Re:Boeing Sales and Profits Plummet as 737 Max Crisis Continues
by TeMPOraL on Wednesday October 23, 2019 @06:02PM
(#21339519)
I understand GP to be talking about something different - about consequences of putting behind the wheel people who don't care whether the company is making planes or toilet paper, but view it as a vehicle to turn money into more money.
Goodhart's law states that "when a measure becomes a target, it ceases to be a good measure" - because people then start optimizing for the value of the measure, instead of what it's a proxy for. It seems that we've created a class of specialists, whose entire job is to do such optimizations. And we let them run companies, leading to predictable results.
Re:Boeing Sales and Profits Plummet as 737 Max Crisis Continues
by munk-a on Wednesday October 23, 2019 @06:04PM
(#21339539)
Oh I agree, but I think that that factor has been obvious and evident in the US economy since the 80's. Management people work to maximize their take home, their take home is highly bonus dependent, their bonus is highly dependent on quarterly performance (not long term investment or good foundational decisions)... thus our stock driven economy is maximizing for people who can sell two dollars tomorrow for a dollar today.
I thought the other point (about the luck of selecting high skill employees early in a company lifetime) was also pretty interesting though.
Re:Boeing Sales and Profits Plummet as 737 Max Crisis Continues
by TeMPOraL on Thursday October 24, 2019 @02:22AM
(#21342145)
> I thought the other point (about the luck of selecting high skill employees early in a company lifetime) was also pretty interesting though.
It was. I never thought about regression to the mean in context of employees of a company before. So thanks for bringing that up.
I think it's just the classic aging business problems, most people are averagely competent, many companies fail, a company that happens to have an over abundance of particularly skilled people will succeed, but over time the average skill of those people will decrease and the company will flounder.
There are ways to keep standards moderately high, and there are ways to tank it by allowing nepotism, encouraging CYOAism & turf wars, cutting salaries on highly skilled individuals relative to market rates (or laying them off to replace them with college grads)... I think companies (in line with the larger market) are just naturally cyclic and that incredibly long lived companies are quite the exception to the standard life cycle.