If engineers are motivated by the success of the company, you get a Boeing situation, where company is doing well and planes are bad. Happiness of the team ... the guy bringing tequila shots and cupcakes to the office will be rated the best (we had a colleague that was baking cupcakes weekly, very popular, but not contributing otherwise to the company's success). Societal service? All companies are doing it, in some way or another, otherwise they would not have any clients and would close.

Success of the team, like getting the next funding round, making the stock worth more, etc.

Success and happiness of the team, like cooperating to help other people's work go well, not being seen as a slacker or incompetent, etc.

Societally beneficial, like doing things that are obviously good for society (e.g., improving health) and not doing things that are bad (e.g., investment scams, surveillance capitalism).

I don't think engineers doing engineering can ever get themselves in a Boeing situation. It's just completely antagonistic to a maker culture.

There are many ways engineers can create a dysfunctional culture, but this one is for management only.

The Boeing decline was brought about by the bean-counters and their quarterly goals, not by the dedicated engineers working on years-long projects who built the company.

At modest size this is a self solving problem because companies full of cupcake makers and eaters simply go out of business. Boeing spent many years being led by the kind of folks who were motivated by the success of the company successfully and the wheels fell off—now literally—when it was lead by folks interested in short term profitability.

People have an inherent need to be useful to matter. Mr cupcake decided to matter by making friends with food but if his performance was objectively that bad it should be fairly easy to set performance goals of some kind and term him when he doesn't meet them.

This seems to be how a lot of functional places work best. Motivated people working together with relatively soft guidelines that turn into hard limits to get rid of dead weight.