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Say you're a decision-maker at Google (or Any Large Corp). You have a KPI to increase revenue by 5% this year. If you hit this KPI, then you get a bonus. If you

Say you're a decision-maker at Google (or Any Large Corp). You have a KPI to increase revenue by 5% this year. If you hit this KPI, then you get a bonus. If you get the bonus, then you can afford the thing that your partner has been wanting forever (or that will make your neighbours jealous, or whatever), and you get a happy life. You know that doing X will harm the company in the long term (defined as anything past your likely tenure in this role, so usually 2 years max). But doing X will bump revenue in the short term, and get you your bonus and your happy life. WDYD? Given that to get to a level where you have the power to make this decision, you had to have a particular personality type and set of priorities, it's extremely likely that you decide to do the thing that helps you and hurts everyone else.

public_defender 4y ago
And it's turtles all the way down. Every single incentive and system is optimized for some goal like periodic revenue increase. It's not one personality type and the desire to buy a new car, it's the intentional structure of a public corporation. We have high minded ideas about sustainability and corporate citizenship, but those views don't drive decisions in the bear market.
- ecuaflo 4y ago
  or in the bull market. techies are greedy
  - public_defender 4y ago
    Yes that's true. I just think it's particularly easy to forget how your company actually works--e.g. what puts the bread on the table--when the markets are high. Therefore we see more monetization strategy in this type of financial cycle.
JohnJamesRambo 4y ago
How do we fix this loop in companies? It is a very serious problem for humanity’s future. It exists in government too. How do we reward long-term thinking and decisions?
- zeroxp 4y ago
  You have to align the long term growth and wellbeing of the company with the long term prosperity of the employee. This is why stock options with a long term vesting period have become an attractive choice.
- Jensson 4y ago
  This is essentially what corruption is. Fixing corruption is extremely hard, especially when it is less overt like this. The main thing you can do is to teach people how to spot bad apples and push them out, fire them or in other ways punish them and reduce the damage they can do. It shouldn't be culturally acceptable to be a bad apple, but that requires a cultural change and those are really hard to do.
- kaushikc 4y ago
  Short term rewards would need to be less enticing than the long term ones. Doing so would involve restricting many rights and privileges and people would hate that.
  - Jensson 4y ago
    That only works if leadership can spot the difference between long term and short term, and more importantly that they even cares about it. "Reward long term" is easier to say than to do.
  - JohnJamesRambo 4y ago
    We are restricting our long term rights and privileges though...I know it is hard to get people to see that, but that is what is happening.
    - kaushikc 4y ago
      We know the problems, would like to see workable solutions.
- MarkPNeyer 4y ago
  Private ownership of businesses, so long term consequences fall on someone with the authority to steer them right.
MarkPNeyer 4y ago
Why do you care if you harm the company long term? It’s not like you are tied to it’s performance forever. When equity and labor markets are liquid, why wouldn’t you make decisions that help you now, and cause long term hurt something you have no long term stake in? If you don’t, your peers will.
- marcus_holmes 4y ago
  Because as an executive officer of a company, I am supposed to have the shareholder's interests as my main priority. I totally get your point, and I understand the "me first!" attitude that it comes from. But we can't have nice things if everyone does this.
- matheusmoreira 4y ago
  Corporations are meant to improve our lives sustainably. If all these people can do is extract short term value for themselves instead of providing long term value to the world, then there's no reason to allow this corrupt system to continue. It's pretty screwed up that executives can go around chasing infinite short term growth and awarding themselves golden parachutes so they can jump ship when the problems inevitably start to surface. How much destruction can they cause before society stops them?
Josteniok 4y ago
I know people that do this very thing but none of them admit to themselves that they "know that doing X will harm the company in the long term". Instead they create a narrative that says "This time it will be different" so they don't have to be bothered by any kind of pesky conscience. I don't even know if they do this consciously, it just seems to happen.
rolph 4y ago
you kinda described sociopathy

public_defender 4y ago

And it's turtles all the way down. Every single incentive and system is optimized for some goal like periodic revenue increase. It's not one personality type and the desire to buy a new car, it's the intentional structure of a public corporation. We have high minded ideas about sustainability and corporate citizenship, but those views don't drive decisions in the bear market.

ecuaflo 4y ago
or in the bull market. techies are greedy
- public_defender 4y ago
  Yes that's true. I just think it's particularly easy to forget how your company actually works--e.g. what puts the bread on the table--when the markets are high. Therefore we see more monetization strategy in this type of financial cycle.

JohnJamesRambo 4y ago

How do we fix this loop in companies? It is a very serious problem for humanity’s future. It exists in government too. How do we reward long-term thinking and decisions?

zeroxp 4y ago
You have to align the long term growth and wellbeing of the company with the long term prosperity of the employee. This is why stock options with a long term vesting period have become an attractive choice.
Jensson 4y ago
This is essentially what corruption is. Fixing corruption is extremely hard, especially when it is less overt like this. The main thing you can do is to teach people how to spot bad apples and push them out, fire them or in other ways punish them and reduce the damage they can do. It shouldn't be culturally acceptable to be a bad apple, but that requires a cultural change and those are really hard to do.
kaushikc 4y ago
Short term rewards would need to be less enticing than the long term ones. Doing so would involve restricting many rights and privileges and people would hate that.
- Jensson 4y ago
  That only works if leadership can spot the difference between long term and short term, and more importantly that they even cares about it. "Reward long term" is easier to say than to do.
- JohnJamesRambo 4y ago
  We are restricting our long term rights and privileges though...I know it is hard to get people to see that, but that is what is happening.
  - kaushikc 4y ago
    We know the problems, would like to see workable solutions.
MarkPNeyer 4y ago
Private ownership of businesses, so long term consequences fall on someone with the authority to steer them right.

MarkPNeyer 4y ago

Why do you care if you harm the company long term? It’s not like you are tied to it’s performance forever. When equity and labor markets are liquid, why wouldn’t you make decisions that help you now, and cause long term hurt something you have no long term stake in? If you don’t, your peers will.

marcus_holmes 4y ago
Because as an executive officer of a company, I am supposed to have the shareholder's interests as my main priority. I totally get your point, and I understand the "me first!" attitude that it comes from. But we can't have nice things if everyone does this.
matheusmoreira 4y ago
Corporations are meant to improve our lives sustainably. If all these people can do is extract short term value for themselves instead of providing long term value to the world, then there's no reason to allow this corrupt system to continue. It's pretty screwed up that executives can go around chasing infinite short term growth and awarding themselves golden parachutes so they can jump ship when the problems inevitably start to surface. How much destruction can they cause before society stops them?

Josteniok 4y ago

I know people that do this very thing but none of them admit to themselves that they "know that doing X will harm the company in the long term". Instead they create a narrative that says "This time it will be different" so they don't have to be bothered by any kind of pesky conscience. I don't even know if they do this consciously, it just seems to happen.

rolph 4y ago

you kinda described sociopathy