If Ken Lay knew how to DISCERN the character and abilities of the people working for him, then he wouldn't have had the disaster he did. Maybe because I believe ethics are essential to EVERY part of life, I assume that an ethical employee is the best employee and a good leader would only hire ethical employees. Some people have the ability to read people, some don't. The difficult part of this is that it really can't be learned. You can learn a degree of it, but the people who have a natural gift for it are really the only ones who are able to be consistent and excel with it.
That's why people are so important. I think management would be much more successful if their time was spent more on defining strategy and goals, and just ensuring their team was going in the right direction, at the right pace, vs. managing the people and having to make sure the employees are DOING what they're supposed to.
Hire the right people, and you can function in the most effective way.