Editors Note: After being passed over as CEO at Enron in 1996, Rich Kinder resigned from the then-high flying energy trading company. It's the smartest move he ever made. Kinder and college pal Bill Morgan went on to build a multi-billion dollar pipeline business and Kinder became one of the city's leading philanthropists. In the second of a CultureMap series, executive Janet Gurwitch quizzes Kinder about his secrets of success.

CultureMap: What are some of the most important leadership lessons you’ve learned?

Rich Kinder: I think there are a lot of them and the most important probably is to always live by that old saying … “There’s no limit to what can be accomplished if you don’t care who gets the credit.” Try to build a “we” organization and not an “I” organization. That is a very good place to start. I think on top of that, there’s no such thing as disengaged leadership. Whenever you hear someone say “I’m just a big picture person” or “I don’t understand or pay attention to details," that’s not a stock you want to invest in … that’s not a leader you want to follow.

So I think you have to be very involved in whatever project you’re leading. You have to make sure the credit is shared with everybody and you have to try to measure what your results are. You can’t get any place if you don’t have the mechanism in place to measure your success or failure.

CM: Tell me about your leadership style.

RK: You have to walk a fine line between understanding what is going on in the business and yet give your senior people the ability to run the show. We have five major business segments, any one of which would be a good sized company on its own. The five segments are our natural gas pipelines, our products pipelines, our 180 terminals around the country, our CO2 operations, and our Canadian pipelines — each headed by an individual president.

They’re responsible for running those individual businesses but my job and the job of the rest of the corporate senior staff is to allocate capital. They need to justify their financial needs through us.

CM: What does it take to run a great company?

RK: There are three things and it takes all three. You’ve got to have a strategic vision, financial excellence and operational excellence. All three of those things are absolutely necessary. Back in 1900, there was probably a great company that manufactured buggy whips — and they were great, they were making money, they were efficient in producing the buggy whips, but they failed to foresee Henry Ford and the internal combustion engine and the buggies would be out of style years later … so that was the lack of strategic vision.

Corporate graveyards are littered with companies and leaderships that had great vision but didn’t know how to execute. They couldn’t make money, so eventually they got taken over by somebody else. The third thing is you can make money and you can have good strategic vision, but if you can’t operate your assets sufficiently, you’re not going to survive very long. If you think about those three things it’s the driving focus behind how you run an organization. That gives you sort of a framework to look at.

CM: If you were hiring a senior executive, what attributes would you look for?

RK: I look for three things: Number one, you’ve got to have some reasonable amount of intelligence. The world is too complicated to not have intelligent people … doesn’t mean you have to be a genius, just reasonable intelligence.

The second thing is you have to have a really great work ethic … FDR said, “success is one percent inspiration and 99 percent perspiration."

And then the third thing you have to have is intellectual honesty. Look for people who are prepared to tell you what’s really going on and to speak their minds freely. This is one of the biggest problems as an organization gets bigger — we started Kinder Morgan with 175 employees and we have 8,000 now. The bigger an organization gets, the harder it is to make certain that you’re getting unfiltered, intellectually honest observations and opinions. People are happy to pass up good news but not very happy to pass up bad news. You hope that the person is smart enough and works hard enough that he or she also has solutions, but nevertheless, you want to know about that problem.

The worse thing in the world is for people to cover up the problem until it gets so big that they can’t cover it up anymore and then often it’s too late to address the problem. Watergate is a classic example. Watergate should have been a nothing, but the coverup is what got everybody into trouble.

CM: How do you run a meeting?

RT: First of all we start it on time. We try to run as efficiently as possible. We try to make certain that there are specific topics to be addressed in a straightforward manner. Every Monday at 1:00 CST we have all the senior people in the company either here or on the phone and various places around North America and we don’t just talk about things. We have each operation start out with how it’s stacking up financially against its monthly target, its quarterly target, its yearly target.

We report on any problems, any health and safety issues that happened during the last week. We talk about any other strategic issues that have come up. On a weekly basis we’ve got the pulse of the company right out there in one meeting where everybody can hear. You have to have a purpose to the meeting, and in my opinion, you have to have structure to your meeting.

CM: So I assume you are a good time manager?

RK: I am mostly. I try to be. You have to manage your time accordingly to how many meetings you have to schedule. And then you have to run those meetings as efficiently as possible.

CM: Anything you have a particularly low tolerance for?

RK: First thing is failure to come forward with problems and ideas. People gild a lily and don’t give you the true facts or information. The second thing that offends me is if someone tries to take credit for something his people did. You need to make sure everybody gets credit … that’s extremely important to me.

CM: How do you judge your own success each year?

RK: I usually have a pocket list of a very few things I want to make sure get accomplished. I think it’s a mistake to make the list too long because, frankly, you need to do things you can basically control or have input. For example, I can’t control the price of oil. You can’t set objectives that depend on other things. You have to set objectives on things you can control. I set very few and try to perform better than the industry average in all environmental and safety issues and try to at least equal whatever our budget numbers are for that year. You must have specific objectives that everybody buys into and ensure they understand those objectives from day one.

