, and other felonies connected to Enron's financial collapse, is now serving a 24-year sentence at a federal prison. Skilling's lawyers appealed that conviction before a three-judge panel last week. A decision is pending.