CM: Do you manage Kinder Morgan any differently than you did at Enron?

RK: Well, I think a little differently, but a lot of the things are similar. I ran the pipelines for Enron. I think a lot of the principles were the same. I think that once I was in charge of the enterprise, we probably paid an awful lot of attention to cost control at Kinder Morgan; some other companies may not have. You won’t see any ball parks named after us or corporate jets, and if you see somebody at a Rockets game or Astros game, they’re there on their own money … not on Kinder Morgan. We don’t pay for country club memberships. What we try to do is give people the feeling that everybody is in the same boat together.

I don’t think anybody begrudges somebody who has created wealth for a lot of people and have made a lot of money for themselves. Good examples are Bill Gates or Warren Buffet or Michael Dell or Sam Walton, when he was alive. These are people who have created instruments that have spread wealth to a lot of employees and a lot of shareholders. What people resent and I think is horrible is when performance is not necessary to get rewards. When you have a company that is doing poorly, but the CEO is still flying around in a corporate jet or the company goes bankrupt and thousands of employees lose their jobs and you find out in small print a year later that the CEO had a special package that guaranteed him $10 million even though the company went broke. That’s what people resent.

The culture we try to build at Kinder Morgan is that we’re all in here together. That’s why I work for $1 a year … so if this company does well, I do well, but if it doesn’t, I don’t. My interest is about as aligned as you can be with that of a shareholder. If you are really going to drive any kind of culture down through an organization, you have to walk the walk and not just talk the talk. Everybody says that, but most people don’t really do it. I like to think we do.

CM: What is the biggest challenge on the horizon for Kinder Morgan?

RK: There are so many challenges to any business today but I believe the biggest single challenge is managing large companies in this kind of governmental environment. It’s very difficult, we have tens of thousands of reports and filings and permits we have to file every year. If you think that sounds simple, it’s not. Kinder Morgan is scattered around 37,000 miles of pipelines, 185 terminals over North America and making sure all of that gets done and not knowing where governmental regulations are coming from, i.e. EPA assigns something different; a new congressional bill assigns something different. Adjusting to all that is a huge challenge for American businesses. Not that there aren’t good reasons for regulations, don’t get me wrong, but adapting to constantly changing regulations is the most significant single challenge.

CM: What kind of legal team do you have?

RK: I think it’s fairly modest by most companies. We have around 25-30 lawyers and I think they’re all pretty gainfully employed.

CM: When you were starting Kinder Morgan, how did you put together a team? Was it people you knew?

RK: It was pretty happenstance. Bill Morgan and I formed it together and we pulled in two or three other people. We inherited about 175 employees when we bought Enron Liquids Pipelines. Enron was getting out of the assets business and we wanted to acquire assets. Then we just started building the team. A lot of our best people came from acquisitions that we have made. So we’ve been very fortunate in getting a lot of good people from our acquisitions.

CM: Do you use a BlackBerry or an iPhone?

RK: BlackBerry.

CM: Are you addicted to it?

RK: When I’m on the road I am, because that’s my one connection. When I’m in Houston, not so much.

CM: What ‘s on your iPod?

RK: Don’t have an iPod.

CM: Favorite car?

RK: 1964 Porsche convertible. Only because when I was in college I didn’t have a car and my good fraternity brother … I was enamored with this young lady who was a couple of years ahead of me in college and I knew she was going to be at a conference 50-60 miles away and I wanted to go there.... so he loaned me his Porsche convertible. Since then I’ve been addicted to Porsche convertibles.

CM: Favorite Houston restaurant?

RK: Da Marco’s.

CM: How many hours do you sleep?

RK: I usually sleep 7½ hours. I’m always up no later than 6 a.m. and usually survive the 10 o'clock news (at night).

CM: What about exercise … what do you do?

RK: Well, I’m a skier in the winter and a fly fisherman in the summer. Beyond that I used to run a lot but blew my knee out several years ago, so I use elliptical trainer several days a week. Nothing severe.

CM: What are your favorite business books?

RK: I read an awful lot, but it’s mostly history and biography and other non-fiction. Most how-to business books have limited worth, as far as I’m concerned. I’ve learned an awful lot by reading a lot of biographies. Right now I’m reading this new biography of Winston Churchill called Winston’s War by Max Hastings. The Pulitzer Prize winner for non-fiction last year was The First Tycoon. It's the story of Cornelius Vanderbilt I thought it was very good. It's (about) business, but history, too.

CM: What is your best advice for a 2010 college graduate?

RK: Do everything you can to follow your own passion. I’ve come to believe it’s not really all that important that you have a set career path. I think if you’re 25 and still looking around for something, that’s okay … if you’re 28-30 … some point you’ve got to settle down, but I think the main thing is to find something you really love to do and do it.

CM: When I asked if I could interview you, your response was you would rather have your teeth pulled than be interviewed. Other than today, when was the last time you were interviewed?

RK: Unfortunately, about a month ago by a guy at Bloomberg.